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The Importance of Retailing Chapter 14, Shopper solution: retail display…
The Importance of Retailing
Chapter 14
Retailing
: All activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use
Statistics1
Creates 4.8m jobs annually
Generated $1.14t value-added GDP (sale price – cost of production) in 2017 ($212b automotive; $167b grocery)
Contributes $2.2t to manufacturing industry
Support $1.15t wholesaling industry
Holiday shopping = about 20% of annual sales
Online shopping expected to reach $523b by 2020
Fluctuations based on consumer confidence
Retail spending higher than previous years, but decreasing month-to-month2
Changes in consumer preferences creating challenges & opportunities3
81% of shoppers use mobile devices to find & select retailers
94% of shoppers need to see inventory online before selecting a retailer
82% of shoppers won’t select a retailer with fewer than three review stars
Types of Retailers and Retail Operations
Retail establishments
can be classified based on:
Ownership arrangement
Independent
: owned by individual or group (e.g., partners); not part of a retail network (a)
98.6% of all retailers have 50 or fewer employees4
Chain
: group of stores owned by an organization (e.g., corporation) (b)
Franchise
: franchisee pays for rights to operate under franchisor’s brand name and business model (c)
Level of service
Product assortment
Price
Gross Margin
(sale price – cost of good)
Executing a Retail Marketing Strategy
The Retailing Mix
2. Place
- Location and Hours
1. Product
- width and depth of product assortment
4. Price
3. Promotion
- Advertising, Publicity, PR
5. Presentation
- layout and atmosphere
Influential factors in creating a store’s atmosphere
Employee type and density
Merchandise type and density
Fixture type and density
Sound, odors, and visual factors
Layout of the store7
6. Personnel
= customer service and personal selling
Retail selling techniques:
Trading up
—Persuading customers to buy a higher-priced item than they originally intended to buy
Suggestion selling
—Seeking to broaden customers’ original purchases with related items
Retailing Decisions for Services
Services
: intangible processes (can include tangible product consumption) that fulfil a customer need, including:
Banking
Dining
Travel/Tourism
Service distribution focuses on:
1. Minimizing wait times
Popeye’s Union Square opens 30 minutes late
2. Managing service capacity
Customers realized mobile ordering was an option and avoided lines
3. Improving service delivery
Only one cashier for the first 30 minutes of service
4. Establishing channel-wide network coherence
Making sure customer experiences are similar and optimized across locations
Popeye’s customer: “woefully underprepared”
Chicken Sandwich Chaos!8
Shopper solution: retail display of related products that fulfill a particular shopper need
