Retailing encompasses the business activities involved in selling goods and
services to consumers for their personal, family, or household use. It includes
every sale to the final consumer.
Issues in Retailing
• How can we best serve our customers while earning a fair profit?
• How can we stand out in a highly competitive environment where
consumers have so many choices?
• How can we grow our business while retaining a core of loyal customers?
An Ideal Candidate for a Retailing Career
• Must be a people person (more important than technical knowledge).
Technical skills can be taught more easily than people skills
• Must be flexible
• Should be decisive
• Must have analytical skills
• Must have stamina
The 10 Largest Retailers in the United States (2011)
Typical Channel of Distribution
Multi-Channel Retailing is the practice of making products available to consumers
on more than one sales channel or marketplaces. Multichannel retailing uses
multiple sales channels such as ecommerce websites, brick-and-mortar stores,
marketplaces, comparison shopping engines, social media platforms, and other
channels.
A retailer sells to consumers through multiple retail format/channel:
Web sites
Physical stores
Catalog
Cross selling across channels (in-store product availability info on Web site)
Consistent pricing in all channels (credibility)
Can buy and return product regardless on channel
Distribution Types
Exclusive: suppliers make agreements with one or few retailers, designating such
retailers as the only ones to carry certain brands or products within a specified
geographic area
Intensive: suppliers sell through as many retailers as possible
Selective: suppliers sell through a moderate number of retailers
Special Characteristics Affecting Retailers
Retail Strategy
An overall plan for guiding a retail firm
Influences the firm’s business activities
Influences firm’s response to market forces
Six Steps in Strategic Planning
1. Define the type of business (corporate mission)
2. Set long-run and short-run objectives
3. Determine the customer market
4. Devise an overall, long-run plan
5. Implement an integrated strategy
6. Evaluate and correct (fine-tune)
Aspects of Target’s Strategy
Growth objectives
Appeal to a prime market
Distinctive image
Focus
Customer service
Multiple points of contact
Employee relations
Innovation
Commitment to technology
Community involvement
Monitoring performance
Customer Service
Activities undertaken by a retailer in conjunction with the basic goods and
services it sells. This includes:
Store hours
Parking
Shopper-friendliness
Credit acceptance
Salespeople
A Customer Respect Checklist
Do we trust our customers?
Do we stand behind what we sell?
Is keeping commitments to customers important to our company?
Do we value customer time?
Do we communicate with customers respectfully?
Do we treat all customers with respect?
Do we thank customers for their business?
Do we respect employees?
Relationship Retailing
Retailers seek to establish and maintain long-term bonds with customers,
rather than act as if each sales transaction is a completely new encounter
Concentrate on the total retail experience
Monitor satisfaction
Stay in touch with customers
Effective Relationship Selling
Use a “win-win” approach
It is easier to keep existing customers happy than to gain new ones (present value
of current customers income stream– cost of keeping existing customers content
versus cost of replacing them with new customer
Develop a customer database (loyalty programs)
Ongoing customer contact is improved with information on people’s attributes
and shopping behaviors.
Relationship Management Among Retailers and Suppliers
Disagreements may occur in the following areas (channel conflict):
control over channel (private label)
profit allocation (resale price control)
number of competing retailers (exclusive, selective or intensive
distribution)
product displays
promotional support (cooperative advertising funds and restrictions)
payment terms (payment on time)
operating flexibility
Parts of Retail Management: A Strategic Approach
Building relationships and strategic planning
Retailing institutions
Consumer behavior and information gathering
Elements of retailing strategy
Integrating, analyzing, and improving retail strategy
