CHAPTER 12CHAPTER 12RETAILING STRATEGYRETAILING STRATEGY

DEFINITION OF RETAILER

Sells majority of sales to consumers

RETAILING STRATEGY

• Current Types of Retailers

• Retail Revenue Streams

• Retail Cost Efficiencies

• Concentrated Niches

CURRENT TYPES OF RETAILERS

• Retail stores only

• Online retailers only

• Retail stores and online retailers

RETAIL STORE INNOVATIONS

Industry Period Innovation

Department Store 1880’s Urban Growth

Supermarket 1930’s Depression

Discounter 1950’s Affluence

Specialty Market 1980’s Breakup of Markets

DEPARTMENT STORES

• Broad product lines

• Lots of services

• High markups

DEPARTMENT STORE EXAMPLES

• Neiman Marcus

• Dillard’s

• Nordstrom

SUPERMARKETS

• Primarily food products

• Expanded into non-food products

• Extensive self-service

HOUSTON SUPERMARKETS

• Kroger

• HEB

• Whole Foods

• Trader Joe’s

DISCOUNT STORES

• Compete on price

• Volume-oriented

• Limited assortment sizes

DISCOUNT STORE EXAMPLES

• Walmart

• Costco

• Target

• Sam’s

SPECIALTY RETAILERS

• Focus on a specific customer market

• Stock products in depth

SPECIALTY RETAILERS EXAMPLES

•Best Buy

•Container Store

•Office Depot

•Ikea

CHANGES IN OFFICE SUPPLY RETAILING

Neighborhood Office Supply

Office Depot

Amazon.com

Time iPad

ONLINE RETAILERS ONLY

Selling on-line

ONLINE RETAILING EXAMPLES

• Warby Parker eyewear

• Threadless

• Blinds.com

• Blue Nile

• Fanatic, Inc

AFFILIATES OF BLINDS.COM

• Interior design companies

• Custom home builders

• Home carpet companies

ONLINE JEWELRER(Blue Nile)

Make the sale

Collect the money

Buy diamonds from wholesaler

Drop ship from wholesaler to customer

RETAIL STORES AND ONLINE RETAILERS

• Bonobos and Nordstrom

• True Fit and Macy’s

U.S. WEB SALES IN 2012

Amazon $61 Billion

Wal-Mart $8 Billion

RETAIL REVENUE STREAMS

• Sale of product

• Credit add-on

• Service add-on

• Warranty add-on

• Trade-in

RETAIL COST EFFICIENCIES

Activities Cost Savings

Self-Service Reduces sales staff

Supply Chains Reduces logistic costs

Internet Selling Reduces channel costs

CONCENTRATED RETAIL NICHES

•Charming Charlie

•Men’s Wearhouse

•Hot Mama

•Buc-ee’s

RETAILING TRENDSSmall Retailers Large Retailers

Retail Store Orders Internet Retail Orders

Internet Retail Orders Your Home Delivery

Buyers Sellers(More (LessControl) Control)