Chapter 1 - Introduction and Trends of retailing

retailing

1. RETAIL ENVIRONMENT CHAPTER 1: INTRODUCTION

2. LEARNING OBJECTIVES What is merchandising management? Why is it importance? Understand the importance of customer satisfaction and customer services Able to segment / categorize consumers Explain the importance of population trends on retail planning List the social trends that retail managers should regularly monitor and describe their impact on retailing

3. LEARNING OBJECTIVES (NEXT WEEK) Describe the changing economic trends and their effect on retailing Discuss the consumer shopping / purchase model, including the key stages in shopping / purchase process

4. MERCHANDISE & MERCHANDISING The various types of goods that can be bought and sold for profit or The wholesale purchase & retail sale of goods for profit or The stock of goods in a store The activity of promoting the sale of goods & services at retail. Merchandising means "planning involved in marketing the right merchandise or service at the right place, at the right time, in the right quantities, and at the right price."

5. WHO IS A MERCHANT ? A wholesaler or retailer who buy goods from various sources for resale to anyone and everyone for profit. A Merchant is held to a higher standard of duty of care than a non-merchant because he is deemed to have expert knowledge about the goods he deals in.

6. MERCHANDISING MANAGEMENT Merchandising management is the science of evaluating human behavior and buying habits in order to determine the best way to stock, display, and sell goods at retail stores. It is a process where in you arrange a group of products that highlights those that you want to sell fast or those that you want people to get noticed.

7. MERCHANDISING MANAGEMENT Therefore the increased visibility and appeal of products leads to increase in sale ability . It includes product packaging, placement, promotion etc. Example : The ice-filled tubs of soda, next to the cash register at the convenience store on a hot summer's day -- a merchandise manager determined that more product would be sold by doing it.

8. BASIS OF RETAIL MERCHANDISING Merchandising management is the key activity in managing the retail business. The primary function of retailing is to sell merchandise. Merchandising mgmt can be termed as planning, buying, & the selling of merchandise.

9. RETAIL MERCHANDISING MGMT PROCESS Retail merchandising management process involves analysis, planning, acquisition, handling and control of merchandise investments of a retail operation.

10. RETAIL MERCHANDISING MGMT PROCESS ANALYSIS : The retailers must be able to correctly identify their customers before they can ascertain consumer desires & requirements for making a good buying decision

11. RETAIL MERCHANDISING MGMT PROCESS PLANNING : It is more important because merchandise to be sold in future must be bought now. It involves marketing the right merchandise at right place at right price in right quantities at right time.

12. RETAIL MERCHANDISING MGMT PROCESS ACQUISITION : It is because the merchandise needs to be procured from others, either distributors or manufacturers.

13. RETAIL MERCHANDISING MGMT PROCESS HANDLING : It involves to see where merchandise is needed and to be sold in a proper condition.

14. RETAIL MERCHANDISING MGMT PROCESS CONTROLLING : It is required since the function of merchandising involves spending money. So it is necessary to control the amount spent in this process.

15. Retail Merchandising Management is Importance? It's the frontline representation of a brand, shaping consumers' perceptions and influencing purchasing decisions. Effective merchandising enhances brand visibility and recognition and communicates brand identity, values, and quality. By strategically showcasing products in retail environments or online platforms, merchandising creates memorable experiences that drive customer loyalty and advocacy. Moreover, it contributes to revenue growth by maximising product sales and optimising inventory management. Thus, investing in thoughtful and strategic merchandising is paramount for brands seeking to strengthen their competitive position and build long-term value.

16. CUSTOMER SATISFACTION occurs when the total shopping experience of the customer has been met or exceeded. Retailer has to spend 5 times as much money to get a new customer into a store, then retaining a current customer.

17. CUSTOMER SERVICE Activities performed by the retailer that influence: the ease with which a potential customer can shop or learn about the store’s offering. the ease with which a transaction can be completed once the customer attempts to make a purchase. the customer’s satisfaction with the products and service before, during and after sales.

18. MARKET SEGMENTATION Divide, or break down, consumer population into smaller groups based on certain characteristics. Why segment a market? Better matching of customer needs Enhanced profits for business Better opportunities for growth Retain more customers Target marketing communications Gain share of the market segment

19. TRENDS AFFECTING CONSUMER BEHAVIOUR

20. POPULATION TRENDS Retailers often find it useful to group consumers according to population variables, such as population growth trends, age distributions, ethnic makeup, and geographic trends. It is useful for two reasons: Data is often linked to marketplace needs. Data is readily available and can be easily applied in analyzing markets.

21. POPULATION GROWTH Any increase in domestic population growth will mean an increased demand for goods and services. Even minimal growth in the total population will mean opportunities for retailers. As population growth slows, successful retailers must focus on taking market share away from competitors, managing gross margin by controlling selling price and cost price, and increasing the productivity of existing stores. Another growth opportunity for retailers is international expansion.

22. AGE DISTRIBUTION A retailer must Understand the various needs of each age segment and know what motivates consumers to spend money. Be able to speak the older consumers’ language, their needs. Understand that, as they age, older consumers need easy-to-navigate store layouts and clearly labeled merchandise. Use the Internet to reach out to young consumers since most of them are technology savvy.

23. ETHNIC TRENDS

24. ETHNIC TRENDS Implications for retailers Retailers must understand Hispanic shoppers and their $1.2trillion of purchasing power. When targeting Hispanics, retailers should not assume that their population in the United States is homogeneous. they behave the same in the marketplace.

25. GEOGRAPHIC TRENDS The location of consumers in relation to the retailer will often affect how they buy. Retailers should be concerned about where their consumers reside. All consumers want convenience and will therefore tend to patronize local retail outlets. Considering mobility, the farther one moves from a prior residence, the more one needs to establish new retail shopping patterns

26. SOCIAL TRENDS Education State of marriage Divorce Makeup of households Changing nature of work

27. EDUCATION The education level of the average world population is increasing , and is the single most reliable indicator of a person’s income potential, attitudes, and spending habits. Retailers can expect consumers to become increasingly sophisticated, discriminating, and independent in their search for consumer products. Education is also a key determinant of the use of the Internet for shopping

28. STATE OF MARRIAGE Single-person households presents many opportunities for the retailer because of the increased need for a larger number of smaller houses complete with home furnishings. With more men living alone, supermarkets will have to direct promotions toward their needs and habits.

29. DIVORCE Divorce may impact the way people shop once they are settled into their new homes. Retailers must make specific adjustments for divorced, working women with children by adjusting store hours and changing the product assortment.

30. MAKEUP OF HOUSEHOLD Homeloners, singles, mingles (unmarried couple), dinks (dual income, no children) Families with children Younger women v older women Younger v older man

31. CHANGING NATURE OF WORK Retailers need to find ways to enrich job experiences and lower turnover. One major opportunity for retailers is employing home-based and disabled workers. Since many individuals are holding multiple jobs, retailers can tap into this pool of individuals for part-time workers.

32. The end