chapter 2

Consignment shop

________ A store that sells used merchandise and reimburses the individual customers who provide the items only after they sell.

movement

Locavore ________ focusing on reducing the carbon footprint caused by the transportation of food throughout the world.

contractual agreement

Franchising A(n) ________ between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor.

soft goods merchandise

In ________, an SKU usually means a size, color, and style.

Variety

________ (breadth)- Assortment (depth) ________ and assortment also apply to a specific merchandise category rather than entire store- Stock- keeping unit (SKU) Retailer Characteristics 3 of 6 Services Offered- Certain services expected Displaying merchandise Accepting credit cards Providing parking Retailer Characteristics 4 of 6 Retailers differ in the services they offer customers- Wheelworks offers assistance in selecting the appropriate bicycle as well as bicycle repairs.

Closeout

________ An offer at a reduced price to sell a group of slow- moving or incomplete stock.

Warehouse

________ club A retailer that offers a limited assortment of food and general merchandise with little service and low prices to ultimate consumers and small businesses.

Wholesale

________- sponsored voluntary cooperative group An organization operated by a(n) ________ offering a merchandising program to small, independent retailers on a voluntary basis.

North American Industry Classification System

________ (NAICS) Classification of retail firms into a hierarchical set of six- digit codes based on the types of products and services they produce and sell.

Retail chain

________ A firm that consists of multiple retail units under common ownership and usually has some centralization of decision making in defining and implementing its strategy.

Department store

________ A retailer that carries a wide variety and deep assortment, offers considerable customer services, and is organized into separate departments for displaying merchandise.

Category

________ killer A discount retailer that offers a narrow but deep assortment of merchandise in a(n) ________ and thus dominates the ________ from the customers perspective.

© Holger Burmeister/Alamy Stock Photo Retailer Characteristics 5 of 6 Amazon offers the largest variety and assortment of any U.S. retailer © franky242/Alamy Stock Photo Retailer Characteristics 6 of 6 Prices and Cost of Offering Breadth and Depth of Merchandise and Services

Stocking a deep and broad assortment (like Wheelworks) is costly for retailers

- Many SKUs Retailer must have backup stock for each SKU This leads to a rise in inventory investment cost

Broader variety, deeper assortment requires retailer to charge higher prices to make a profit

-Concentrate on limited number of complementary merchandise categories -Deep but narrow variety -Sales associate expertise -Among most-profitable and fastest-growing firms -Growing specialty store sector Resale stores Thrift stores Consignment shops General Merchandise Retailers 6 of 8 Drugstores -Concentrate on health and beauty care -Competition from pharmacies, some food retailers, pressure to reduce costs Offer wider assortment of merchandise Offer more services with drive-through windows, curbside pick-up, in-store clinics General Merchandise Retailers 7 of 8 Extreme-Value Retailers -Dollar stores -Broad variety, but shallow assortment -Target low-income consumers © Daniel Acker/Bloomberg/Getty Images General Merchandise Retailers 8 of 8 Off-Price Retailers -Inconsistent assortment of brand-name merchandise -Significant price discounts

20% to 60% lower than suggested retail price -Closeouts -Irregulars -Outlet stores -Factory outlets -Flash sale sites Service Retailing 1 of 2 Learning Objective 2-4 Explain the differences between service and merchandise retailers

Appendix of Image Long Descriptions Appendix 1 EXHIBIT 2-1 NAICS Codes for Retailers Twelve NAICS codes for merchandise sellers are listed

441 motor vehicle and parts dealers; 442 furniture and home furnishing stores; 443 electronics and appliance stores; 444 buildings material and garden equipment and supplies dealers; 445 food and beverage stores; 446 health and personal care stores; 447 gasoline stations; 448 clothing and clothing accessories stores; 451 sporting goods, hobby, book, and music stores; 452 general merchandise stores; 453 miscellaneous store retailers; 454 nonstore retailers

Return to original slide Appendix 2 Service Retailing 1 of 2 Business are listed as follows from left to right

wholesale club, supermarket, category specialist, specialty/department store, optical center, restaurant, airline, bank/university