Perspectives on Retailing

2243 Words Jun 15th, 2010 9 Pages
Chapter 1 Perspectives on Retailing


In this chapter, we acquaint you with the nature and scope of retailing. We present retailing as a major economic force in the United States and as a significant area for career opportunities. Finally, we introduce the approach to be used throughout this text as you study and learn about the operation of retail firms.

Learning Objectives:

After reading this chapter, you should be able to:
1. Explain what retailing is.
2. Explain why retailing is undergoing so much change today.
3. Describe five methods used to categorize retailers.
4. Understand what is involved in a retail career and be able to list the prerequisites necessary for success in retailing.
5. Be able to explain
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The major portion of a retailer's competition comes from other retailers in its NAICS category. 2. Three-digit codes are very broad; four-digit codes provide much more information on the structure of retail competition and are easier to work with. B. Number of Outlets 1. Another method of classifying retailers is by the number of outlets each firm operates. Generally, retailers with several units are a stronger competitive threat because they can spread many fixed costs, such as advertising and top management salaries, over a large number of stores and can achieve economies in purchasing. 2. Chain Stores - account 41% of all retail sales. a. Size categories - Broken down by the Census Bureau into "2 to 10 stores," and "11 or more stores" categories. b. Large chains take advantage of their economies of scale and centralized buying by using: (1) Standard Stock List - Method whereby all stores in a chain stock the same merchandise. (2) Optional Stock List - Method which gives each store in a retail chain flexibility to adjust its merchandise mix to local tastes and demands. (3) Providing Supply Chain Leadership - by directing the channel and having other channel members do what they might not

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