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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.