UNIT II

BY
SARANYADEVI.S

UNORGANISED RETAIL
FORMATS

ORGANISED RETAIL
FORMATS

Merchandise Offering
Variety (breadth of merchandise): wide vs.
narrow
- The number of merchandise categories

Assortment (depth of merchandise): deep vs.

shallow
-the number of items in a category (SKUs)

2-4

DIFFERENT ORGANISED RETAIL

FORMAT

STORE
FOOD RETAILERS
RETAILE
RS
GENERAL MERCHANDISE RETAILERS
NON STORE RETAILERS
SERVICE RETAILERS

FOOD RETAILES
SUPER MARKET/ CONVENTIONAL
SUPER MARKET
LIMITED ASSORTMENT SUPER
MARKET
SUPER CENTRES
HYPER MARKETS
WAREHOUSE CLUBS
CONVENIENCE STORES

SUPER MARKETS
SELF SERVICE FOOD STORE
OFFERINGS GROCERIES, MEAT AND
LIMITED NON FOOD ITEMS SUCH AS,
HEALTH AND BEAUTY CARE
PRODUCTS AND GENERAL
MERCHANDISE
SIZE 20000-30000 Sq ft
CARRIES 30000 SKUS

LIMITED ASSORTMENT SUPER

MARKET

Limited assortment supermarkets (extreme value

food retailers)

1250 SKU
Offer one or two brands and sizes
Designed to maximize efficiency and reduce costs
Offer merchandise at 40-60% lower prices than
conventional supermarkets
Save-A-Lot, ALDI (Germans Wal-Mart)

SUPER CENTRES
The fastest growing retail category
Large stores (150,000 220,000 square
feet) that combine a supermarket with
a full-line discount store
One-stop shopping experience
Large percentage of nonfood items and
focus more on dry groceries such as
breakfast cereals and canned goods
instead of fresh items.

HYPER MARKETS

SIZE 100000-300000 Sq ft
FOOD - 60-70 %
GENERAL MERCHANDISE 30-40 %
STOCK FEWER SKU THAN SUPER
CENTRES
HYPER MARKETS CARRY A LARGE
PROPOTION FOOD ITEMS THAN
SUPER CENTRES
MORE PERISHABLES

WAREHOUSE CLUBS
Offer a limited and irregular assortment of
food and general merchandise with little
service at low prices
Use low-locations, inexpensive store design,
little customer service
Low inventory holding costs by carrying a
limited assortment of fast selling items
SIZE 100000 150000 sq ft
Members wholesale members and individual
members.

Convenience store
Limited variety and assortment of
merchandise
Size 2000 3000 sq ft
Modern version of mom and pop
stores.

Types of General Merchandise

Retailers

Department Stores
Specialty Stores
Category Specialists
Home Improvement Centers
Discount Stores
Drugstores
Off-Price retailers
Extreme Value Retailers
2-14

Department Stores:
Department stores are:

Board variety and deep assortment, offer customer

service and organize their stores into distinctly
separate departments for displaying merchandise.
They sell both soft goods ( apparels and bedding) and
hard goods (appliances, furniture's etc.)

RoyaltyFree/CORBIS

undertaking marketing campaigns to develop strong

images for their stores and brands
building better relationships with their key customers
Their strength is the brand they sell. Attempting to
increase the amount of exclusive merchandise they
sell.
2-15

Three Tiers of Department

Stores
First Tier: Upscale, high fashion chains
with exclusive designer merchandise
and excellent customer service
Nordstrom, Neiman Marcus, Saks
Second Tier: Retailers sell more
modestly priced merchandise with less
customer service
Macys
Third Tier: Value oriented caters to
more price conscious customer
JCPenney, Sears, Kohls

Rob Melnychuk/Getty Images

2-16

Full line discount stores

Broad variety of merchandise, limited
service and low prices.
Have both private label and national
brands but these brands are typically
less fashion oriented than brands in
department stores.

Specialty store
Limited number of complementary
merchandise categories and provide a high
level of service in relatively small stores.
Very specific market segment.
Deep and narrow assortments.
Customers are free to shop and experiment
on their own.
As specialty retailers focus on specific
market segments, they are vulnerable to
shifts in consumer taste and preferences.

Category specialist
Definition:Discount stores that specialize in a
particular category are called category specialist
retailers. They are also known as discount
specialty stores or category killers.
Description:They offer a narrow variety but deep
assortment of merchandise in their category. Since
they are category specialists, they can use their
buying power to negotiate lower prices, excellent
terms and assured timely supply. They can thus
manage to offer such low prices that can virtually
kill a category of merchandise for other retailers

Home improvement centers

Is a category specialist offering
equipment and material to make
home improvements.
Merchandise in home improvement
centers is displayed in a warehouse
atmosphere, salespeople are
available to assist customers in
selecting merchandise and to tell
them how to use it.

Off price retailer

Close-out retailers
Offer an inconsistent assortment of brand name
merchandise at low prices

TJX companies (T.J. Maxx, Marshalls.

HomeGoods)
Ross Stores, Burlington Coat factory, Big
Lots, Tuesday Morning

Types of Non-store
Retailers

2-25

Service retailing
Selling primarily services rather than
merchandise large and growing
part of retail industry.
examples :
Restaurant
Airline
Bank
Educational institution

Difference between service and

merchandise retailers
Intangibility
Simultaneous production and
consumption
Perishability
Inconsistency