CH 2- Retail Marketing

Three Pillars of Retail Success

To be successful, a retailer’s experience should be Different( unique products), Compelling (intriguing methods), or High in Value (saving money)

The Retailing Concept

A foundational guide for management decisions based on four principles: Customer Orientation, Coordinated Efforts, Value Driven, and Goal Orientation

Principle 1:Customer Orientation

Focusing specifically on the wants and needs of a target customer segment rather than the general public

Example: Canada Goose (Customer Orientation)

Uses sub-zero dressing rooms (10-20 below zero) so luxury shoppers can test $2,000 jackets in their intended environment

Principle 2: Coordinated Efforts

Integrating all plans and activities across a firm to maximize efficiency and manage costs

Saks Fifth Avenue( Coordinated Efforts)

An organized strategy to move excess inventory from flagship stores to Saks Off 5th and then to Gilt( e-commerce) to maintain prestige

Goal Orientation

Using specific strategic goals to move away from just offering “channels” and toward understanding shopper modes

Total Retail Experience

Everything that either encourages or inhibits a customer when interacting with a retailer

Encouraging Factors ( The “Good”)

Customer service, loyalty programs, Retailtainment (games/experiences), community clubs( ex. hiking clubs), and personalization

Inhibiting Factors ( The “Bad”)

Poor signage, long lines, bad parking, and even the “aura” created by other customers (“People of Walmart”)

Value(Channel Perspective)

Value is seen as the “Value Chain”— the series of activities and processes a firm performs to provide value for consumers.

Value(Customer Perspective)

A subjective perception of all benefits received from a purchase versus the price paid

The Value Equation

Value= Results +Process Quality​ ÷ Price + Customer Access Costs

Value Component: Results

Tangible benefits like product quality, ease of assembly, taste, health benefits, and warranties.

Value Component: Process Quality

Positive experience factors like wide aisles, items being in-stock, short wait times, and a fun environment.

Value Component: Price

The financial costs, including the item price, delivery fees, assembly charges, and credit fees.

Value Component: Customer Access Costs

Non-monetary "pains" like membership fees, inconvenient locations, poor store hours, or inadequate parking.

Social Mode

Shopping as a social activity with friends; the experience is the priority, and a transaction may or may not occur.

Discovery Mode

The shopper has a need in mind but isn't sure where to go; focus is on learning about and physically touching the product.