Retail Management: A Strategic
Approach
Thirteenth Edition
WEEK 4
Retail Institutions
By Store-based
Strategy Mix
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Learning Objectives
5.1 To describe the wheel of retailing, scrambled
merchandising, and the retail life cycle and to show how
they can help explain the performance of retail strategy
mixes
5.2 To discuss some ways in which retail strategy mixes are
evolving
5.3 To study a range of general merchandise firms involved
with store-based strategy mixes
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Retailer Strategy Mix
• A strategy mix is the firm’s particular combination of:
– store location
– operating procedures
– goods/services offered
– pricing tactics
– store atmosphere
– customer services
– promotional methods
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The Wheel of Retailing
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Retail Strategy Alternatives
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Store-Based Retail Strategy Mixes
Food-Oriented General Merchandise
• Convenience store • Specialty store
• Conventional supermarket • Traditional department
store
• Factory outlet
• Membership club
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Convenience Store Strategy Mix
• Location
– Neighborhood
• Prices
– Average to
– Above average
• Atmosphere & Services
– Average
• Merchandise
– Medium width and low depth of assortment;
– Average quality
• Promotion
– Moderate
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Convenience Store
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Conventional Supermarket Strategy
Mix
• Location
– Neighborhood
• Prices
– Competitive
• Atmosphere & Services
– Average
• Merchandise
– Extensive width and depth of assortment; average quality;
manufacturer, private, & generic brands
• Promotion/Communication
– Heavy use of POP materials, and coupons.
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Supermarket of Tomorrow
Please click URL to view:
[Link]
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Specialty Store Strategy Mix
A specialty store concentrates on selling one type of goods or
service line, such as young women’s apparel.
• Location
– Business district or shopping center
• Prices
– Competitive to Above average
• Atmosphere & Services
– Average to excellent
• Merchandise
– Very narrow width and extensive depth of assortment; average
to good quality
• Promotion
– Heavy use of displays Extensive sales force
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Specialty Store Strategy Mix
➢ Among the most popular categories of specialty stores are
apparel, personal care, auto supply, home furnishings,
electronics, books, toys, home improvement, pet supplies,
jewelry, and sporting goods.
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Traditional Department Store
Strategy Mix
• A department store is a retail establishment offering a wide
range of consumer goods in different areas of the store
under one roof, each area ("department") specializing in a
product category.
• furnishings, electronics, clothing, footwear, toys, jewelry,
cosmetics, and sometimes also groceries.
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Traditional Department Store Strategy
Mix
• Location
– Business district, shopping center or isolated store
• Prices
– Average to Above average
• Atmosphere & Services
– Good to excellent
• Merchandise
– Extensive width and depth of assortment; average to good
quality
• Promotion
– Heavy ad and catalog use; direct mail; personal selling
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Traditional Department Store
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Traditional Department Store: Boyner
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Factory Outlet Strategy Mix
➢ A factory outlet is a manufacturer-owned store that sells
discontinued merchandise, irregulars, canceled orders
• Location
– Out of the way site or discount mall
• Prices
– Very low
• Atmosphere & Services
– Very low
• Merchandise
– Moderate width but poor depth of assortment; some irregular
merchandise; lower continuity
• Promotion
– Little; self-service
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Factory Outlet Stores
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Membership Club Strategy Mix
• A membership (warehouse) club straddles the line between
wholesaling and retailing.
• It appeals to price-conscious consumers, who must be
members to shop there.
• Some members are small business owners and employees
who pay a membership fee to buy merchandise at wholesale
prices.
• e.g.: Metro Market
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Membership Club Strategy Mix
• Location
– Isolated store or secondary site (industrial park)
• Prices
– Very low
• Atmosphere & Services
– Very low
• Merchandise
– Moderate width and poor depth of assortment; lower
continuity
• Promotion
– Little, some direct mail; limited sales force
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Scrambled Merchandising: A Retail Trend
• Scrambled merchandising refers to a practice by
retailers that carry an increasingly wider assortment of
merchandise.
