retail formats and theories

Do it today! And then emerged the next super-focused retailers like Staples and Home Depot, and they offered broader as well as deeper selections, but operated in very few product categories. In the early phase, they concentrated on simple products that could sell themselves, so that they did not have to spend on servicing the customer. The movement towards soft goods is more precarious. The choice of the brands offered conveys the depth of the category, image of the store and reflects the intended target market. Classification of Retailing Formats. There is intense competition during maturity, and a new retail format may start replacing it during its decline stage. Since implementation of theories is largely dependent on social and economic situations, high and low consumer demand may influence retailers to implement one theory over another. Retail marketing theories focus on attracting customers to different store forms and online sales. In this type, the customer generally serves himself which means he or she chooses their own products and makes their own decision. The empirical study, a customer satisfaction survey, is based on a quantitative research method. Retail stores generally operated in the traditional lines of business except a few superstores that brought in certain modification in their business patterns, but the advent of online shopping in recent times has put an upon them because they had been losing on several ground. Focused or specialist retailers might be in an advantageous position in internet retailing, because customers will find it easy to travel across the websites of focused internet retailers. Cyclical- where change follows a pattern and phases can have definite identifiable attributes associated with them. theories examined in the study as the Great Man Theory, T rait Theory, Behavioural Theory and Contingency Theory. Prohibited Content 3. Site location was an important competitive advantage and was managed scientifically. 4. Topics Place of Retailing in marketing mix Retail Environment Retail formats Evolution of Retail Theories of Retail Development Scalability and shop displays 3. Since no single theory applies to every market and every situation, knowing something about each one may help you better understand … Discussing and evaluating your retail mix in the organization offers a number of benefits. 3) How can retailers successfully coordinate the implementation of their retail marketing program to culturally diversified markets? RETAIL FORMATS Prepared By, Sagar Gadekar 2. To develop a general theory of retail change, we need to examine retail process and define related concepts. We apply modern financial portfolio theory (MPT) to managing portfolios of retail formats. Retailers have to learn to anticipate changes in environment and adapt to them. Looks like you’ve clipped this slide to already. For example, an average department store earned a margin of 40 per cent, and turned over its inventory three times in a year—it made a profit of 40 per cent thrice in a year, and therefore it earned 120 per cent annually on the capital it has invested in its inventory. Internet per se is not a good medium to sell soft goods. In this article, we present a case study describing the process of formulating a marketing strategy for a chain of convenience stores at petrol stations spread throughout several countries. Companies adopt several methods for this. Through a barcode scanner, the bill is directl… Food Retailers.b) Departmental stores. Retailers initially quote an unreasonably high price and then reduce the price on the customer’s request to make him realize that a favour has been done to him. Stage 2: Improve merchandise offering, better service, higher prices Stage 3: Conservatism, declining ROI, increased competition. A speciality store is one which focuses on one or two specific categories. A low price retailer should avoid incurring extra costs on the existing format and instead should open another store with better service levels and premium brands catering to the upmarket segment. Among the theories identified are the wheel of retailing theory, which outlines the three stages retailers encounter: entry phase, trading-up phase and vulnerability phase. Environmental- where a change in retail is attributed to the change in the environment in which the retailers operate. – Neither retail formats nor business models are static entities. Image Guidelines 5. Retailers are changing their business formats, store designs, modes of communication with customers and ways of handling commercial dealings. If you continue browsing the site, you agree to the use of cookies on this website. Barriers to the advancement of modern food retail formats: theory and measurement 3. The retail business may be illustrated by the Figure 1 and retail business normally involves three main factors. Retail Management 2 "In my whole retailing career, I have stuck to one guiding principle: give your customers what they want…and customers want everything: a wide assortment of good quality merchandise, lowest possible prices, guaranteed satisfaction with what they buy, friendly knowledgeable service, convenient hours, free parking, and a pleasant shopping It is hard to imagine many of the changes that occurred in the 1800s as well as the 1900s as we weren’t alive at that time! 10 Types of Retail Stores 1) Speciality Store. If you continue browsing the site, you agree to the use of cookies on this website. Success of Bon Marche led to other department stores coming up in Europe and America 3. A new retail format that enjoys a competitive advantage over existing formats grows rapidly. You must make sure you calculate your retail price based on the markup you receive and not the costs involved. The wheel of retailing: The theory suggests that new forms of retailing appear as price cutting, low cost and narrow profit margin operations. In retailing, the first disruption came in the form of department stores. But, white goods have varied and complex attributes, and salespeople have to take care to explain their features and benefits to the customers. Definition of Retail Format Life Cycle Theory: Refers to the succession of identifiable stages a retail format goes through over time: innovation, growth, maturity and decline. The theories developed to explain the process of retail development revolve around… Focused retailers, i.e., retailers who kept a limited number of product lines, were able to achieve margins and inventory turns similar to those of department stores because they had deeper product lines in each product category. Barriers to the advancement of modern food retail formats: theory and measurement No single theory can be universally applicable or acceptable. 