Retailing is concerned with serving the ultimate consumer. Ultimate is stressed because retailing is not concerned with industrial goods, nor does it involve sale of consumer goods to retailers or wholesalers. Retailing consists primarily of buying the correct assortment of goods for the target customers to be served, making these goods available and often convincing the target customers of the satisfaction to be obtained from them.

Retailing is an extremely important activity. The retailer is the last member of a channel team and the only one to have direct contact with final consumers. If this contact is not effective, the goods may not be sold. To the detriment of all the members of a channel.

It follows that marketing managers at all levers must understand retailing. This is so simple task, for many different types of retailers have developed. For instance, retailers used to  display  goods  and  provide  credit,  delivery  and  other services. Now, some retailers announce proudly that they do none of these!

Changes in retailing have been especially rapid in recent years, making a full understanding of the why of retailing even more important. It is not enough at assume that retailers will automatically take over from wholesalers. The kind of retailers which are chosen for use in a channel or seek out channel members, may make the difference between success and failure.

9.1. How Customers View Retailing Facilities

Place objectives and policies must enter into the selection of retailing facilities in a channel. And the consumer goods classifications are, of course, relevant, because the marketing manager must know how target customers tend to view a product.

He needs to know more than this, however. He must also know how his target customers view particular stores or in the case of a retail marketing manager, How they view his store.

9.2. Retail Store Types

Marketing men are coming to realize the importance of the consumers image of a store. This image, in fact, can be likened to a product itself. This concept, we can classify stores according to three types: Convenience stores, shopping stores and specialty stores. We will not discuss another possibility, unsought stores because they have achieved no image at all. Clearly, however, such stores exist, but not for long unless they become another type in minds of some target customers.

These labels do not mean that any stores must deal only in one type of merchandise. On the contrary, a convenience store might very well stock specialty goods, a classification refers, rather, to customers image of the store.

To illustrate a centrally located or neighborhood convenience store might draw many customers who patronize it simply because it is convenient. They will go first to this store even for shopping goods.

On the other hand, there are certain stores which customers seem to regard as a place to do their shopping for clothes, furniture, household appliances etc. Although these stores carry all types of merchandise, their attraction lies in the width and depth of the assortment offered. Such stores are classified as shopping stores.

Finally, a customer may develop an extremely strong allegiance to a particular store. Whatever her reasons service, selection, store reputation the customer will consistently make the bulk of her purchases at this store, whatever they are convenience, shopping or specialty goods. Store like these are classified as specialty stores.

Thus, a retailers planning must combine both customers attitudes toward products and the store product and patronage motives must be viewed together. This can be done by classifying stores by type of goods.

Convenience Store - Convenience Goods: Here the target customers are willing to buy any brand of the product type at the most accessible store. There may be some brand preference for convenience is stronger.

Convenience Store - Shopping Goods: The target customers want some assortment but are willing to select from the assortment offered by the most accessible store. Although a greater assortment is necessary, it is clear that these shopping goods are close to convenience goods.

Convenience Store - Specialty Goods: In these case, the target customers have favorite brands which they will insist upon, but from the most accessible store which stocks in effect, is offering little more than a well-branded physical product plus convenience.

Shopping Store - Convenience Goods: In these case, the target customers think of the physical product as a convenience good, but may shop among different stores to secure better retail service and/or lower prices. While customers think of the manufacturers product itself as a convenience good, retailers have succeeded in adding something they have differentiated their 'Total Product'.

Shopping Store - Shopping Goods: The target customers wish to compare both the physical product and the various store offerings as well.

Shopping Store - Specialty Goods: In this instance the target customers have strong preferences for the product and will be willing to go as far as necessary to obtain it. At the same time, they are shopping among a number of stores in order to secure the best  'Total Product' and/or perhaps the best price.

Specialty Goods - Convenience Goods: In these case, the patronage motives are dominant and the target customers simply prefer to trade at a specific store, even though the particular brand purchased may be a matter of indifference.

Specialty Goods - Shopping Goods: Here the target custo­mers prefer a particular store but still insist upon an adequate assortment for these shopping goods. The store may have achieved this status because of its wide assortment.

Specialty Goods - Specialty Goods: Here the target customers prefer both a particular store and a particular branded product coveted position for both the retailer and the manufacturer.

The implications for the marketing manager should be obvious. If the majority of a manufacturers target customers are willing to patronize convenience stores, then intensive distribution may be necessary. The manager of a shopping store will be wise to add something to the physical products he carries; if he succeeds in gaining specialty store status, manufacturers aiming at target customers in that area may find it vital to place their products in his store. He may even become channel captain in that area.

Store type affects a retailers whole marketing mix; in fact, it should be part of his overall strategy. In this sense it is important to our focus on strategy planning. Store types are also important to manufacturers and wholesalers when implementing their strategy. But determining store type requires detailed evaluation of individual retailers and geographical market areas. Implementation efforts are beyond our scope, so in subsequent discussion we will de-emphasize store types in favor of the goods classifications but stores entire offering of goods and service as its 'product', then many of the concepts discussed below are immediately applicable.

9.3. Department Stores

Department stores handle a wide variety of goods such as women's ready-to-wear accessories men's and boys wear, piece goods, housewives and house furnishings. The distin­guishing characteristic of department stores is that they are organized into separate departments actually a group of limited-line stores and specialty shops for purposes of promo­tion, service and control. They are normally considered to be larger stores. The evolution of department stores might be thought of as a return to the general store concept, only on a much larger scale.

Department stores generally try to cater to customers seeking shopping goods and are often located near the center of the downtown district convenient to many potential customers many are even located close to each other. This is sometimes intentional, to facilitate stores.

While some department stores have achieved the specialty store status, most have continued to cluster together as would be logical for shopping stores.

Department stores have traditionally provided many 'free' services, such as liberal return policies, free credit and delivery, style and fashion shows. New year displays and so on. They are often leaders in the retailing community, in so far as sales are concerned.

Target market considerations have been important for department stores. At one time, they were serving most classes of customers with certain departments catering to those with very low or very high incomes. But as recent developments have shown, many customers no longer want to buy for all of the services provided by department stores and are patronizing stores which offer limited service and with it, lower prices. This trend became especially noticeable as former customers moved into the middle income groups and at the same time shifted to the suburbs. Many department stores were left with two distinct groups of customers very high and very low-income families.

Many downtown stores have opened suburban branches, called 'Twigs' to serve the middle and higher-income groups who have moved to the suburbs. These branch operations are especially common around the large commerce cities. Many of the    downtown   department   stores   however,   are   making renewed   efforts  to   remain   attractive   in their downtown locations, especially by carrying wide lines in the major shopping goods items for which they have long been famous. Some have been using special sales and promotions to attract trade. And to appeal to remaining low-income groups, some have opened or expanded bargain basements.