© 2006 pearson education canada inc. 1.1 powerpoint presentation tracy tuten ryan virginia...
TRANSCRIPT
© 2006 Pearson Education Canada Inc. 1.1
PowerPoint Presentation
Tracy Tuten Ryan
Virginia Commonwealth University
Laurie Logan
Algonquin College
Chapter 1
An Introduction to Retailing
© 2006 Pearson Education Canada Inc. 1.2
Chapter Objectives1. To define retailing, consider it from various
perspectives, demonstrate its impact, and note its special characteristics
2. To introduce the concept of strategic planning and apply it
3. To show why the retailing concept is the foundation of a successful business, with an emphasis on the total retail experience, customer service, and relationship retailing
4. To indicate the focus and format of the text
© 2006 Pearson Education Canada Inc. 1.3
Retailing
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.
© 2006 Pearson Education Canada Inc. 1.4
Key Issues in Retailing
1. How can we best serve our customers while earning a fair profit?
2. How can we stand out in a highly competitive environment where consumers have so many choices?
3. How can we grow our business while retaining a core of loyal customers?
© 2006 Pearson Education Canada Inc. 1.5
Retail Management:A Strategic Approach
Retailers can best address these questions by fully understanding and applying the basic principles of retailing in a well-structured, systematic, and focused retail strategy.
© 2006 Pearson Education Canada Inc. 1.6
Figure 1-1 Boom Times for Costco
www.costco.ca
© 2006 Pearson Education Canada Inc. 1.7
An Ideal Candidate for A Retailing Career
Be a people personBe flexibleBe decisiveHave analytical skillsHave stamina
To learn more about retailing career opportunities visit www.retailcouncil.ca
© 2006 Pearson Education Canada Inc. 1.8
Figure 1-5: Top Ten Retailers in Canada, 2003
Rank Company Head-quarters
Net Sales ($US Mil)
Total Stores
1 Loblaw Companies Ltd. Canada 13,441 1,641
2 Empire Company Ltd. Canada 7,913 1,311
3 Wal-Mart (CDN sales) U.S. 7,400 235
4 Hudson’s Bay Company Canada 5,301 562
5 Costco (CDN sales) U.S. 5,237 63
6 Canadian Tire Corp. Ltd. Canada 4,343 996
7 Shoppers Drug Mart Corp. Canada 4,338 918
8 Sears Canada (CDN sales) U.S. 4,168 429
9 Safeway (CDN sales) U.S. 4,043 216
10 Home Depot (CDN sales) U.S. 3,243 102
© 2006 Pearson Education Canada Inc. 1.9
Example A Typical Retail Distribution Channel
Manufacturer
WholesalerFinal
Consumer
Retailer
© 2006 Pearson Education Canada Inc. 1.10
Role of Retailers and the Distribution function
Communicate with manufacturers, wholesalers and customers
Can provide assistance by transporting, storing, marking, advertising, and pre-paying for products
Complete transactions with customersEngage in multi-channel retailing
© 2006 Pearson Education Canada Inc. 1.11
Multi-Channel Retailing
A retailer sells to consumers through multiple retail formats Web site Physical store Catalogue Toll-free phone number
© 2006 Pearson Education Canada Inc. 1.12
Relationship Management Among Retailers and Suppliers
• Disagreements may occur over:control over the distribution channelprofit allocationnumber of competing retailersproduct displayspromotional supportpayment termsoperating flexibility
© 2006 Pearson Education Canada Inc. 1.13
Distribution Types
• Exclusive: suppliers make agreements with one or few retailers that designate the retailer as the only ones in a specified geographic area to carry certain brands or products
• Intensive: suppliers sell through as many retailers as possible
• Selective: suppliers sell through a moderate number of retailers
© 2006 Pearson Education Canada Inc. 1.14
Figure 1-7 Comparing Distribution Types
© 2006 Pearson Education Canada Inc. 1.15
Special Characteristics of Retailing
1. The average amount of a sales transaction for retailers is much less than for manufacturers
2. Final consumers make many unplanned or impulse purchases
3. Retail customers usually visit a store, even though mail, phone, and Web sales have increased
© 2006 Pearson Education Canada Inc. 1.16
