destination retailers
draw customers by selling unusual items, having a friendly atmosphere, special pricing, and other desirable characteristics
examples of destination retailers
trader joes, bass pro shop
the wheel of retailing
a theory that explains institutional changes that happen when new retailers enter the retail market
the wheel of retailing in detail
come in with low price and services -> medium strategy (moderate prices, more services and products introduced) -> high end strategy (high prices, upscale customers, excellent service and facilities)
4 principles of retail wheel
- there are many price sensitive shoppers who will trade service, location, selection for price
- price sensitive shoppers are not loyal and switch for lower prices
- new retailers have lower operating costs than existing ones
- retailers move up the wheel to increase sales, broaden target market, and improve image
lessons learned from principles of retail wheel
- don’t trick yourself into thinking consumer is loyal to you and not to the price
- beware of dangers in upgrading target market
- employ customer benefit cost analysis when thinking of service upgrade
- use unbundling pricing
scrambled merchandising
a retail strategy where retailers broaden their products to include things generally not related to them and is outside of their focus
retail life cycle
- introduction (low sales, negative profits, no competition)
- growth (rapid increase in sales/profits, competition starts coming in)
- maturity (leveling off sales, declining profit)
- decline (dropping sales, low profits)
retail strategy mix
a business’s combo of store location, pricing tactics, good/services offered, customer service, and more
merchandise product mix
total number of product lines offered to customers
merchandise product lines
groups of products that are closely related (like different flavored kit kats)
