Retailing and Wholesaling

Retailing

• Activities involved in selling goods/services directly to consumers for personal use.
• Retailer: Business whose sales come primarily from retailing.

Shifting Retail Model

• Shopper marketing: Focus on turning shoppers into buyers at the point of sale.
• Omni-channel retailing: Seamless cross-channel buying experience (in-store, online, mobile).

Types of Retailers

• Classified by: amount of service, breadth/depth of product lines, relative prices, organization.
  • Self-service: Customers perform locate-compare-select.
  • Limited-service: Provide sales assistance.
  • Full-service: Assist in every shopping phase.

Major Store Retailer Types

• Specialty store: Narrow product line, deep assortment (e.g., apparel, sporting goods).
• Department store: Several product lines, separate departments (e.g., clothing, home furnishings).
• Supermarket: Large, low-cost, high-volume, self-service (groceries and household products).
• Convenience store: Small, near residential areas, limited line, high-turnover, higher prices.
• Superstore: Very large, meets total needs for food and non-food (e.g., Walmart Supercenter).
• Discount store: Standard merchandise, lower prices, lower margins, higher volumes.
• Off-price retailer: Sells merchandise at less than regular wholesale prices (e.g., factory outlets).

Major Types of Retail Organizations

• Corporate chain: Two or more commonly owned/controlled outlets.
• Voluntary chain: Wholesaler-sponsored group of independent retailers (group buying).
• Retailer cooperative: Independent retailers with central buying organization (joint promotion).
• Franchise organization: Contractual association between franchisor and franchisees.

Omni-Channel Retailing

• Blending in-store, online, mobile, and social media channels to research products and prices.
• Boundaries between in-store and online rapidly blurring.

Retailer Marketing Strategies

• Retail segmentation and targeting.
• Store differentiation and positioning.

Retail Marketing Mix

• Product and service assortment.
• Retail prices.
• Promotion.
• Distribution (location).

Segmentation, Targeting, Differentiation, and Positioning Decisions

• Define target markets.
• Decide how to differentiate and position in those markets.

Product Assortment and Services Decision

• Product assortment, services mix, store atmosphere.

Price Decision

• Price policy must fit target market, positioning, product/service assortment, competition, economic factors.
  • Everyday low pricing (EDLP).
  • High-low pricing: Higher prices daily with frequent sales.

Promotion Decision

• Use combinations of advertising, personal selling, sales promotion, public relations, direct/social media.

Place Decision

• Locations accessible to the target market, consistent with retailer’s positioning.
• Shopping center: Planned, developed, owned, managed group of retail businesses.

Types of Shopping Centers

• Regional, community, neighborhood, power, and lifestyle centers.

Retailing Trends and Developments

• Tighter consumer spending (impact of Great Recession).
• New retail forms, shorter life cycles, retail convergence.
• Rise of megaretailers.
• Growth of direct, online, mobile, and social media retailing.
• Growing importance of retail technology.
• Green retailing.
• Global expansion of major retailers.

Wholesaling

• Activities in selling goods/services to those buying for resale or business use.
• Wholesaler: Firm primarily engaged in wholesaling activities.

Channel Functions of Wholesalers

• Selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, management services.

Major Types of Wholesalers

• Merchant wholesalers: Independently owned, take title to merchandise.
  • Full-service: Full line of services (e.g., carrying stock, sales force, credit).
  • Limited-service: Fewer services (e.g., cash-and-carry, truck wholesalers, drop shippers).
• Brokers and agents: Do not take title; facilitate buying/selling for commission.
  • Brokers: Bring buyers/sellers together, assist in negotiation.
  • Agents: Represent buyers/sellers on a more permanent basis.
• Manufacturers’ and retailers’ branches and offices: Wholesaling operations by sellers/buyers themselves.

Trends in Wholesaling

• Need for greater efficiency, lower prices.
• Sorting out suppliers, blurring lines between retailers/wholesalers.
• Increased technology use to contain costs and boost productivity.