BUS 348 Lecture Notes - Lecture 12: Dollar Tree, Shopping Cart, Living Wage
27 Jun 2018
School
Department
Course
Professor
BUS 348
Lecture 12: Goods and Services via Bricks and Clicks
Retailing, 21st Century Style
oRetailing is the process by which organizations sell goods and services to consumers for
their personal use.
Provide time, place, and ownership utility
oRetailing is a big business:
2015 US sales totaled $4.87 trillion
More than 1 in 10 US workers is employed in retail
oRetailing practices vary around the world
In some European countries, don’t even think about squeezing a tomato to see
if it’s too soft or picking up a cantaloupe to see if it smells ripe. Such mistakes will
quickly gain you a reprimand from the store clerk, who will choose your oranges and
bananas for you.
In developing countries like those in Asia, Africa, and South America, retailing
often includes many small butcher shops where sides of beef and lamb proudly hang
in store windows so everyone will be assured that the meat comes from healthy
animals.
The Evolution Continues: What's "In-Store" for the Future?
oFour factors motivate innovate merchants to reinvent the way they do business:
Changes in economic conditions
Demographic and consumer preference change
Technology
Globalization
oCultural trends are also important. The anti-fur movement and focus on sustainability
are just 2 examples of how trends may impact the retail merchandising mix. Sustainability
concerns also make certain forms of marketing less attractive, such as direct mail, which
"wastes" paper and kills trees.
The Changing Economy
oEconomic downturn that began in 2008 had great impact on retailers
Lowered consumer confidence resulted in less discretionary spending.
oScales for upscale stores especially vulnerable
Stores like TJ Maxx, Marshall's, and Amazon.com thrived
Some retailers responded by allocating more shelf space to private label brands
Changing Demographics and Consumer Preferences
oMore dual-career families place greater emphasis on convenience
Increased number of locations and format
Drive-up windows, mobile retailing, walk-in medical clinics
Extended hours
oEthnic Diversity
Need to adjust retail mix to attract consumers in areas with high concentration
of ethnic population
Ex: Texas, California, and Florida contain large numbers of consumers who
speak only Spanish
oExperiential Merchandising
Tactic whose intent is to convert shopping from a passive activity into a more
interactive one, by better engaging the customer
find more resources at oneclass.com
find more resources at oneclass.com
Ex: Build-a-Bear
oDestination Retailer
Firm that consumers view as distinctive enough to become loyal to it
Ex: The Verizon Destination Store in Bloomington, Minnesota
Technology
oTechnology is revolutionizing retailing
Store associates carry an iPod Touch to quickly ring up sales from anywhere in
the store
Electronic POS systems feed data into inventory control and auto replenish
systems
Stores may use POS systems to create perpetual inventory unit control
systems that keep a running total on sales, returns, transfers to other stores,
and so on.
This technology allows stores to develop computerized automatic
reordering systems that are activated when inventories reach a certain level.
RFID tags on items
The store of the future will use RFID tags (and other technology) to
assist the shopper in ways we haven’t even thought of. For example, an RFID tag
on a bottle of wine can tip off a nearby plasma screen that will project an ad for
Barilla pasta and provide a neat recipe for fettuccine with bell peppers and
shrimp.
E-menus and other electronic ordering systems
E-menus help customers because they can see what every item on the
menu will look like and, it is hoped, avoid a surprise when the waiter arrives.
This innovation also increases sales for the restaurant—who can avoid that
mouth-watering picture of the eight-layer chocolate cake with peppermint-stick
ice cream on top?
Electronic banking
oOmni-channel Marketing
Seamless shopping experience whether shopping online, mobile device, phone,
or brick-and-mortar
The idea is that your information and past purchases are available despite the
format.
oBeacon Marketing
Bluetooth signal within a store that communicates with shoppers' smartphones
A way to provide instant coupons or other incentives to shoppers while they are
in the store. Macy's, Target, and American Apparel are examples of companies using
beacon marketing.
oDigital Wallets
Bluetooth technology permitting customers to use their smartphones to pay for
items
Digital wallets permit customers to pay for items without cash or even swiping
their credit card
Globalization
oMany retailers have expanded operations into different countries.
