BUS 450: Types of Retailing

Variety

(i.e., breadth) is the number of merchandise categories a retailer offers

Assortment

(i.e., depth) is the number of different items offered in a merchandise category

Stock keeping unit (SKU)

Each different item

Food Retailers

1. Supermarkets

2. Supercenters

3. Warehouse clubs

4. Convenience stores

5. Online grocery stores

General merchandise retailers

1. Department stores

2. Full-line discount stores

3. Category specialists

4. Specialty stores

5. Drugstores

6. Extreme-value retailers

Independent, single-store establishments

Owner-managed, entrepreneurial activity is extensive

Corporate retail chains

Operates multiple retail units under common ownership and usually has a centralized decision making for defining and implementing strategies.

Franchising

Contractual agreement where the franchisor (the company) sells the rights to use its business trademark, service mark, or trade name, or another commercial symbol of the company, to the franchise for a one-time franchise fee and ongoing royalty fee

Omnichannel Retailing

Integration of multiple channels (in-store and online) to provide customers with a seamless and holistic shopping experience

Challenges with Omnichannel Integrated systems

• Poor quality cross-channel integration

• Inconsistent brand image across channels

• Channel switching behavior (Webrooming and showrooming behavior)

Search-Purchase behavior

Consumer tend to:

• Search for products online

• Purchase product in-store

Channel Switching

• Channels that consumers are using to switch and purchase products

• Channel switching is dangerous for retailers because:

  • Loss of control over customer journey

  • Free riding problem (showrooming; webrooming)

  • Weaker customer loyalty → weaker channel stickiness