Retail Exam 3 - Nicole Cox - all of exam 3 class notes PDF

Preview

Summary

Nicole Cox - all of exam 3 class notes ...

Description

Retail Exam 3 Paradox of Choice Having too many choices hurts consumers  Paralysis  Regret (buyer’s remorse)  Escalation of expectations  Self Blame

Long Tail Theory The limited and thought to be “less wanted” items when added up account for just as much as the “wanted” or carried items “combine enough non-hits on the long tail and you’ve got a market bigger than the hits” Long Tail Article 1. Make everything available 2. Cut price in half, now lower it 3. Help me find it

Merchandise Management The process involved in attempting to offer the right quantity of the right merchandise, in the right place, at the right time, in order to meet the company’s financial goals. Buyer: Responsible for selecting the merchandise carried by the retailer, and setting the strategy to market that merchandise. They devise and control sales and profit projects for several product categories. Other duties include:  Plan assortment  Negotiate with vendors  Oversee in-store displays Micro-Merchandising: Retailer adjusts shelf-space allocations to respond to customer and other differences among local markets Cross-Merchandising: retailers carry complementary goods and services to encourage shoppers to buy more Types of Merchandise  Staple Merchandise  Fashion Merchandise o Fad  Seasonal Merchandise

Fashion Merchandise: a type of product or way of behaving that is temporarily adopted by a large number of consumers because the product or behavior is considered to be socially appropriate for the time and place. Forecasts: projections of expected retail sales for given periods Components:  Overall company projections  Product category projections  Item-by-items projections  Store-by-store projections (if a chain) Forecasting Staple Merchandise  Based on extrapolating historical sales because sales are constant from year to year Controllable factors affecting Sales Projections  Promotions  Store locations  Merchandise placement  Cannibalization Uncontrollable factors affecting Sales Projections  Seasonality  Weather  Competitive Activity  Product Availability  Economic Conditions Staple Merchandise  Predictable Demand  History of Past Sales  Relatively accurate forecasts Fashion Merchandise  Unpredictable Demand  Limited Sales History  Difficult to Forecast Sales Assortment Plan: a set of SKUs that a retailer will offer in a merchandising category in each of its stores and channels. It reflects the variety and assortment that the retailer plans to offer in that category  Variety (Breadth) vs. Assortment (depth) Surviving Silly Bandz

Private Label Readings

Target’s New Private Label: Will a new private label keep Target’s customers out of Aldi and Dollar General?  Target is introducing a new line of toiletries and household cleaning products to attract budget conscious shoppers  70% cheaper then national brands and 50% cheaper then up & up Nielsen on Private Label: ‘We’ve seen a complete reversal in growth trajectory compared to manufacturer branded items’ Store Brand Facts

Category Management Seeks to understand consumers and to optimize shelf within the category  Data Intensive and Analytical  Collaborative and continuous  Broad category focus Why category management? 1. Growing retailer power 2. The growing importance of marketing to the shopper 3. Big data and insight generation Category Management creates two types of incremental consumer buying opportunities:  To attract new consumers  To incrementally increase purchases by existing consumers Basic Tenets of Category Management 1. Category management must be consumer based and consumer driven 2. The process should take a view from the perspective of the retailer, the true category manager 3. The ultimate outcome of the category management process must be an increase in at least one of the following: sales, profits, or productivity Components of Category Management  Strategy o Scorecard o Trading partner relationships  Business Process o Information technology o Organization capabilities

Strategy: the strategic choice to organize, lead and manage the business from a foundation of category strategic business units. Category management becomes the overall framework to guide decision making in the business process. Information Systems  The data and systems that support the fact-based decisions of category management and improve the business process productivity  The integrated decision support systems that extract, summarize and deliver the data from the operational systems to decision makers throughout the category management process Marketing Information System (MIS): people, equipment, and procedures which gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to decision makers  Internal reports system  Marketing intelligence system  Decision support system  Marketing research system Trading Partner Relationships: the synergy that is created when trading partners collaborate to maximize their unique resources and perspectives for a common objective – enhancing business results by delivering superior consumer value Organizational Capability: refers to the development of category management as a core competency through the creation of an appropriate organizational structure, roles/responsibilities, skill/knowledge development and reward systems. Disadvantages of Traditional Structure  No-one owns the category management process  No clear cut responsibility or accountability for category performance  Slow response to consumer based opportunities Business Process: a structured, measured set of activities designed to produce a specific result for both the trading partners and the consumer Step 1: Category Definition: Selecting the SKUs that will comprise the category’s merchandise assortment and variety  It is preferable to manage the category as the consumer perceives it, but not always possible Step 2: Category Role Convenience, Traffic Driver, Profit Driver 1. Development of company wide category roles 2. Assignment of category roles to each category 3. Allocation of resources consistent with the category role

Step 3: Category Assessment Review and analysis of all internal and external data, including key inputs from supplier  Who is shopping the category? How? Why? Step 4: Category Scorecard Balanced set of category measures and objectives; mix of hard and soft measures Step 5: Categories Strategies A total systems “roadmap” that moves the category from the current state to the desired state: 1. Strategy to grow market share 2. Increase sales 3. Increase foot traffic 4. Improve gross margin 5. Improve gimroi 6. Increase basket size 7. Improve customer satisfaction Step 6: Category Tactics Used to implement chosen strategies (assortment, pricing, promotion, shelf presentation and supply chain) have to fit with strategy which must fit role Step 7: Plan Implementation Process of securing management approval and executing the activities called for in the category plan Step 8: Category Review An appraisal of category performance

Consumer Centric Category Management Making Category Management Work

Shopper Marketing Is “understanding how one’s target consumers behave as shoppers, in different channels and formats, and leveraging this intelligence to the benefit of all stakeholders – brands, target consumers, retailers and mutual shoppers” Common Elements 1. Understanding how one’s target consumers behave as shoppers in different channels and formats 2. Shopper Marketing is a discipline designed to drive growth by improving the shopping experience for the shopper

3. The application of shopper insights along the path to purchase behavior in order to increase sales for both retailers and manufacturers Shopper Marketing Goals  Improve the shopping experience across the store  Increase trip frequency and basket size  Increase exposure to and relevance of brands; increase brand equity via the retail environment Why is Shopper Marketing such a big deal? 1. More then half decisions are made at the shelf 2. It’s getting harder & harder for brands to create loyalty 3. Private labels are becoming more competitive 4. Balance in power between retailer and manufacturer is shifting towards retailer 5. Historically focused on consumer, now we have data on the shoppers How is shopper marketing different from category management? Category Management  Seeks to understand consumers and to optimize shelf within the category  Data intensive and analytical  Collaborative and continuous  Broad Category Focus Shopper Marketing  Seeks to understand shoppers  Emotion intensive, searching for the motivation to purchase  Collaborative, but time-bound and episodic  Narrow shopper focus The Missing Link Between Shopper Marketing is E-Commerce...