Advantages And Disadvantages Of Retailers

Costco buys the majority of its merchandise directly from manufacturers for shipment either directly to Costco’s selling warehouses or to a consolidation point where various shipments are combined so as to minimize freight and handling costs. As a result, Costco eliminates many of the costs associated with multiple step distribution channels, which include purchasing from distributors as opposed to manufacturers, use of central receiving, storing and distributing warehouses, and storage of merchandise in locations off the sales floors. (1)

Low product differentiation and economies of scale: There isn’t much product differentiation at play in the retail industry as there are well known manufacturers whose products are offered for sale, which leaves price to compete on. Current well established retailers with thousands of stores enjoy the economies of scale to control their cost that a new entrant might not be able to replicate after immediately entering the industry.

The possibility to become the manufacturer for one of the biggest retail chain in the field with 300 stores

Different retailing businesses have very different distribution methods based on the types of product that they sell, some arguably more effectively than others.

A store like Nordstrom has built a successful model on availability of knowledgeable salespeople, and other luxury or near-luxury retailers would be advised to pay attention. But a mass retailer like Target is not dependent on “high touch” customer service; rather, the most important things it can do to satisfy its shoppers are to ensure that goods are on the shelf and the checkout process is efficient. As more consumers migrate to

Retail: The sale of goods to the public in relatively small quantities for use or consumption rather than for resale.

The development of dedicated distribution systems by the large integrated retailers. The development and application of scanning systems provided the necessary information for the supply chain to be reversed from 'producer push ' to 'consumer pull '. A consequence of this process is the decline of traditional wholesalers and cash and carries that has the effect of further disadvantaging small retailers. The emergence of retail chains as national brands

On the other hand, a online retail store in comparison to a retail store provide new values to their marketing system. Businesses like Scorptec offer values to their customers in different methods. The most simplistic value they offer is reduced prices of their products attracting customers. The reasoning behind reduced costs of goods is because the handling cost have reached minimal amounts in parallel to retail stores. Online retailers require only a storage warehouse to contain their products and dispatch them when they are required. This is managed by inventory control to ensure that products are available for sale when needed without overstocking on the product. The prime function of managing an online retail is that the business doesn’t require shipping products to independent intermediaries. This makes time and concentration more available on creating an improved product without the need to consistently dispatch products to outlets but simply

Since buying items in a retail location is quite often more extravagant than buying the same things from the Internet, there must be a more prominent understanding of why that is and how this can advantage you.

The suppliers get the advantages of making their products be showcased for the consumers thru these retailing outlets. A wider scope of retail outlets could mean wider scope for the brand recognition of the seller’s products, that is why these retailing giants has more power than suppliers. But when it comes to distribution, having a strong supplier is important, the company be better over competitors when it comes to qualitative factors such as on time deliveries on their branches and wider network of

Suppliers in the industry seek buyers who can move a lot of merchandise in a short period of time. The threat of substitution is a big deal in this industry. Most retail stores carry the same types of products with little differentiation. This makes it difficult for companies in this industry to keep customers coming back. This places an emphasis on the need to build a good reputation with customers.

This is when business like John Lewis gives customer option to buy item from their physical store and

„h It results in quicker delivery time due to the faster distribution cycle of products being shipped directly from the wholesalers.

The store management is decentralized, allowing individual store managers more power in decision-making, as they were expected to come up with their own methods for cutting prices and increasing sales. This is done differently in the competitors’ stores, where policies are brought in regional offices. Superior personal customer service offered at the stores from 9am to 9pm six days a week, with shorter working hours on Sundays (Supercentres were open continuously) together with specialized employee training provided customers with an atmosphere in which they were happy to spend their time and money.

For my low (mass) market I chose Primark, which offers fast fashion at low prices. This particular retailer has to supply on high demand on mass, to a specific market where their products are bought mainly on price rather than quality. For the merchandiser this means sourcing their supplies at low cost. Therefore being able to sell at a lower price, demanding the merchandiser to use good negotiation with suppliers to achieve this. For my middle market retailer I chose Next, which is directed at a different consumer than that of Primark and the price range is higher also. For this specific retailer the merchandiser has to think about a higher quality of product that the customer can invest in, such as workwear. The merchandiser has to invest time communicating with buyer on a budget that will still be able to turn a profit for the business. For my third retailer I chose Harvey Nichols which is a high end department store. This requires a different process for the retailer as it has to research buying the products as finished garments and does not have to deal with the manufacturing aspects of its product range. This therefore means the merchandiser has to work closely with the buyer on deciding which products to sell from a range of branded items. Comparing all three retailers there is a great difference on the responsibilities and functions that the merchandiser has to adopt, from concentrating on costing and pricing, through to