• When retailers introduce products that go beyond the core
product mix.
• This strategy can help retail businesses meet a wider
range of consumer needs, which can boost sales volumes.
• Carrying unexpected items can also encourage impulse
buys, further increasing sales.
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Why Scrambled Merchandising?
• Desire for one-stop shopping format.
• Concern to adopt “hot” products to increase store traffic
• Looking to increase store sales per square foot and same
store sales especially in a recessionary period
• Looking to make up for lost sales due to Web
• Desire for cross selling opportunities
• Looking for high gross profit businesses
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Scrambled Merchandising by a Shoe
Store
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Scrambled Merchandising: D&R of Turkiye
• D&R was originally a bookstore selling mainly books and
partly music CDs ad DVDs of movies
• Now it is selling many items from books to headphones,
toys to stationary and even candies. Even they recently
start to operate a cafe in a part of the store in Izmir!
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The Retail Life Cycle
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A Retail Format in Introduction Stage
of the Retail Life Cycle
➢The Frictionless Micro-Store:
• [Link]
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Copyright
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Retail Management: A Strategic
Approach
Thirteenth Edition
WEEK 5
Web, Nonstore-
based, And Other
Forms Of
Nontraditional
Retailing
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Learning Objectives (1 of 2)
6.1 To contrast single-channel and multi-channel retailing
6.2 To look at the characteristics of the three major retail
institutions involved with non store-based strategy
mixes: direct marketing, direct selling, and vending
machines – with an emphasis on direct marketing
6.3 To explore the emergence of electronic retailing
through the World Wide Web
6.4 To discuss two other nontraditional forms of retailing:
video kiosks and airport retailing
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Non-store Retailing
➢Retailing strategy that is not store-based
1. Direct Marketing
2. Digital Retailing
2a) Online Retailing
2b) Omncihannel Retailing
3. Automated Vending
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1. Direct Marketing
• Direct marketing relies on one-on-one communication with
a target audience. It aims direct sales using tools like mails,
e-mails, phone calls, catalog marketing, and text messages.
• Direct marketing is an effective way for a company to build
and maintain brand awareness and raise interest in products
and services. Leading countries include:
– US
– Japan
– Germany
– Great Britain
– France
– Italy
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Strategic Business Advantages of
Direct Marketing
• Reduced costs
• Lower prices
• Large geographic coverage
• Convenient to customers
• Ability to pinpoint customer segments
• Ability to eliminate some salesforce requirement
• Ability to supplement regular business without additional
outlets
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Strategic Business Limitations of
Direct Marketing
• Products often cannot be examined prior to purchase
• Costs may be underestimated
• Response rates to mails and catalogs under 10%
• Clutter exists
• Industry reputation/reliability sometimes negative
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2a. Online Retailing
• Web-based retailing (often called e-tailing or online retail)
is a form of non-store retailing where businesses sell goods
and services directly to consumers through the internet.
➢Core Components:
• A Digital Storefront: A website or mobile app where products
are displayed.
• An Electronic Shopping Cart: Software that allows users to
select items and calculates totals (including taxes and
shipping).
• A Payment Gateway: A secure system to process credit
cards, digital wallets (like Apple Pay), or even "Buy Now, Pay
Later" services.
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Online Strengths: Consumer Appeal
• Information • Low search costs
• Entertainment • Endless selection
• Interactive • Prices
communications
• Convenience
• Personalization
• Fun
• Peer-reviews
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Global Consumers’ Online Retail Purchases
Trends
➢Global Market Scale (2025–2026):
• Total Sales: Global retail e-commerce sales are projected to
reach $6.88 trillion in 2026.
• Retail Share: Online sales now account for approximately to
21.5% of all total retail sales worldwide.
• Shopper Population: Roughly 2.85 billion people
worldwide are expected to make at least one online purchase
in 2026.
• Regional Leaders: China remains the dominant force,
controlling nearly 50% of global online shopping, followed by
the United States and the United Kingdom.
