The Modern Retail Marketing Environment
The retail marketing environment is dramatically different today from what it was just a decade or so ago. To better satisfy customers’ need for convenience, a variety of new retail forms have emerged. Retailers are experimenting with “pop-up” stores that let them create buzz through interactive experiences and promote brands for a few weeks in busy areas. Also, giant retailers such as Walmart are using information systems, logistical systems, and buying power to deliver good service and immense volumes of product to masses of consumers at appealing prices. Middle- market retailers are in decline as discount retailers improve both quality and image and some retailers move even further upscale. Department stores can’t worry just about other department stores now that discount chains such as Walmart and Tesco are expanding into product areas such as clothing, health, beauty, and electrical appliances.3
An important trend in fashion retailing in particular, but with broader implications, is the emergence of fast retailing. Here retailers such as Zara and Uniqlo develop completely different supply chain and distribution systems to allow them to offer consumers constantly changing product choices. Critics, however, pan fast fashion for its planned obsolescence and the resulting disposability and waste.4
Technology is profoundly affecting the way retailers conduct virtually every facet of their business. Almost all now use technology to produce forecasts, control inventory costs, and order from suppliers, reducing the need to discount and run sales to clear out languishing products.
TABLE 13.2 Major Types of Corporate Retail Organizations
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Corporate chain store: Two or more outlets owned and controlled, employing central buying and merchandising, and selling similar lines of merchandise. Gap, Pottery Barn. |
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Voluntary chain: A wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising. Independent Grocers Alliance (IGA). |
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Retailer cooperative: Independent retailers using a central buying organization and joint promotion efforts. ACE Hardware. |
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Consumer cooperative: A retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends. Local cooperative grocery stores can be found in many markets. |
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Franchise organization: Contractual association between a franchisor and franchisees, popular in a number of product and service areas. Dunkin’ Donuts, Marriott, The UPS Store. |
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Merchandising conglomerate: A corporation that combines several diversified retailing lines and forms under central ownership, with some integration of distribution and management. Macy’s operates Macy’s and other retailers such as Bloomingdale’s. |
Technology is also directly affecting the consumer shopping experience inside the store, including experiments with virtual shopping screens, audio/video presentations, and other applications. Shopper marketing is the way manufacturers and retailers use stocking, displays, and promotions to influence consumers actively shopping for a product. “Marketing Insight: The Growth of Shopper Marketing” describes the important role technology is taking in the aisles.
Social media are especially important for retailers during the holiday season when shoppers are seeking information and sharing successes. Beyond the holidays, many retailers are linking to customer photos supporting their brands on Instagram, Pinterest, and other sites to create social engagement.5
