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How important is retailing to the U.S. economy?

How important is retailing to the U.S. economy?. Retailing is one of the largest employers Retailers ‘ring up’ a third of U.S. GDP Industry is dominated by a few giant organizations, such as Wal-Mart. Wal-Mart Home Depot Target Sears/K-Mart Kroger. Costco Albertson’s Safeway JCPenney.

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How important is retailing to the U.S. economy?

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  1. How important is retailing to the U.S. economy? • Retailing is one of the largest employers • Retailers ‘ring up’ a third of U.S. GDP • Industry is dominated by a few giant organizations, such as Wal-Mart Free Background from www.brainybetty.com

  2. Wal-Mart Home Depot Target Sears/K-Mart Kroger Costco Albertson’s Safeway JCPenney Who are the largest U.S. retailers? Free Background from www.brainybetty.com

  3. Retailer Classification Variables • Ownership—independent, chain, or franchise? • Level of Service —self-service to full-service • Product Assortment —mass merchandisers to specialty stores • Price —discounters to full-price stores Free Background from www.brainybetty.com

  4. Gross Margin • The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted Free Background from www.brainybetty.com

  5. Department Stores’ Shrinking Share! • Discount stores (e.g. Wal-Mart, Target) have upgraded their apparel and merchandise • Manufacturers (e.g. Ralph Lauren, Tommy Hilfiger) have opened their own outlets or stores • Specialty stores (e.g. Gap, Eddie Bauer) have become more cost and value-oriented Free Background from www.brainybetty.com

  6. How are department stores fighting back? • Using the “boutique within the store” format • Increasing ‘value-added’ services (e.g. personal shoppers, free alterations) • Remodeling and revitalizing • Going to smaller store formats Free Background from www.brainybetty.com

  7. Supermarkets are practicing ‘scrambled merchandising’! • “the addition of non-core goods to add convenience for shoppers and to increase store revenues” • Examples of Scrambled Merchandising • Supermarkets sell gasoline, fresh flowers, greeting cards, school supplies, hardware, and pharmaceuticals • Drugstores sell milk, juice, cereals, foods, and gardening supplies Free Background from www.brainybetty.com

  8. Convenience stores are changing! • Adding more fresh food and hot food items • Partnering with fast food franchises and banks • “Upscaling”—hardwood floors, stainless steel shelving, bistro tables, better lighting, upgraded restrooms Free Background from www.brainybetty.com

  9. ‘Extreme Value Retailers’ are growing! • “full-line discounters with smaller stores, narrower selections, and rock-bottom prices” • Examples—Dollar General, Family Dollar, Fred’s • Target Market—low-income and fixed- income households Free Background from www.brainybetty.com

  10. ‘Category killers’ rule certain retail categories! • Category killer—single-line, high-volume retailer that dominates a narrow merchandise segment (e.g. pet supplies, toys) • Examples—Staples, Best Buy, Toys R Us, PetCo, Home Depot Free Background from www.brainybetty.com

  11. Non-store retailing is booming! • Non-store retailing—shopping without visiting a bricks & mortar store • Four Major Forms: • Automatic Vending • Direct Retailing • Direct Marketing • Electronic Retailing Free Background from www.brainybetty.com

  12. About non-store retailing forms— • Automatic Vending—not just snacks and soft drinks anymore! • In airports, hotels, restrooms, mass transit stations, theaters • Office supplies, toys, DVDs, underwear, toiletries, disposable cameras, hot foods • Machines work with debit/credit cards—no coins needed Free Background from www.brainybetty.com

  13. Direct Retailing vs. Direct Marketing • Direct Retailing —the selling of products through home parties, office parties, or door-to-door • Direct Retailing is not just Avon and Tupperware!—includes food items, cookware, make-up, baby items, lingerie, clothes, home accessories • Direct Marketing —the selling of products by direct mail, phone, or catalog • Direct mail success depends on: (1) the quality of the mailing list, and (2) the effectiveness of the mailing piece Free Background from www.brainybetty.com

  14. Basic Formsof Franchising Product and Trade Name Franchising (e.g. Coca-Cola, Goodyear Tires, Honda) Business FormatFranchising (e.g. Taco Bell, Mail Boxes Etc., Midas) Franchising—moving beyond McDonald’s Free Background from www.brainybetty.com

  15. Franchising fees—One-time fee + royalties Free Background from www.brainybetty.com

  16. The ‘Retail Mix’—keys to retail success • Product (Mix—Width and Depth) • Place (Location and Hours) • Promotion • Price • Presentation (Layout and Atmosphere) • Personnel (Employees and Customer Service) Free Background from www.brainybetty.com

  17. Important Retail Trends • “Shoppertainment” – stores as ‘destinations’, couches, cafes, video screens, guest appearances • Convenience and Efficiency –delivery, in-store services, preselection, refrigerators with bar code scanners • Customer Management – data warehousing, databases, mass customization, ‘narrowcasting’ Free Background from www.brainybetty.com

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