Retail Exam 1 Flashcards
(35 cards)
What is retailing?
the set of business activities that adds value to products and services sold to consumers for their personal or family use
What is a retailer
a business that sells products and/or services to consumers for their personal or family use.
Define Supply Chain
a set of firms that make and deliver goods and services to consumers
What are the 4 value adding activities made from retailers?
providing an assortment of products / services, breaking bulk, holding inventory, and providing services.
Why is retail important?
- We interact with it every day.
- The economy depends on it.
What do retailers do?
Retailers satisfy consumer needs by offering the right product, at the right place, and at the right price when the consumer wants it.
What’s Retail Strategy:
An overall plan for guiding a retail firm.
* Influence the firm’s business activities.
* Influence firm’s response to market forces.
When you look at all the retailers in the world, they are divided into 4 categories based on what they sell.
1: Fast-moving consumer goods. (Low-cost products, sold quickly. Food, Cleaning products, pet supplies.)
2: Hardlines. (Non-personal goods that are physically hard. Furniture or weights, bicycles)
3: Softline’s. (Products that are soft. Towels, pillows, clothing).
4: Diversified. (Kohls).
True or False? 66 Percent of the top retailers are fast-moving consumer goods.
True
Challenges facing retailers in 2023:
-Low profit margins
-Labor Shortages.
-Supply chain difficulties and inventory problems.
-Inflation, which creates lower levels of cons
Ongoing shifts in retail:
1: Growth of Omni-Channel. (Being able to shop anytime in any format).
2: Blurring of formats. (Stores that sell multiple items. Example Cabela’s selling hunting gear, food, clothes, etc).
3: Bifurcated Retailing. (The income gap is widening. Essentially, the middle class is disappearing. Middle class stores like JC Penny, Sears, etc. are disappearing because more and more people are falling either on the high end of income, or the low end.)
T / F. The wheel of retailing applies to all retailers.
False, The wheel of retail only applies if retailers starts out as low cost, low price.
The wheel of retailing:
Entry Phase: Low margins, low prices, limited to no services. Low end facilities.
Trading Up Phase: Moderate prices, better facilities, some services, increased quality merchandise.
Vulnerability Phase: High Prices, Luxory facilities, Excellent services and amenities.
The retail life cycle:
Development: New format or new channel of operation.
Introduction: Geographically, the retailer is growing slowly. Not pushing out far from home.
Growth: Spread out rapidly, push boundaries, enter new states and countries. Sales accelerate rapidly, along with profit.
Maturity: Geographically, they’ve gone everywhere they can and sales are starting to become consistent. No more growth, but still high numbers.
Decline: Dropping low to break even amounts. Closing of stores and bankruptcy.
The retail life cycle applies to all retailers. (T/F)
True
What is a retail format?
The overall appearance and feel that a retailer presents to customers, primarily it’s look, layout, the sort of range it stocks, and the approach taken to pricing.
Classifying Brick and Mortar Retailers:
1: What types of goods does it sell?
2: If they sell goods, what type of merch is sold?
a: NAICS Code (North American Industry Classify System)
3: Variety vs Assortment.
a: Variety: How many different merch categories does a
retailer stock. (Casey’s selling candy, toys, clothes, etc)
b: Assortment: How much is offered in the specific merch
categories. (What are the alternative similar options).
What are the 3 types main types of retailers?
Food Retailers, General Merch Retailers, Service Retailers.
What are the 3 types main types of retailers?
Food Retailers, General Merch Retailers, Service Retailers.
Food Retailers outlets:
Supercenters, supermarkets, warehouse clubs, C-Stores, Hard-line grocers.
Food retailers were classified as essential over covid, so their sales percentages are up by 11.4
(Hard line grocers are retailers with a limited selection of merchandise, sold at an extremely low price. Example: Aldi’s)
General Merchandise Retailers outlets:
Department stores
Discount Stores. (Walmart, Target, K-Mart)
Category Specialists. (Home Depot, Lowes)
Specialty Stores (Beauty Stores, Apparel, Electronic Stores)
Drugstores
Extreme-Value Retailers (Dollar Tree, Dollar General)
Off price retailers. (TJ Maxx, Marshalls)
Service Retailers Characteristics
Intangible (You can’t physically inspect said product or service)
Simultaneous production and delivery: (I can’t decide if I no longer want it halfway through the process, because it’s made and delivered at the same time).
Perishability: Services perish and end as they are delivered or finished.
Inconsistency of the offering: Everything is dependent on employees, which means that things can change slightly from one employee to another due to human error.
A concept to understand: There is no such thing as a pure goods retailer, and a pure services retailer
Everyone offers a mixture of these services. The closest you can get to a pure goods is a wholesale club like Sam’s club or Costco. The closest you can get to a pure services retailer is the University.
Brick & Mortar is far from dead why?
1: Convience
2: Customer Experience
3: Service
