Raphaella Marie Gupiteo Marketing 2-B Retailing Management

Types of Retailing

Characteristics of Retailers

Retail does not have a fixed conceptional structure since they cater to the various
and everchanging needs and wants of the consumers. Each retailer is different and
offers distinctive approaches throughout multiple markets. As the number or retailers
increase and the vast selection of products and services available, there is bound to be
competition. Many elements must be considered for retailers to accommodate their
customers and form an advantage against competitors.

The Retail Mix is the most fundamental characteristic to describe the different
types of retailers. Its elements include the merchandise type, variety, and assortment
offered, customer service level, and the price of the merchandise, which determines
how they attract their customers. Retailers are classified and given a six-digit code
based on the products they sell and the services they offer (a type of merchandise).
Different retailers can provide the same commodity with several variations and
quantities (variety and assortment). The approaches (service offered and promotional
methods) each retailer take and the prices they give depends on the products or
services they have. They may also charge higher depending on their costs, and for
them to make a profit, they may have customers pay for extra services.

Types of Food Retailers

Food products could only be purchased at supermarkets, however, and

nowadays, customers can find food in several places as new supermarket-type stores
rise. The conventional supermarket is where people usually go to for food. In the same
way, limited assortment supermarkets accommodate customers but with lower prices
and lesser, or more limited, assortments or varieties. They have smaller costs
compared to supermarkets and typically found in areas with low rent. These retailers
focus more on food products since it is one of the primary needs of consumers. By
imploring trends in marketing, which include offering fresh, green, ethnic, and private-
label merchandise (which relatively appeal to customers) and creating a shopping
experience that customers can enjoy, they can compete with other food retailing
formats.

Supercenters are another type of food retail store that is larger and provides a
one-stop shopping experience. As opposed to supermarkets, supercenters offer general
merchandise at a higher ratio but still lower than that of food items. Hypermarkets are
similar to supercenters, but they carry a more significant proportion of food products,
specifically perishables, in contrast to supercenters with more dry groceries and non-
food items. These retail food stores have higher operating costs and are too big for
customers to find convenient.

Another type of food retail store is warehouse clubs. They use low-cost locations,
which means they can offer lower prices. They have inexpensive store designs and do
not provide much customer service since and they are opportunistic about their
inventories, making use or their bargaining powers. Warehouse clubs are the type of
store wholesalers, and large families visit for their purchases since they offer more
copious amounts of products in larger containers and packages.

Convenience stores are also familiar to most customers since they can be found
in easily accessible areas, like nearby workplaces. This type of store diverges from the
similarity of other food retail stores, which are larger since its target is to enable on-the-
go customers to find and purchase products quicker. Most of the time, convenience
stores can be located near gasoline stores since this dynamic is convenient for
travelers.

Types of General Merchandise Retailers

Like food retail, some stores cater mostly to general merchandise. Department
stores are the most common general merchandise retailers. They carry a range of
organized and displayed products in their stores and offer customer service. They are
categorized into three tiers: upscale, high-fashion, designer merchandise to more
modestly priced merchandise, and the value-oriented-tier, which caters mostly price-
conscious consumers. They increase the amount of exclusive merchandise they sell,
their use of private-label brands, and also expand their multichannel and social media
presence keep their market shares up.

Full-line discount stores are the type of general merchandise retailers that offer
great deals of a wider variety of merchandise. In contrast, category specialists provide a
narrow but deep assortment of merchandise and often compete against each other
through customer service. However, specialty stores use a different approach to their
retail strategy compared to the rest since they focus on a particular market segment.
The manufacturers often open their own specialty stores rather than having other
retailers purchase from them. Drugstores focus on health and beauty care products,
and extreme-value retailers are small discount stores that target low-income
consumers. Similarly, Off-price retailers can sell brand-name and designer-label
products for lower prices by dealing with closeout and irregular merchandise. Bargains
change on each visit because of its inconsistent and unpredictable nature.

Differences between Service and Merchandise Retailers

Discussed above are merchandise retailers that generally offer less service and
more products. On the other hand, service retailing is another way of catering to the
needs and wants of consumers by providing more service than goods. The two differ in
their physicality (tangibility and intangibility), production and consumption, perishability,
and consistency. Yet, the general nature that distinguishes them from the other is the
emphasis on training employees and inventory management issues.

Types of Ownership for Retail Firms

Another way of classifying retailers is by their ownership, which is independent,

single-store establishments, corporate chains, and franchises. Independent or separate
establishments are mostly owner-managed, meaning management has direct contact
with the customers and can efficiently respond to their needs. The owner also manages
a single-store establishment, only they rely on them to make a broad range of
necessary retail decisions. Corporate retail chains are more on the larger scale of retail.
A retail chain is a company that operates multiple stores that share the same
ownership, whereas a franchise is an agreement to sell the right to use a business
trademark or trade name.