MT303
Unit 3
Welcome to MT- 303
Store Management Seminar
Dear Students,
The Seminar will start promptly at the
Schedule Time.
Remember that the system saves a transcript
of everything in the Chat, if you wish to talk
among yourselves you may do so, or you
may use the Private Chat Option.
Dr. Nardi
Welcome to MT- 303
Store Management
TYPES OF RETAILERS
Unit 3- Seminar
Professor: Dr. Nardi
Note: This seminar will be recorded
by the instructor.
Agenda
 Announcements
 Unit 2 – Review
 Unit 3 Topics


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
Trends in Retail
Types of Retailers
Non-retailers
Services
 Types of Ownership
 Unit 3 – Assignments
 Wrap Up
Announcements
 Good work your discussion posts and quizzes.
 Start working on your Research Papers
 Never to early…..
 Our Usual Reminder:
 Before a question please type ?? Or //
Unit 2
 How did it go?

Time management?

Questions : Grades

Review?


Getting familiar with it?
Project/Written assignment

Have you started doing research?


Have you approached a Store Manager?
Other questions? Concerns?
Review from Last Week
 What is retailing?
 Distribution
 Types
 Selective, Intensive, exclusive
 Supply Chain
 How retailers add value?
 Retail differences across the world.
 Ethical issues in retail
 Career opportunities in retail.
 Relationship Management
?
Any
Questions??
General Trends in Retailing
 New Types of Retailers
 Increased Concentration
 Globalization
 Growth In Services Retailer
 Demise of Pure Electronic Retailers (Webvan, eToys, etc)
 Growth in Use of Multi-Channel Retailing by Traditional Retailers
 Increase Use of Technology to Reduce Cost; Increase Value
Delivered
2-9
Types of Retailers
 Retailers Use Different Retail Mixes
-merchandise: variety (breadth) / assortment
(depth)
-services
-store design, visual merchandising
-location
-pricing
 Infinite Variations
 Some combination of retail mixes satisfy the
needs of significant segments and persist over
time.
2-10
Types of Merchandise Retailers
Food Retailers
Mom and Pop Stores
Convenience Stores
Supermarkets
Supercenters
General Merchandise Retailers
Department Stores
Specialty Stores
Discount Stores
Category Specialists
Off-Price Retailers
Warehouse Clubs
Value Retailers
2-11
NAICS Codes for Retailers
2-12
Merchandise Offering
Variety (breadth of merchandise): wide vs. narrow
- The number of merchandise categories
Assortment (depth of merchandise): deep vs. shallow
-the number of items in a category (SKUs)
2-13
Variety and Assortment of Kayaks
in Different Retail Outlets
2-14
Services offered
Retailers differ in the services
they offer customers
 EMS offers assistance in
selecting the appropriate
kayak and repairing them
VS
 Outdoorplay.com and
 Wal-Mart: doesn’t provide
any services
2-15
?
Any
Questions??
Prices and the cost of offering breath and
depth of merchandise and services
Stocking a deep and broad assortment (like EMS) is costly
for retailers.
Many SKUs
Because the retailer must have backup stock for each SKU
in addition to holding the inventory
Inventory Investment Cost
2-17
?
Any
Questions??
Food Food
Retailers
retailers
Channel preference for food shopping
channel where grocery purchasers do
most of their food shopping
■ Supermarkets
■ Supercenters
■ Warehouse
Clubs
■ Convenience
Stores
2-19
Supermarkets
 Conventional supermarkets
 30,000 SKU
 Limited assortment
supermarkets (extreme value
food retailers)
 2000 SKU
 Offer one or two brands and sizes
 Designed to maximize efficiency
and reduce costs
 Offer merchandise at 40-60% lower
prices than conventional
supermarkets
 Save-A-Lot, ALDI (German’s WalMart)
2-20
Trends
in Supermarket
Retailing
Trends
in Supermarket
retailing
Competition from Discount Stores
Efficient
Distribution
Lower Costs
Lower Prices
Changing Consumption Patterns
Time Pressure
Eating Out More
Meal Solutions
2-21
Conventional Supermarket
Survival Pack
 Emphasize Fresh Perishables
 Wegmans
 Target health conscious and ethnic
consumers
 Provide a better in-store experience
 Offer more private label brands
Chef-crafted meals on the go at EatZi’s
2-22
Supercenters and Warehouse
Clubs
Supercenters
 The fastest growing retail
category
 Large stores (150,000 –
220,000 square feet) that
combine a supermarket
with a full-line discount
store
 One-stop shopping
experience
Warehouse Clubs
■ Offer a limited and irregular
assortment of food and
general merchandise with
little service at low prices
■ Use low-locations,
inexpensive store design,
little customer service
■ Low inventory holding
costs by carrying a limited
assortment of fast selling
items
2-23
Convenience Store
 Tailors assortments to local market
 Makes more convenient to shop
 Offers fresh, healthy food
