UNIT C
THE BUSINESS OF
FASHION
3.03 Identify the types of
fashion retailers.
Main types of retailers
Retailers can be classified into 1 of 2 categories, based on the
merchandise the store carries.
1. General merchandisers
2. Specialized merchandisers
General merchandisers
•Carry & market many types of
goods in several price ranges
•May be a rural general store or a
huge mass merchandiser
Sears Product Mix:
Appliances
Fashion
Tools
Automotive & Tires
Beauty & Health
Baby
Books
Jewelry
Fitness & Sports
Lawn & Garden
Outdoor Living
Specialized merchandisers
•Narrower lines of related merchandise
•Target a more distinct group of
customers
•Market certain categories of goods to
particular age groups, sizes, and
consumer tastes and preferences
•Examples: Victoria’s Secret,
Footlocker, Lane Bryant
Even though retailers can
be categorized as either
general or specialized
merchandisers, they can be
further classified by specific
types:
Department store retailing
• Large-scale mass merchandisers
• Usually carry a wide range of sizes
• Carry household goods
• “Departmentalized” by category/sizes of goods being sold
• Each department may have separate salespeople and
payment areas.
• Generally known for high quality, fashion, and customer
service
• Usually offer credit and return or exchange privileges
•Examples:
Department store retailing (cont.)
• Offer numerous customer services such as gift wrap,
layaway, and restaurant(s)
• Sell to many income levels, but generally target middle to
upper income customers
• High operating expenses due to number of employees and
customer services
• Advertise heavily
• Large buying and sales volume
Types of department stores
1. Branch stores
2. Flagship stores
3. Junior department stores
4. Chain stores
Branch stores
Small retail stores owned and operated by
a parent store.
•May be located in suburbs or other urban
areas
•Receive merchandise and operation
instructions from the original store (or
flagship store)
Flagship stores
“Parent” or main stores originally located
in a central business district
(New York City is the home office for all the Macy’s branch
stores throughout the country).
•Responsible for merchandising and
promotion for entire operation
•Can make merchandise available to branch
stores on short notice
•Some flagship stores have closed and
moved administrative offices to other
locations.
Junior department stores
Small department stores with
limited assortments of apparel,
housewares, gifts, and household
textiles.
•Moderately priced merchandise
•Small, locally owned
•Low sales volume makes it difficult
for these stores to compete.
Chain stores
A group of stores (usually 12 or more) owned,
managed, merchandised, and controlled by a central
office.
• All stores carry similar goods at similar prices.
• Prices in chain stores are often lower than
department stores.
• Private label merchandise (Example: Kenmore for
Sears)
• Decisions made at central headquarters
• Merchandise can be produced to the chain’s
specifications
• Chains can be general or specialized
• May serve as anchor stores
Anchor stores: The attractions that draw
customers to shopping centers and malls.
Discount store retailing
Discount stores: Mass merchandisers
that sell at lower-than-average prices.
• Located in large, no-frills
facilities in high traffic
areas
• Offer minimal customer
services
• Merchandise is paid for at
checkout counters located
near store exits.
•High sales volume, shown
strongest growth in market
share
•Fashion followers
•Many retailers are making
an effort to offer more
current fashions.
•Most discounters are
chains.
Discount store retailing (cont.)
•Extended operating hours
•Many imports from low-wage countries
•Appeal to customers with modest clothing
budgets
Other Types of Discount Stores
1. Off-price discounters
2. Factory outlets
Off-price discounters
Retailers that sell brand name or designer
merchandise at lower-than-normal prices.
•High fashion goods at moderate
prices
•Changing and unstable collection
of merchandise
•Buy merchandise at belowwholesale prices
•Labels may be cut out to protect
merchandise sold in upscale
shops
Off-price discounters (cont.)
•Do not place advance orders
•Make low-cost special purchases during
the season when other stores are planning
for the next season
•Stock consists of production overruns,
end-of-season goods, closeouts, and
irregulars.
Factory outlets
Discount stores that are
manufacturer owned and
operated
•Sell only merchandise
produced by the company
•Products sold include
overruns, canceled orders,
and discontinued items.
•May be located in factory
malls
Wholesale Warehouse Clubs
• Specialize in bulk sales of a limited selection of nationally
branded staple merchandise
• Offer almost no services, no shopping bags, no home
delivery, limited payment options
• Most charge an annual membership fee
• Merchandise is bought with volume discount and stacked
high in packing cartons
• Almost no advertising or promotion is done
Hypermarkets
• Huge “supercenters”
• Function as a combination grocery and
discount store
• Target time-stressed consumers who want
to do all of their shopping in 1 place
• The concept, which started in Europe, also
features a very high volume of sales at low
prices
Specialty store retailing
Specialty stores: Retailers that sell limited
classifications of merchandise. Ex: maternity
shops, shoe stores, bridal boutiques, children’s
apparel, accessory shops
•Low sales volume
•High prices
•Offer unusual
merchandise, more
personalized service,
convenience, and
ambience
•Known for a certain level
of design or quality of
merchandise
Many specialty stores
are now franchise stores
or national chains with
well-known retail names.
Boutiques
Franchise stores
Retail establishments in which a firm
or an individual buys the right to use a
famous or established name or
trademark in a specified trading area.
Franchise stores (cont.)
•Often located in exclusive
shopping areas of major
cities or boutique areas
within large department
stores
•The designer or
manufacturer does not have
direct ownership of the
franchise and does not help
run the business. They only
supply goods to the retailer.
Boutiques
Small, stand-alone shops or
areas within larger stores that
sell unusual, limited quantity
apparel, accessories, or
decorative items.
Boutiques (cont.)
•High level of customer
service
•Fashion-forward
merchandise
•Target special-interest
customers
•Unique images
•New, artistic, and
handmade items
Nonstore retailing
Selling without a conventional store
facility.
•Mail-order retailing
•Telecommunication retailing
•In-home selling
*Nonstore retailing developed for the convenience of
the consumer.
Mail-order retailing
Selling merchandise through
catalogs distributed to
customers.
•Customers select items by
looking at pictures and
reading product
descriptions.
•An alternative for customers
who prefer to shop from the
comfort of their home or
cannot go out to shop
•Orders are placed by mail,
toll-free calls, computer.
Mail-order retailing (cont.)
•Merchandise is usually paid for by credit card and
shipped directly to consumer.
•Extended order-taking hours
•May offer a full line of items or specialize in a single
line of merchandise
•Many retail department stores and chains offer
catalog shopping.
•Many mail-order houses also have retail stores.
•Customers usually pay high shipping and handling
fees.
Telecommunication retailing
Selling merchandise using
communication devices.
1. Television retailing
2. Computer (Internet)
retailing
Television retailing
•Television channels are used to
show and describe merchandise.
•Many celebrities sell signature
lines of merchandise.
•Consumers can control what they
view.
•Orders are placed by telephone or
online at the company website.
•Used to introduce and test the
market for new products
•Reaches a national audience
Computer (Internet) retailing
•Electronic retailing or “e-tailing”
•Combines computer and telephone
technologies with marketing and
merchandising
•Shoppers view merchandise on computer
monitors and order through a modem
connection.
•Allows customers to view “electronic
catalogs”
•Allows for comparison shopping
In-home selling
•Selling outside of a retail store
•Used to sell cosmetics, jewelry,
clothing lines, and other
merchandise through selling
parties or door-to-door sales
•Merchandise is often high quality
and unusual in design.
•Prices may be high.