MKTG300 CH14 KT

Retailing

Retailing

All activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use

Retailer

A channel intermediary that sells mainly to consumers

• The millions of goods a services provided by retailers mirror the diverse needs, wants, and trends of modern society

• The best retailers actually lead the way by anticipating change and developing new and exciting ways to interact with customers

In the United States, the retail industry:

• Generates 6 percent of gross domestic product (GDP), which equates to $3.9 trillion

• Consists of more than 1.8 million different retail entities and supports 52 million jobs, equal to about one in every four American jobs

• Is made up predominantly of small businesses but is dominated by a small number of large companies

Independent Retailer

A retailer owned by a single person or partnership and not operated as part of a larger retail institution

Chain store

A store that is part of a group of the same stores owned and operated by a single organization

Franchise

A relationship in which the business rights to operate and sell a product are granted by the franchisor to the franchise

Franchisor

The originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product

Franchisee

An individual or business that is granted the right to sell another party’s product

Gross Margin

The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted

Department Store

A store housing several departments under one roof

Specialty Store

A retail store specializing in a given type of merchandise

Supermarket

A large, departmentalized, self-service retailer that specializes in food and some nonfood items

Drugstore

A retail store that stocks pharmacy-related products and services as its main draw

Convenience Store

A miniatore supermarket, carrying only a limited line of high-turnover convenience goods

Discount Store

A retailer that competes on the basis of low prices, high turnover, and high volume

Full-line Discount Store

A discount store that carries a vast depth and breadth of product within a single product category

Supercenter

A large retailer that stocks and sells a wide variety of merchandise including groceries, clothing, household goods, and other general merchandise

Specialty Discount Store

A retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover

Category Killer

A large discount store that specializes in a single line of merchandise and becomes the dominant retailer in its category

Warehouse Club

A large, no-frills retailer that sells bulk quantities of merchandise to customers at volume discount prices in exchange for a periodic membership fee

Off-Price Retailer

A retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesn’t ask for return privileges

Factory Outlet

An off-price retailer that is owned and operated by a manufacturer

Used Goods Retailer

A retailer whereby items purchased from one of the other types of retailers are resold to different customers

Restaurant

A retailer that provides both tangible products— food and drink— and valuable services— food preparation and presentation

Non-Store Retailing

Shopping without visiting a store

Automatic Vending (Non-Store)

The use of machines to offer goods for sale

Self-Service Technologies (SST) (Non-Store)

Technological interfaces that allow customers to provide themselves with products and/or services without the intervention of a service employee

Direct Retailing (Non-Store)

The selling of products by representatives who work door to door, office to office, or at home sales parties

Direct Marketing (DM) (Non-Store)

Techniques used to get consumers to make a purchase from their home, office, or other non-retail setting

Telemarketing (Non-Store)

The use of the telephone to sell directly to consumers

Direct Mail (Non-Store)

The delivery of advertising or marketing material to recipients of postal or electronic mail

Microtargeting (Non-Store)

The use of direct marketing techniques that employ highly detailed data analytics to identify potential consumers with great precision

Shop-at-Home Television Network (Non-Store)

A specialized form of direct response marketing whereby television shows display merchandise, with the retail price, to home viewers

E-tailing/Online Retailing (Non-Store)

A type of shopping available to consumers via access to the internet

Sharing Economy (Non-Store)

The way connected consumers exchange goods and services with each other through a digital marketplace

Floor Stock

Inventory displayed for sale to customers

Back Stock

Inventory held in reserve for potential future sale in a retailer’s storeroom or stockroom

Retailing Mix

A combination of the six Ps— product, promotion, place, price, presentation, and personnel— to sell goods and services to the ultimate consumer

Brand Cannibalization

The reduction of sales for one brand as the result of the introduction of a new product or promotion of a current product by another brand

Destination Store

A store that consumers purposely plan to visit prior to shopping

Atmosphere

The overall impression conveyed by a store’s physical layout, decor, and surroundings

Layout

The internal design and configuration of a store’s fixtures and products

The most influential factors in creating a store’s atmosphere are:

• Employee type and density

• Merchandise type and density

• Fixture type and density

• Sound

• Odors

• Visual Factors (colors and lighting)

Shopper Marketing

Understanding how one’s target consumers behave as shoppers, in different channels and formats, and leveraging this intelligence to generate sales or other positive outcomes

• Shopper marketing brings brand managers and account managers together to connect with consumers along the entire path to purchase

Shopper Analytics

Searching for and discovering meaningful patterns in shopper data for the purpose of fine-tuning, developing, or changing market offerings

Big Data Analytics

The process of discovering patterns in large data sets for the purposes of extracting knowledge and understanding human behavior

Beacon

A device that sends out connecting signals to customers’ smartphones and tablets to bring them into a retail store or improve their shopping experience

Retail Channel Omnification

The reduction of multiple retail channel systems into a single, unified system for the purpose of creating efficiencies or saving costs

Click-and-Collect

The practice of buying something online and then traveling to a physical store location to take delivery of the merchandise