Textile & Apparel Management 4

Retailing (Definition)
Business activities that involve the sale of goods and services to the ultimate (final) consumer for personal, family, or household use.
– final channel of distribution
Fiber
Fabric
Apparel
Retail
Consumer
Retailing (Characteristics)
average sale is a small amount. Many unplanned purchases. A need to tightly control costs. Important to bring customer to the store location. Inventory management is a problem
Cross Shopping (Retail Trends & Strategies)
Willingness to shop at many different stores
Over stored (Retail Trends & Strategies)
Too much retail. Over capacity
Entertainment (Retail Trends & Strategies)
Retailers do different things to try to engage customers ( Scents, lighting, music, other activities that go on to make it a more entertaining enviorment)
Globalization (Retail Trends & Strategies)
The process whereby the economies by nations states become integrated
Electronic Retailing (Retail Trends & Strategies)
Company that offers goods and/or services over the internet or uses the internet in addition to it’s stores and/or catalog retailing business
Nonstore Retailing (Retail Trends & Strategies)
Distributer of products to consumers per means other than brinks-and-mortar retail stores
Quick response (Retail Trends & Strategies)
Comprehensive business strategy that promotes responsiveness to consumer demand, encourages business partnerships, and shortens the business cycle from raw materials to consumer
Good vs. Service (Classifications of Retail Stores)
Service-Actitivies or satisfactions which are offered for sale are provided in the connection with the sale of goods
Store vs. Nonstore (Classifications of Retail Stores)
– Direct Selling
– Vending Machine
– Direct marketing
– Electronic
-Ownership
– Elements of the retail mix
Independent Store (Classification of retail stores by ownership)
Retailer owns only one retail unit chain
Chain (Classification of retail stores by ownership)
Multiple retail units under one common ownership that utilize centeralized purchasings and decision making
Franchise (Classification of retail stores by ownership)
Contractual arrangement which allows the franchisee to conduct a given form of business under an establishment and according to a given pattern of business
Leased Department (Classification of retail stores by ownership)
A department and a retail store that is rented out to an outside party
– pays the store a percent of sales as rent
Vertical Company (Classification of retail stores by ownership)
Channel member performs more than one step in the production and distribution process
Consumer Cooperative (Classification of retail stores by ownership)
Retail establishment characterized by consumer ownership
– don’t see this much in apparel but more in food
Product (Elements of the retail mix [ and retail terms])
Width & Depth
Qualitiy
Place (Elements of the retail mix [ and retail terms])
Isolated Location
Centeral Business district
Malls
Price (Elements of the retail mix [ and retail terms])
Penetration
Competitive
Prestige
Promotion (Elements of the retail mix)
Advertising
Publicity
Personal Selling
Sales Promotion
Speciality Store (Classification of retail store types based on elements of the retail mix)
Concentrates on selling one line of goods or services
Narrow & deep assortment
Tailor their strategy to selective market segments
Department Store (Classification of retail store types based on elements of the retail mix)
Large retail institution that carries a variety of merchandise & is organized by departments
Discount Store (Classification of retail store types based on elements of the retail mix)
– Retail enterprises offering low prices, self-service, & Spartan facilities
– Organized by departments
– Contemporary discount department stores
– Suburban area
– Pleasing décor
– Wider aisles
– Mass merchandiser
– Outlets presenting a discount image
– Handle at least 3 different merchandise lines
– Have at least 10,000 sq. ft. of floor space
Hypermarket Superstore (Classification of retail store types based on elements of the retail mix)
Huge general merchandise retail outlet that combines:
Discount store
Supermarket
Drugstore
Furniture & appliances
Automotive
Buying Club/Warehouse Store (Classification of retail store types based on elements of the retail mix)
Membership warehouse club
Combination of wholesaling & retailing
Nominal annual fee
Large store facility
100,000 square feet or more
Inexpensive location
Opportunistic buying
1/10 of the items stocked by full line discount stores
Large quantities
Category Killer (Classification of retail store types based on elements of the retail mix)
A type of specialty store that has:
Enormous selection
Relatively low prices
Attracts customers from a wide geographic area
Off-Price chain(Classification of retail store types based on elements of the retail mix)
Offer popular, name brand merchandise at prices lower than department stores & specialty stores
Focus on specific product lines
Factory Outlet (Classification of retail store types based on elements of the retail mix)
Manufactured owned store selling that manufacturer’s:
Close outs
Canceled orders
Discontinued merchandise
Irregulars
1st quality merchandise
Trading area (Location)
geographic area from which a store draws its customers
Primary Trading Area (Location)
the geographic area where the retailer can serve customers, in terms of convenience and accessibility, better than the competition

50-80%

Secondary Trading Area (Location)
the geographic area where the retailer can still be competitive despite a competitor having some locational advantage

additional 15-20%

Fringe Trading Area (Location)
all remaining customers
Destination Store (Location)
magnet for consumers
Parasite Store (Location)
No traffic of its own
Understored (Trading area)
An area with too few stores; large number of consumers per square foot store space
Overstored (TA)
So many stores that the retailer can;t earn a profit. number of square foot of retailing space per person is HIGH
Saturated Trading Area
JUST THE RIGHT AMOUNT
Isolated Store
a freestanding retail outlet located on either a highway or a street
There are no adjacent retailers with which this type of store shares traffic
Unplanned business district
a type of retail location where two or more stores situate together (or in close proximity) in such a way that the total arrangement or mix of stores in not due to prior long-range planning
Central business district
the hub of retailing in a city. it is synonymous with the term “downtown”
Secondary business district
an unplanned shopping area in a city or town that is usually bounded by the intersection of two major streets
Neighborhood business district
an unplanned shipping area that appeals to the convenience shopping and service needs of a single residential area
String
an unplanned shopping area comprising of group retail stores, often with similar or compatible product lines, located along a street or highway
Planned shopping center/balanced tenancy
consists of a group of architecturally unified commercial establishments on a site that is centrally owned or managed, designed and operated as a unit, based on balanced tenancy, and accompanied by parking facilities
regional mall, mega mall
a type of regional center that is an enormous planned shopping center with 1 million+ square feet of retail space, multiple anchor stores, up to several hundred specialty stores, food courts, and entertainment facilities
Community shopping center
a moderate-sized shopping facility with a branch department store (traditional or discount) and/or a category killer store, as well as several smaller stores (similar to those in a neighborhood center)
sells both convenience and shopping goods
Neighborhood shopping center
a planned shopping facility, with the largest store being a supermarket or a drugstore
sells mostly convenience items
MARKUP
c + MU = R
MU = R-C
C = R +MU
IMU% (R)
R – C / R x 100
IMU% (C)
R – C/C x 100
KEYSTONE (Retail)
R = C/(1-MU%)
KEYSTONE (Cost)
C = R(1-MU%)
Advertising (Lusch, Dunne, Gebhardt)
any paid for of nonpersonal presentation & promotion of ideas, goods and services, by an identified sponsor
Publicity (L, D, G)
nonperson stimulation of demand for a store or product by “planting commercially significant news about it” that is not paid for by the sponsored
Personal Selling (L, D, G)
an oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales
Sales Promotion (L, D, G)
those marketing activities other than advertising, personal selling & publicity that stimulate dealer effectiveness