Retail Trade

1. Retail Trade Frequently Asked Questions By: Qresha Abdul Gaffaar

3. Explain two reasons why e-commerce is becoming increasingly important. [4] many companies wish to expand their markets without incurring the expenses of additional shop space their competitors are offering e-commerce, so they must offer e-commerce to remain competitive

4. Explain two reasons why e-commerce is becoming increasingly important. [4] an increasing number of people have access to computers and to the Internet suitable for a large range of products/services some of the difficulties of using Internet shopping have been overcome - danger of credit card fraud

5. Explain two reasons why e-commerce is becoming increasingly important. [4] many people have little time to go shopping and prefer to shop on-line saves time and money on other forms of advertising

6. Explain why attractive packaging is used for the chocolates. [4] to make the chocolates more attractive than other chocolates chocolates are often given as presents so colour adds to this the brand can be included on the packaging to attract attention

7. Explain why attractive packaging is used for the chocolates. [4] so that the packaging attracts attention - may mean more orders can be used as part of the advertising on the website to encourage impulse buying

8. (d) Explain how a retailer might make use of computers to run the business. [6] use of computers in documentation process use of Internet banking to run the business' finances use of computer software to manage accounts word processing, advertising, literature,

9. (d) Explain how a retailer might make use of computers to run the business. [6] communication with customers - fax, e-mail communication with other parts of the business - intranet, fax, e-mail • communication with suppliers - fax, e-mail

10. (d) Explain how a retailer might make use of computers to run the business. [6] database of customers and their details desktoppublishing for communication and advertising material stock control in warehouse communication with customers

11. (a) What are the advantages of large-scale retailing to Bonusbuy itself? [6] buying in bulk - obtain discounts - lower prices to customers can afford to use regional distribution centres and own transport employment of specialist buyers - quality goods at competitive prices can use self service - savings on sales staff

12. (a) What are the advantages of large-scale retailing to retailers itself? [6] should have quick turnover - beneficial when selling perishables economies of scale - administration/advertising use of technology - bar coding, epos offers wide range of goods

13. (a) What are the advantages of large-scale retailing to Bonusbuy itself? [6]

14. What are the advantages to the retailer of providing self service to its customers [3] saves on sales staff - stocking shelves, manning tills may encourage impulse buying - so greater turnover may encourage more shoppers who want to self select involves less work for retailer than offering personal service

15. What are the advantages to the retailer of selling its own brands [3] makes the goods offered by the retailer distinctive enables customers to recognise the products assists retailers to advertise

16. What are the advantages to the retailer of selling its own brands [3] encourages brand loyalty/goodwill may be able to offer these goods more cheaply than other brands because has placed a bulk order with a particular producer

17. What are the advantages to the retailer of using bar coding on its goods. [3] may speed up individual transactions at the till may reduce human error at the till saves pricing goods individually enables stock control to be computerised

18. What are the advantages to the retailer of using bar coding on its goods. [3] enables the retailer to see which types of goods are selling enables re-ordering to be computerised and so reduces costs to Retailer and so reduces costs to retailer

19. What are the advantages to the retailer of providing after sale service. [3] Creates customer loyalty May increase turnover May need to deliver goods May be selling goods which require maintenance

20. Explain why the retail trade attracts many people wishing to set up small businesses. [4] A small amount of money is needed to start trading e.g. own savings Banks may be willing to lend against collateral such as property It is an attractive job for many people with a wide diversity of opportunities/products/ services that can be sold

21. Explain why the retail trade attracts many people wishing to set up small businesses. [4] It may be possible to take a franchise and so share risk with a larger organisation It may be possible to operate from home using the Internet or have premises close to home Many people enjoy serving customers and offering personal service

22. Explain why the retail trade attracts many people wishing to set up small businesses. [4]

23. Name important factors to consider when deciding on the location of a small retailbusiness. [6] Nearness to customers – customers often buy locally Availability of labour – may need shop assistants Availability of transport – customers to come to the shop, labour Kind of site – close to other shops – on main roads

24. Name important factors to consider when deciding on the location of a small retailbusiness. [6] Ease of obtaining supplies – near main roads, delivery area Close to/away from competition especially large-scale retailers – may have to relyon nearby customers Close to/away from competition especially large-scale retailers – may have to rely on nearby customers

25. Explain why Paradise Supermarkets decided to buy most of its supplies direct from suppliers. can take advantage of economies of scale – bulk buying to obtain discounts can obtain goods to its own specification and so can control the quality may required manufacturers to make goods under its own brand name + e.g.

