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Retailing and B2C E-Commerce

Retailing and B2C E-Commerce. Retailing. Final stop on the distribution path The process by which products are sold to consumers for personal use Retailers add value with image, inventory, service quality, location, and pricing policies. Retail sales ($billion), by type of business.

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Retailing and B2C E-Commerce

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  1. Retailing and B2C E-Commerce

  2. Retailing • Final stop on the distribution path • The process by which products are sold to consumers for personal use • Retailers add value with image, inventory, service quality, location, and pricing policies

  3. Retail sales ($billion), by type of business

  4. The Wheel of Retailing • New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; up scaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices

  5. The wheel of retailing

  6. Retail Life Cycle • Retailers are also products because they provide benefits and must offer a competitive advantage to survive • Introduction: new retailer takes a unique approach to doing business • Growth: retailer catches on with shoppers, sales and profits rise, others start to copy it so retailer expands offerings • Maturity: many have copied it and an entire industry has formed, profits decline • Decline: retail format becomes obsolete

  7. The retail life cycle

  8. Factors Affecting the Future of Retailing • Demographics Convenience for working women Catering to specific age segments Recognizing ethnic diversity • Technology • Globalization

  9. Classifying Retailers • All retailers are classified by the NAICS codes • Some lines still blurred • scrambled merchandising - strategy of carrying a combination of food and nonfood items

  10. Classifying Retailers by Service • Self-service retailers • Full-service retailers • Limited-service retailers

  11. Classifying Retailers by Merchandise Selection • Merchandise breadth is the number of different product lines available • Narrow versus Broad assortments • Merchandise depth is the variety of choices available for each specific product • Shallow versus Deep assortments

  12. Breadth versus depth of merchandise lines

  13. Merchandise Selection

  14. Convenience stores Supermarkets Specialty stores Department stores Hypermarket stores Discount stores General merchandise discount stores Off-price retailers Warehouse clubs Factory outlet store Store Types

  15. Supercenters are a popular store format.

  16. Nonstore Retailing • Any method a firm uses to complete an exchange that does not require a customer visit to a store • Direct selling • Automatic vending

  17. Forms of nonstore retailing

  18. Direct Selling • Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise • Door-to-Door Sales • Parties and Networks • party plan systems • multilevel pyramid schemes

  19. Automatic Vending • Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate • French fries • Software • Levi’s jeans

  20. B2C E-Commerce • Online exchange between companies and individual consumers

  21. Benefits Shop 24/7 Less travel More choices More information Price competition Fast delivery Limitations Lack of security Fraud Can’t touch items Hard to distinguish color/ texture online Expensive to return E-Commerce and the Customer

  22. Benefits The world is your marketplace Decreases costs Very specialized businesses possible Real-time pricing Tracking of consumer behavior Limitations Lack of security Must maintain site Price competition Conflicts with conventional retailers Legal issues not resolved E-Commerce and the Marketer

  23. Developing a Store Positioning Strategy • Store image • how the target market perceives the store • its market position relative to the competition • Atmospherics • the use of color, lighting, scents, furnishings, sounds, and other design elements to create a desired setting

  24. Mapping a Store’s Personality

  25. Store Design: Setting the Stage • Store layout and traffic flow • Fixture type and merchandise density • The sound of music • Color and lighting • The Actors: Store Personnel • Pricing policy

  26. Building the Theater: Store Location • Types of Locations • Site Selection • Location planners evaluate trade area and conduct site evaluation • traffic flow, number of parking spaces available, ease of delivery access, visibility from street, local zoning laws, population characteristics, community life cycle, mobility, degree of competition

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