How Retailers Create Value

1
How Retailers Create Value
- Right Merchandise - Good Shopping Atmosphere -
Decreased Shopping Risk - Convenience
Increases Customer Utility
Enhances Value
Reduces Price
- Control of Costs
2
The Retail Mix

• Selling
• Service
• Store Design
• Location
• Merchandise
• Pricing
• Promotion

3
Retailing Careers

• Store Management
• Merchandising/Buying
• Corporate (support)
• Information Systems
• Distribution
• Loss Prevention
• Finance
• Store Design

4
Challenge of Retail Management
Overall Goal Create value for customers and
profit for firm
Marketing Objective Create differential advantage
Tasks Analyze changing environment Select target
market Coordinate ele- ments of retail mix
5
The Margin-Turnover Tradeoff
Hi Margin Lo Turnover
High Low
Margin
Lo Margin Hi Turnover
Low High
Turnover
6
Competition Among Strategic Groups
High
Prestige Stores
Traditional Dept. Stores
Merchandise Offering (quality, selection,
fashion, etc.)
Mass Merchandisers
Upscale Discounters
Low
Discounters
High
Low
Price
7
The Margin-Turnover Tradeoff
Hi Margin Lo Turnover
High Low
Margin
Lo Margin Hi Turnover
Low High
Turnover
8
Competition Among Strategic Groups
High
Prestige Stores
Traditional Dept. Stores
Merchandise Offering (quality, selection,
fashion, etc.)
Mass Merchandisers
Upscale Discounters
Low
Discounters
High
Low
Price