Retailers must adjust to global differences in culture, law, and regulations.
oRetailers are busy expanding to other countries, and they bring with them innovations
and new management philosophies. McDonald’s, T.G.I. Friday’s, Starbucks, and the Hard
find more resources at oneclass.com
find more resources at oneclass.com
Rock Café are global success stories for U.S. retailers. Similarly, Spanish fashion retailers Zara
and Mango are now global brands, while Swedish home goods company IKEA furnishes
rooms around the world. Even French hyperstore chain Carrefour has stores in Europe,
South America, Asia, North Africa, and the United States.
oStill, retailers need to adjust to different conditions around the world. In countries in the
Middle East with large Muslim populations, you won’t find the riblet basket on the
Applebee’s menu, and McDonald’s offers customers McArabia Kofta sandwiches.
oAnd some countries require that certain percentages, often over half, of goods sold in
retail stores are locally produced.
Retailtainment to Satisfy Experiential Shoppers
oRetailtainment is all about marketing strategies that enhance the shopping experience.
Many consumers are seeking fun
Retail experiences that incorporate elements of surprise, excitement, and
novelty lead to increased purchase likelihood.
oStores need to position themselves in a manner that demonstrates their competitive
advantage over other stores while attracting the interest and attention of the consumer.
oMany retailers recognize that there is a “theatre” aspect to what they do. Shoppers
represent the audience to be entertained, while the store design sets the stage. When sales
people—the equivalent of actors in retail—are added to the mix, the scene is set. Employee
uniforms often serve as costumes. For example, consider the referee shirts worn by Foot
Locker employees.
oMerchandising displays can be very creative, making the buying experience less about
buying and more about having an experience. It’s clear that the line between entertainment
and retail is blurring.
Ethical Problems in Retailing
oRetailers must deal with ethical problems that involve both customers and employees.
Shoplifting
Employee theft
Retail "borrowing"
Ethical treatment of customers
Customer profiling
Sale of harmful products
oRetailers experience ethical problems with both their customers and employees. Losses
due to shrinkage are a growing problem. Shrinkage occurs due to shoplifting, employee
theft or merchandise damage, or retail borrowing.
Shoplifting has increased substantially in recent years and accounts for 35% of
all shrinkage. In 2009, shoplifting accounted for $15.1 billion in losses. Thus while the
text labels shrinkage an ethical problem, it certainly has legal overtones. In fact,
shoplifting is often an organized criminal activity in which thieves take various
measures to evade security sensors. Items are then easily sold via eBay.
Employee theft of both merchandise and cash represents a second form of
shrinkage. While some employees unconsciously take pens from work home in their
pocket and forget to bring them back to work, the real damage comes from
systematic, planned efforts to steal from the store. Theft of store gift cards is
common, as is “sweethearting,”, a practice in which a cashier consciously
undercharges or provides a cash refund to a friend. In extreme instances, unethical
cashiers allow friends to walk away with merchandise without paying anything.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 12: goods and services via bricks and clicks. Retailing, 21st century style: retailing is the process by which organizations sell goods and services to consumers for their personal use. More than 1 in 10 us workers is employed in retail o. In some european countries, don"t even think about squeezing a tomato to see if it"s too soft or picking up a cantaloupe to see if it smells ripe. Such mistakes will quickly gain you a reprimand from the store clerk, who will choose your oranges and bananas for you. The evolution continues: what"s in-store for the future? o. Four factors motivate innovate merchants to reinvent the way they do business: The anti-fur movement and focus on sustainability are just 2 examples of how trends may impact the retail merchandising mix. Sustainability concerns also make certain forms of marketing less attractive, such as direct mail, which. Economic downturn that began in 2008 had great impact on retailers.
