Chapter 2 notes Flashcards
(27 cards)
What is the North American Industry Classification System (NAICS)?
A classification scheme for the type of merchandise
What does ‘variety’ refer to in retail terminology?
The number of merchandise categories a retailer offers
Define ‘assortment’ in the context of retail.
The number of different items offered in a merchandise category
What is a Stock-keeping unit (SKU)?
A specific, individual item that has its own code
How does high variety affect a retailer like Nike?
Nike sells shoes, t-shirts, jackets, hats, and socks, indicating high variety
Give an example of deep assortment within a category.
Nike offers various types of running shoes, including multiple styles like Air Zoom Pegasus, Vaporfly, etc.
What is the relationship between the number of SKUs and inventory costs?
More SKUs lead to higher inventory costs
What are basic services that retailers provide?
Displaying products, taking credit cards, parking, and convenient hours
What are extra services that retailers may offer?
Home delivery, gift wrapping
True or False: Conventional supermarkets only compete with other supermarkets.
False
What do limited-assortment supermarkets typically stock?
Only 1400 SKUs, no credit card service, and free bags
What differentiations do conventional supermarkets offer to compete?
[“Adding valuable services like online ordering”, “Offering more ready-to-eat meals”, “Selling exclusive and private-label products”, “Providing a better shopping experience”]
What characterizes supercenters?
They combine a supermarket with a full-line discount store
Define warehouse clubs.
Retailers offering limited and irregular assortments of food and general merchandise at low prices
What defines convenience stores?
Limited variety and assortment of merchandise at a convenient location with speedy checkout
What is a key characteristic of drugstores?
Focus on health and beauty products and prescription medications
What is the tier system in department stores?
[“First tier: High-end (e.g., Neiman Marcus)”, “Second tier: Traditional (e.g., Macy’s)”, “Third tier: Value-oriented (e.g., Kohl’s)”]
What is the strategy of full-line discount stores?
Broad variety, limited service, low prices
What are category specialists also known as?
Category killers
What is a key feature of specialty stores?
Focused on limited categories with a high level of service
What are extreme-value retailers?
Also known as dollar stores, offering broad but shallow assortments at very low prices
What defines off-price retailers?
Sell brand-name goods at lower prices due to overruns and excess inventory
What are four key characteristics of services?
[“Intangibility”, “Simultaneous production and consumption”, “Perishability”, “Inconsistency”]
What is a characteristic of independent, single-store establishments?
Typically operated by the owner with strong local connections
