What strategies distinguish the different types of general merchandise retailers?

Types of RetailersChapter 2

VIPs•Understand Newer Retailer Formats•Identify the different characteristics that defineretailers•Explain the different types of food retailers•Explain the different types of general merchandiseretailers•Explain the differences between service andmerchandise retailers

General Trends in Retailing•Growth in Omnishopping by Traditional Retailers including mobile•Fewer bricks and mortar with more compelling reasons to shop inthem•Physical store becoming a piece in a ‘bigger’ customer experience•New retail formats•Globalization of US Retailers•Increased Industry Concentration•Growth in Services Retailers•Data Analytics and Personalization

‘Newer’ Retail Formats•Renting vs. buying•Online subscription services – Stitch Fix; Birchbox; Trunk Club (menand women)•Customer experience that fuses the offline and online worlds – WarbyParker•Bluefly, Gilt Groupe, OpenSky.com, Blue Apron•Amazon Go stores: Just walk out technology (first store opened indowntown Seattle in January 2018)

How Trunk Club Workswatch/uTmQ7ghV_FSVHjCSUixaKQ

Types of Retailers•Retailers use Different mixes …-Merchandise: variety (breadth)/ assortment (depth)- Services- Design, visual merchandising- Location- Pricing- Delivery•Infinite Variations•Some combination of retail mixes satisfy the needsof significant segments and persist over time.

Types of Merchandise•The US Bureau of the Census uses a hierarchical set offour digit codes called the Standard IndustrialClassifications (SIC).•The US Bureau, along with Mexico and Canada,converted to a new system in 2004, the NorthAmerican Industrial Classification System (NAICS -Nakes)

NAICS Codes for RetailersNorth American Industry ClassificationCodes

Merchandise Offering: Variety &Assortment•Variety (breadth of merchandise): wide vs. narrow- The number of merchandise categories•Assortment (depth of merchandise): deep vs. shallow-The number of items in a category (SKUs)

Variety and Assortment of Kayaks inDifferent Retail Outlets

Services Offered•Offers assistance in selecting theappropriate kayak and repairing them•Versus …•Both provide limited services

If you look up the government's statistics on retailers, you'll find that most of the industry is listed under "general merchandise" and then subdivided further into a number of retail sectors. General merchandise forms a substantial part of the retail world, so it's worth looking at in detail.

A Basic Definition of General Merchandise

If you're a retailer, the products you sell fall into one of two broad merchandise categories. One is groceries and food products, and the other is general merchandise, which is a broad catchall term for pretty much everything that's not groceries – from hearing aid batteries to major appliances. Some definitions go a bit further in describing who is or is not a general merchandise retailer, excluding things like building supplies or secondhand goods.

In the real world, retailers often sell both groceries and general merchandise. Groceries accounted for over half of Walmart's U.S. revenues in 2017, for example, while grocery chain Kroger reported nongrocery sales amounting to more than 20 percent of its grocery sales.

The Perishability Issue

One of the key distinctions between groceries and general merchandise is perishability. Grocery items often have a brief life cycle, with produce, meats and baked goods having a shelf life that's measured in days. That doesn't apply to canned and dry foods, but it still means that a grocer doesn't have much room for error when stocking the shelves.

General merchandise, as a rule, isn't perishable, so there's not as much pressure to turn over your inventory in a hurry. There are exceptions, of course. Tech products and clothing aren't perishable, but those markets move so quickly you may have to take a heavy write down on your unsold inventory after just a few months.

General Merchandise Retailers

Most of the stores you see when you look out your window are general merchandise retailers of one kind or another. The big department stores and discount stores are classified as general merchandise retailers, despite their recent move into grocery sales, and so are the big-box warehouse clubs. Most specialty retailers also deal in general merchandise. They don't offer the wide range of products you'd see at a department store but instead offer specialized expertise in a single product such as shoes, cameras or sporting goods.

It's a good strategy for a small retailer who wants to compete with the monster chains. They have a little bit of everything, but small specialized retailers have a whole lot more of one specific thing.

General Merchandise Wholesaling

Retailing isn't the only way to make a dollar from general merchandise. If you're in search of an entrepreneurial opportunity, you can also wholesale general merchandise. The large chains are probably out of your reach, at least initially, but there's plenty of room to earn a living by selling to smaller retailers. You'd need to form relationships with manufacturers or distributors of suitable products and then turn around and sell the products you buy to retailers in your area.

If you've ever bought a handy gizmo in a gas station or convenience store, it was there because an entrepreneur saw the opportunity and persuaded the store's owners to stock and sell it.

What are the different types of general merchandise retailers?

What is the example of general merchandise?

What are three common ways to classify retailers?

What is considered a general merchandise store?