Types of retailers

By:
Ashish Jaiswal
Imran
Manish
 Retailing
 Retail consists of the sale of goods or merchandise to
small or individual lots for direct consumption by the
purchaser. 

 Retailing may include subordinated services, such as

delivery.

 Retail establishments are often called shops or stores.

 Retailers are at the end of the supply chain.

Trends in Retailing

Increasing Growing Diversity

Industry of

Concentration Formats

Globalization
 Retailer Characteristics
 The store-based retailers range from street vendors selling
vegetables to large corporations such as Reliance, TATA,
Mahindra, Walmart, Tesco, Sears etc that have become an
integral part of global culture
 The different types of retailers offer unique benefits
 Consumers patronize different retail types when they have
different needs like:

Prices and the Cost

of offering breadth
Variety and
Type of Merchandise Services Offered and depth of
Assortment
Merchandise and
Services
 Retail Mixes
 Merchandise
 Variety (breadth)
 Assortment/SKUs (depth)
 Services (check-out lines)
 Store size, design and visual merchandising
 Location
 Pricing
 Targeted segments
 Food Retailers

 Mom and Pop Stores

 Kirana Stores

 Convenience Stores

 Supermarkets
 General Merchandise Retailers

 Departmental Stores

 Specialty Stores

 Category Specialists

 Drug Stores

 Full-line Discount Stores

 Non-store Retailers

 Electronic Retailers

Catalog and Direct Mail Retailers

 Direct Selling

 Television Home Shopping

Vending Machine Retailing

 Services Retailing

 Fast food outlets

 Health clubs and clinics

 Movie halls

 Auto service

 Beauty care

 Hotels and resorts

 Ownership Types

 Independent, Single Store Establishment

 Cooperatives

 Corporate Retail Chains

 Franchising
 Mom and pop stores
These are small owned family business which sells a small
collection of goods to the customers.

They are individually run and cater to a small sections of

society.

These stores are known for their high standards of service.

 Product\service retailers
Convenience Stores:-
Food oriented retailers that appeal to busy consumers by reducing the time spent shopping.

Well-organised, logical store designs that speed out product selection & check-out are must.

Charge higher prices.

Shoppers must weigh costs & benefits of patronizing a convenience store.

Carry very narrow merchandise lines.

Snack foods, dairy products, gasoline accounted for 70% of sales volume.

Makes more convenient to shop.

Fast, casual restaurants.

Opening smaller stores closer to consumers (like airports).

Convenience Stores
Traditional product Retailers
Supermarkets:

Large,self-service, low-price & low margin food retailers

Carry an extensive variety of merchandise & rely heavily on high inventory turnover to
turn a profit

Most items sold are low margin

Use bar code scanners to identify & record purchases

Major trend is the movement towards a combination store format(cosmetics & apparels)

Based on the concept of scrambled merchandising, in which goods & services that are
unrelated to one another are sold together

Larger than conventional supermarkets with 20-30000 sq. feet & some to 100,[Link]
Supermarkets
 Traditional product Retailers
combination store extends the concept to include complete business units, unrelated to
one another, operating within a single store( banks, dry-cleaners, parlors)

Goal : To reduce perceived scale of store from one giant entity to series of
small,independent shops

Superstores :
-operate in 120,000 or more sq. feet, stocks & display both broad & deep assortment

lower prices & vast array of hard & soft goods make for one stop shopping

Located in well-defined,easily accessible areas enhance shopping convenience

 Supermarkets
Conventi
onal
●
30,000
superma
rkets
SKU
Limited ●
2000 SKU
assortment ●
Offer one or two brands and sizes
supermarkets ●
Designed to maximize efficiency and
reduce costs
(extreme ●
Offer merchandise at 40-60% lower prices
than conventional supermarkets
value food ●
Save-A-Lot, ALDI (German’s Wal-Mart)
retailers)
2-17
 Supercenters and Warehouse Clubs
Supercenters Warehouse Clubs
Useainventory
Low
Offer low-locations,
limited andholding
irregular
inexpensive
costs
ass by carrying
ortment of foodstore a
and
The
One-stop
fastest
Large stores (150,000 – general merchandise
design,
limited littlewith
assortment of
220,000 square feet) that little service
fast at low
selling itemsprices
growing
shopping
retail customer service
combine a supermarket with
experience
category
a full-line discount store

2-18
Hypermarkets

- viewed as strip centers operating under a single roof

- its huge operations occupying 225,000 sq. feet of selling space-attempt to create a
synergistic tie b/w food & general merchandising

success of these retailers will depend on superior merchandise planning, inventory &cost
control & customer service

A classic example is Metro in Bangalore.

Hypermarkets
 Product\service retailers

Specialty stores

Referred as limited-line/single-line retailers.

Product mix is quite narrow with unusually deep assortments within product category.

Include fashion apparel, jewelry, fabrics, sporting goods ,computers.

Operate multiple locations within a single geographic market where market segments are highly
defined.

Leader in custom tailoring its operations to serve target market.

More customer driven than supplier driven.

