Retailing-consists of the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer or to provide services to the consumer. Last step in supply chain.
Trends that affect Retailing today:
* E-tailing- ie. The Internet accounts for less than 5% of retail sales but has changed consumer behavior. (speed, convenience, control, vast info, lowest prices)
hasn’t destroyed …
*Bricks-and-Mortar retailers – Retailers that operate out of a physical building.’ but B & M retailers must give customers more control to combat E-tailing.
Outshopping-when customers get needed info (such as proper size or how to assemble a product) in the store and then orders it online for a lower price and to avoid paying sales tax.
* Price Competition
Loss Leader-selling a product at or below its cost
Bottom Line-net profit on an income statement
*Same-Store sales-compares an individual store’s sales to its sales for the same month in the previous year.
*Market Share-the retailer’s total sales divided by total market sales
*Scrambled Merchandising- exists when a retailer handles many different and unrelated items. The result of the pressure being placed on many retailers to increase profits by carrying additional merchandise or services (with higher profit margins) that will also increase store traffic ex. Convenience store that sells low margin gasoline but high margin bread, milk, beer, ciggs ETC. Supercenters, gift cards in grocery stores but causes cost increases in RENT, INVENTORY COSTS, LABOR COSTs
*Category Killer-a retailer that carries such a large amount of merchandise in a single category at such good prices that it makes it impossible for customers to walk out without purchasing that they need, thus KILLING the competition
Census Bureau- NAICS code
Number of outlets- Chain? Or not?
*Standard Stock list-a merchandising method in which all stores in a retail chain stock the same merchandise *Optional Stock List approach-merchandising method in which each store in a retail chain is given the flexibility to adjust its merchandise mix to local tastes and demands. *Channel Advisor or Captain-the institution (manufacturer, wholesaler, broker, or retailer) in the marketing channel that is able to plan for and get other channel institutions to engage in activities they might not otherwise engage in. Large store retailers are often able to perform the role of channel captain. *Private Label Branding- May be store branding, when a retailer develops its own brand name and contracts with a manufacturer to produce the product with the retailer’s brand, or designer lines, where a known designer develops a line exclusively for the retailer.
Gross margin percentage- measure of profitability GROSS MARGIN/NETSALES Gross Margin-NET SALES – COST OF GOODS SOLD
Operating Expenses-expenses that a retailer incurs in running the business other than the cost of merchandise Inventory Turnover- refers to the number of times per year, on average, that a retailer sells its inventory. High Performance retailers-retailers that produce financial results substantially superior to the industry average. Low margin/low turnover-operates on a low gross margin percentage and a low rate of inventory turnover… will not be able to generate sufficient profits to remain competitive and survive. High Margin/Low turnover-(bricks and mortar) high gross margin percentage and low rate of inventory turnover ( high end stores, mom and pop) Clicks and Mortar-instore and online
Low margin High turnover- low gmp, high rate of inventory turnover (wal mart, amazon.com) High, High- convenience stores, 7 eleven, circle k,
Location- new non traditional places.
*Store management- the retailing career path that involves responsibility for selecting, training, and evaluating personnel, as well as instore promotions, displays, customer service,...