Correction:In the presentation from the first class session there was a typo on the “Grading” slide.

The correct proportion/amount of points for the Exams are:

Exams #1 and #2 are 100 points each for a total of 200 points

• The Final Exam is worth 200 points.

This is consistent to what is shown on the syllabus.

Sorry if this caused any confusion.

The World of Retailing

Favorite “Refact”

Retailer Fred Lazarus, Jr.

successfully proposed to the

United States Congress that

Thanksgiving be set on the fourth

Thursday of November to expand

the Christmas shopping season.

What is Retailing?• Retailing – a set of business

activities that adds value to the products and services sold to consumers for their personal or family use.

• A retailer is a business that sells products and/or services to consumers for personal or family use.

James Darell/Getty Images

Merchandise ManagementMerchandise ManagementMerchandise ManagementMerchandise Management

1.1.Planning Merch. Planning Merch. AssortmentsAssortments

2.2.Buying SystemsBuying Systems3.3.Buying MerchandiseBuying Merchandise4.4.PricingPricing5.5.Retail CommunicationsRetail Communications

Retailing StrategyRetailing StrategyRetailing StrategyRetailing Strategy

5.5.Retail MarketingRetail Marketing6.6.Financial StrategyFinancial Strategy7.7.Retail LocationsRetail Locations8.8.Site LocationSite Location

Retail Management Decision Process

The World of RetailingThe World of RetailingThe World of RetailingThe World of Retailing1.1.IntroIntro2.2.Types of RetailersTypes of Retailers

Store ManagementStore ManagementStore ManagementStore Management

1.1.Managing the StoreManaging the Store2.2.Store Layout, Design, & Store Layout, Design, &

Visual MerchandiseVisual Merchandise3.3.Customer ServiceCustomer Service

3. Multichannel Retailing3. Multichannel Retailing4. Customer Buying 4. Customer Buying

BehaviorBehavior

9. Org. Structure and HR Mgmt.9. Org. Structure and HR Mgmt.10.10. Info Sys. & Supply Chain MgmtInfo Sys. & Supply Chain Mgmt11.11. Customer Relationship Mgmt.Customer Relationship Mgmt.

ConsumerConsumerConsumerConsumerRetailerRetailerRetailerRetailerWholesalerWholesalerWholesalerWholesaler

The Distribution Channel

ManufacturManufacturerer

ManufacturManufacturerer

Point ofProduction

Point ofSale (POS)

The Distribution Channel:VERTICAL INTEGRATION

ConsumerConsumerConsumerConsumerRetailerRetailerRetailerRetailerWholesalerWholesalerWholesalerWholesalerManufacturManufacturerer

ManufacturManufacturerer

BackwardIntegration

ForwardIntegration

How Retailers Add Value

• Provide Assortment• Break Bulk• Hold Inventory• Offer Services

Social and Economic Significance of Retailing• Economic support -

over $3.4 trillion in annual U.S. sales (greater than medical care, housing, recreation combined)

• Community Support - retail employs 27 million people in the U.S.

World’s Largest Retailers

“Hardest hit were clothing and high-fashion chains.”

Shares of J.C. Penney Co., Sears Holdings Corp., Target Corp. and Wal-Mart Stores Inc. all rose.

Retailers Post Tepid Growth

January 11, 2008

The results confirmed pre-holiday worries that falling home prices and high gasoline prices would crimp consumer spending. Retail Metrics Inc.'s index of December same-store sales rose a scant 0.4%, compared to a 3.2% gain the previous year.

The weakness among clothing and jewelry was offset elsewhere by sales of food, health care and pharmaceuticals.

Among major discount chains, Wal-Mart Stores said grocery, electronics and pharmacy businesses gained while home decor and apparel sales slipped.

World’s Largest Retailers

Environmental Factors

Macro-Environment

Competitors

Customers

Micro-EnvironmentTechnology Social Issues

Ethical/LegalIssues

Political &Economic Issues

Environmental Issues

RETAILRETAILERER

Environmental Factors

Competitors

Customers

Micro-Environment

RETAILRETAILERER

Who is my competitor?

Really??

Who is my competition?

Definitely.

I thought they sold coffee...

Who is our customer?HINT: They buy a lot of music, watch a lot of movies, drink a lot of

coffee and have a lot of disposable income...

Retail Strategy Decision Areas(Retail Mix)

Customer

Service

Retail Strategy

Store Design

& Display

Location

CommunicationsMix

Merchandise

Assortments

Pricing

Retail Mix:Macy’s

Customer

Service

Retail Strategy

Store Design

& Display

Location

Merchandise

Assortments

Pricing

Enclosed Malls

Many apparel items and soft home

Moderate with frequent

sales

CommunicationsMixTV, Newspaper

and Special Events

Racetrackwith displays

Modest

Retail Mix:Target

Customer

Service

Retail Strategy

Store Design

& Display

Location

Merchandise

Assortments

Pricing

Free-standingstores

Many Categories

Private Labels

Few Items in each category

Low to modest

CommunicationsMixTV and

Newspaper insert ads

Colorful, wide aisles displaysfor products with a grid layout

Limited

Environmental Factors:

“Story of Stuff” (on blog)Macro-

Environment

CompetitorsCustomers

Micro-EnvironmentTechnology Social Issues

Ethical/LegalIssues

Political Issues

Environmental Issues

RETAILRETAILERER