Marketing exam #3

Retailing

all of the business activities involved in the sales of goods and services to an end consumer for their personal, family, or household use

• Value creation

• Focus on the customer

Value Creation

Great retailers don’t just move product — they create value through assortment, convenience, price, service, and experience. That’s the retailer’s job

Types of Retailers

• Department Stores

• Specialty Retailers

• Discount and Value

• Warehouse Clubs

• Convenience Stores and Grocery

• E-Commerce

• Dark Stores and Ghost Retail

• Experimental

Department Stores

merchandise outlets that carry a wide variety of product lines, with each line operated as a separate department and managed by specialist merchandisers and buyers

• Broad product range in departments. Struggling with relevance — Macy's closed 150+ locations 2024–26. Nordstrom and luxury segments surviving via experience.

Specialty Retailers

Focused assortment, deep expertise

• Nike, Lululemon, Apple thriving. Experiential differentiation is the key differentiator from Amazon.

Discount and Value

Dollar General (20,000+ locations), Five Below, Aldi. Value-seeking is now structural across ALL income levels — not just low income. (Deloitte 2026)

Warehouse Clubs

merchandise outlets that operate in warehouse-like facilities that offer merchandise in bulk quantities, at ultra-low prices, to shoppers who pay an annual fee to join

Convenience Stores and Grocery

Kroger, Whole Foods, 7-Eleven. AI-driven inventory and dynamic pricing. Ultra-fast delivery from dark store models (15-min standard emerging)

E-Commerce

Amazon (37.6% of US e-commerce), Shein, Temu. Chinese platforms now dominate 40% of cross-border purchases globally.

Dark Stores and Ghost Retail

Gopuff, DoorDash DashMart. Fulfillment-only locations. 3,400+ US locations. No customer foot traffic — pure last-mile efficiency plays.

Experimental

Nike House of Innovation, Lululemon community hubs, Samsung 837 NY. Traffic generation AND brand building — not just transactions.

Discount Stores

general merchandise outlets that offer brand-name and private-label products at low prices

Specialty Discount Stores

general merchandise outlets that offer a wide selection of merchandise within a single category

• ex. Dick’s Sporting Goods and Bed Bath and Beyond

Specialty Store

a store that concentrates on selling one line of goods and services and carries a narrow, but deep merchandise assortment

Convenience Stores

small, self-service stores that are open long hours and carry a limited number of frequently purchased items

Full-Line Discount Store

general merchandise outlets that carry a wide assortment of merchandise across popular categories

• ex. Walmart and Target

Isolated Store

a freestanding retail outlet located on either a highway or major road

Off-Price Retail Stores

stores that feature brand-name (sometimes designer) merchandise bought at less-than-regular wholesale prices and sold at less-than-retail prices

Single Channel to Unified Commerce 1990s-Now

• Single Channel (1990s-2005)

• Multi-Channel (2005-2015)

• Omnichannel (2015-2020)

• Unified Commerce (2020-Now)

Single Channel

Physical store only. One touchpoint, full control.

• 1990s - 2005

Multi-Channel

Store + website, but separate systems, separate inventory.

• 2005 - 2015

Omnichannel

Connected channels, shared customer profiles, BOPIS.

• 2015 - 2020

Unified Commerce

One platform, real-time inventory, AI-personalized across every touchpoint.

• 2020 - Now

Omnichannel Retailing

the retailing practice of integrating customer experiences across the physical and online channels

Future Changes in Retailing / Social Commerce

• AI in retailing

• Agentic AI

• Autonomous Checkout

• AI Shopping Agents

• Buy Online, Pay in Store

• Mobile First

• Returns Culture

• Personalization

BOPIS

Buy Online, Pick up In Store

The Future of Retail — What’s Coming in 2026 - 2030

• AI Becomes Infrastructure

  • AI will manage 80% of customer interactions by 2030. Agentic AI will autonomously execute purchasing, returns, and service. The question isn't whether to adopt — it's how fast

• Retail Media Matures

  • By 2030, retail media will surpass traditional TV advertising spend. Every major retailer will operate an ad network. First-party data is the new oil

• Physical Stores Evolve

  • Stores that survive become fulfillment hubs, experience centers, and community spaces. Footprint shrinks; productivity per sq ft rises. 55M retail jobs evolving, not disappearing

• Social Commerce Sales

  • US livestream e-commerce hits $68B by 2026 and $300B+ by 2030. TikTok Shop's trajectory mirrors what Instagram did to brand advertising in 2012

• Sustainability as Standard

  • Circular economy crosses $300B by 2030. Product-as-a-service models emerge. Brands that ignore this lose Gen Z permanently

• Hyper-Personalization

  • Real-time, millisecond personalization across every touchpoint. Price, product, content and promotions dynamically adjusted per individual. The 'store of one' becomes reality

Social Commerce — Where Discovery Becomes Purchase

• TikTok Shop

  • $23.4B in US sales projected 2026 — larger than Target or Costco's e-commerce. 80.4M American users (67% of US TikTok audience) shopping the platform

• Instagram

  • 187M checkout users. Gen Z shops Instagram (53%) and TikTok (41%). Creator partnerships averaging 23% commission — performance-based brand building

• Facebook/Meta

  • Millennials primary channel (49%). Marketplace + Shop integration. Live selling growing rapidly in Southeast Asia markets

• YouTube

  • Shopping integrations from live streams. Tutorial-to-purchase journey. Beauty and tech categories highest conversion

• Pinterest

  • High purchase intent. 80% of users discover new products. Average order value higher than other social platforms.

AI in Retail — The $18.6 Billion Transformation

• Predictive Inventory

  • AI reduces demand forecasting errors 20–50%

  • Prevents stockouts & overstock simultaneously

  • Real-time replenishment triggers

  • Saves millions in carrying cost annually

• Personalization Engine

  • Companies using AI earn 40% more revenue

  • Product recs boost sales up to 59%

  • Basket size lifts 20–25% with dynamic content

  • Delivered within 50 milliseconds at scale

• Computer Vision

  • Cashierless checkout (Amazon, Walmart, Kroger)

  • Theft/shrink reduction — 23% avg decrease

  • 60+ fps shelf monitoring for out-of-stocks

  • 63% of APAC shoppers would use vision checkout

• Generative AI

  • AI chatbots handle 78% of first-contact queries

  • Auto-generated product descriptions at scale

  • Virtual try-on: 34% of fashion retailers live

  • AI search drives 15–20% of major retailer

• Dynamic Pricing

  • Real-time price optimization across SKUs

  • Fashion/FMCG brands now deploying engines

  • Competitive intelligence scanning in real time

  • Balances margin and conversion

• Agentic AI

  • 47% of retail/CPG companies deploying agents

  • Autonomous reasoning & task execution

  • From pilots to full production in early 2026

  • End-to-end from inventory to customer service

Agentic AI

AI that can independently make decisions and take actions to achieve a goal with minimal human input

Autonomous Checkout

a system that lets customers take items and leave a store without stopping to pay, with technology automatically tracking purchases and charging them.

• Amazon, Walmart, Kroger — cashierless expanding

AI Shopping Agents

AI tools that can search for products, compare options, and even make purchases on your behalf based on your preferences and goals

• ‘Shop for me' — personalized autonomous purchasing

Mobile First

60% of global e-commerce via mobile. 70% of US mobile shoppers prefer apps over mobile web. Mobile is the new storefront.

Returns Culture

$850B in US merchandise returned annually. 19.3% online return rate. Returns logistics is now a major strategic challenge.

Hyper-Personalization

using data and AI to tailor marketing messages, products, and experiences to each individual customer in real time