Types of Retailers

Types of Retailers
The World of Retailing
Distribution Channel
The Retailers Role in a Supply

Chain
Retailers are the final business
within a supply chain which links
manufacturers to consumers.
A Supply Chain is a set of firms that
make and deliver a given set of
goods and services to the ultimate
consumer.
Manufacturing, Wholesaling
and Retailing
Vertical Integration firm performs more
than one set of activities in the channel
Ex: retailer invests in wholesaling or
manufacturing
Backward Integration retailer performs

some distribution and manufacturing
activities
Ex: JCPenney sells Arizona jeans (Private Label)
Manufacturing, Wholesaling
and Retailing
Forward Integration manufacturers
undertake retailing activities
Ex: Ralph Lauren (New York Jones, Liz
Claiborne) operates its own stores
Large retailers engage in both

wholesaling and retailing
Ex: Wal-Mart, Lowes, Safeway, Brown Shoe
Company
Do Retailers Add Value?

Provide Assortment
Buy other products at the same time

Break Bulk
Buy it in quantities customers want

Hold Inventory
Buy it at a convenient place when you

want it
Offer Services
Decision Variables for

Retailers
Customer
Service
Merchandis
e
Assortment
Store Design
and Display
Retail
Strate
gy
Pricing
Location
Communicati
on Mix
Trends in Retailing
Increasing Industry
Concentration
Globalization
Growing
Diversity
of
Formats(New
types of
retailers)
Increasing Concentration
Discount Stores
Wal-Mart, Target and Kmart
New Types of Retailers

Category Specialists
-PetsMart
-Bed, Bath and Beyond
Wal-Mart Supercenters
-Supermarket + Discount Store
E bay, Priceline, Travelocity
Types of Retailers
Retailers Use Different Retail Mixes
-merchandise: variety (breadth) / assortment
(depth)
-services
-store design, visual merchandising
-location/Space
-pricing
Infinite Variations
Survival of the Fitness Some combination
of retail mixes satisfy the needs of
significant segments and persist over time.
Merchandise Offering
Classification by Type of Merchandise
Types of Retailers
Food Retailers
Mom and Pop Stores
Convenience Stores
Supermarkets
Supercenters
Hypermarkets(A-Z)
General Merchandise Retailers

Department Stores
Specialty Stores
Discount Stores
Off-Price Retailers
Warehouse Clubs
Types of Food Retailers
Issues in Food Retailing

Competition from Discount Stores
Efficient
Distribution
Lower Costs
Lower Prices
Changing Consumption Patterns

Time Pressure
Eating Out More
Meal Solutions
Types of General Merchandise

Retailers
Discount Stores
Specialty Stores
Home Improvement Centers
Department Stores
Drugstores
Off-Price retailers
Value Retailers
Characteristics of General Merchandise

Retailers
Many New Types of retailers,

Increased
Diversity to Meet Diverse Needs
Most People Shop at All Types Depending
on Situations Growth in Cross-Shopping
Non-store Retail Formats

Electronic Retailing
Catalog and Direct Mail
Direct Selling
Shopping
Machines
Television Home
Vending
Types of Retail Ownership

Independent, Single Store
Establishments
Consumer Owned CooperativesApna
Bazaar, Sahakari Bhandar
Wholesaler Owned Cooperatives-GCCF- Amul
Corporate Chains -Wal-Mart, Target
Franchise Business Model-KFC, Dominos,
VLCC, GATI, ADLABS
Trends in Ownership
Initial concentration on One Format
and gradually move to multiple
formats
Growth in Services Franchising
There are approximately 1150 national and international

business format franchise systems in India in 2007.
Around 8 to 10 per cent Indian franchise systems have
entered international markets.
There are an estimated 70, 000 units operating in business
format franchises.
The growth rate in franchised units from 2005-06 to 200607 was 30 to 35 per cent for the last 4-5 years.
Some 500000 persons are employed in business format
franchise organizations.
Franchising contributed less than 4 per cent to Indias
Gross Domestic Product (GDP) in 2007.
Annual turnover is approximately us$ 4 billion.
Reasons for Franchising

Growth
Technological advances
Profitable utilization of capital resources
Demographic expansion
Product/service consistency
Types of Franchise Systems
Theories of Retail Institution Change

CYCLICAL THEORIES
Wheel of retailing (price/service)
Accordion Theory (assortment)
EVOLUTIONARY THEORIES
Dialectic process (retailer)
Natural selection (customer)
Wheel of Retailing
Accordion theory
This
theory
focuses
on
the width of
product
assortment
sold by retail
outlets
and
claims
a
generalspecificgeneral
cycle.
The
cycle begins
by
retailers
selling a wide
assortment of
The Dialectic Process

Thesis
Department store
High margin
Low turnover
High price
Full service
Downtown location
Plush facilities
Antithesis
Discount store
Low margin
High turnover
Low price
Self-service
Low rent location
Spartan facilities
Synthesis
Discount
department store
Average margins
Average turnover
Moderate prices
Limited services
Suburban
locations
Modest facilities
Natural process-Retail lifecycle:

A new retail format passes through the stages of birth, growth,
maturity and decline as industries and products do. A new retail
format that enjoys a competitive advantage over existing formats
grows rapidly.
Attracted by the growth potential of the new format, competitors
enter the business during the growth phase, and there is intense
competition among the retailers of the new format.
The players develop ambitious plans of expansion and seek to
open their stores in new geographical areas. There is intense
competition during maturity, and a new retail format may start
replacing it during its decline stage. The three theories explain
the evolution of retail formats, but the decline and demise of a
retail format is not inevitable. Retailers have to learn to anticipate
changes in environment and adapt to them.

Types of Retailers

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Types of Retailers

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Types of Retailers

The World of Retailing

The Retailers Role in a Supply

Backward Integration retailer performs

Large retailers engage in both

Do Retailers Add Value?

Buy other products at the same time

Buy it in quantities customers want

Buy it at a convenient place when you

Decision Variables for

New Types of Retailers

Classification by Type of Merchandise

General Merchandise Retailers

Types of Food Retailers

Issues in Food Retailing

Changing Consumption Patterns

Eating Out More

Types of General Merchandise

Characteristics of General Merchandise

Many New Types of retailers,

Non-store Retail Formats

Types of Retail Ownership

There are approximately 1150 national and international

Reasons for Franchising

Types of Franchise Systems

Theories of Retail Institution Change

The Dialectic Process

Natural process-Retail lifecycle:

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