Retailing and Gross Margin Percentage

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1.Retailing is the final activity and steps needed to place a product in the hands of the consumer or to provide services to the consumer. All activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. 2.Retailing is undergoing so much change today because of e-tailing, store size, price competition, and demographic shifts. E-tailing is basically ordering from the internet and having those items delivered to your home. Store size plays a big role because as the stores increase in size, they often tend to have a scrambled merchandising strategy (when a retailer handles a number of different and unrelated items). Another part of the store size is category killer. When a retailer kills the competition by having a large amount of merchandise in a single category at really good prices that it makes it impossible for the customers to walk out without purchasing what they need, it is called a category killer. Price competition is self explanatory – a good example is Walmart because they try to beat out any competitors by having low prices. Some demographic shifts that are shaping retail are baby boomers retiring, Generation Xer’s starting to reach middle age, the importance of Generation Y consumers, and changes in the birth rate. Same store sales compares an individual store’s sales to its sales for the same month in the previous year and market share is the retailer’s total sales divided by total market sales. 3.Five methods used to categorize retailers are the Census Bureau, Number of Outlets, Margin versus Turnover, Location and Size. The number of outlets include chain stores, the standard stock list, the optimal stock list, channel captain, and private label branding. Margin versus turnover included gross margin percentage, gross margin, operating expenses, inventory turnover, high-performance retailers, low margin/low turnover, low margin/high turnover, high margin/low turnover, and high...
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