all of the activities involved in reselling goods to final consumers, but it
does not include the sale of services to final consumers since services must
be produced in the presence of the consumer.
In the U.S. about
three-fourths of new retailing ventures fail during the first year.
A consumer’s choice
of a retail store appears to be based almost entirely on economic
A consumer’s choice
of a retail store appears to be based almost entirely on emotional
needs–economic needs have almost no influence.
strategies for the two shoe retailers Payless and Zappos are very different
but both are successful.
strategies for the two shoe retailers Payless and Zappos are very different,
and Zappos’ strategy is successful while Payless’ strategy is not.
to classify retailers and their strategies on the basis of a single
characteristic–such as sales volume, services, product assortment,
Retailers and their
strategies can easily be classified based on the type of merchandise they
that used to carry anything they could sell in reasonable volume were the
main retailers in the United States.
“conventional” retailers are single-line or limited-line stores
that have very low expenses relative to sales.
Most single-line and
limited-line stores apply the retailing philosophy of buying low and selling
In most countries,
small limited-line retailers still account for the majority of all
Specialty shops are
limited-line stores which aim at a carefully defined target market with a
unique product assortment, good service, and knowledgeable salespeople.
Specialty shops will
continue to be a part of the retailing scene as long as customers have varied
tastes and the money to satisfy them.
are stores which usually try to serve customers seeking a variety of
are larger stores that are organized into many separate departments and offer
many product lines.
keep growing in numbers, sales, and market share.
mass-merchandising concept means that retailers can succeed by selling a
large volume of merchandise to a target market at low prices.
have proved to be effective competitors in taking away department store
Retailers who follow
a policy of “buy low and sell high” are practicing the
started the move to mass-merchandising.
The basic idea for
supermarkets developed in the U.S. in the 1960s when consumers started to
move from the cities to the suburbs.
Large sales volume
and efficient operation are usually very important for supermarkets, since
net profits usually run 1 percent of sales or less.
stores charge higher prices than supermarkets and focus on attracting
customers who want better selections of perishables like meat and
offer “soft goods” at substantial price cuts to customers.
houses are found in low-rent facilities, have poor images with customers, and
offer few services and no guarantees.
A discount house is
trying to meet all the customer’s routine needs at a low price.
emphasize “hard goods” while discount houses emphasize “soft
have become the primary place to shop for many frequently purchased consumer
Walmart, one of the
largest mass-merchandisers in the U.S., handles 30 percent or more of the
total national sales for whole categories of products.
“supercenter” carries all the goods and services that a consumer
might routinely purchase.
A consumer who went
to shop at a “supercenter” would probably expect not only to be able
to buy food and health care products, but also to leave dry-cleaning or have
are very large stores that specialize in selling a big variety of
infrequently purchased products that would otherwise be hard for consumers to
In addition to food,
warehouse clubs carry homogeneous shopping goods.
In addition to food,
warehouse clubs emphasize heterogeneous shopping goods.
Category killers is
another name for single-line mass-merchandisers.
Because of their
higher margins, faster turnover, and narrower assortments, convenience food
stores have the potential to be more profitable than supermarkets.
stores now compete with supermarkets, gas stations, and fast-food
The sale of candy
from a vending machine at a bus station is not considered retailing since no
store is involved.
The major advantage
of vending machine retailing is that the costs are low relative to the volume