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Fairchild Books

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Organization for buying and merchandising in chains,leased ... merchandising and training Often confused for chains since the franchises and directly owned ... – PowerPoint PPT presentation

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Title: Fairchild Books


1
Everything you always wanted to know about the
organization, operation, differences, and new
trends in various types of retail organizations.
  • Key Concepts
  • History and development of fashion retailing in
    the United States
  • Organization for buying and merchandising in
    department stores, specialty stores, and discount
    stores
  • Organization for buying and merchandising in
    chains,leased departments, and franchises
  • Operation of off-price retailers, factory outlet
    stores,category killers, boutiques, and showcase
    stores
  • Operation of nonstore retailers, including direct
    sellers,catalog stores, TV home shopping, and
    Internet sites
  • Trends in retail patterns

Fashion Retailing
chapter eighteen
2
The Five Rs
The Right
  • Merchandise
  • Price
  • Quantity
  • Place
  • Time

3
History
  • The first department store is generally agreed to
    be Bon Marché, in Paris in the mid-1800s
  • The urban population of New York, Philadelphia
    and Boston modeled themselves after the most
    sophisticated European cities
  • Originally three types of retailing existed in
    America, matching the rural population

4
General Stores
  • The home of Indians (Native American), traders,
    and explorers
  • They sold only basics, as was the need of the
    above market segment, correctly marketing what
    the customer wanted
  • As the settling of territory in America takes
    place, women emerge as customers and start to
    standardize prices, although bartering is still
    taking place

5
General Stores
  • Became social centers and remain so, particularly
    out in the provinces and suburbs
  • Bartering is replaced by cash
  • These become the general merchandise, specialty,
    and discounters of today

6
Peddler
  • The first marketing experts!
  • Door-to-door salesmen were the outgrowth of
    medieval peddlers
  • No longer viable, they are rare today

7
Mail Order
  • The final element in the development of modern
    retailing is started in the Midwest
  • In 1872, Montgomery Ward issued its first
    catalog and before long began to do most of
    their business via mail
  • By 1886, Sears jumped into the catalog business

8
Rural Free Delivery (RFD)
  • RFD is a system of free mail delivery to rural
    areas and parcel post
  • It is still an important selling tool
  • Fashion, home furnishings and tools are now
    within reach of a new audience
  • Sears 1895 catalog was 532 pages!
  • It is still an important selling tool

9
Department Stores
  • The Census Bureau defines a department store as a
    retail store carrying
  • General lines of apparel
  • Home furnishings
  • Housewares
  • Stores, published by the National Retail
    Federation, defines department stores to include
  • Multidepartment soft good stores of specialized
    department stores with a fashion orientation and
    full markup policy

10
Department Stores
  • Many no longer carry hardlines
  • Organization of department stores
  • Parent, or flagship stores and branch stores
  • Buyers purchase for areas
  • Entertainment is a key component of todays
    shopping experience

11
Specialty Stores
  • Limited lines of merchandise typify them
  • Tiffany, Talbots, Crate Barrel
  • Private label retailer is a variation of the
    specialty store, carrying only product it makes
    itself
  • Brooks Brothers, Gap, Ann Taylor

12
Discount
  • Discounters sell name-brand merchandise at less
    than retail prices
  • Discounters turn a profit by
  • Keeping overhead low and service minimal

13
Discount
  • Organizations
  • Buyers are responsible for several departments
    instead of a single category
  • Entertainment is a big part of the experience
  • Greeters are often present
  • Blue light specials are eagerly awaited

14
Forms of Ownership
  • Four common types of ownership (U.S.)
  • Sole Proprietors
  • Account for over 90 of all retailers
  • Small stores, mom pops are single store sole
    proprietorships
  • Chain Organization
  • A group of centrally owned stores, 4 or more
  • Mass merchandiser known for low prices,
    department stores known for high quality
    merchandise and speciality stores known for
    exclusive designs at high prices can be chains

