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McGraw-Hill/IrwinRetailingManagement,6/eCopyright©2007byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Chapter1IntroductiontotheWorldofRetailing1-2WhatisRetailing?•Retailing–asetofbusinessactivitiesthataddsvaluetotheproductsandservicessoldtoconsumersfortheirpersonalorfamilyuse.Aretailerisabusinessthatsellsproductsand/orservicestoconsumersforpersonalorfamilyuse.JamesDarell/GettyImages1-3ExamplesofRetailersRetailers:Kohl’s,Macy’s,Wendy’s,Amazon.com,JiffyLube,AMCTheaters,AmericanEagleOutfitter,KrogerFirmsthatareretailersandwholesalersthatselltootherbusinessaswellasconsumers:OfficeDepot,TheHomeDepot,UnitedAirlines,BankofAmerica,CostcoTheMcGraw-HillCompanies,Inc./AndrewResek,photographerTheMcGraw-HillCompanies,Inc./JohnFlournoy,photographer1-4RetailingisaHighTechIndustry•SellingMerchandiseovertheInternet•UsingInternettomanagesupplychains•AnalyzePOSdatatotailorassortmentstostores•ComputersystemsformerchandiseplanningRyanMcVay/GettyImages1-5NatureofRetailIndustryisChangingMomandPopStoreToToday’sRetailer1-6World’sLargestRetailers1-7TheDistributionChannelDistributionChannelPPT1-41-8Manufacturing,WholesalingandRetailingVerticalIntegration–firmperformsmorethanonesetofactivitiesEx:retailerinvestsinwholesalingormanufacturingBackwardIntegration–retailerperformssomedistributionandmanufacturingactivitiesEx:JCPenneysellsArizonajeans(PrivateLabel)ForwardIntegration–manufacturersundertakeretailingactivitiesEx:RalphLaurenoperatesitsownstores1-9HowRetailersAddValue•BreakBulk-Buyitinquantitiescustomerswant•HoldInventory-Buyitataconvenientplacewhenyouwantit•ProvideAssortment-Buyotherproductsatthesametime•OfferServices-Seeitbeforeyoubuy,getcredit,layawayRyanMcVay/GettyImages1-10HowRetailersAddValueThevalueoftheproductandserviceincreasesastheretailerperformsfunctions.BicycleisdevelopedatmanufacturerBicycleisdevelopedinseveralstylesBicycleisofferedinconvenientlocationsinquantitiesofoneBicycleisfeaturedonfloordisplayBicyclecanbeboughtoncreditorputonlayaway1-11SocialandEconomicSignificanceofRetailing•CommunitySupport•Over$3.4trillioninannualU.S.salesgreaterthanmedicalcare,housing,recreationcombined•Employs27millionpeople21%ofnon-agriculturalUSworkforce•Managementtrainingopportunities•Entrepreneurialopportunities1-12RetailingisBigPartofEconomyServices(45.8%)Manufacturing(11.2%)Retail(21.8%)Government(16.6%)Other5.6%1-13ComparisonofDistributionChannelsAcrosstheGlobe1-14RetailMixRetailStrategyCustomerServiceLocationMerchandiseAssortmentPricingCommunicationMixStoreDesignandDisplay1-15Macy’sRetailMixRetailStrategyCustomerServiceLocationMerchandiseAssortmentPricingCommunicationMixStoreDesignandDisplay1-16Macy’sRetailMixEnclosedMallsCustomerServiceMerchandiseAssortmentPricingCommunicationMixStoreDisplayAndDesignLocationStrategy1-17Macy’sRetailMixLocationPricingCommunicationMixStoreDesignandDisplayCustomerServiceManyItemsinApparelandSoftHomeAssortmentStrategy1-18Macy’sRetailMixLocationCommunicationMixStoreDesignandDisplayCustomerServiceMerchandiseAssortmentModeratewithFrequentSalesPricingStrategy1-19Macy’sRetailMixCommunicationMixTV,NewspaperAdsandSpecialEventsStoreDesignAndDisplayMerchandiseAssortmentPricingCustomerServiceLocation1-20Macy’sRetailMixStoreDesignandDisplayRacetrackwithDisplaysCustomerServiceLocationMerchandiseAssortmentsPricingCommunicationMix1-21Macy’sRetailMixCustomerServiceModestLocationMerchandiseAssortmentPricingCommunicationMixStoreDesignandDisplay1-22Target’sRetailMixRetailStrategyCustomerServiceLocationMerchandiseAssortmentPricingCommunicationMixStoreDesignandDisplay1-23Target’sRetailMixFree-standingStoresCustomerServiceMerchandiseAssortmentPricingCommunicationMixStoreDisplayAndDesignLocationStrategy1-24Target’sRetailMixLocationPricingCommunicationMixStoreDesignandDisplayCustomerServiceLargeNumberofCategoriesPrivateLabelsFewItemsinEachCategoryAssortmentStrategy1-25Target’sRetailMixLocationCommunicationMixStoreDesignandDisplayCustomerServiceMerchandiseAssortmentLowtoModestPricingStrategy1-26Target’sRetailMixCommunicationMixTVandNewspaperInsertAds1-27Target’sRetailMixStoreDesignandDisplayColorful,wideaislesdisplaysforproductswithagridlayoutCustomerServiceLocationMerchandiseAssortmentsPricingCommunicationMix1-28Target’sRetailMixCustomerServiceLimitedLocationMerchandiseAssortmentPricingCommunicationMixStoreDesignandDisplay1-29JCPenney’sStrategicEvolution•MainStreetprivatelabelsoftgoodsretailer•Changesinenvironment--increaseddisposableincome,growthofsuburbs,interstatehighwayprogram•EmulateSearsinenclosedsuburbanmalls•Focusonsoftgoods--dropautomotive,sportinggoods,hardware•Developcatalog,developelectronicretailing•Standalonestores•Centralizedcheckout1-30OrganicandnaturalfoodssupermarketchainAssortmentbeyondorganic/naturalfoods–Privatelabels-WholeFood™,360DayValue™–Love,trust,andemployeeempowerment–Alwaysinnovation:CandyIslandLamarStreetGreensFifthStreetSeafoodIn-storeMassageTherapistWholeFoodsImplementation1-31EthicalSituationsforaRetailManager•Shouldaretailersellmerchandisethatissuspectswasmadeusingchildlabor?•Shoulditadverti