International Retailing

1. International Retailing Dana-Nicoleta Lascu Chapter 12

2. Chapter Objectives • Provide an overview and description of the general merchandise retailing category and offer examples and illustrations • Provide an overview and description of the food retailing category and offer examples and illustrations • Provide an overview and description of the nonstore retailing category and offer examples and illustrations • Address issues related to legislation, taxation, and retailing practices around the world

3. International Expansion of Retailers • Wal-Mart • Metro AG • Sears Roebuck • Rewe Gruppe • Edeka Gruppe • Aldi Gruppe • Dayton Hudson • Tenzelmann Gruppe

4. International Retailing Defined All the activities involved in selling products and services to final international consumers for their personal consumption.

5. Retail Formats: Variations in Different Markets • Specialty Stores • Retailers offering a narrow product line and wide assortment • Virgin Records (music products) • Mango (youth fashion) • Specialized Markets • Markets that house stores specializing in a particular product category • Jade market (Hong Kong) • Spice market (Istanbul)

6. Retail Formats: Variations in Different Markets • Department Stores • Offer a broad variety of goods and wide assortments • U.S. and Canada: recent substantial losses • Europe: expansion of national chains throughout the European Union • Asia: on the decline

7. Retail Formats: Variations in Different Markets • General Merchandise Discount Stores • Sell high volumes of merchandise • Offer limited service • Charge lower prices • Types: • All-purpose: offer wide variety of merchandise and limited depth • Category specialists (category killers): carry a narrow variety of merchandise and offer a wide assortment

8. Retail Formats: Variations in Different Markets • Off-Price Retailers • Sell brand name and designer merchandise at below regular retail prices • Overruns, irregular products, previous seasons’ products • Examples: • Factory outlet stores • Close-out retailers (broad, inconsistent assortments) • Single-price retailers (all products for the same price)

9. Retail Formats: Variations in Different Markets • Catalog Showrooms • Offer high-turnover, brand name goods at discount prices • Internationally, however, goods sold through this venue tend not to be brand name, but, rather, goods that have not sold the last season through the catalog

10. International Food Retailers • Conventional Supermarkets • Self-service retailers with annual sales higher than $2 million and less than 20,000 square feet of store space

11. International Food Retailers • Superstores • Combination stores (food and drug) • Hypermarkets – combine supermarket, discount, and warehouse retailing

12. Food Retailers • Warehouse Clubs (Wholesale Clubs) • Require members to pay an annual fee • Operate in low-overhead, warehouse-type facilities • Offer limited lines of brand-name and dealer-brand merchandise at a substantial discount

13. Food Retailers • Convenience Store • Small residential retailers or retail chains consisting of small neighborhood stores • Open long hours • Carry limited lines of higher-turnover necessities • One-stop shopping

14. Nonstore Retailing • Internet Retailing • Also known as interactive home shopping or electronic retailing • Includes both new dot-com companies and traditional retailers attempting additional market penetration • Increase company diversification • Vending Machines • Increasingly popular • Extent of use varies from country to country

15. Nonstore Retailing • Television Home Shopping • A venue for selling merchandise to consumers in their homes using cable channels • Examples: infomercials and direct response advertising • Popular in North America and Europe, and becoming increasingly popular in Asian markets

16. Nonstore Retailing • Catalog Retailing and Direct Mail Retailing • Venues for selling merchandise to consumers using catalogs and other types of direct mail • It allows for the international expansion of retailers • Must be adapted to local market needs and practices • Obstacles in developing countries: • deficient telephone service • unreliable mail service • low income • unavailability of credit cards

17. Nonstore Retailing • Direct Selling • A retailing venue whereby a salesperson, typically an independent distributor, contacts a consumer, demonstrates product use and benefits, takes orders and delivers the merchandise • Direct selling firms are most active in the growth markets (in emerging markets, in particular)

18. Network Marketing • Variation on direct selling • Involves signing up sales representatives to go into business for themselves with minimal start-up capital and sell more "distributorships" and merchandise • Network marketing is growing rapidly, especially in emerging markets

19. Issues in International Retailing • Legislation and Regulation • Taxation and Cross Border Shopping • Variations in Retailing Practice and Customs

20. Chapter Summary • Described general merchandise retailing • Addressed the food retailing category • Discussed the non-store retailing category • Addressed issues related to legislation and taxation • Discussed retailing practices around the world