RETAIL MANAGEMENT
Chapter 1: Overview about retail world
RULES
When Who
Why
5W1H How
What
Where
On time
Ask – Ask & Ask?? Self-learning at home
Switch your phone to Do homework Don’t talk privately
silent mode
Content
• What is retail?
• The role of retail in supply chain management
• Value-added from retailers
• The economic and social roles of retailers
• Retail channels and global distribution system
• Changes in Distribution channels
• Retail opportunities: management, entrepreneur
• Decision process in retail management
Activity
Spend five minutes writing your responses to the following questions:
• When is the last time you went to your favorite retailer? What store
was it? Maybe you prefer to shop online. Why?
• Have you wondered about the journey those products take before
making it out to the shelves?
• What is your definition the word “retail”
Which company is retailer?
What is retailing?
Retailing – a set of business activities that adds value to the
products and services sold to consumers for their personal or
family use
A retailer is a business that sells products and/or services to
consumers for personal or family use
The role of retail in supply chain management
• Retailers are a key component in a supply chain that links manufacturers to
consumers
• A supply chain is a set of firms that make and deliver goods and services to
consumers
• Wholesalers buy and store merchandise in large quantities from manufacturers
and then resell the merchandise (usually in smaller quantities) to retailers
Why are retailers needed?
• Wouldn’t it be easier and cheaper for consumers to cut out the middlemen,
the wholesalers and retailers, and buy directly from manufacturers?
• Because retailers add value and are more efficient at adding this value than
manufacturers or wholesalers
CONSIDERABLE
Supply Chains
A supply chain is system of organizations, people, activities, information, and
resources that involve transformation in an efficient, nimble, and seamless way
Supplier: person providing service (domestic or international)
Factory: supplier has raw materials made into products
Distribution Center: finished product goes here after leaving factory
Regional Distribution Center: local to area with many advantages
Retailers Create Value
Providing Breaking Holding Providing
Assortments Bulk Inventory Services
Functions of a retailer
• Creates value (Assorting, breaking bulk, holding inventory,
providing services)
• Customer convenience
• Important link in the supply chain
• Supply of information
• Risk bearing (Spoilage, natural risks, change in customer’s taste)
• Financing
• Introduction of new products
• Advertising
• Economic development
Challenges in Retailing
1. Inventory: having too much or too little can affect reputation of
retailer and perception of consumer
2. Mobile Experience and Engagement: 90% of customers use
smartphones while shopping
3. Digital Disruption: 5 stages (need recognition, information search,
evaluating alternatives, purchase decision, post-purchase
evaluation)
The economic and social roles of retailers
• Corporate Social Responsibility (CSR): The voluntary actions
taken by a company to address the ethical, social, and
environmental impacts of its business operations, in
addition to the concerns of its stakeholders
• Role in Developed Economies: 4,3 trillion USD (2011)
• Employment: 14 million people were employed in retailing
in 2012
Retail channels and global distribution system
• Top 50 Global Retailers 2024
Leading global retailers of 2023
Retail channels and global distribution system
• Differences in Distribution Channels
Changes in Distribution channels
Information Systems in Retail
Frequently utilized information systems in retail:
• Inventory Management Software (IMS): tracks inventory levels, orders, sales,
and deliveries
• Customer Relationship Management (CRM): looks at data about current
and future customers in hopes of retaining and building relationships
(personal profile/details, sales history, communication, feedback)
• Accounting Information Systems (AIS): system of collecting, storing, and
processing data used by decision makers
Historical Changes in Retail
Pre-1800s: retail was made up of local merchants who provided full service to
customers (credit, repairs, etc.)
First department store was developed in 1800s, by the 1950s over 4,000
department stores operated, and by 1970s department stores closed and
replaced with malls
1990s: Internet impacted retail industry, online shopping became widely
popular and still is to this day
Retail opportunities: Management
• Management: People with a wide range of skills and
interests needed because retailers' functions include
➢ Finance
➢ Purchase
➢ Accounting
➢ Management information system (MIS)
➢ Supply management including warehouse and distribution
management
➢ Design and new product development
Retail opportunities: Entrepreneur
• Entrepreneur: Retailing provides opportunities for people
who want to start their own business
• Some of the world's richest people are retailing
entrepreneurs
Amazon: Jeff Beros
Decision process in
retail management
The Retail Mix
Strategic vs. Tactical Decisions
• Doing the Right Thing (direction) vs. Doing Things Right (execution)
• Strategic Decisions Are:
✓ Made Infrequently
✓ Long-term
✓ Require significant investment
✓ Not easily reversed
• Location, Organization Design, Information and Distribution Systems,
Customer Service
Checklist for Making Ethical Decisions
Misconceptions About Careers in Retailing
• College not needed
• Low pay
• Long hours
• Boring
• Dead-end job
• No benefits
• Everyone is part-time
• Unstable environment
• No opportunity for women and minorities
Why You Should Consider Retailing
• Entry level management positions: department manager or
assistant buyer/planner
• Manage and have P&L responsibility on your first job
• Starting pay average with great benefits
• Some retailers pay graduate school
• No two days are alike
• Buying and planning for financially analytically oriented
• Management for people-people
THANK FOR LISTENING!
