Retailers deal with any sales that are for the customer's own use, or for the use of family and friends. In other words, any purchases that are not for business needs are the domain of the retailer.
Here are some descriptions of different types of retail outlet:
- Convenience stores, or corner shops, offer a range of grocery and household items. These local shops often open until late at night. They are usually family run, often belong to a trading group such as Spar, Circle K or 7-Eleven, and cater for last-minute and emergency purchases. In recent years, the Circle K and 7-Eleven franchises have expanded internationally from the United States and are making inroads into the late-night shopping market. Convenience stores have been under threat from supermarkets as later opening has become more common, and as the laws on Sunday trading in many countries have been relaxed.
- Supermarkets are large self-service shops, which rely on selling at low prices. Typically they are well-laid-out, bright, professionally run shops carrying a wide range of goods.
- Hypermarkets are even bigger supermarkets, usually in an out-of-town or edge-of-town location. A typical hypermarket would carry perhaps 20 000 lines. The true hypermarket sells everything from food to TV sets.
- Department stores are located in city centres and sell everything; each department has its own buyers, and functions as a separate profit centre. Examples are Harrods of London, El Corte Ingles in Spain and
- Clery's in Dublin. Within department stores, some functions are given over to concessionaires, who pay a rental per square foot plus a percentage of turnover to set up a store-withina- store. Miss Selfridge, Brides and Principles all operate in this way within department stores. The trend is towards allowing more concessionaires, and around 70% of Debenham's floor space is allocated this way.
- Variety stores offer a more limited range of goods, perhaps specialising in clothes (e.g. Primark) or in housewares and music (e.g. Woolworths).
- Discounters (sometimes called baby sharks) are grocery outlets offering a minimum range of goods at very low prices. Often the decor is basic, the displays almost non-existent, and the general ambience one of pile-it-high-and-sell-itcheap. Kwik Save, Lidl and Aldi are examples of this approach; such stores typically carry only 700 lines or so.
- Niche marketers stock a very limited range of products, but in great depth. Examples are Sock Shop and Tie Rack. They frequently occupy tiny shops (even kiosks at railway stations) but offer every possible type of product within their very narrow spectrum. Niche marketers were the success story of the 1980s, but declined somewhat during the 1990s.
- Discount sheds are out-of-town DIY and hardware stores. They are usually businesses requiring large display areas, but with per-square-metre turnovers and profits that do not justify city-centre rents. Service levels are minimal, the stores are cheaply constructed and basic in terms of decor and ambience, and everything is geared towards minimising the overhead.
- Catalogue showrooms have minimal or non-existent displays, and are really an extension of the mail order catalogue. Customers buy in the same way as they would by mail order, by filling in a form, and the goods are brought out from a warehouse at the rear of the store. These outlets usually have sophisticated electronic inventory control.
- Non-store retailing includes door-to-door selling, vending machines, telemarketing (selling goods by telephone), mail order and catalogue retailing.
- Telemarketing may be inbound or outbound: inbound means that customers telephone the retailer to place an order, whereas outbound means the retailer telephones potential customers to ask them to buy. Currently outbound telemarketing is relatively unusual in UK consumer markets, although it is common in the United States; it is often used to make appointments for sales representatives to call, for products such as fitted kitchens or double glazing, but actual selling over the telephone is rare.
- E-commercerefers to retailing over the Internet. Currently, e-commerce is dominated by business-to-business marketing, but dot.com firms such as Amazon.com, Lastminute.com and Priceline.com are making inroads into consumer markets. The growth of such firms is limited mainly by the growth in Internet users; as more people go on-line, the potential market increases and is likely to do so for the foreseeable future. Traditional retailers have not been slow to respond to the perceived threat: in the United Kingdom, frozen food retailer Iceland now offers an Internet service, with free delivery.
Because consumer needs change rapidly, there are fashions in retailing (the rise and fall of niche marketing demonstrates this). Being responsive to consumer needs is, of course, important to all marketers but retailers are at the ’sharp end’ of this process, and need to be able to adapt quickly to changing trends. The following factors have been identified as being crucial to retail success:
- Location. Being where the consumer can easily find the shop – in other words where the customers would expect such a shop to be. A shoe shop would typically be in a high street or city-centre location, whereas a furniture warehouse would typically be out of town.
- Buying the right goods in the right quantities to be able to supply what the consumer wants to buy.
- Offering the right level of service. If the service level is less than the customer expects, he/she will be dissatisfied and will shop elsewhere. If the service level is too high, the costs increase, and also the customer may become suspicious that the prices are higher than they need be. Discount stores are expected to have low service levels, and consumers respond to that by believing that the prices are therefore lower.
- Store image. If the shop and its goods are upmarket, so must be the image in the consumer's mind. As with any other aspect of the product, the benefits must be as expected or post-purchase dissonance will follow.
- Atmospherics – the physical elements of the shop design that encourage purchase. Use of the right colours, lighting, piped music and even odours can greatly affect purchasing behaviour.3 For example, some supermarkets use artificially generated smells of fresh bread baking to improve sales of bakery goods.
- Product mix. The retailer must decide which products will appeal to his/her customers. Sometimes this results in the shop moving away from its original product range into totally unrelated areas.
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