 Fast, casual restaurants
 Financial services available
 Opening smaller stores closer to consumers (like airports)
2-24
?
Any
Questions??
Types
General
Merchandise
Types
of of
General
Merchandise
Retailers
Retailers
 Department Stores
 Specialty Stores
 Category Specialists
 Home Improvement Centers
 Discount Stores
 Drugstores
 Off-Price retailers
 Extreme Value Retailers
2-26
IssuesininDepartment
DepartmentStore
Store
Issues
Retailing
Retailing
 Competition
-Discount Stores on Price
-Specialty Stores on Service, Depth
of Assortment
 Lower Cost by Reducing Services
(?)
-Centralized Cash Wraps
 More Sales (?)
-Customers Wait for Sale
 Focus on Apparel and Soft Home
 Develop Private Labels and
Exclusive Brands
2-27
Three Tiers of Department Stores
 First Tier: Upscale, high fashion chains
with exclusive designer merchandise
and excellent customer service
Nordstrom, Neiman Marcus, Saks
 Second Tier: Retailers sell more
modestly priced merchandise with
less customer service
Macy’s
 Third Tier: Value oriented caters to
more price conscious customer
JCPenney, Sears, Kohl’s
2-28
Department Stores:
What To Do With an Eroding Market
To deal with an eroding market
Department stores are:
 attempting to increase the
amount of exclusive
merchandise they sell
 undertaking marketing
campaigns to develop strong
images for their stores and
brands
2-29
Issues
in Discount
Store Retailing
Issues
in Discount
Store Retailing
■ Only Big Left
Wal-Mart, Target
■ Wal-Mart’s Dominance
■ Differentiate Strategy
Wal-Mart = Low Price and Good value
Target = More Fashionable Apparel
■ Competition from Category Specialists
Toys-R-Us, Circuit City, Sports Authority
2-30
Issues
IssuesininSpecialty
SpecialtyStore
StoreRetailing
Retailing
 Mall-Based Apparel Retailers
 Decline in Mall Shopping and
Apparel Sales
-Lack of New Fashions
-Less Interest in Fashion
-Increased Price Consciousness
 Lifestyle Formats –
Abercrombie and Fitch
Hot Topics
2-31
Specialty Store Retailers
McGraw-Hill Companies, Inc./Andrew Resek, Photographer
2-32
Issues
IssuesininDrug
DrugStore
StoreRetailing
Retailing
 Consolidation – Walgreens,
CVS, Rite-Aid
 Competition from
Supermarkets, discount Stores
and mail-in orders
 Evolution to a New Format
-Stand Alone Sites with Drive Thru
Windows
-offering more frequent purchase
food items
 Improved systems provide
personalized service in the
pharmacy
2-33
Category
CategorySpecialists
Specialists
 Deep and Narrow
Assortments
Destination Stores
 Category killers
 Low Price and
Service
 Wholesaling to
Business Customers
and Retailing to
Consumers
Bass Pro Shops
 Incredible Growth
2-34
Category Specialists
Sephora,
France’s leading perfume/cosmetic chain
LVMH’s division
2-35
Category Specialists:
Home Improvement Centers
Home Depot and Lowes act as both:
Retailer
Consumer
and
Wholesaler
Business
2-36
Home Improvement Centers
 Displayed in a warehouse
atmosphere
 Customer Service: How to select and
how to use merchandise
 Competition focuses on price, effort
to differentiate and services provided
2-37
Issues
IssuesininExtreme
ExtremeValue
ValueRetailing
Retailing
 Focuses on Lower Income Consumers
 Names mostly imply good value not $1 price points
 Low Cost Location
 Limited Services
 One of the Fastest Growing Retail Segments
Dollar Tree
Family Dollar
Dollar General
99 Cents Only Store
?
Any
Questions??
Off-Price Retailers
 Close-out retailers
 Offer an inconsistent assortment of brand name
merchandise at low prices
TJX companies (T.J. Maxx, Marshalls. HomeGoods)
Ross Stores, Burlington Coat factory, Big Lots, Tuesday Morning
2-40
Types of Non-store Retailers
2-41
Electronic Retailing
 Many retailers operate from virtual storefronts on the
World Wide Web, usually maintaining little or no
inventory, ordering directly from vendors to fill
customer orders
 History of frenzied investments and false predictions
of retail dominance
 Primarily used by traditional retailers to compliment
store and catalog offerings
 Exclusive e-tailers target small and dispersed niche
markets
2-42
What are Amazon and eBay?
 http://www.Amazon.com – Merchandise to consumers. Provides
website development and fulfillment services to other retailers
 eBay – Acts as a mall or other shopping center providing a
“place” for buyers and sellers to meet
Don Farrall/Getty Images
2-43
Issues
Issuesin
inCatalog
CatalogRetailing
Retailing
 Low Start Up Cost
 Evolution of Multi-Channel Offering
 Hard to compete with large well established firms
 Increasing Mail Costs
 Clutter from other Catalogs
 Specialty Catalogs like Victoria Secret
 General merchandise catalogs like JC Penney
2-44
Issues in Direct Selling
 Completely bypasses retailers and wholesalers
