Models in Retailing Monopoly

- is a market structure characterized by a single seller, selling the

The Market Structure refers to the characteristics of the market either
organizational or competitive, that describes the nature of competition and unique product with the restriction for a new firm to enter the
the pricing policy followed in the market. market. Simply, monopoly is a form of market where there is a single
seller selling a particular commodity for which there are no close
substitutes.
Pure Competition
- Occurs when there is only one seller for a product or service.

- is a market structure where a large number of buyers and sellers are Overstored
present, and all are engaged in the buying and selling of the - A condition in a community where the number of stores in relation to
homogeneous products at a single price prevailing in the market. households is so large that to engage in retailing is usually
- exists when there is no direct competition between the rivals and all unprofitable or marginally profitable.
sell identically the same products at a single price.
- When a market has homogeneous products and many buyers and Understored
sellers, all having perfect knowledge of the market, and ease of entry - A condition in a community where the number of stores in relation to
for both buyers and sellers. households is relatively low so that engaging in retailing is an
attractive economic endeavor.
Monopolistic Competition
TYPES OF COMPETITION
- large number of firms that produce differentiated products which are
Intratype Competition
close substitutes for each other. In other words, large sellers selling
- Two or more retailers of the same type compete directly with each
the products that are similar, but not identical and compete with
other for the same households.
each other on other factors besides price.
- The products offered are different, yet viewed as substitutable for
Intertype Competition
each other and the sellers recognize that they compete with sellers
- Two or more retailers of a different type compete directly by
of these different products
attempting to sell the same merchandise lines to the same
households.
Oligopolistic Market

- characterized by few sellers, selling the homogeneous or

differentiated products. In other words, the Oligopoly market
structure lies between the pure monopoly and monopolistic
competition, where few sellers dominate the market and have
control over the price of the product.
- Relatively few sellers, or many small firms who follow the lead of a
few larger firms, offer essentially homogenous products and any
action by one seller is expected to be noticed and reacted to by the
other sellers.
Wheel of Retailing

A long-term strategy in which a discount retailer gradually begins to sell

higher quality goods. The wheel of retailing allows the retailer to increase its
prices over time, leading to higher revenues and perhaps higher profits.. The
ultimate goal of a wheel of retailing is to develop a discount company into a Retail Accordion
department store or the equivalent Describes how retail institutions evolve from outlets that offer wide
assortments to specialized stores and continue repeatedly through the
Describes how new types of retailers enter the market as low status, low pattern.
margin, low price operators. As they meet success they acquire more
sophisticated and elaborate facilities and become more vulnerable to new Retail Life Cycle
types of low margin retail competitors who progress through the same Four distinct stages that a retail institution progresses through: introduction,
pattern. growth, maturity, and decline.

Resource- Advantage Theory

Argues that firms gain competitive advantage by offering superior value to
customers and/or having lower operating costs.

