Chapter 13:Retailing

Retailing

retailing involves the sale of products and services to end consumers for their personal non-business use

not all sales by retailers are retail sales. why? similarly, not all retailing is done by retailers most of the retailers of Canada are very small there is considerable concentration in retailing,

accounted for by the large chains many small retailers join contractual vertical

marketing systems to increase their competitiveness

Figure 13-1 Total Retail Trade in Canada, Selected Years

Physical Facilities of Retailers

most retailers operate from stores, although more now engage in nonstore retailing

those that operate stores must consider where to locate their stores, how to design them, and what physical layout to use

much retailing in Canada is concentrated in shopping centres which range in size from small neighbourhood convenience centres to very large regional centres

Forms of Retailing

most retailers are independents corporate chains are centrally owned and

managed which means that individual stores have relatively little autonomy

chains can generally offer their customers lower prices because of a lower cost structure

they spread their risk and exposure over a larger number of stores; they can experiment and gain economies of scale in advertising

however, they tend to be quite standardized

Franchising and Other VMS

retail co-operatives and voluntary chains offer retailers increased buying power and the benefits of management and marketing support

product and trade name franchising allows a retailer to use the franchisor’s trade name for promotional purposes; focus is on what is sold

in business format franchising, a firm with a track record sells the right to operate identical businesses; focus is on how the business is run

Major Types of Retailers

department stores offer a wide variety of mechandise and services and don’t compete on the basis of price; they are facing intense competition and high operating costs

discount houses are large-scale chain retailers that offer a wide range of products but less depth; they offer low prices and fewer services and have succeeded in keeping costs low through use of technology

Limited-line Retailers

limited-line retailers offer customers less selection, but great depth within their lines

specialty stores carry a very narrow product line, usually specializing in a single category

off-price retailers offer a deep assortment in a narrow line, low prices, and few services; these include factory outlets

category-killer stores offer a very wide variety and low prices; dominate the category

Other Forms of Retailing

many of the established retailers are moving toward new forms of distribution, including telephone and Internet shopping

supermarket retailing has extended with the opening of superstores and combination stores

convenience stores are open 24 hourswarehouse club chains have made a major

entry into Canada in recent years; they offer a wide breadth of products, but little depth

Nonstore Retailing there has been considerable growth in nonstore

retailing with advancing technology and changing consumer shopping preferences

direct selling avoids using intermediaries telemarketing uses sales people on the phone

to sell products and services direct marketing uses catalogues, direct mail,

television shopping, and the Internet many products and services are now sold

through vending machines

Online Retailing

more and more companies are selling directly to consumers over the Internet

those that operate only online have struggled to become profitable; those that also have a physical stores are more likely successful

shopping-cart abandonment is high; challenge to turn browsers into buyers

Retailing Management

in a competitive market, positioning of retailers is a challenge

in many retail operations, managing through seasonal and fashion cycles is necessary

through technology, retailers will have access to considerable volumes of information; improved productivity will be one result

retailers will place greater emphasis on convenience, customer service, and customer retention

Figure 13-2 Fashion-Adoption Processes