RETAILING
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase
Types of retail outlets
A marketplace is a
location where goods and services are exchanged. The traditional market
square is a city square where
traders set up stalls and buyers browse the merchandise. This kind of market is
very old, and countless such markets are still in operation around the whole
world.
In some
parts of the world, the retail business is still dominated by small family-run
stores, but this market is increasingly being taken over by large retail
chains.
Retail is
usually classified by type of products as follows:
- Food
products
- Hard
goods or durable goods ("hardline retailers") - appliances,
electronics, furniture, sporting goods, etc. Goods that do not quickly
wear out and provide utility over time.
- Soft
goods or consumables - clothing, apparel, and other fabrics. Goods that
are consumed after one use or have a limited period (typically under three
years) in which you may use them.
There are
the following types of retailers by marketing strategy:
- Department
stores - very large stores offering a huge
assortment of "soft" and "hard goods; often bear a
resemblance to a collection of specialty stores. A retailer of such store
carries variety of categories and has broad assortment at average price.
They offer considerable customer service.
- Discount
stores - tend to offer a wide array of products and
services, but they compete mainly on price offers extensive assortment of
merchandise at affordable and cut-rate prices. Normally retailers sell
less fashion-oriented brands.
- Warehouse
stores - warehouses that offer low-cost, often
high-quantity goods piled on pallets or steel shelves; warehouse
clubs charge a membership fee;
- Variety
stores - these offer extremely low-cost goods, with
limited selection;
- Demographic
- retailers that aim at one particular segment (e.g., high-end retailers
focusing on wealthy individuals).
- Mom-And-Pop :
is a retail outlet that is owned and operated by individuals. The range of
products are very selective and few in numbers. These stores are seen in
local community often are family-run businesses. The square feet area of
the store depends on the store holder.
- Specialty
stores: A typical speciality store gives attention
to a particular category and provides high level of service to the
customers. A pet store that specializes in selling dog food would be
regarded as a specialty store. However, branded stores also come under
this format. For example if a customer visits a Reebok or Gap store then
they find just Reebok and Gap products in the respective stores.
- General
store - a rural store that supplies the main needs
for the local community;
- Convenience
stores: is essentially found in residential areas.
They provide limited amount of merchandise at more than average prices
with a speedy checkout. This store is ideal for emergency and immediate
purchases as it often works with extended hours, stocking everyday;
- Hypermarkets:
provides variety and huge volumes of exclusive merchandise at low margins.
The operating cost is comparatively less than other retail formats.
- Supermarkets: is
a self-service store consisting mainly of grocery and limited products on
non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing.
The supermarkets can be anywhere between 20,000 and 40,000 square feet
(3,700 m2). Example: SPAR supermarket.
- Malls:
has a range of retail shops at a single outlet. They endow with products,
food and entertainment under a roof.
- Category
killers or Category Specialist: By supplying wide
assortment in a single category for lower prices a retailer can
"kill" that category for other retailers. For few categories,
such as electronics, the products are displayed at the centre of the store
and sales person will be available to address customer queries and give suggestions
when required. Other retail format stores are forced to reduce the prices
if a category specialist retail store is present in the vicinity.
- E-tailers:
The customer can shop and order through internet and the merchandise are
dropped at the customer's doorstep. Here the retailers use drop shipping
technique. They accept the payment for the product but the customer
receives the product directly from the manufacturer or a wholesaler. This
format is ideal for customers who do not want to travel to retail stores
and are interested in home shopping. However it is important for the
customer to be wary about defective products and non secure credit card
transaction. Example: Amazon, Pennyful and eBay.
- Vending
Machines: This is an automated piece of equipment
wherein customers can drop the money in the machine and acquire the
products.
Some
stores take a no frills
approach, while others are "mid-range" or "high end",
depending on what income level they target.
Other
types of retail store include:
- Automated
Retail stores are self-service, robotic kiosks
located in airports, malls and grocery stores. The stores accept credit
cards and are usually open 24/7. Examples include ZoomShops and
Redbox.
- Big-box
stores encompass larger department, discount,
general merchandise, and warehouse stores.
Retailers
can opt for a format as each provides different retail mix to its customers
based on their customer demographics, lifestyle and purchase behaviour. A good
format will lend a hand to display products well and entice the target
customers to spawn sales.
Global Top Five Retailers
|
Retail Sales Rank
|
Company
|
Country of Origin
|
2010 group revenue (US $mil)
|
|
1
|
US
|
$421,849
|
|
|
2
|
France
|
$121,519
|
|
|
3
|
UK
|
$94,244
|
|
|
4
|
Germany
|
$89,311
|
|
|
5
|
US
|
$82,189
|
|
Operations
Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer's cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon who the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths, students, or senior citizens..
Staffing
Because patronage at a retail outlet varies flexibility in scheduling is desirable. Employee scheduling software is sold which, using known patterns of customer patronage, more or less reliably predicts the need for staffing for various functions at times of the year, day of the month or week, and time of day. Usually needs vary widely. Conforming staff utilization to staffing needs requires a flexible workforce which is available when needed but does not have to be paid when they are not, part-time workers; as of 2012 70% of retail workers in the United States were part-time. This may result in financial problems for the workers, who while they are required to be available at all times if their work hours are to be maximized, may not have sufficient income to meet their family and other obligations.[3]Transfer mechanisms
There are several ways in which consumers can receive goods from a retailer:- Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries like India.[which?]
- Delivery, where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744 and was common in the late 19th and early 20th centuries. Ordering by telephone is now common, either from a catalog, newspaper, television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, including telemarketing and television shopping channels, are also used to generate telephone orders. started gaining significant market share in developed countries in the 2000s.
- Door-to-door sales, where the salesperson sometimes travels with the goods for sale.
- Self-service, where goods may be handled and examined prior to purchase
Source: Wikipedia.