26. Why many customers prefer to buy from supermarkets. [6] it allows them to do one-stop shopping and to buy large quantities of goods are able to use self service so that they can examine the goods shop at their own pace without pressure from sales staff.

27. Why many customers prefer to buy from supermarkets. [6] wide rangeof goods at competitive prices the goods are likely to be fresher and also packaged and branded for easyrecognition delivery of goods, specialist counters within the store e.g. bakery

28. Why many customers prefer to buy from small corner shops. [6] They value thepersonal service and the quality of the goods sold prefer to shop daily rather than weekly They may also be allowedinformal credit They may also be allowedinformal credit

29. (i) Why is the supermarket able to sell cans of beans more cheaply? [4] purchase cans of baked beans in very large quantities, obtain larger trade discount supermarket may be offering the beans on special offer or as a loss leader no middleman like wholesaler Large turnover

30. (Does the growth of e-commerce present a threat or an opportunity to the shops in theshopping centre? Opportunities very convenient to buy in the comfort of their own homes credit card fraud have been reduced are too busy to have time for shopping and find it convenient to order everything obtain sales by offering online services

31. (Does the growth of e-commerce present a threat or an opportunity to the shops in theshopping centre? Opportunities supermarkets allow shoppers to order food and household goods online and offer a deliveryservice This has greatly added to their turnover save themcosts of expensive rentals and reduce the wage bill

32. (Does the growth of e-commerce present a threat or an opportunity to the shops in theshopping centre? Threats shops who are reliant on shoppers Others prefer to see theactual goods they wish to buy buying online is likely to be more expensive

33. ((b) Mrs Habib, a small-scale retailer, is faced with competition from a large-scale retailer.Suggest two actions she might take. [2] Convert from personal service to self-service. Offer products or services that the large-scale retailer does not offer. Look for different/cheaper suppliers. Try to cut costs – reduce labour. Advertise – introduce special promotions. Move to another location

34. b) Mrs Habib, a small-scale retailer, is faced with competition from a large-scale retailer.Suggest two actions she might take. [2] Do nothing and wait and see. Give credit (informal credit). Improve variety of goods. Use cash and carry. Join voluntary chain. Provide after-sales service.

35. (i) Large-scale retailers computerise many of their operations. Describe two ways in whichthese retailers make use of computers. [4] Use of bar-coding and scanners – to speed up transactions at the checkout and to aidstock control. Computerised ordering of supplies and the accounts. Electronic point of sale with electronic tills to speed up customer payments. Database – stock records.

36. (i) Large-scale retailers computerise many of their operations. Describe two ways in whichthese retailers make use of computers. [4] Use of security cameras to try to prevent shoplifting and employee theft. Intranet – computer network within the retail business to aid communication betweenstaff Communication between branches by means of email. Online ordering by customers with Internet catalogues and home delivery.

37. (i) Large-scale retailers computerise many of their operations. Describe two ways in whichthese retailers make use of computers. [4] Preparation of advertising and promotional materials using desktop publishing. Internet – for advertising. Use of credit card machines.

38. (i) Is computerisation by large-scale retailers likely to benefit their customers?Give reasons for your answer. [6] Retaileruses bar coding and electronic tills, customers should find that there are fewer mistakes move through the checkouts more quickly retailer should not run out ofsupplies. It may offer the customer online shoppingand prices may be lower

39. (i) Is computerisation by large-scale retailers likely to benefit their customers?Give reasons for your answer. [6] large-scale retailer is able to offer customers more services (checking their shopping bills, loyalty schemes) and a wider range of goods with betterpromotions.