CHAPTER 12
RETAILING STRATEGY
DEFINITION OF RETAILER
Sells majority of sales to consumers
RETAILING STRATEGY
• Current Types of Retailers
• Retail Revenue Streams
• Retail Cost Efficiencies
• Concentrated Niches
CURRENT TYPES OF RETAILERS
• Retail stores only
• Online retailers only
• Retail stores and online retailers
RETAIL STORE INNOVATIONS
Industry
Period
Innovation
Department Store
1880’s
Urban Growth
Supermarket
1930’s
Depression
Discounter
1950’s
Affluence
Specialty Market
1980’s
Breakup of Markets
DEPARTMENT STORES
• Broad product lines
• Lots of services
• High markups
DEPARTMENT STORE EXAMPLES
• Neiman Marcus
• Dillard’s
• Nordstrom
SUPERMARKETS
• Primarily food products
• Expanded into non-food products
• Extensive self-service
HOUSTON SUPERMARKETS
• Kroger
• HEB
• Whole Foods
• Trader Joe’s
DISCOUNT STORES
• Compete on price
• Volume-oriented
• Limited assortment sizes
DISCOUNT STORE EXAMPLES
• Walmart
• Costco
• Target
• Sam’s
SPECIALTY RETAILERS
• Focus on a specific customer market
• Stock products in depth
SPECIALTY RETAILERS EXAMPLES
• Best Buy
• Container Store
• Office Depot
• Ikea
CHANGES IN OFFICE SUPPLY
RETAILING
Neighborhood Office Supply
Office Depot
Amazon.com
Time
iPad
ONLINE RETAILERS ONLY
Selling on-line
ONLINE RETAILING EXAMPLES
• Warby Parker eyewear
• Threadless
• Blinds.com
• Blue Nile
• Fanatic, Inc
AFFILIATES OF BLINDS.COM
• Interior design companies
• Custom home builders
• Home carpet companies
ONLINE JEWELRER
(Blue Nile)
Make the sale
Collect the money
Buy diamonds from
wholesaler
Drop ship from wholesaler
to customer
RETAIL STORES AND
ONLINE RETAILERS
• Bonobos and Nordstrom
• True Fit and Macy’s
U.S. WEB SALES IN 2012
Amazon
$61 Billion
Wal-Mart
$8 Billion
RETAIL REVENUE STREAMS
• Sale of product
• Credit add-on
• Service add-on
• Warranty add-on
• Trade-in
RETAIL COST EFFICIENCIES
Activities
Cost Savings
Self-Service
Reduces sales staff
Supply Chains
Reduces logistic costs
Internet Selling
Reduces channel costs
CONCENTRATED RETAIL NICHES
• Charming Charlie
• Men’s Wearhouse
• Hot Mama
• Buc-ee’s
RETAILING TRENDS
Small Retailers
Large Retailers
Retail Store Orders
Internet Retail Orders
Internet Retail Orders
Buyers
(More
Control)
Sellers
(Less
Control)
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