© 2006 pearson education canada inc. 1.1 powerpoint presentation tracy tuten ryan virginia...

© 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


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


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.


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?


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.


Figure 1-1 Boom Times for Costco

www.costco.ca

http://www.costco.ca/




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

http://www.retailcouncil.ca/




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


Example A Typical Retail Distribution Channel

Manufacturer

WholesalerFinal

Consumer

Retailer


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


Multi-Channel Retailing

A retailer sells to consumers through multiple retail formats Web site Physical store Catalogue Toll-free phone number


Relationship Management Among Retailers and Suppliers

• Disagreements may occur over:control over the distribution channelprofit allocationnumber of competing retailersproduct displayspromotional supportpayment termsoperating flexibility


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


Figure 1-7 Comparing Distribution Types


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


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


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


Figure 1-8 Special Characteristics Affecting Retailers

Retailer’sStrategy

Small Average

Sale

Impulse Purchases

Popularityof

Stores


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


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


Figure 1-9 The Real Canadian Superstore

www.loblaws.ca

http://www.loblaws.ca/




Aspects of Loblaws’ Strategy

Growth-oriented objectives

Appeal to a prime markets

Multi FormatDistinctive ImageFocusStrong customer

service

Employee relationsInnovationCommitment to

technologyCommunity

involvementConstant performance

monitoring


The Retailing Concept

These concepts should be applied by all retailers:

1. Customer orientation

2. Coordinated effort

3. Value Driven

4. Goal oriented


Figure 1-10 Applying the Retail Concept

Customer Orientation

Coordinated Effort

Value driven

Goal Orientation

RetailingConcept

RetailStrategy


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


Figure 1-11 Eliminating Shopper Boredom

CREATE AN ELEMENT OF UNIQUE EXCITEMENT

www.buildabear.ca

http://www.buildabear.ca/




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.


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?


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


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


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


Approaches to the Study of Retailing

Institutional

Functional

Strategic


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

© 2006 pearson education canada inc. 1.1 powerpoint presentation tracy tuten ryan virginia...

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