Retailing and B2C E-Commerce. Retailing Final stop on the distribution path The process by which...
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![Page 1: Retailing and B2C E-Commerce. Retailing Final stop on the distribution path The process by which products are sold to consumers for personal use Retailers.](https://reader035.fdocuments.net/reader035/viewer/2022062301/56649cc55503460f9498f648/html5/thumbnails/1.jpg)
Retailing and B2C E-Commerce
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Retailing
• Final stop on the distribution path
• The process by which products are sold to consumers for personal use
• Retailers add value with image, inventory, service quality, location, and pricing policies
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Retail sales ($billion), by type of businessRetail sales ($billion), by type of business
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The Wheel of Retailing
• New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; up scaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices
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The wheel of retailingThe wheel of retailing
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Retail Life Cycle• Retailers are also products because they provide
benefits and must offer a competitive advantage to survive– Introduction: new retailer takes a unique approach to
doing business– Growth: retailer catches on with shoppers, sales and
profits rise, others start to copy it so retailer expands offerings
– Maturity: many have copied it and an entire industry has formed, profits decline
– Decline: retail format becomes obsolete
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The retail life cycleThe retail life cycle
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Factors Affecting the Future of Retailing
• Demographics
Convenience for working women
Catering to specific age segments
Recognizing ethnic diversity• Technology
• Globalization
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Classifying Retailers
• All retailers are classified by the NAICS codes
• Some lines still blurred– scrambled merchandising - strategy of carrying
a combination of food and nonfood items
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Classifying Retailers by Service
• Self-service retailers
• Full-service retailers
• Limited-service retailers
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Classifying Retailers by Merchandise Selection
• Merchandise breadth is the number of different product lines available– Narrow versus Broad assortments
• Merchandise depth is the variety of choices available for each specific product– Shallow versus Deep assortments
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Breadth versus depth of merchandise linesBreadth versus depth of merchandise lines
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Merchandise Selection
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Store Types
• Convenience stores• Supermarkets• Specialty stores• Department stores• Hypermarket stores
• Discount stores– General merchandise
discount stores
– Off-price retailers
– Warehouse clubs
– Factory outlet store
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Supercenters are a popular store format.Supercenters are a popular store format.
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Nonstore Retailing
• Any method a firm uses to complete an exchange that does not require a customer visit to a store– Direct selling– Automatic vending
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Forms of nonstore retailingForms of nonstore retailing
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Direct Selling
• Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise– Door-to-Door Sales– Parties and Networks
• party plan systems
• multilevel pyramid schemes
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Automatic Vending
• Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate– French fries– Software– Levi’s jeans
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B2C E-Commerce
• Online exchange between companies and individual consumers
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E-Commerce and the Customer
• Benefits– Shop 24/7
– Less travel
– More choices
– More information
– Price competition
– Fast delivery
• Limitations– Lack of security
– Fraud
– Can’t touch items
– Hard to distinguish color/ texture online
– Expensive to return
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E-Commerce and the Marketer
• Benefits– The world is your
marketplace
– Decreases costs
– Very specialized businesses possible
– Real-time pricing
– Tracking of consumer behavior
• Limitations– Lack of security
– Must maintain site
– Price competition
– Conflicts with conventional retailers
– Legal issues not resolved
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Developing a Store Positioning Strategy
• Store image– how the target market perceives the store– its market position relative to the competition
• Atmospherics– the use of color, lighting, scents, furnishings,
sounds, and other design elements to create a desired setting
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Mapping a Store’s Personality
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Store Design: Setting the Stage
• Store layout and traffic flow
• Fixture type and merchandise density
• The sound of music
• Color and lighting
• The Actors: Store Personnel
• Pricing policy
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Building the Theater: Store Location
• Types of Locations
• Site Selection– Location planners evaluate trade area and
conduct site evaluation • traffic flow, number of parking spaces available,
ease of delivery access, visibility from street, local zoning laws, population characteristics, community life cycle, mobility, degree of competition