Chapter 2

TYPES OF
RETAILERS
Dr. Civi
Chapter 2
Types of retailers

• Explore various trends that are shaping today’s

retailers.
• Compare and contrast the different types of
retailers.
• Examine how retailers differ in terms of how they
meet the needs of their customers.
• Review how services retailers differ from
merchandise retailers.
• Explore how multichannel retailers provide more
value to their customers.
• Recognize the key success factors in
multichannel retailing.
• Identify the types of ownership for retail firms.
Reality Check
Why Retail Types
Exist
Same product. Different retailers. Why?
Shampoo at:
• Dollarama
• Shoppers Drug Mart
• Amazon

“Why are these prices different if the product is

the same?”
Retailers differ
Retailers differ because they make different choices
about:

• Merchandise (breadth & depth)

• Service level
• Price
• Access (store, online, mobile)

“Retail types are strategies, not labels.”

Merchandise:
Breadth vs Depth
Breadth = how many categories
Depth = how many options within a category

Example: Walmart vs SportCheck

 Retailers by
Merchandise Focus

Focus What it means Example

Broad & shallow Many categories, few choices Walmart
Narrow & deep Few categories, many choices Sephora
Category One category, massive scale Home Depot
dominant

“You cannot maximize breadth and depth at the same time.”

 Stop & Think
“Where do YOU prefer breadth —
and where do you want depth?

• Electronics?
• Clothing?
• Groceries?
Pair & share (2–3 minutes)
Why Service Is a Trade-Off

More service ≠ always better

Depends on: Product, Risk, Customer expectations

More service usually means:

• Higher operating costs
• Higher prices
• Slower transactions

More service = higher costs = higher prices

“When is extra service actually annoying?”

What Counts as Service
in Retail?
Service = anything that reduces effort, risk, or frustration for the customer:
• Information & advice (product details, comparisons, staff expertise, reviews)
• Convenience & speed (store layout, self-checkout, payment options, store
hours)
• Purchase support (financing, price matching, gift services)
• Fulfillment (delivery, click-and-collect, shipping options)
• Post-purchase support (returns, exchanges, repairs, customer support)
• Digital & omni-channel support (apps, inventory visibility, consistent
experience)
• Personalization & loyalty (recommendations, rewards, member perks)
• Experience & problem-solving (events, setup help, complaint handling)
“Which of these services do you personally value the most?”
Activity: Retail Strategy Mapping Lab-1
Understanding retail strategy through real examples

Objective:
Understand how retailers make strategic trade-offs
across merchandise, service, and price.

How this works:

• You will work in groups of 3–4
• Each group will analyze one familiar Canadian
retailer
• Focus on strategy, not personal preference
• There is no single “correct” answer — only well-
reasoned ones.
Activity: Retail Strategy Mapping Lab-2
Understanding retail strategy through real examples
Your Task: Map the Retail Strategy Map the retailer on FOUR
Choose ONE retailer (or assigned): dimensions:
• Walmart
• Merchandise breadth
Narrow ⟷ Broad
• Dollarama • Merchandise depth
• Costco Shallow ⟷ Deep
• Sport Chek • Level of service
• Atlantic Superstore Low ⟷ High
• Winners • Price positioning
Low ⟷ Premium
• Canadian Tire
Activity: Retail Strategy Mapping Lab - 3
Understanding retail strategy through real examples
Trade-Off Question: Share Back
If this retailer tried to significantly • One insight per group
improve service, what would they have
to give up? • Be ready to defend your reasoning

Choose one: Rules:

• Higher prices
• Use your own experience
• Slower operations
• Less assortment • No Googling
• Lower efficiency • Be ready to explain why, not just
• More complexity
where you place them
Levels of Service
Self-service → Limited → Full service

Examples:
• Self-service: IKEA
• Limited service: Best Buy
• Full service: Apple Store
Major Retail Formats:
General Merchandise
Retailers

• Discount
• Specialty
• Category specialist
• Department store
• Off-price
• Value retailers

“Retail formats exist along continua of price,

service, and assortment — not in fixed
boxes.”
Discount Stores: Price
First, Service Minimal
• Wide assortment, low prices
• Self-service model
• Cost efficiency over ex

“Which services from our list are intentionally missing

here?”
Specialty Stores: Strong
but Risky
Why they work:
• Narrow product line
• Deep assortment within that category
• Strong product expertise

Why they’re vulnerable:

• Taste changes
• Narrow target
Category Specialists
(Big Box)
Why they win:
• Scale
• Depth
• Price perception

Why they struggle:

• Intense competition
• Location limits

“How is this different from a specialty store — really?”

Department
Stores:
Stuck in the Middle

• Wide variety of product

categories
• Moderate depth in each
category
• Traditional anchors in malls

“Who are they competing against —

and losing to?”
Off-Price & Value
Retailers

Why Winners & Dollarama work:

• Treasure hunt
• Price certainty
• Low expectations → high satisfaction

“Why does ‘messy’ work here but not elsewhere?”

Food Retail Has
Changed

• Atlantic Superstore
• Sobey’s
• Walmart Supercentre
• Costco
• No Frills
Food Retail
Then vs Now

• Grocery ≠ just groceries

anymore
• Everyone sells food now

Where did your family buy groceries 10

years ago vs now?
Why Food Retail Is So
Competitive
• Thin margins
• High frequency
• Easy switching

Formats:
• Supercentres
• Warehouse clubs
• Convenience stores
Non-Store Retailing
• Online
• Mobile
• Direct-to-consumer
• Social

No stats yet — just logic.

Name one brand you rarely visit in-store anymore.

Multichannel
vs
Omni-channel
Multichannel: Many channels offered
Omni-channel: One seamless experience across
channels

“Who has used click-and-collect?”

Why Omni- • Inventory visibility
Channel Is Hard • Technology integration
• Consistent pricing & service
This is why execution matters more than ideas.

Failures here are operational, not strategic.

Service vs Merchandise
Retailers
What makes services different?
• Intangible
• Produced and consumed at the same time
• Perishable
• Inconsistent

“Managing people becomes even more important.”

 Scenarios: Group Task (10 minutes):
• Rising labor costs • Which retail format is
Activity: • Inflation squeezing
most vulnerable?

FORMAT consumers
• Declining mall traffic
• Which format is most
resilient?
STRESS • Online competitors offering • Why? (Think trade-offs)
free returns
TEST
Retail Ownership
Types
• Independent
• Chain
• Franchise

Ownership affects control, consistency, and

risk.

“Where would you rather work — and why?”

 Retail types = strategic
choices
What You No retailer wins on
Should everything
Remember
Trade-offs matter