Retail marketing Ch 1-5

Two most important retail principles

-the five rights
-sell the most in the least amount of inventory

The five rights

-right product
-right price
-right time
-right place
-right quantity

do most sales happen in-store or online?

-in-store

Retail

a set of business activities that adds value to products and services sold to consumers for their personal or family use

retailer and examples

the business that sells the product (restaurants, doctors, travel, airlines, amazon, clothes, big stores like Walmart, etc.)

wholesaler

sells to a business/retailer for resale

example of a store that is both a retailer and a wholesaler

Lowe's

Supply chain

a set of firms make and deliver goods/services to the final consumer

Vertical integration and example

a firm performs more than one set of activities in the channel (manufacturers that want to sell directly to consumers, or a manufacturer that wants to buy its own raw materials)

Backward integration and example

retail performs some distribution and manufacturing activities (amazon created a new line of private-label home furnishings)

Forward integration and example

manufacturers undertake retailing activities, anything ahead of where you are in the supply chain (Amazon hires internal employees to deliver packages to customers)

How retailers add value (4)

-provide assortment of products (one place for all shopping)
-break bulk (retailers have min quantities
-hold inventory (basically have it available anytime)
-offer services (Von Maur free alterations, offering water while shopping)

The retail environment includes (2)

-macroenvironment
-microenvironment (competitors, customers)

Competition strategies (5

-direct
-indirect
-intratype
-intertype
-variety

Direct vs indirect strategy and examples

-same customer, product, price (Ulta and Sephora)
-something's different (Ulta and Amazon

Intratype vs intertype and examples

-primary competition and same store classification (Macy's and Dillards are both department stores
-different store classification (RagStock and Macy's)

Variety strategy and example

scrambled merchandising (Aldi home section)
-adds competition with multiple types of stores

Customer strategy includes (2)

-who is the target market
-significant demographic and lifestyle trends

A retail strategy should do 3 things

-identify target market
-meet their needs through the retail mix
-have a long-term, sustainable advantage strategy

Retail mix

-personnel
-presentation
-product
-promotion
-price
-place

Which of the following is NOT part of the five rights of retail?
a. quantity
b. price
c. place
d. quality

d. quality

The majority of all retail sales happen online.
True or False

False

Which of the following is not part of the retail mix:
a. product
b. quantity
c. price
d. location

b. quantity

Sam's Club carries a line of private label goods called Member's Mark. This is an example of:
a. backward integration
b. forward integration
c. horizontal integration
d. none of these

a. backward integration

Which of the following is NOT part of a retailer's strategy:
a. location
b. a sustainable, competitive advantage
c. retail mix
d. target market

a. location

How to classify retailers (5 classifications)

-variety and assortment
-services offered
-pricing
-ownership
-store type

Breadth (variety)

the number of merchandise carried
-wide vs narrow

Example of
wide
narrow

-Sam's Club
-Gucci store

Depth (assortment)

the number of items in a category
-deep vs. shallow
-lots of SKU's

SKU

sizes, colors, etc

examples of
deep
shallow

Walmart - more choices for each product
Aldi- less choices for each product

Breadth and depth example

Target has a wider assortment of everything, but if I want electronics specifically, Best Buy has a deeper selection

Services are _________
Great service =

expensive
higher markup for products

Two types of supermarkets (food retailer)

conventional supermarkets vs. limited assortment

Example of conventional vs limited assortment supermarkets and typical SKU count for each

conventional - Hy-Vee, 30,000 SKU's
limited assortment - Aldi, 1,500 SKU's

Why do supermarkets face intense competition

other stores might have increased space for food

Supermarkets are offering (5)

-online
-ready-to-eat/meal kits
-private label
-improved shopping experience
-gourmet/specialty food items

Supercenters (food retailers)

larger stores, one-stop shops

Examples for supercenters

Walmart and target ONLY when they have a full grocery section

Warehouse clubs (5) (food retailers)

-limited and irregular merch assortment
-limited service
-low prices
-low inventory holding cost cause low markup and fast-selling items
-pallet shelving

Warehouse Clubs example

Costco and Sam's Club

Convenience stores (food retail)

buy now - eat now

Example of convenience stores

Kwik Trip, 7/11

Online grocery (food retailer)

-all online
-delivery/instacart

Hard goods
Soft goods

-electronics, furniture
-clothes, accessories

Department stores (merch retailers)

-broad assortment, can be deep
-offers services

Why are department stores not doing great right now?

-broad target market
-focus on apparel and home

What are department stores doing in response to not doing great rn?

-things are constantly on sale
-closing stores
-using more private labels
-trying to form partnerships

Three tiers of department stores and examples

1-specialty (Nordstrom, Bloomingdales)
2-moderate prices (Macy's, Dillards)
3-value-oriented (Kohl's, JC Penny)

Full-line discount store (merch retailer)

-broad variety
-low prices
-limited service

Full-line discount store example

Walmart and target if they are not a "super" center

Specialty store (merch retailer)

-more depth, less breadth
-faster
-private labels/branded
-more specific market segments

example of specialty stores

Brandy Melville, Famous Footwear

Issues with specialty stores

-fast fashion
-decline in mall shopping
-fluctuating apparel sale
-growth in other forms of competition
-lifestyle formats

Category killers (merch retailer)

like a specialty store, but way bigger

Example of category killer

Ikea, Lowe's, Ulta

Extreme value retailer (merch retail)

-lower-income customer
-good value
-limited service
-low-cost location

Examples of extreme value retailers

dollar store, five below, Popshelf

Off-price retailer (merch retailer)

