Types Of Retailers Chapter 2

Types Of RetailersChapter 2Basharatullah MalikTo develop and Implement a Retail Strategy, understand the nature of Competition in the Retail Marketplace.Learning Outcome?Trends in todays RetailingTypes of RetailersMeeting Needs of Customers-Different RetailersServices and Merchandise Retailers-DifferenceRetail Firms-Types of OwnershipTrends in Retail IndustryGrowing Diversity- Retail FormatsIncreasing Industry ConcentrationGlobalizationFactors Supporting Retail Globalization1- Maturation of Domestic Markets2-Skills and Systems3- Trade Barriers

Trends in Retail IndustryGrowing Diversity- Retail FormatsSame Merchandise-Variety of RetailersCDs are available at:Hall Road, Every Road, Music Shops, Computer Shops, Medium Level Stores, Hyper Stores, Shopping MallsInternet Shopping

Trends in Retail IndustryIncreasing Industry ConcentrationIn USA Wal-Mart, K-Mart and Target Controlling 85% of Retail Market2 Store controlling Consumer Electronics3 Warehouse Clubs having monopoly 3 in office Supplies In PakistanFigures not available but situation is differentMultinational Store are growing to control the Retail Market of Pakistan

Trends in Retail IndustryGlobalizationNo more Local Business Successful in Country of Origin-developed Global presenceSustainable Competitive advantage in home country helps to be successful globallyWal-mart USA and Carrefour (France)- Efficient distribution and communication systemIKEA Furniture (Sweden)- Popular with Young Home OwnersMc Donald and KFC- Target Hungry People with Less time available to wait

Trends in Retail IndustryFactors Supporting Retail Globalization1- Maturation of Domestic MarketsUS Domestic Market maturedFailure of New Stores attributed to presence of any stores offering same Category of merchandiseOpportunities found in other global markets

Trends in Retail IndustryFactors Supporting Retail Globalization2-Skills and SystemsBetter skills to Manage Store in Nondomestic marketsExpertise easily used in global MarketsGlobal Merchandise Sourcing Improves quality, reduces Cost, Increases Variety for CustomersInformation revolution-Global Expansion Easier

Trends in Retail IndustryFactors Supporting Retail Globalization3- Trade BarriersRelaxation in Trade Barriers-Expansion easierWTO, NAFTA, ASEAN, EU, SAARC

Retail CharacteristicsRetail MixPrice-Cost Trade Off Type of MerchandiseThe degree to which retailers compete against each otherVariety and AssortmentCustomer Service

Retail CharacteristicsRetail Mix; Elements used by Retailer to satisfy its consumer needsPrice-Cost Trade Off; Classification of Retailers has relevance to Price-Cost Trade offMore are the Services associated, Variety improved more will be the cost, so is the price

Retail CharacteristicsType of MerchandiseNorth American Industry Classification System NAICSThe degree to which retailers compete against each other:isnt simply based on the similarity of their merchandiseVariety, Assortment and Services they provide must be consideredRetail CharacteristicsVariety and AssortmentVariety - the number of merchandise categories a retailer offers- Breadth of MerchandiseAssortment- Number of different items in a merchandise category-Depth of MerchandiseSKU- each different item is called Stock keeping Unit SKUBashir Cycle Shop, HKB, and METRO all sell CyclesBCS- has different types of cycles in terms of Size, Design, Usage, meant for different age groups, Desert or Mountain Bike Depth of MerchandiseHKB- has cycles only for Kids and other products Breadth of MerchandiseMETRO- has cycles for Sports and Kids along with 5000 SKUs even Sheep and Goats . Greater Breadth of Merchandise

Retail Characteristics Customer ServiceBCS offers more service in relation to CyclesCan adjust the SizeAdd features like Light, Gear, Stand, CareerRepair ServicesHKB and Metro Do not provide services like BCSSome retailers charge for the services they provideTypes of Food Retailers Conventional SupermarketSuper StoreHyper MarketWare House ClubConvenience StorePercentage Food 70-9030-4060-706090Size(000) 20-50150-220100-300100-1502-3SKUs (000s)20-30100-15040-60202-3VarietyAverageBroadAverageBroadNarrowAssortmentAverageDeepDeepShallowShallowCheck out Lines 6-1020-3040-6010-151-2PricesAverageLowLowLowHighGeneral Merchandise RetailersCharacteristicsTypeVarietyAssortmentServicePricesSize 000s sq ft.SKUs000sLocationDiscount StoresBroadAverage & ShallowLowLow60-8030Stand Alone Power strip CentersSpecialty StoresNarrowDeepHighHigh4-125Regional MallsCategory SpecialistsNarrow Very DeepLow to HighLow50 -12020-40Stand Alone Power strip CentersHome Improvement CentersNarrow Very DeepLow to HighLow 80-12020-40Stand Alone Power strip Centers General Merchandise RetailersCharacteristicsTypeVarietyAssortmentServicePricesSize 000s sq ft.SKUs000sLocationDepartment StoresBroadDeep to AverageAverage to HighAverage to High100-200100Regional mallsDrug StoresNarrowVery deepAverageAverage to High3-1510-20Stand alone Strip CentersOff Price StoresAverageDeep but VaryingLowLow20-3050Outlet MallsValue RetailersAverageAverage and VaryingLow Low7-153-4Urban, StripGeneral Merchandise RetailersDiscount StoresOffers a broad Variety of Merchandise, limited service and low pricesOffers Private Labels and National BrandsLess Fashion oriented than Brands in Department StoreProblemsIntense Competition from Specialty stores focusing on Single Category of MerchandiseElectronic Items from Hall RoadFood Items from Food Stores in Markets and Akbari StoreComputers from Hafeez Center

General Merchandise RetailersSpecialty StoresConcentrates on limited number of complementary merchandise categoriesProvides High Level of Service Typically under 8000sq ftCategory Specialist (Discount Specialty Stores)A discount store with narrow variety and deep assortmentCategory KillersUrdu Bazar Stationers

General Merchandise RetailersDepartment StoresThat carry a broad variety of deep assortment, offers some customer Service, and organized into separate departments for displaying merchandiseLeased DepartmentPaceDrug StoresOff-Price RetailersValue RetailersNon Store Retail FormatsElectronic RetailersRetailers communicate with customers and offer products and servicesCatalog and Direct mail RetailingDirect SellingTelevision Home ShoppingVending machine Retailing Services RetailingDifferences between Services and Merchandise RetailersIntangibilitySimultaneous Production and ConsumptionPerish abilityIn consistency