Off- Price Retailers

Sell products at a discount but don't carry certain brands on a continuous
basis. They carry those brands they can buy from manufacturers at closeout
or deep one- time discount prices.
The Future of Retail: Trends of Tomorrow
The report, titled The Future of Retail: Trends of Tomorrow and featuring
case studies from retailers around the globe, warns that retailers should
begin preparing themselves for another few years of significant structural
change.
Natalie Berg, Retail Insights Director and author of the report, commented:
“Retailing has undergone seismic shifts over the past five years and we
believe that further fundamental changes are just around the corner. By
2020, we predict that shoppers will have to pay for home delivery, traditional
points-based loyalty cards will become a thing of the past, pure-play retail
will largely cease to exist and checkout-less stores will become a reality.
“A key theme across the 10 future trends is the need for collaboration.
Retailers are finally beginning to recognise the benefits of working together
both in bid for differentiation and providing a better service for the customer.
We expect more retailers will join forces by 2020, primarily through instore
concessions or collection points for online orders.”
Fulfilment
“When it comes to fulfilment of online orders, we believe there is a growing
disconnect between shopper expectations and retailer capabilities. The
competitive state of the sector has resulted in a proliferation of retail delivery
services with lead times getting shorter and shorter. As a result, shoppers
now expect delivery to be fast, reliable and – crucially – free. This is
unsustainable in our view, and we are beginning to see the first signs of
cracks in the system. Looking to the future, we expect more retailers to begin
charging for services such as home delivery and for low-value click & collect
orders.
“Click & collect will continue to bridge the gap between online and offline
retailing. Our own research shows that half of global shoppers are now
influenced by a retailer’s ability to offer convenient collection points for
online purchases. Click & collect is no longer a nice-to-have, it’s now a
prerequisite.
“Looking ahead, retailers must follow their own golden rule by putting the
customer first. For many, this will require collaboration with some
unconventional partners to improve speed and quality of service while
providing additional choice for customers. The key will be to collaborate with
non-competing chains that share an overlap in customer demographics, thus
allowing the retailer to benefit from increased footfall and shopper
satisfaction without the risk of sales cannibalisation. It’s for this reason that
we are expecting more retailers competing in different sectors - e.g. fashion
and beauty - to join forces in the name of providing a best-in-class click &
collect service.”
Instore technology
“The store of the future will be heavily influenced by technology. We expect
more retailers - particularly the spacious, SKU-heavy hypermarkets - to
invest in instore navigation capabilities. In addition to the opportunity to
better understand shopping habits, this technology is incredibly powerful as
it enables the retailer to engage with shoppers just moments before
potentially making a purchase.
“In the not too distant future, we also expect more shoppers to pay for items
via their smartphones. The highly publicised launch of Apple Pay has
certainly created a buzz around mobile payments, but we believe it will be
some time before shopper usage catches up with awareness. In fact, our own
research shows that only 20% of shoppers globally have used their mobile
phones as a method of payment.
“Concerns over privacy and security must be addressed in order for mobile
payments to be accepted beyond those early adaptors. Convenience, ease of
use and providing tangible benefits for the shopper are essential. For
example, some retailers have been testing checkout-less stores, allowing
shoppers to use their smartphones to scan and pay for items as they add
them to their basket.
“Retailers should also consider rewarding shoppers, potentially linking to
loyalty schemes, as an incentive to make mobile payments. It’s for this
reason that we believe in the long-term success of a more comprehensive
mobile wallet as opposed to mobile payments as a standalone option.
Although such technologies can help retailers to differentiate today, it’s
important to bear in mind that this will also lead to greater customer
expectations and in the next five to 10 years such technologies will simply
become the norm.”

Loyalty

“We believe the end is nigh for points-based loyalty cards. The rise of
shopper promiscuity and general strive for more honest, transparent pricing
has had a detrimental impact on traditional loyalty schemes. That said, the
notion of rewarding your most loyal, most profitable customers will never go
away. The future will revolve around personalisation, digitisation and
gamification. We would also encourage retailers to look towards value-added
perks – as opposed to money-off vouchers - such as providing VIP
checkouts for cardholders or free hot drinks instore.”

Personalisation

“Retailers must be prepared to enter a new phase of mass personalisation.

Historically, bricks and mortar players have struggled to replicate the level of
personalisation that can be found online. However, recent advances in
beacon technology mean that targeted, real-time offers are now a reality.
What’s more, Planet Retail research shows that 38% of global shoppers want
to opt in to receiving relevant discounts when instore, compared to the 15%
of shoppers currently doing this. This combination of shopper enthusiasm
and technological capability means that bricks and mortar retailers should
be looking to take personalisation to new heights, driving both customer
loyalty and spend,” Berg concluded.

The Future Trends:

1. Fewer, but more impactful, stores

2. Working together to stand apart

3. Race for the most convenient store experience

4. Personalisation to reach new heights

5. The end of points-based loyalty cards