Forms of Organized Retailing

Independent
By Ownership
Corporate Chains

Franchise

Convenience Stores

Super Market

Store Based Big Box Stores

Retailer
Department Stores
Types
Discount Stores

Specialty Stores

Club Store

By Format Virtual Stores

Non-Store
Based
Catalog Marketing

Network Marketing
1. Classification of Ownership
Mostly family owned businesses and the
Independent
Independent managed by the owners. High flexibility,
Retailers
Retailers high visibility to customer but
unorganised.

Multiple retail units under one company

Chain
Chain Stores
Stores operates with a common objective.
Economies of scale, high degree of
specialization, but slow decision making.

Franchises
Franchises Franchiser and Franchisee enters into an
agreement, Franchisee enjoys the benefit of
brand equity developed by the franchiser.
Franchise Formats
Product/Trademark Business Format
Franchisee acquires the Franchisee receives
identity of a franchisor by
agreeing to sell products assistance: location, quality
and/or operate under the control, accounting
franchisor name systems, startup practices,
management trainin
Franchisee operates
autonomously Common for restaurants,
real-estate
2/3 of retail franchising
sales
Largest US Franchisers
• McDonald’s
• Subway sandwiches
• Burger King
• Starbucks
• Taco Bell
Store based Classification

Department
Department Stores
Stores
Specialty
Specialty Stores
Stores
Supermarkets
Supermarkets
Drugstores
Drugstores
Convenience
Convenience Stores
Stores
Discount
Discount Stores
Stores
Restaurants
Restaurants
The Largest Retailers in the USA

Rank Company Main Emphasis

1 Wal-Mart Full-line discount stores, supercenters,
membership clubs
2 Home Home centers, design centers
Depot
3 Kroger Supermarkets, convenience stores, jewelry stores
4 Target Full-line discount stores, supercenters
5 Costco Membership clubs
6 Albertson’s Supermarkets, drugstores
7 Walgreens Drugstores
8 Lowe’s Home centers
9 Sears Department stores, specialty stores
10 Safeway Supermarkets
 a wide range of products offered
Department Stores without a single predominant
merchandise line.

The product range includes

apparel, furniture, appliances,
electronics, and additionally
select other lines of products
such as paint, hardware, toiletries,
cosmetics, photographic
equipment, jewelry, toys, and
sporting goods.
Specialty stores/ category killers

Specialty stores are small

stores which specialize in a
specific range of merchandise
and related items.

Most stores have an extensive

width and depth of stock in the
item and provide high levels of
service and expertise.
Category Killer
A dominating store format that focuses its total efforts on a limited
number of categories.

• Home Depot
– Toys “R” Us/ Kids “R” Us
• Pepperidge Farms
– Circuit City/ Radio shack
• Barnes & Noble
– Best Buy
• Borders
– Office Depot
• Walden Books
– Staples
• Blockbuster
– OfficeMax
• Cosmetics Plus
– Starbucks
• Container Store
– PETsMart/ Petco
Category killers
 Supermarkets Supermarkets are located near the
residential area and have an average
size of 20,000 sft.

The product mix comprises of meat, produce,

dairy and baked goods, canned and packaged
goods and alcohols.

The non-food range includes personal care items,

household cleaners, pharmacy products, and pet
supplies.
Hypermarket and super center

combination
combination of of ==
aa supermarket
supermarket ++
Hypermarket
Hypermarket department
department store.
store. ((full
full lines
lines of
of groceries
groceries
and
and general
general merchandise.
merchandise. ...
...
))

Retail
Retail store
store combining
combining groceries
groceries
Super
Super center
center and
and general
general merchandise
merchandise goods
goods
with
with aa wide
wide range
range of
of services.
services.
Drug Stores

A store that primarily sells OTC

pharmacy products, HBC
products and has an in-house
pharmacy.
Interior of Drugstore
Convenience stores small format stores – 1 -3000 sft area.
located alongside busy roads, at gas/petrol
stations or in densely-populated urban
neighborhoods.

