Lecture 1 | The Retail Industry | September 9, 2021
Concept of Retail
Retail Marketing = All activities from companies and organizations that focus on the direct
delivery of goods, services, and information through all available channels to consumers,
where the goods and services are paid out of the net income of consumers.
● Providing information is a very important part of the business model. Information is
important to make your decision (value). For the goods and services businesses get
paid but for the information they give, they don’t get paid.
Direct Sales = Goods and services are sold directly to the consumer without the intervention
of an intermediary.
As long as albert heijn is selling products to the end user, there’s nobody in between.
When Unilever sells products they’re using companies like Amazon, Albert Heijn to sell their
products to the end user. Although sometimes they’re selling directly: “brands go retail” e.g.
magnum store (unilever) becoming a retailer e.g. lego opening their own store
Unilever (trade marketing) vs Amazon
nespresso store, magnum store, apple store, lego = retail marketing! (now they have stores)
unilever = no retail, trade marketing
nike-cutting out multi brand stores so in their own channels they have the products
● organisations like nestle can have both retail and trade marketing.
What is retail?
- Retail expenditures on services by consumers
- Financial services, communication services, travel and entertainment
- can be a bank giving loan
- Retail expenditures on goods by consumers
- Including goods which can be consumed immediately
- can be goods you consume immediately on the spot. restaurants are part of
retail.
● it’s important that consumers are paying out of their net income
What is retail trade?
- goods-retailing = That part of the total economic activity that deals with the sales
of goods and services directly to consumers.
retail = that part of the total economic activity that is engaged in the direct supply of
goods, services and information to consumers
Different forms of retail
- Stores
- Online retail
- Market trade
- Door to door sales
- House parties
- Vending machines
- Social commerce
Business Chain
1
,Direct retail environment
Value Web
2
,Retail in the economic theory
- Transaction cost theory: Retail only can survive as long as the process of
distribution is cheaper than doing it directly
- Transformation of information
- Time is very precious -- only looking at financials in this, is very hard.
Changing function of retail & Classification criteria
The traditional retail function
- The art of distribution
- Re-allocation of the flow of goods:
- Time
- Place
- Quantity
- Part of the goods producing process
- Product push
- Seller’s market
The current retail function
- Shifting power towards consumer: buyer’s market
- Compose range of demand-related products that meet consumer needs
- Demand satisfying process
- Demand pull
- Today it’s buyer’s, consumer market: we’re in charge--demand satisfying process
- Moving from product push to demand pull
Influence on business chain
Some retailers moved upwards in the supply chain and others moved downstream: some
started manufacturing themselves (zara) and moved into retail. h&m started as a catalog
retailer and moved upwards to manufacturer.
3
, “vertically integrated”: they’re managing their supply chain, they’re not the owners of the
factories but they manage the total supply chain
Mixed forms
Classification Criteria
- Statistical
- Classification by type of goods
- Online vs offline retail
- Online share of non-food and food are increasing, it will be over 20% by 2030
- “having it’s peak in april 2020”
- Growth e-tail compared to retail:
- Online retail
- pure players (wehkamp)
- omnichannel players (ah)
- online is valued more than offline
- Size of the company
4
Concept of Retail
Retail Marketing = All activities from companies and organizations that focus on the direct
delivery of goods, services, and information through all available channels to consumers,
where the goods and services are paid out of the net income of consumers.
● Providing information is a very important part of the business model. Information is
important to make your decision (value). For the goods and services businesses get
paid but for the information they give, they don’t get paid.
Direct Sales = Goods and services are sold directly to the consumer without the intervention
of an intermediary.
As long as albert heijn is selling products to the end user, there’s nobody in between.
When Unilever sells products they’re using companies like Amazon, Albert Heijn to sell their
products to the end user. Although sometimes they’re selling directly: “brands go retail” e.g.
magnum store (unilever) becoming a retailer e.g. lego opening their own store
Unilever (trade marketing) vs Amazon
nespresso store, magnum store, apple store, lego = retail marketing! (now they have stores)
unilever = no retail, trade marketing
nike-cutting out multi brand stores so in their own channels they have the products
● organisations like nestle can have both retail and trade marketing.
What is retail?
- Retail expenditures on services by consumers
- Financial services, communication services, travel and entertainment
- can be a bank giving loan
- Retail expenditures on goods by consumers
- Including goods which can be consumed immediately
- can be goods you consume immediately on the spot. restaurants are part of
retail.
● it’s important that consumers are paying out of their net income
What is retail trade?
- goods-retailing = That part of the total economic activity that deals with the sales
of goods and services directly to consumers.
retail = that part of the total economic activity that is engaged in the direct supply of
goods, services and information to consumers
Different forms of retail
- Stores
- Online retail
- Market trade
- Door to door sales
- House parties
- Vending machines
- Social commerce
Business Chain
1
,Direct retail environment
Value Web
2
,Retail in the economic theory
- Transaction cost theory: Retail only can survive as long as the process of
distribution is cheaper than doing it directly
- Transformation of information
- Time is very precious -- only looking at financials in this, is very hard.
Changing function of retail & Classification criteria
The traditional retail function
- The art of distribution
- Re-allocation of the flow of goods:
- Time
- Place
- Quantity
- Part of the goods producing process
- Product push
- Seller’s market
The current retail function
- Shifting power towards consumer: buyer’s market
- Compose range of demand-related products that meet consumer needs
- Demand satisfying process
- Demand pull
- Today it’s buyer’s, consumer market: we’re in charge--demand satisfying process
- Moving from product push to demand pull
Influence on business chain
Some retailers moved upwards in the supply chain and others moved downstream: some
started manufacturing themselves (zara) and moved into retail. h&m started as a catalog
retailer and moved upwards to manufacturer.
3
, “vertically integrated”: they’re managing their supply chain, they’re not the owners of the
factories but they manage the total supply chain
Mixed forms
Classification Criteria
- Statistical
- Classification by type of goods
- Online vs offline retail
- Online share of non-food and food are increasing, it will be over 20% by 2030
- “having it’s peak in april 2020”
- Growth e-tail compared to retail:
- Online retail
- pure players (wehkamp)
- omnichannel players (ah)
- online is valued more than offline
- Size of the company
4