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Global Consumers’ Online Retail
Purchases Trends
➢Mobile and Social Commerce:
• Mobile Dominance: Mobile commerce (m-commerce) is
expected to account for roughly 70% of all global e-
commerce sales in 2026.
• Mobile Traffic: Smartphones now generate 75% of all retail
website traffic globally.
• Social Commerce: Sales through social media platforms
(like TikTok Shop and Instagram) are projected to reach
$2.9 trillion globally by the end of 2026.
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Global Consumers’ Online Retail
Purchases Trends
Category 2026 Projected Revenue
Consumer Electronics ~$988 Billion
Fashion & Apparel ~$957 Billion
Food & Beverage ~$905 Billion
DIY & Hardware ~$395 Billion
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Online Retail Trends-Summary
Category Key Statistic Market Insight
Represents ~21.5% of all total
Global Sales $6.88 Trillion retail sales worldwide.
Nearly 1 in 3 people globally now
Shopper Base 2.8 Billion People shop online.
Smartphones are the primary
Mobile Usage 75% of Sales device for completing purchases.
Huge growth driven by "Shop"
Social Commerce $2.9 Trillion features on TikTok and Instagram.
Mostly caused by high shipping
Cart Abandonment ~70% costs and complex checkout.
"Buy Online, Pick Up In-Store"
Omnichannel 16% Annual Growth (BOPIS) is becoming standard.
Followed closely by Fashion and
Top Category Consumer Electronics Food & Beverage.
Accounts for nearly 50% of the
Regional Leader China entire global e-commerce market.
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Recommendations for Digital Retailers
• Develop or exploit a well-known, trustworthy retailer brand
• Tailor the product assortment for Web shoppers
• Enable the shopper to “click” as little as possible-
e.g., [Link] one-click option
• Provide an effective search engine
• Permission-based use of customer information
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Recommendations for Digital
Retailers (2)
• Include unedited ratings and reviews for customers to
increase consumer information
• Personalize the shopping experience for each shopper
based on past purchases and previous Web searches
• Include free shipping or one time shipping fee for unlimited
shipping
• Service experience based on delivery speed, speed with
which questions are answered, customer’s ability to find
suitable product and accurate portrayal of good (features,
color, style and fit)
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2b) Omnichannel Retailing
• Omnichannel retailing is a fully integrated approach to
sales and marketing that provides shoppers with a unified
experience
• A customer might see an ad on Instagram, read reviews on
a blog, check local stock on a search engine, and finally go
to the store to touch the product before buying it on their
phone to get a coupon.
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Omnichannel Retailing
• Seeks synergies among different channels (get product
information online, try in-store, buy from app, pick-up in
store, return in-store)
• Retailer views each channel as creating value (immediacy
of store, 24/7 of Web)
• Channels are viewed as complementary, not competitive
(Zara app. vs. store)
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Principles of Omni Channel Retailing
• Use same product identification in all channels
• Price goods the same in all channels
• Assess infrastructure economies. Direct marketer database
and delivery system.
• Use suitable partners (Amazon to sell, Fedex) to deliver
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Nike-Omni channel Retailing
• Nike has shifted heavily toward a Direct-to-Consumer (DTC)
model that relies on their ecosystem of apps (Nike Run Club,
SNKRS).
• The Edge: Their "Nike Live" stores are curated based on the
digital buying patterns of people in that specific neighborhood.
• Omni-Feature: Members can reserve items on the app and
find them waiting in a digital locker in-store, which they unlock
with their phone—zero human interaction required unless
desired.
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3. Vending Machines
• Vending machines are a cash- or card-operated retailing
format that sells goods and services.
• Eliminates the use of sales personnel and allows 24-hour
sales. Lowers costs and risks.
• Machines placed wherever convenient for consumers, but
not for store.
• Hot/cold beverages and food items are the most popular.
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3. Vending Machines
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Street Food in Vending Machines
• Japanese case:
• [Link]
OmpBWdcOk1GyGJrDtdBQgCHhSC61iIlB&index=3
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Copyright
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