RETAIL

MANAGEMENT
Sir M
Instructor
Module 1 : Modern
Retailers
Upon completion of this
module, you will be able
to:
• Identify the types of retail stores.
• Explain how the emergence of the internet
has changed retail.
• Define and explain the four retail archetypes.
A retailer is a person or business that sells goods or
services to the public; there are many types of retail
stores.
Department
stores
Department stores house a wide variety of product mixes,
each of which is contained within a section, or
“department”, of the store. Products might include
hardware, clothing, appliances, and so on.

Popular department stores around the world include

Debenhams, Walmart, Target, and many more. Below is an
example of a cosmetic counter such as that can be
found in many department stores.
Chain
Stores
Chain stores buy a wide variety of merchandise in large
quantities at discounted prices. These discounts lower their
costs and can therefore set lower prices.

Popular chain stores worldwide include T.K. Maxx, Primark,

Home Depot, and more.
Franchises

Franchises allow for individuals or groups to carry

specific activities out
as agents for a company’s products.
Franchises are common with restaurants and car
dealerships, such as McDonald’s, Costa, or Ford.
Discount
Houses
Discount houses are stores that emphasize price over all
else. Merchandise tends to be highly assorted and highly
limited.

Non-Store Retailing
Non-store retailing includes non-traditional retail stores,
such as life insurance, vending machines, or online
retailers.
Warehouse
Style
Becoming more common are “warehouse-style retail stores”,
The stores tend to have high ceilings and tall racks that
store both ready for sale items and inventory.
Second-Hand
Second-hand stores retail used goods at deeply
discounted prices. A type of second-hand store called a
pawn shop allows people to offer products as collateral
against a cash loan.

When the loan is repaid, the collateral is reclaimed, or,

conversely, a customer may surrender their collateral as
payment.

As seen by websites like eBay, second-hand retail is not

limited to brick-and-mortar stores.
The Future of
Retail
Formerly, the only way for consumers to buy products was
through a store-based retailer. With the emergence of the
internet, consumers can often go directly to the source.

This change has required traditional retailers to rethink their

business models. This transformation has resulted in several
archetypes that can be operated either by traditional
retailers or by online operators.

Namely these archetypes are: lowest cost, convenience-

location, convenience-pre selection, and platform operator.
Lowest
Cost
The lowest cost archetype is made up of four features:
accurate forecasting, perfect integration of online and
offline channels, small stores, and lean, scaled-up
operations. This archetype appeals to customers that are
on tight budgets and are keen for a bargain.
Demand forecasting
Refers to forecasting customer demands to
drive operations. Better forecasting could involve:

• Coordinating staffing levels with customer traffic

• Cutting back on waste of fresh food products and
shrinkage (shrinkage refers to the percent of products
lost between the manufacturer and the point of sale
• Reducing stock-outs
• Optimizing inventory space
Integratio
n
Of online and offline channels could include:

• Pre-ordering
• Offering discounts to those who order online
and pick up in-store
• Self-checkout
• Online payment
Convenience-Location
Convenience-location is an archetype that states that due to
the convenience of a store’s location, customers will be more
willing to pay more for particular goods, like snacks, ingredients
for dinner.

The success of stores that follow the convenience-location model

can be seen in small town gas stations or airports. Stores that
follow this type of model should be relatively small with high
visibility of products and fast checkouts.

These types of stores can encourage impulse purchases through

appealing storefronts, signage, and promotional displays.
Convenience-Preselection

Stores that follow a convenience-preselection offer

convenience in the form of choice and promise low
prices and a high level of service. Stores that hope to
follow this model should offer limited choice but choices
that are particular to the needs of the customer.

If customers know that they can trust the store to offer

options that are good for them, they can forgo
comparing the endless options that are offered online.
Prices do not need to be the lowest, but still need to be
attractive to the customer.
Platform
Operator
While some may prefer a convenience-preselection
model as it takes away the stress of choice, a retailer
that offers many options can still do quite well online.
These websites can help customers to find the exact item
they want at a very good price.

An excellent example of a successful platform operator

model is Amazon.
The main points from this module are
as follows:
• Types of retail stores include: department stores, chain
stores, franchises, discount houses, non-store retailing,
warehouse style, and second-hand.

• Department stores house a wide variety of product

mixes, each of which is contained within a section, or
“department”, of the store.

• Chain stores buy a wide variety of merchandise in large

quantities at discounted prices.
• Franchises allow for individuals or groups to carry out
specific activities as agents for a company’s
products.

• Discount houses are stores that emphasize price over

all else.

• Non-Store retailing includes non-traditional retail

stores, such as life insurance, vending machines, or
online retailers.
• Warehouse-style retail stores tend to have high ceilings
and tall racks that store both ready for sale items and
inventory.

• Second-hand stores retail used goods at deeply

discounted prices.

• There are several main archetypes in retail, namely: lowest

cost, convenience-location, convenience-preselection,
and platform operator.

• Demand forecasting refers to forecasting

customer demands to drive operations.
THANK
YOU!!!