 Manufacturers set up their own channels to sell their
products directly to consumers
 Party plan system: merchandise is
demonstrated in a party atmosphere
 Multi-level network: Master distributors sell to
distributors who sell merchandise
 Pyramid schemes: Firm sells to other distributors
and little if any merchandise goes to end users
2-45
Issues in Television Home
Shopping
 Consumers watch cable stations, infomercials
or direct response ads
 Few consumers watch regularly
 Most purchases made by small proportion of
viewers
 Customers can’t examine merchandise
 Customers must wait for merchandise to come
on
 Sells predominately jewelry, apparel, cosmetics,
kitchenware, and exercise equipment
2-46
Issues in Vending Machine
Retailing
 Automatic Merchandising
 About $25 billion worth of convenience goods are sold to Americans
through 4.7 million vending machines
 Sales growth has been declining due to higher prices and healthier
eating habits
 New technology may help sales growth
 Trend of placing machines in captive consumer locations
2-47
?
Any
Questions??
Services
Servicesvs.
vs.Merchandise
MerchandiseRetailers
Retailers
■ Intangibility
Problems in Evaluating Service Quality
Performance of Service Provider
■ Simultaneous Production and Delivery
Importance of Service Provider
■ Perishability
No Inventory, Must Fill Capacity
■ Inconsistency of the Offering
Importance of HR Management
2-49
Characteristics of
Service Retailing
Intangibility
•No patent protection possible
•Difficult to display/communicate service benefits
•Service prices difficult to set
•Quality judgment is subjective
•Some services involve performances/experiences
Characteristics of
Service Retailing
Inseparability
•Consumer may be involved in service production
•Centralized mass production difficult
•Consumer loyalty may rest with employees
Characteristics of
Service Retailing
Perishability
•Services cannot be inventoried
•Effects of seasonality can be severe
•Planning employee schedules can be complex
Characteristics of
Service Retailing
Variability
•Standardization and quality control hard to achieve
•Services may be delivered in locations
beyond control of management
•Customers may perceive variability
even when it does not actually occur
Examples of Service Retailers
Type of Service
Service Retail Firms
Airlines
American, Delta, British Airways, Singapore Airways
Automobile maint/repair
Jiffy Lube, Midas, AAMCO
Automobile rental
Hertz, Avis, Budget, Alamo
Banks
Citibank, NCNB, Bank of America
Child care centers
Kindercare, Gymboree
Credit cards
American Express, VISA, Mastercard
Education
University of Florida, Babson College
Entertainment parks Disney, Universal Studios, Six Flags
Express package delivery
Federal Express, UPS, US Postal Service
Financial services
Merrill Lynch, Dean Witter
Fitness
Jazzercise, Bally’s, Gold’s Gym
Health Care
Humana, HCA
Home maintenance
Chemlawn, MiniMaid, Roto-Rooter
2-54
Examples of Service Retailers
Type of Service
Service Retail Firms
Hotels and motels
Hyatt, Sheraton, Marriott, Days Inn
Income tax preparation
H & R Block
Insurance
Allstate, State Farm
Internet access/Elec info.
American On-Line, CompuServe
Movie theaters
AMC, Loews/Sony, Universal
Real estate
Century 21, Coldwell Banker
Restaurants
TGI Friday’s, Wendy’s, Pizza Hut
Truck rentals
U-Haul, Ryder
Weight loss
Weight Watchers, Jenny Craig
Video rental
Blockbuster, Hollywood Video
Vision centers
Lenscrafter, Pearle
2-55
Consumer Perceptions of
Service Retailing
Lessons in
Service Retailing
?
Any
Questions??
Merchandise/Service Continuum
2-59
?
Any
Questions??
Types of Retail Ownership
 Independent, Single Store
Establishments
 Wholesale-sponsored voluntary
group
 Corporate Retail Chains
 Franchises
2-61
Retailers Using Franchise Business Model
2-62
?
Any
Questions??
Unit 3
Assignments
?
Any
Questions??
Wrap Up
 Discussion: Remember 1 Answer AND at least 2 Peer to Peer
Comments per Question. Answer ALL Questions. Post on Three
(3) separate days – First post by Saturday.
 Remember you have assignments due this week.
 Due on Tuesday by 11:59 PM E.T. Late? Let me know BEFORE!
 Pending Assignments?
 Get them to me ASAP – contact me for instructions on how to
make them up or follow my instructions if I already contacted
your.
 Last day for Unit 1 assignments- Tuesday of Unit 3
Contact
 you can contact me
through my email: nnardi@kaplan.edu ,
through AOL Instant Messaging
my AOL IM name is nknardi,
(put me on your buddy list)
Office Hours or through the “Instructor’s Office” link under the
Course Home page
?
Any
Questions??
Thanks
 Thank you for Attending!!!!
 See you in the Discussion Thread Questions and in Next
Week’s Seminar
Next Week – Unit 4
Multi-Channel Retailing