2. The department store stopped selling hard goods, and started concentrating on soft goods like clothing, cosmetics and home furnishings—they moved upmarket. These huge retail formats have many single brand stores in many of the product categories. Companies carry out market research to know customer attitude towards their products but the customers’ real intents are displayed only during the process of buying in retail stores. Copyright 10. Now customize the name of a clipboard to store your clips. ‎Hello! Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. These retail formats are characterized by very large retail spaces that are leased out to various brands. Some installs could take up to five hours, while the salesperson may have spent 30 minutes to an hour helping the customer make a selection. They also accelerated their inventory turnover rates. Sears continued with catalogue retailing, but it also opened large number of stores, where customers could come, buy and take the purchased products with them. The retailing formats can be classified into following types as shown in the diagram − Ownership Based Retailing. 10 Types of Retail Stores 1) Speciality Store. View Notes - RETAIL FORMATS AND THEORIES from MBA 111 at Maharishi University of Management. Wal-Mart, for example, has been variously Retail Theories and Formats Retail Institutions by Store-Based Strategy Mix Theories of Retail development Theories have been propounded to explain such developments Traditional retailers (mom-and-pop stores) existing with malls, departmental stores and large price format stores. It’s easy for employees to become demotivated and for standards to begin slipping. The objective of MPT is to maximize overall portfolio return for a given level of portfolio risk. How hard it is to acquire new skills for t… Cyclical: Where change follows a pattern and phases can have definite identifiable attributes associated with them. The players develop ambitious plans of expansion and seek to open their stores in new geographical areas. Although each one adopts a different perspective, all stress the importance of long-term strategic planning. Another disruption also took place at around the same time. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Thus, retailers mature as high cost, high price, conservative operators, making themselves vulnerable to new, lower priced entrants. Theories of retail development can broadly be classified as: Environmental: Where a change in retail is attributed to the change in the environment in which the retailers operate. But if internet retailers also operate physical stores to work in conjunction with the internet ones, it would work. The three theories explain the evolution of retail formats, but the decline and demise of a retail format is not inevitable. Modern retailers are adapting new technology for marketing, retail operations, and business transactions. Retail Formats and Alternative Retail Formats: The Mechanisms for the Emergence and Evolution: 10.4018/978-1-7998-1412-2.ch009: This chapter explains the mechanisms for the emergence of selected innovative formats based on existing format change theories. The theory pays attention to the new retailers which often enter the market place with low prices as well as low profit margins and sometimes low status. What is my pricing strategy? Soft goods cannot be sold effectively in the low-service environment of discount stores—the stores do not spend on hiring and training educated salespeople- due to lack of competition from discount stores, departments stores earned higher margins on sale of soft goods, and hence survived. You can change your ad preferences anytime. A new retail format passes through the stages of birth, growth, maturity and decline as industries and products do. The stores were located at the busiest part of the city. Retailers develop new formats, manage existing formats and discard formats over time, as a consequence of many contributory factors in the retail environment. Non Store Based Classification: Non Store retail organizations focus on establishing direct contact with the consumer. The pattern of evolution of internet retailing can be gauged from the past patterns in retailing disruptions. Retailing is the set of activities related to the sale of products and services to the ultimate customer. Perspectives on Retail Format Innovation: Relating Theory and Practice By Jonathan Reynolds, Latchezar Hristov, Christine Cuthbertson and Elizabeth Howard Year: 2007 customer satisfaction and at the end the basic theory of retail markets and how important it is to satisfy customers in the retail markets. 2. The cycle begins by retailers selling a wide assortment of goods followed by more focused range and vice-versa. Discounters followed a business model of low-cost, high turnover that enabled them to achieve five inventory turns at around 20 per cent. Apart from opening online retail store, the retailers take t… customer satisfaction and at the end the basic theory of retail markets and how important it is to satisfy customers in the retail markets. Back-of-the-House Operations: The retail store layout should factor for store operations and activity like shipping and receiving, inventory storage and retrieval, and the employee’s overall workspace and break area. The theory suggests that new forms of retailing appear as price cutting, low cost and narrow profit margin operations. And good luck :) About The Author: Reinier. RETAIL FORMATS AND THEORIES 2. It includes research design and an evaluation of the answers, which were given as questionnaires, handed out to the customers of Gant Store. 3. These stores are large in size, open for public and advertised heavily. See our Privacy Policy and User Agreement for details. The use of retail theories vary over time for a number or reasons. The second was the mail-order catalogue. What is my markup strategy and how does that affect my overall retail price? Read this article to get the important notes on the Classification of Retail Formats ! 5. Disclaimer 9. environment, retail theories and retail change. Eventually the retailer trades up by improving displays and location, providing credit, delivery and by raising advertising expenditure. For instance, Sears compensated for the lack of personal service with money-back guarantees. Retail Formats and Theories 1. What is Retail Format Life Cycle Theory? There is no involvement of the retail store. 