Chapter 1 Introduction to the world of retailing. Chapter 1 describes the role of retailing as a keystone to the Canadian economy, the functions retailers perform, and the variety of decisions they make to satisfy customers’ needs in the rapidly changing, highly competitive Canadian marketplace.
1-1 Chapter Introduction to the World of Retailing McGraw-Hill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc All rights reserved 1-3 The World of Retailing Introduction to Retailing Types of Retailers Multi-Channel Retailing Customer Buying Behavior 1-4 What is Retailing? • Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use A retailer is a business that sells products and/or services to consumers for personal or family use James Darell/Getty Images 1-5 The Distribution Channel 1-6 Examples of Retailers Retailers: Kohl’s, Macy’s, Wendy’s, Amazon.com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, Kroger Firms that are retailers and wholesalers that sell to other business as well as consumers: Office Depot, The Home Depot, United Airlines, Bank of America, Costco The McGraw-Hill Companies, Inc./John Flournoy, photographer The McGraw-Hill Companies, Inc./Andrew Resek, photographer 1-7 Manufacturing, Wholesaling and Retailing Vertical Integration – firm performs more than one set of activities Ex: retailer invests in wholesaling or manufacturing Backward Integration – retailer performs some distribution and manufacturing activities Ex: JCPenney sells Arizona jeans (Private Label) Forward Integration – manufacturers undertake retailing activities Ex: Ralph Lauren operates its own stores 1-8 How Retailers Add Value • Break Bulk -Buy it in quantities customers want • Hold Inventory -Buy it at a convenient place when you want it • Provide Assortment -Buy other products at the same time • Offer Services -See it before you buy, get credit, layaway Ryan McVay/Getty Images 1-9 How Retailers Add Value The value of the product and service ncreases as the retailer performs functions Bicycle can be bought on credit or put on layaway Bicycle is featured on floor display Bicycle is offered in convenient locations in quantities of one Bicycle is developed in several styles Bicycle is developed at manufacturer World’s Largest Retailers 110 Macy’s Retail Mix Customer Service Modest Location Merchandise Assortment Store Design and Display Pricing Communication Mix 135 Target’s Retail Mix Customer Service Location Merchandise Store Design and Display Retail Strategy Communication Mix Assortment Pricing 136 Target’s Retail Mix Location Strategy Free-standing Stores Customer Service Store Display Merchandise And Design Assortment Communication Mix Pricing 137 Target’s Retail Mix Assortment Strategy Customer Service Location Large Number of Categories Store Design and Display Private Labels Few Items in Each Category Communication Mix Pricing 138 Target’s Retail Mix Pricing Strategy Location Customer Service Merchandise Assortment Store Design and Display Communication Mix Low to Modest 139 Target’s Retail Mix Customer Service Communication Mix Location Store Design And Display Merchandise Assortment Pricing TV and Newspaper Insert Ads 140 Target’s Retail Mix Store Design and Display Customer Service Location Colorful, wide aisles displays Merchandise Assortments for products with a grid layout Communication Mix Pricing 141 Target’s Retail Mix Customer Service Limited Location Merchandise Assortment Store Design and Display Pricing Communication Mix 142 Ethical Situations for a Retail Manager 143 • Should a retailer sell merchandise that is suspects was made using child labor? • Should it advertise that its prices are lowest in area even though some items are not? • Should a buyer accept an expensive gift from a vendor? • Should salespeople use high-pressure sales when they know the product is not the best for the customer’s needs? • Should a retailer give preference to minorities when making a promotion decision? • Should a retailer treat some customers better than others? Checklist for Making Ethical Decisions 144 You are Faced with an Ethical Decision: What Can You Do? • Ignore your personal values and what your company asks you to – you will probably feel dissatisfied with your job • Take a stand and tell your employer what you think Work to change the policies • Refuse to compromise your principles – you could lose your job! 145 Career Opportunities in Retailing Start Your Own Business 146 ist of Retail Entrepreneurs on Forbes 400 Richest Americans • • • • • • • • • Walton Family (Wal-Mart) Fisher (The Gap) Wexner (limited) Menard (Menard’s) Marcus, Blank (The Home Depot) Kellogg (Kohl’s) Schulze (Best Buy) Levine (Family Dollar) Gold (99Cent Only) Misconceptions About Careers in Retailing • • • • • • • • • Don’t need college Low pay Long hours Boring Dead-end job No benefits Everyone is part-time Unstable environment No opportunity for women and minorities 147 The McGraw-Hill Companies, Inc./Andrew Resek, photographer 148 Why You Should Consider Retailing • Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job • Starting pay average with great benefits - Some retailers pay graduate school • No two days are alike • Buying and planning for financially analytically oriented • Management for people-people Types of Jobs in Retailing Most entry level jobs are in store management or buying, but there’s… -accounting and finance -real estate -human resource management -supply chain management -advertising -public affairs -information systems -loss prevention -visual merchandising 149 ... 21% of non-agricultural US workforce • Management training opportunities • Entrepreneurial opportunities Retailing is Big Part of Economy Manufacturing (11 .2%) 11 2 Retail ( 21. 8%) Government (16 .6%).. .Chapter Introduction to the World of Retailing McGraw-Hill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc All rights reserved 1- 3 The World of Retailing. .. McGraw-Hill Companies, Inc./Andrew Resek, photographer Human Resources 11 3 11 4 Nature of Retail Industry is Changing To Today’s Retailer Mom and Pop Store Retailing is a High Tech Industry 11 5 •