Chapter 2
Types of Retailers

Variety and Assortment
Variety is the number of merchandise categories a retailer offers. (“Breadth of merchandise”)
Assortment is the number of different items in a merchandise category (“Depth of Merchandise”)

SKU
Each different item of merchandise is called an SKU (stockkeeping unit)

Services Offered by Retailers displaying merchandise accepting credit cards parking convenient hours home delivery gift wrap selection assistance warranties

Food Retailers
Conventional Supermarket
Limited Assortment Supermarket
Supercenter
Warehouse Club
Convenience Store

Conventional Supermarket a self-service food store offering groceries, meat and produce with limited sale of non-food items about 30,000 SKUs

Limited-Assortment
Supermarkets
Only about 1250 SKUs
Only 1-2 brands and sizes
40-60% lower prices

Supercenters a supermarket combined with a full-line discount store
100,000-150,000 SKUs

Warehouse Clubs offer a limited and irregular assortment of food and general merchandise with little service at low prices

Convenience Stores provide a limited variety and assortment of merchandise
2000-3000 SKUs

Full-Line Discount Stores
Specialty Stores
Drugstores
Category Specialists (and Category
Killers)
Extreme Value Retailers
Off-Price Retailers (Outlet
Stores/Factory Outlets)
El

Department Stores
Retailers that carry a broad variety and deep assortment offer customer service organize their stores into distinct departments

Full-Line Discount Stores retailers that offer a broad variety of merchandise, limited service and low prices

Specialty Stores concentrate on a limited number of complementary merchandise categories provide a high level of service in relatively small stores deep but narrow assortments and sales associate expertise

Drugstore specialty stores that concentrate on health and personal grooming merchandise

Category Specialists big box discount stores that offer a narrow but deep assortment of merchandise can be ‘category killers’

Extreme Value retailers small, full-line discount stores (Dollar
Tree)

Off-Price Retailers an inconsistent assortment of brand name merchandise at low prices close outs/irregulars outlets stores/factory outlets

Non-store Retailing
Electronic Retailing
Catalog Retailing
Direct mail Retailers
Direct Selling
Television Home Shopping
Vending Machine Retailing

Electronic Retailing
Electronic Retailing (online) is a retailing format in which the retailers communicate with customers and offer products and services for sale over the internet.

Catalogue Retailing the retail offering is communicated to a customer through a catalogue

Direct-Mail Retailers communicate to customers using letters and brochures

customers directly in a convenient location, demonstrate merchandise benefits, take orders, deliver the merchandise or perform the service
Party-plan system - salespeople encourage customers to act as hosts and invite friends and coworkers
Multilevel network - people serve as master distributers, recruiting other people to become distributers of their network

Television Home Shopping a retail format in which customers watch a television program that demonstrates merchandise and place orders - usually by telephone
3 Types - dedicated cable channels, infomercials and direct response advertising

Vending machine retailing merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card

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Service Retailers
Firms that primarily sell services rather than merchandise.
Services are generally intangible
Services have simultaneous production and consumption (service providers create and deliver the service as the consumer is using/consuming it)
Services are perishable or time-sensitive
Services can be inconsistent

Types of Ownership
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Independent, Single-Store Establishments
Corporate Retail Chains
Franchises