 Product\service retailers

Strategy : To analyze the market for latent demand in inadequately satisfied market
segments

Outcome : Greater reliance on private-label merchandise

It enables specialty stores to penetrate & nurture market segments that are not served well
by conventional departmental stores
 Traditional product Retailers
Discount stores

general merchandisers that offer brand name products at lower prices.

Accept lower prices in exchange for high sales volume.

Meet customer demands for hard goods (appliances, equipment, hardware), soft goods
(fashion items, food products), services (automotive repairs, restaurants, personal care).

New store – specialty discounter referred as category killers focus on single product line as
toys, electronics, books/ home improvements.
 Traditional product Retailers

Variety stores

carry gifts, toileteries, toys, linens & fashion accessories in limited

assortment & at low prices.

Offer limited customer service, employ few sales people.

Because of its lowest growth it have been moving towards specialty

stores format.
 Traditional product Retailers
Off-price retailers

Appeal to price conscious consumers.

Strategy – to secure mfrs returns & off merchandise below whole sale cost & offer them
to consumers at deep discount.

Carry limited national brands & designer merchandise at 20 to 60 percent below

traditional departmental store prices.

But, price cutting by department stores has been squeezing the profitability of off-price
retailing.

Go for re-organising the operations to meet out the competitive pressure.

 Traditional product Retailers
Catalog showrooms

These are discount operations that offer merchandise through either a showroom or
catalog.

As they compete on price operating cost must be held at minimum.

So they occupy low cost facilities &display a limited assortment of samples.

Customers write up their own orders, present then to clerks at centralized check outs &
pick up the merchandise at in-store delivery stations.

Competitive strategy – planning of merchandise mix, systematic monitoring & control of

inventory& long range pricing decisions.
 Traditional product Retailers

Factory outlets
manufacturer owned outlets to sell off goods that cannot be sold through traditional
retailers.

Offer medium-high quality goods at deep discounts.

Based on the concept of value positioning – giving shoppers better value for their money.

Occupy large,low-overhead locations(suburban,rural) known as factory outlet malls.

 Traditional product Retailers
Warehouse stores
wholesale retail, cash &carry setups with limited sales personnel & display areas Referred as
wholesale clubs sell groceries, office supplies, appliances at wholesale prices

Membership cards are required to gain entry.

Success is based on ability to attract small business customers & increase inventory turnover.

60 – 70 percent of sales in these stores are wholesale purchases by hotels, restaurants, small
retailers & service firms.

Goal: zero ownership of inventory or sale of merchandise to customers before it is paid for.

Allows warehouse store to reduce spoilage, low operating expenses & make a profit at
wholesale prices.
 Nontraditional product/service retailers
Success
Qualityof of
Customer
Types of e-
retailing & to
information
merchandise
acceptance
services
dependit delivers
consumers on :

C
o
m
pe
titi
ve
re
sp
on
se
fr
o
m
st
or
e
ret
ail
er
s
 Nontraditional product/service retailers

Direct response retailers

Advertise products on radio/TV & take mail or telephone orders(toll free)

Take credit cards & operate 24 hrs

Television shopping programs – home shopping n/w

Video logs – shop at home video catalogs designed for use on VCRs

Infomercials – paid TV ads,30 – 60 min long,designed solely to promote & demonstrate

merchandise or services

- product demo, testimonials from past users,& benefits are woven in the [Link]
consumers are asked to purchase by phone or mail
 Nontraditional product/service retailers
Catalog retailers :

Offer goods through mail order catalogs

Save consumer time

Electronic retailers :

Allows consumer to evaluate & purchase goods & services in comfort of their homes.

Provide complete & up to date information on price, quality, assortment & styles through direct interaction with the
retailers.

Computer – h/w & s/w is required to link retailer & customer through phone lines/TV cables.

Home banking, hotels, airlines, book retailers, ready to wear fashion items.

Use is for general merchandise sales.

 Nontraditional product/service retailers

Automatic vendors

Automatic vending m/c enhance customer service inside traditional retail stores & provide
convenient service where stores do not exist.

ATMs & Airline ticket m/c reduce long lines at service counters.
 Service retailers
Four unique characteristics :

Intangibility : Lack physical properties that consumers normally use in evaluation – color,
texture, design, materials, workmanship

- Cannot be possessed or consumed, but it can only be experienced

- Retailers can build tangibility into their services in 3 ways

Price can be used as a distinguishing feature(competitors)

Celebrity endorsement can lend tangibility to [Link] is to identify service with

celebrity who provide tangibility

A well chosen Logo can provide tangibility for a service offering

 Service retailers

Perishability - Services cannot be stored for later use.

Inseparability – normally produced at the same time they are consumed. customers
active participation in the process is required – weight loss clinics.

Heterogeneity – degree of variation in the quality of service, as human performance varies day
by day or from customer – customer.

- it imposes special challenge on service retailers to provide an efficient, standard service at an

acceptable level of quality.
 Service retailers-classification
People Things

Restaurants Freight
Health care services Home improvements
Tangible Travel & lodging Business services
Actions Repair services

Education Financial services

Intangible Information services Legal services
Actions
Entertainment Insurance
Broadcasting
Differences between Services and
Merchandise Retailers.
Four important differences in the nature of the offering provided
by services and merchandise retailers are:
Thank you