operates at least 13 hours a day

 

may or may not sell gasoline

limited selection of grocery items like confectionary,
snacks, tobacco products, milk and beverages
Discount Stores

focuses on fast turnover of inexpensive

consumables including HBC, cleaning
supplies, dry foods and candy, as well as toys,
housewares, home decor, party goods, pet
foods, stationery and school supplies.
Family Dollar inner view
Categories of Discount Stores
Full-Line
Discounters

Categories
Categoriesof
of
Discount
Discount Discount Specialty Stores
Stores
Stores

Warehouse Clubs

Off-Price
Discount Retailers
Wholesale Club

sells packaged and bulk foods and general merchandise

 Club stores are similar to big box retail stores, which
Club Houses offer a wide variety of merchandise at very low price.

the customers
needs to take the
annual
membership of the
store and the
products are sold
in bulk.
Types of stores and their Characteristics

Type Service
Service Assort-
Assort-
Typeof
ofRetailer
Retailer Level ment
Price
Price
Level ment
Department
DepartmentStore
Store Mod
ModHi-High
Hi-High Broad
Broad Mod-High
Mod-High
Specialty
SpecialtyStore
Store High
High Narrow
Narrow Mod-High
Mod-High
Supermarket
Supermarket Low
Low Broad
Broad Moderate
Moderate
Convenience
ConvenienceStore
Store Low
Low Med-Narrow
Med-Narrow Mod
ModHigh
High
Drugstore
Drugstore Low-Mod
Low-Mod Medium
Medium Moderate
Moderate
Full-line
Full-lineDiscounter
Discounter Mod-Low
Mod-Low Med-Broad
Med-Broad Mod
ModLow
Low
Specialty
SpecialtyDiscounter
Discounter Mod-Low
Mod-Low Med-Broad
Med-Broad Mod
ModLo-low
Lo-low
Warehouse
WarehouseClubs
Clubs Low
Low Broad
Broad Low-lower
Low-lower
Off-price
Off-priceRetailer
Retailer Low
Low Med-Narrow
Med-Narrow Low
Low
Restaurant
Restaurant Low-High
Low-High Med-Narrow
Med-Narrow Low-High
Low-High
4. Classification on the basis of Price
• High End retail stores
• Low End retail stores
Pricing Strategies

LOW MARGIN MORE VARIETY HIGH MARGIN

& Hypermarket &
Combination
WIDE SELECTION Store
WIDE SELECTION

Superstore
Mass Merchandiser
Conventional Supermarket
LOWER HIGHER
MARGIN MARGIN
Warehouse Store
Mom-and-Pop
Convenience Store
Limited
LOW MARGIN Assortment HIGH MARGIN
& NARROW Store Specialty Food & NARROW
SELECTION Store SELECTION

LESS VARIETY

Page 24 On
boa
 Mass Merchandising
Retailing Strategy using
moderate to low prices
on large quantities of merchandise
and lower service
to stimulate high turnover of products.
 Non- Store Classification

Non Store
Mail Orders
Store
Catalogue
Teleshopping
e-tailing
Call Centers
Direct Selling
Non-Store Retailing

a.
a. Automatic
Automatic Vending
Vending Direct
DirectMail
Mail

Catalogs
Catalogs&& Mail
MailOrder
Order
b.
b. Direct
Direct Marketing
Marketing Telemarketing
Telemarketing

Electronic
ElectronicRetailing
Retailing

Major
MajorForms
Forms
of
of
Nonstore
Nonstore
Retailing
Retailing c.
c. Electronic
Electronic Retailing
Retailing
Vending Machine – self-serving
Non-Store Retailers
Recap
•Chain stores •Hyper markets
•Franchises •Supercentres
•Department stores •Direct Marketing
•Speciality stores •Electronic retailing
•Supermarkets •OTC
•Drug stores •HBC
•Convenience stores • Flagship store
•Discount stores
•Category killers
flagship store

•This is the store that holds the largest

merchandise, is a "landmark" and a symbol of the
entire chain.

•Example: Macy's in New York is a prime example.

This is considered the "flagship" store, although
there are other Macy's all over the country.