Chapter 2

Types of Retailers

Variety and Assortment

Variety is the number of merchandise categories a retailer offers. (“Breadth of merchandise”)

Assortment is the number of different items in a merchandise category (“Depth of Merchandise”)

SKU

Each different item of merchandise is called an SKU (stockkeeping unit)

Services Offered by Retailers

displaying merchandise

accepting credit cards

parking

convenient hours

home delivery

gift wrap

selection assistance

warranties

Food Retailers

Conventional Supermarket

Limited Assortment Supermarket

Supercenter

Warehouse Club

Convenience Store

Conventional Supermarket

a self-service food store offering groceries, meat and produce with limited sale of non-food items

about 30,000 SKUs

Limited-Assortment Supermarkets

Only about 1250 SKUs

Only 1-2 brands and sizes

40-60% lower prices

Supercenters

a supermarket combined with a full-line discount store

100,000-150,000 SKUs

Warehouse Clubs

offer a limited and irregular assortment of food and general merchandise with little service at low prices

Convenience Stores

provide a limited variety and assortment of merchandise

2000-3000 SKUs

General Merchandise Retailers

Department Stores

Full-Line Discount Stores

Specialty Stores

Drugstores

Category Specialists (and Category Killers)

Extreme Value Retailers

Off-Price Retailers (Outlet Stores/Factory Outlets)

El

Department Stores

Retailers that carry a broad variety and deep assortment

offer customer service

organize their stores into distinct departments

Full-Line Discount Stores

retailers that offer a broad variety of merchandise, limited service and low prices

Specialty Stores

concentrate on a limited number of complementary merchandise categories

provide a high level of service in relatively small stores

deep but narrow assortments and sales associate expertise

Drugstore

specialty stores that concentrate on health and personal grooming merchandise

Category Specialists

big box discount stores that offer a narrow but deep assortment of merchandise

can be ‘category killers’

Extreme Value retailers

small, full-line discount stores (Dollar Tree)

Off-Price Retailers

an inconsistent assortment of brand name merchandise at low prices

close outs/irregulars

outlets stores/factory outlets

Non-store Retailing

Electronic Retailing

Catalog Retailing

Direct mail Retailers

Direct Selling

Television Home Shopping

Vending Machine Retailing

Electronic Retailing

Electronic Retailing (online) is a retailing format in which the retailers communicate with customers and offer products and services for sale over the internet.

Catalogue Retailing

the retail offering is communicated to a customer through a catalogue

Direct-Mail Retailers

communicate to customers using letters and brochures

Direct selling

Independent salespeople contact customers directly in a convenient location, demonstrate merchandise benefits, take orders, deliver the merchandise or perform the service

Party-plan system - salespeople encourage customers to act as hosts and invite friends and coworkers

Multilevel network - people serve as master distributers, recruiting other people to become distributers of their network

Television Home Shopping

a retail format in which customers watch a television program that demonstrates merchandise and place orders - usually by telephone

3 Types - dedicated cable channels, infomercials and direct response advertising

Vending machine retailing

merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card

Service Retailers• Firms that primarily sell services rather

than merchandise.• Services are generally intangible• Services have simultaneous production

and consumption (service providers create and deliver the service as the consumer is using/consuming it)

• Services are perishable or time-sensitive• Services can be inconsistent

Types of Ownership

• Independent, Single-Store Establishments• Corporate Retail Chains• Franchises