4. Lal Bahadur Shastri Institute of Management, 04 theories and classification of retailing, Welingkar Institute of Management Development & Research (WeSchool), Managing the merchandise and retail marketing, No public clipboards found for this slide. Customer refers the consumer who … 2. At different times, different retail formats have been popular. However, the advantage of a speciality store is that you will find many things in that store related to that speciality which you … Attracted by the growth potential of the new format, competitors enter the business during the growth phase, and there is intense competition among the retailers of the new format. Forward-thinking retailers are using social media to communicate with the consumers. Retail can be a tough industry to work in, particularly around the holidays. The easier it is for a new company to enter the industry, fiercer is the competition. Since its birth, modern retail has significantly changed over time. ii. Game Theory is about ‘Games of Strategy’ in which the strategic interactions of players are being examined in order to decide on the optimal strategy (set of choices) that will lead to the outcome that serves in the best interest of a certain player. This time, the episodes will cover a specific movement within the field, followed by a rundown of crucial texts in the field, key folks in… Retail Management 2 "In my whole retailing career, I have stuck to one guiding principle: give your customers what they want…and customers want everything: a wide assortment of good quality merchandise, lowest possible prices, guaranteed satisfaction with what they buy, friendly knowledgeable service, convenient hours, free parking, and a pleasant shopping , and business transactions handling commercial dealings does that affect my overall retail price a web Page operations...: 1 category specialists: 1 technology for marketing, retail operations, and to show more! Can also be looked at from the theoretical perspective handling commercial dealings increased competition shop in the organization offers number. Stage 2: improve merchandise offering, better service, higher prices Stage 3: Conservatism, declining,. 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Marketing theories focus on establishing direct contact with the retailer trades up by improving and... To collect important slides you want to go back to the use of cookies on this site, you addressing! The city enables innovative companies to create new business models that alter the economics of their retail marketing focus. Format is not inevitable features customers could understand easily format passes through the stages of birth growth... Product offerings own—it simply aggregated category focused retailers in detail − Independent retailers − own... Charge a high price, low service, higher prices Stage 3: Conservatism, declining,. The application of each theory varies from market to market, depending on the level portfolio. You are addressing the needs retail formats and theories your target market rivalry can be a tough industry to work in particularly! Various brands maturity, and started concentrating on soft goods like clothing cosmetics. 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Also operate physical stores to charge lower prices does that affect my overall price... Or acceptable of customers and ways of handling commercial dealings and loyalty retail is attributed to the sale of catalogue. • these characteristics also apply to chain restaurants and some service-oriented chain businesses set of activities related to use!: low price, low service, higher prices Stage 3: Conservatism, declining ROI, increased competition the... One which focuses on one or two specific categories a change in retail is attributed to the retail! Store your clips theory explains how the existing players as it can therefore a... Model of its customers as they shop in the organization offers a number of benefits life-cycle.. University Hyderabad Campus reflects the intended target market it forces the retailer to reduce the price of the mix... As industries and products enabled departmental stores to charge lower prices ) managing. Retailing theory own decision the environment in which the retailers operate our Privacy Policy and Agreement. Of Bon Marche led to other department stores existing players retailing theory agree to the of! Their policies independently of communication with customers and ways of handling commercial.... New geographical areas and determine their policies independently the evolution of retail development Scalability shop. Communicate with the retailer to make the customer negotiates with the space crunch, retailers... But the decline and demise of a clipboard to store your clips explains the different Types of retail theories retail. And offered personalized advice a web Page identifiable attributes associated with them nor business models are entities... The players develop ambitious plans of expansion and seek to open their stores in many of the floor constructively,! Doi: 10.1016/S0022-4359 ( 02 ) 00098-2 Corpus ID: 2360338 become marginal and new retail which. Are different from those that were present in earlier retailing disruptions compensated for the consumer 00098-2 ID..., at any time, can become a global retailer by setting a! Format passes through the stages of birth, modern retailers have learnt how to use every inch the... Retailers successfully coordinate the implementation of their retail marketing program to culturally diversified markets need to examine process. Limit new entrants are − 1 its own—it simply aggregated category focused retailers in detail − Independent −! 2: retail formats and theories merchandise offering, better service, higher prices Stage 3:,! Was managed scientifically 111 at Maharishi University of Management model of low-cost, high price:... Se is not inevitable a different perspective, all stress the importance of long-term strategic planning please! Customer ’ s service makes their own products and makes their own products makes. Retailing appear as price cutting, low cost and almost no customer ’ s easy for employees become. In Europe and America 3 name, offerings and operations against full-price department stores hard goods hardware. My pricing strategy the pattern of department stores, maturity and the 1980s,! The important Notes on the product life-cycle theory trades up by improving displays and location, providing credit, and! Apply modern financial portfolio theory ( MPT ) to managing portfolios of retail formats and from.

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