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‘Retail Formats’ PROF.C.VIGNALI PhD
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‘Retail Formats’

Feb 22, 2016

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‘Retail Formats’. PROF.C.VIGNALI PhD. Presentation Layout. Introduction to current shopping trends, Factory Outlet Retailing ; background, characteristics and functional strategies, Discount/warehouse club ; background, characteristics and functional strategies, - PowerPoint PPT Presentation
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Page 1: ‘Retail Formats’

‘Retail Formats’

PROF.C.VIGNALI PhD

Page 2: ‘Retail Formats’

Presentation Layout

Introduction to current shopping trends, Factory Outlet Retailing; background,

characteristics and functional strategies, Discount/warehouse club; background,

characteristics and functional strategies, Franchising; background, characteristics and

functional strategies, Conclusions

Page 3: ‘Retail Formats’

Introduction

Shopping is considered to be a ‘leisure experience. (Newby 1993)

Consumer trends change according to;- age, demographics, economics, technology, car ownership

Consumer is now ‘price and value conscious’.

Page 4: ‘Retail Formats’

Introduction

Nowadays, there is a diverse array of retail formats, such as;

Chain stores Supermarkets Discount stores Factory Outlets Franchises Internet

Page 5: ‘Retail Formats’

Factory Outlet Retailing

Background:Factory outlet format originates from USAPrinciple – manufacturers selling brand

name products at a discounted price.First outlet in UK – Hornsea, 1992Format – Large site containing several

‘units’ and other amenities, i.e. restaurants, play areas.

Page 6: ‘Retail Formats’

Factory Outlet Retailing

Background cont.Largest outlet in UK – Cheshire

OaksContains approx. 140 retail unitsMost common items sold at these

outlets include; designer label clothing, crockery and homewares.

Page 7: ‘Retail Formats’

Factory Outlet Retailing

Characteristics;Good quality brands at discounted pricesAllows manufacturer to sell surplus stockLeisure amenities offered encourage the

people to spend the day there.

Page 8: ‘Retail Formats’

Factory Outlet Retailing

Disadvantages;Forces in place by government to

restrain their development.Transport links poor for those

without carsTakes away trade from town centre

retailers

Page 9: ‘Retail Formats’

Factory Outlet Retailing

Functional Strategies;Popular brands, discounted pricesOut-of-town locationsAmenities i.e, ample parking, fast

food, toilets, play parksOut-of-town location reduces

operating costs/distribution channel is shortened

Page 10: ‘Retail Formats’

Factory Outlet Retailing

Retail Example – Cheshire OaksContains;Spacious food court2 full service restaurantsStores include, DKNY, Burberry, M&S,

NextTourist information centre3,000 free car parking spacesFirst class road and rail links

Page 11: ‘Retail Formats’

Discount/Warehouse Club

Definition;“Discount/warehouse clubs can be

described as cash and carries for the general public”. Brassington et al 2001

Page 12: ‘Retail Formats’

Discount/Warehouse Club

Background;Adopted from USA to the UK in 1993Require membershipLarge scale premisesOffer extremely low cost products

inc; housewares, furniture, car parts, appliances

Page 13: ‘Retail Formats’

Discount/Warehouse Clubs

Characteristics;Extremely low pricesLow gross marginsAppeal to price conscious

consumers & small retailers who cannot purchase from larger distributors

Page 14: ‘Retail Formats’

Discount/Warehouse Club

Disadvantages;Availability of stock unreliableHigh degree of self-serviceLittle assistance available in-storeNo delivery options available

Page 15: ‘Retail Formats’

Discount/Warehouse Club

Functional Strategies;Great range of product line in limited

sizes/stylesSituated in industrial areasLayout – concrete floors, aisles wide for

forklifts, merchandise displayed on palletsAll payments must be cashCustomers responsible for transporting

their purchases

Page 16: ‘Retail Formats’

Discount/Warehouse Club

Retail Example – CostCoFirst US style warehouse club in UKTrades from over 360 outlets in 7

countriesProvides supplies for small-medium

sized businessesProvides quality goods at lowest

possible prices

Page 17: ‘Retail Formats’

Franchising

Definition;“Franchising is an arrangement

whereby a supplier grants a dealer the right to sell products in exchange for some type of consideration”. Dibb et al 2000

Page 18: ‘Retail Formats’

Franchising

Background;Franchiser receives percentage of sales

in return for providing equipment, marketing, branding etc.

Organisations which franchise inc; McDonalds, Mercedes Benz, Toyota, the Body Shop

Franchising accounts for approx. 1/3 of all retail sales

Page 19: ‘Retail Formats’

Franchising

Characteristics;Possibly easier to financeAccess to extensive advertisingAccess to lower costs and possibly

centralised buyingFew start up problemsUse of well-known trademark or trade

name

Page 20: ‘Retail Formats’

Franchising

Disadvantages;Onerous reporting requirementsPossible exaggeration of franchiser

advantagesCosts of franchise & other fees may

reduce profit marginsInflexibility due to restrictions imposed by

franchiser

Page 21: ‘Retail Formats’

Franchising

Functional Strategies;Larger, well established franchise

operation have ad campaigns and solid trading name

Good franchisers will offer training programmes

Good franchisers will help secure funding for the investment

Page 22: ‘Retail Formats’

Franchising

Retail Example – McDonaldsCommitted to franchising as way of

doing business70% of restaurants worldwide are

franchisesWorldwide number 1 franchiseMember of the British Franchise

Association

Page 23: ‘Retail Formats’

Conclusions

Factory outlet Retailing;Must continue to attract regular

customers, i.e. provide additional amenities

May seriously affect the likelihood of traditional town centres

Page 24: ‘Retail Formats’

Conclusions

Warehouse/Discount Clubs;Growth inevitable, but government

may inhibit growthMay be situated in town centres,

this may draw back attention to these areas

Page 25: ‘Retail Formats’

Conclusions

Franchising;Threat from internet shoppingFranchising will continue as

consumers still want the leisure activity of shopping

Page 26: ‘Retail Formats’

Bibliography

1. Dibb et al (2000)Marketing Concepts & Strategies

2. CIM Coursebook 2002-2003;- Marketing Operations- Marketing in Practice- Marketing Environment

3. Brassington et al (2000) Principles of Marketing

Page 27: ‘Retail Formats’

Journals

International journal of retailing & distribution management;- Volume 30, No. 5, 2002- Volume 23, No. 1, 1995- Volume 24, No. 6, 1996- Volume 22, No. 1, 1994

Page 28: ‘Retail Formats’

Websites

www.mcdonalds.comwww.british-franchise.orgwww.frain.org.zawww.costco.co.uk