Customer Impulse Purchases
The high frequency of impulse purchases shows the value of:
• In-store displays• Attractive store layouts• Well-organized stores• Catalogues • Web sites
© 2006 Pearson Education Canada Inc. 1.17
Popularity of Stores
Retailers need to consider the following to attract customers to their store:
• Store location• Transportation• Store hours• Proximity of competitors• Product selection• Parking • Advertising
© 2006 Pearson Education Canada Inc. 1.18
Figure 1-8 Special Characteristics Affecting Retailers
Retailer’sStrategy
Small Average
Sale
Impulse Purchases
Popularityof
Stores
© 2006 Pearson Education Canada Inc. 1.19
Retail Strategy
Is the overall plan guiding a retail firm
It influences the firm’s business activities
It influences the firm’s response to market forces, such as competition and the economy
© 2006 Pearson Education Canada Inc. 1.20
Six Steps in Retail Strategic Planning
1. Define the type of business
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
© 2006 Pearson Education Canada Inc. 1.21
Figure 1-9 The Real Canadian Superstore
www.loblaws.ca
© 2006 Pearson Education Canada Inc. 1.22
Aspects of Loblaws’ Strategy
Growth-oriented objectives
Appeal to a prime markets
Multi FormatDistinctive ImageFocusStrong customer
service
Employee relationsInnovationCommitment to
technologyCommunity
involvementConstant performance
monitoring
© 2006 Pearson Education Canada Inc. 1.23
The Retailing Concept
These concepts should be applied by all retailers:
1. Customer orientation
2. Coordinated effort
3. Value Driven
4. Goal oriented
© 2006 Pearson Education Canada Inc. 1.24
Figure 1-10 Applying the Retail Concept
Customer Orientation
Coordinated Effort
Value driven
Goal Orientation
RetailingConcept
RetailStrategy
© 2006 Pearson Education Canada Inc. 1.25
Total Retail Experience Includes all elements designed to encourage
or inhibit consumers Elements to be directed toward the selected
market segment’s appeal should include:• Salespeople• Displays• Prices• Brands carried• Inventory
© 2006 Pearson Education Canada Inc. 1.26
Figure 1-11 Eliminating Shopper Boredom
CREATE AN ELEMENT OF UNIQUE EXCITEMENT
www.buildabear.ca
© 2006 Pearson Education Canada Inc. 1.27
Customer Service
Store hoursParkingShopper-
friendlinessCredit acceptanceSalespeople
Gift wrappingRest roomsEmployee politenessDelivery policiesCheck-out linesCustomer follow-up
•Activities undertaken by a retailer in conjunction with the basic goods and services it sells.
© 2006 Pearson Education Canada Inc. 1.28
Figure 1-12: 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?
© 2006 Pearson Education Canada Inc. 1.29
Relationship Retailing
• 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 with customer service
– Stay in touch with customers
© 2006 Pearson Education Canada Inc. 1.30
Effective Relationship Retailing
• Use a win-win approach
– It is harder to get new customers than to keep existing ones happy
• Develop a customer database
– Ongoing customer contact is improved with information on people’s attributes and shopping behaviour
© 2006 Pearson Education Canada Inc. 1.31
Twenty Trends for 2010
1. No more one size fits all2. Wal-Mart keeps smiling3. Supercentres keep rolling4. Surviving the supercentre5. Department store death
spiral6. Malls get mauled7. Re-concept8. Experience excels9. E-commerce10. Smart Shopping
11. Smart stores12. M-commerce13. Global land rush continues14. Retailers act like suppliers15. Retailers as brand
managers16. Brand sharing17. Uber retailers18. Suppliers act like retailers19. Suppliers become retailers20. Consumers call the shots
© 2006 Pearson Education Canada Inc. 1.32
Approaches to the Study of Retailing
Institutional
Functional
Strategic
© 2006 Pearson Education Canada Inc. 1.33
Parts of Retail Management: A Strategic Approach
Building relationships and strategic planning Retailing institutions Consumer behaviour and information
gathering Elements of retailing strategy Integrating, analyzing, and improving retail
strategy