15
Forms of Ownership
  • Leased Departments
  • Sections of retail stores owned and operated by
    outside organizations
  • Specialized knowledge usually portends leased
    departments
  • Furs, fine jewelry, beauty salons, and shoes are
    often leased

16
Forms of Ownership
  • Franchises
  • Exclusive use of name, merchandise, and any
    corporate advertising in an exclusive trading
    area are the franchisees benefits
  • The franchisor gets a royalty fee for providing
    the organization, merchandising and training
  • Often confused for chains since the franchises
    and directly owned stores look alike. Benetton is
    a successful franchisor
  • Designers like Yves Saint Laurent have long taken
    advantage of franchising to expand the Rive
    Gauche label

17
Other Types of Fashion Retailers
  • Off-Price
  • Factory Outlet Stores
  • Category Killers
  • Boutiques/Showcase Stores
  • Nonstore Retailers
  • TV Home Shopping
  • Internet Shopping Sites

18
Off-Price
  • Late rise/early peak fashion cycle merchandise as
    opposed to discounters late peak/early decline
  • Compete directly with department stores
  • Sell brand name/designer at lower than normal
    prices, but often late in the season and usually
    in broken sizes and colors

19
Off-Price
  • In the 80s manufacturers turned to off-pricers,
    who paid full price for excess fabric and
    demanded lower cost garments it helped everyone
  • T.J. Maxx and Marshalls led the way for the
    resurgence of off price stores

20
Factory Outlet Stores
  • Prior to this, manufacturers and designers turned
    to off-pricers
  • Todays factory outlet malls are destinations

21
Category Killers
  • Carry the ultimate narrow and deep selection
    allowing for deep purchasing discounts which are
    passed on to the customer in the form of low
    prices
  • 1970s saw the rise of Toys R Us, Bed, Bath
    Beyond and others
  • Home Depot and Barnes Noble continue the trend
    today
  • Most are free standing destinations, big boxes

22
Boutiques
  • The appeal for individuality is one of the
    driving forces behind the boutique revival

Foley Corinna specialty boutiques in New York
(far right) and California (right) sell unique
merchandise, while offering inviting environments
23
Nonstore Retailers
  • 4 categories exist
  • Direct selling
  • Typified by the Avon, direct selling sales
    totaled 25 billion in the U.S.
  • Catalogue
  • Lands End, Eddie Bauer, Patagonia,
    Williams-Sonoma and L.L. Bean all run successful
    catalogue businesses
  • Catalogues also function as early predictors of
    sales for the brick and mortar stores

24
Nonstore Retailers
  • TV Home Shopping
  • In 2006, HSN had a total sales of almost 3.29
    billion and a customer base of almost 89
    million
  • Celebrities of some form often appear to
    promote their goods on air

25
Internet
  • E-tailing or electronic retailing
  • What you need is a PC to access shopping anytime
    from anywhere
  • Although the potential is great, it remains
    largely untapped
  • E-tail players that have been the most successful
    so far, are the online channels of apparel retail
    and catalog giants, like JCPenny.com,
    Landsend.com, and jcrew.com
  • Catalogue firms like Lands End, Eddie Bauer and
    L.L. Bean have had success in part due to their
    sophisticated fulfillment capacity

26
Mergers
  • Until the 30s, most department stores were
    independently owned
  • Consolidations, bankruptcy, and foreign
    investments have changed the scene dramatically
  • Many retailers closed down
  • Efficiency and expansion are the key strategies
    for the retailing future

27
Wheel of Retailing
  • Retailers must constantly respond to change in
    the environment to succeed and flourish
  • The following theory of Harvard Business School
    Professor Emeritus, Malcolm McNair, is the wheel
    of retailing

28
McNairs Wheel of Retailing
  • Most retailers begin as lower priced distributors
  • To grow they trade up and add amenities, varied
    assortments, customer service, higher quality
    goods, etc.
  • Capital requirements mean higher prices
  • As each retailer moves up, the vacuum is filled
    quickly by the level below
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