-inconsistent assortment of brand name merch at lower prices
-closeouts: end of season merch that needs to go
-irregulars: merch with slight mistakes
-basically you never know what you are going to get

Examples of off-price retailer

TJ Maxx, Homegoods, Marshalls

Outlet (merch retailer)

-manufacturer and retailer outlets

example of an outlet

Nike outlet store in a strip mall

Example of drugstores (merch retailer)

CVS and Walgreens

4 pillars of service retailers

-intangibility
-perishability (can't be stores)
-inconsistency of offering
-simultaneous production and consumption (quality control)

3 types of retailer ownership

-independent, owned by one person
-corporate retail chains
-franchises

Dollar General carries many different types of items (food, personal care, gift) but doesn't offer many different choices in any given category. Their assortment would be described as:

a. wide and deep
b. wide and shallow
c. narrow and deep
d. narrow and shallow

b. wide and shallow

Warehouse clubs have all of the following characteristics EXCEPT:

a. low prices
b. low inventory holding costs
c. limited and irregular merchandise assortment
d. low visibility locations

d. low visibility locations

Dollar General is classified as a:

a. full-line discount store
b. extreme value retailer
c. off price store
d. specialty store

b. extreme value retailer

Service retailers like hotels and airlines have to match supply and demand because services can't be stored. This is referred to as:

a. intangibility
b. inconsistency
c. supply and demand
d. perishability

d. perishability

Amazon hires internal employees to deliver packages to customers. This is an example of:

a. horizontal integration
b. backward integration
c. forward integration
d. wholesaling

c. forward integration

Amazon created a new line of private label home furnishings. This is an example of:

a. horizontal integration
b. backward integration
c. forward integration
d. wholesaling

b. backward integration

Walgreens is open 24 hours a day so that sick customers can buy medicine when they need it, at any time. How is Walgreens adding value?

a. offering services
b. holding inventory
c. breaking bulk
d. providing assortment

b. holding inventory

Walmart and Target are both full line discount stores. What type of competition do they have:

a. intratype
b. intertype
c. scrambled
d. none of these

a. intratype

Which of the following is NOT part of the retail mix:

a. product
b. quantity
c. location
d. presentation

b. quantity

Which best describes the assortment of Discount Tire (a store selling only tires and tire accessories)

a. broad and deep
b. narrow and deep
c. broad and shallow
d. narrow and shallow

b. narrow and deep

What type of store is Walmart?

a. traditional supermarket
b. off-price retailer
c. warehouse club
d. full-line discounter

d. full-line discounter

What type of store is Aldi?

a. traditional supermarket
b. off-price retailer
c. limited assortment supermarket
d. convenience store

c. limited assortment supermarket

Dollar tree store type

a. extreme value retailer
b. off-price retailer
c. limited assortment supermarket
d. outlet

a. extreme value retailer

Altar'd state store type

a. department store
b. specialty store
c. category killer
d. manufacturer's outlet

b. specialty store

Lowe's store type

a. department store
b. specialty store
c. category killer
d. warehouse club

c. category killer

JC Penny store type

a. department store
b. specialty store
c. category killer
d. full-line discounter

a. department store

TJ Maxx store type

a. extreme value retailer
b. off-price retailer
c. full-line discounter
d. outlet

b. off-price retailer

BreakTime

a. extreme value retailer
b. convenience store
c. limited assortment store
d. full-line discounter

b. convenience store

Schnucks store type

a. traditional supermarket
c. off-price retailer
c. limited assortment supermarket
d. convenience store

a. traditional supermarket

A consumer orders McDonalds on an app and picks it up at the counter. What type of purchase is this

a. omnichannel
b. multichannel
c. cross-channel
d. just online

c. cross-channel

Which of the following is a medium?

a. a retailer's app
b. a retailer's store
c. a retailer's website
d. a retailer's YouTube page

d. a retailer's YouTube page

A retail medium is used to communicate information to a customer and allows them to purchase goods or services.

true or false

false- communication yes, but purchases no

Showrooming is when a customer looks at an item online and then purchases it in a physical store.

True or false

false- other way around

Retailers use multiple channels to interact with customers for all of the following reasons EXCEPT:

a. customers that shop in more channels spend more time in stores
b. customers that shop in more channels spend more money
c. customers want the benefits that come with each channel
d. they can collect data to personalize customer experiences

a. customers that shop in more channels spend more time in stores

Which of the following is NOT a benefit customers receive for shopping in-store:

a. social experience
b. lower risk
c. immediate gratification
d. broader selection

d. broader selection

Which of the following is NOT a benefit customers receive from shopping online?

a. expanded market preference
b. personalization
c. broader selection
d. reduced risk

d. reduced risk

Channel definition

the formats for selling (store, online, app)

Issues with online retail (4)

-risk
-data privacy
-no touch/feel aspect
-delivery problems

M-commerce (5)

-shop from anywhere, anytime
-location based offers
-one tap purchasing
-push notifications
-camera integration for visual search and AR

cross-channel

-customers use multiple channels in one purchase journey

multichannel

-multiple independent channels operating separately without integration
-maximizing sales through non-connected channels

omnichannel

coordinated, seamless, synchronized customer experience across all touchpoints
-providing customers smooth shopping experience through connected channels

Pros of in-store channels (8)

-feel of products
-personal service
-reduce risk
-immediate gratification
-social experience
-browsing
-cash payment
-experiential retail

pros of internet channels (5)

-deeper and broader selection
-more info
-personalization
-expanded market
-info to improve shopping experience

Showrooming steps (3)

1. customer visit physical store to examine products
2. use mobile device to compare prices online while in store
3. purchases from competitors online at lower price