An Introduction to Retailing

Transcription

1 An Introduction to 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 consumerranging from cars to apparel to meals at restaurants to movie tickets Last stage of distribution channel Revenue in 2015 $ 486 Billion 260 million customers every week 11,535 stores in 28 countries and e-commerce sites in 11 countries Walmart employs 2.2 million associates worldwide 1.4 million in the U.S. 1

2 Since 1962 Every day low prices (EDLP) on a broad assortment - anytime, anywhere. aggressive on price PRICE LEADERSHIP shopping online at Walmart.com, through one of our mobile apps or shopping in a store greater access E-commerce sales $12.2B in 2015 (Growth Rate: 22%) improving customer experience, both in stores and online a faster checkout experience, with more lanes available during peak hours and weekends How can we best serve our customers while earning a fair profit? How can we stand out in a highly competitive environment where consumers have so many choices? How can we grow our business, while retaining a core of loyal customers? Be a people person Be flexible Be decisive Have analytical skills Have stamina RETAIL REVENUE OF TOP 250 $ 4.48 Trillion 2

3 A retailer sells to consumers through multiple retail formats Web sites Mobile devices Physical stores Disagreements may occur: control over channel profit allocation number of competing retailers product displays promotional support payment terms operating flexibility Exclusive: suppliers make agreements with one or few retailers that designate the latter 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 3

4 Small Average Sale Impulse Purchase Retailer s Strategy Popularity of Stores CASE: TARGET The Target Corporation is an American retailing company, founded in 1902 and headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer ($72.6 B in 2015) in the United States, Wal-Mart being the largest. Target is an upscale discounter that provides high-quality, ontrend merchandise at attractive prices The company is ranked 36th on the Fortune 500 as of

5 Growth objectives Appeal to a prime market Distinctive image Focus Customer service Multiple points of contact Employee relations Innovation Commitment to technology Community involvement Monitoring performance Activities undertaken by a retailer in conjunction with the basic goods and services it sells Store hours Parking Shopper-friendliness Credit acceptance Salespeople 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 Stay in touch with customers 5

6 The bottom line: Consumers will demand more for less from the shopping experience They will spend less time shopping They will split the commodity-shopping trip from the valueadded shopping trip Represents the total bundle of benefits offered to consumers through a channel of distribution Store location and parking, retailer ambience, customer service, brands/products carried, product quality, retailer s in-stock position, shipping, prices, image, and other elements Planning value with just a price perspective Providing value-enhanced services that customers do not want or will not pay extra for Competing in the wrong value/price segment Believing augmented elements alone create value Paying lip service to customer service Expected customer service is the service level that customers want to receive from any retailer, such as basic employee courtesy Augmented customer service includes the activities that enhance the shopping experience and give retailers a competitive advantage 6

7 Credit Delivery Installations Packaging/Gift wrapping Complaints/Return handling Baby-sitting Fitting rooms Restrooms Gift certificates Trial purchases Special sales Extended store hours Mail and phone orders Parking Shopping bags 7

8 Rented goods services Owned goods services Non-goods services Controllable Variables: Store location Managing business Merchandise management and pricing Communicating with customer Retail Strategy Uncontrollable Variables: Consumers Competition Technology Economic conditions Seasonality Legal restrictions 8