Introduction to

Retailing and
Merchandising
Strategies
“...high performing retailers are those
who understand clearly the cultures and
customs of the customs of the
customer especially in the local
market.”
Learning Objectives:
● Introduction to the nature of retailing in the aspect
of distribution.
● The trend and changes in the retailing operations.
● The basic functions of business retailing as it
impact to the selling industry.
● Identify the perspective in retailing.
What do you think of the
Retail Market in today's
generation?
 Notable
Examples:
● Dell Computers succeeded in selling units and
accepting customized order without
maintaining a Brick-and-Mortar Stores but
more of a B2B and B2C type of domain.
● Leading stores breakthrough in the wider size
coverage of Superstores in the Philippines
such as SM Mall of Asia, IKEA, S&R, Landers,
and Robinsons Magnolia.
● To cater a wider pool of customers retail giants
like SM, Ayala, and Robinsons are tapping key
provincial areas like Davao, Cebu, and
Northern Luzon.
OMNI Channel
Multi-Channel
The Essence of Retailing
RETAILING - as a set of business activities that adds value to the products
and services sold to consumers coming from the point of consumption.

● It does the final activities in the marketing channel since retailing

finally bring the product in the end users.
○ Retailing comes from the French word “retailer” means to cut a
piece off or “break bulk”.
● Retail stores ultimate goal is not just doing the final activity in
selling but also making the product always available for
consumer whenever and wherever it is demanded.
 The Functions of Retailing:

1 2 3 4

Providing Assortment Breaking Bulk Process Holding Inventory - Providing Services -

of Products and - from the manufacturing retailer through their such as payment
channel, it reduces bulk
Services - from dry delivery and minimized store managers terms, enough display
goods manufacturing, transportation cost. As it monitor the flow of areas, good shelf
food, health, beauty, reaches the retail stocks and supplies location, promodisers,
channel, the store does
and etc. It makes the break bulking and available for sale. website utilization,
shopping for buyers repacking and eventually store catalogues, and
more convenient and does the display of the testing areas.
merchandise to end
less time consuming. users.
Merchandising and
assortments are
normally on display to
catch attention from
store shoppers leading
to the interest and
desire for them to
purchase the product
which results to action
from customer.
 Retailing Distribution Pattern

1 2 3

Wholesaler/Supplier Retailer/Resell End-User/Customer

 This illustrates the distribution of the product
when it reaches the final channel which is
the retail level for consumption (the end
users).

Example:

Channel of ● SM Appliance store source their

items from several brands, so
Distribution they can cater different target
market.
● Supermarkets are placing POP
(point-of-purchase) display in
different areas of the store to
push different brands to walk-in
shoppers.
 ● Convenient Stores
● Drug Stores
● Boutiques
● Food Chains
Types of Retail ● Supermarkets
Stores: ● Specialty/Category Stores
● Kiosks
● Super Stores
● Department Stores
● Hypermarkets
Retail Giants Defend their Position
through Aggressive Strategies

These includes their Many of these

continuous expansion in expansion strategies are
key cities outside of designed to leverage on
Metro Manila. the rising income levels
in cities outside Metro
Manila.
Supermarkets ● Grocery retailers remain
on Aggressive unchallenged.
○ Demand for Value for Money.
Dynamic ● This was largely driven by the
Pricing developing expansion strategies of
Strategies large retail players – such as SM
Retail Holdings, Inc. and Puregold
Price Club. The increasingly intense
competition translated into more
dynamic pricing strategies, thereby
further boosting the demand.
E-Tailing
E-tailing which involves online shopping for travel, books, clothing and
even music. The convenient way to shop using internet or the so called
E-grocers or online grocery shopping.

The transition of conventional shopping to “Virtual Shopping” even inside

your home in a click of a mouse you can explore the stores virtually.
 ● With the entry of foreign stores such
as Landers, S&R, and IKEA. This adds
Demographic Shifts to the total slice of market share of the
entire retail industry aside from the fact
that it entice competition with the local
stores in the country.
● Convenient stores are now establishing
along the provinces contributing the
modernization of sub urban areas.
● Starbucks are now stationed on the
NLEX and SLEX capturing travelers 24
hours coming from key provincial areas
not to mention the mini stores along
gasoline stations. This indicate location
and territorial expansion on store
retailing.
Retail 1. Scrambled Merchandising - usually found
on big size stores – it exist when a retailers
Stores in handles many different unrelated items.
Terms of: Example: Japan Home Center,
Daiso

1. Category Killer - are those retailers that

carries such a large amount of merchandise in
a single category and these are products that
normally sells the most in a store or the front
line category.

Example: Unilever, P&G, Nestle –

Chicken Joy for Jollibee
Retail 3. Number of Outlets
a. Chain Stores - stores that are operating
Stores in in more than 10 outlets.
Terms of: b. Standard Stock List - are the basic
product line available in all other the
same chain of outlet.
c. Optional Stock List - refers to a
merchandise mix in a retail chain, giving
flexibility to adjust of other customers
demands.
d. Franchise Outlets - are normally
operating in more than 1 outlets.
e. Convenient Stores - usually offers the
daily necessities of customers.
Retail 4. Channel Captain - channel leader in a
Stores in marketing supply chain usually played
Terms of: by large retailers.

Example: Jollibee Foods

Corporation

● In the case of Small Business like Sari-

Sari stores, Puregold can be the
Channel Captain in terms of Supply
Management
Retail 5. Private Label Branding - SM
Stores in Department Store manufacture their
Terms of: own private label brand exclusively
available in all SM outlets only such as
SM Bonus, Parisian Shoes, Milanos,
and Salvatorre.

Example: National Bookstore produces

“Best Buy” for low price school
supplies, and Robinsons have their
own brand “supersavers”.
Retail 6. Location
Stores in Retail Store success has been attributed in
Terms of: terms of:

● Strategic location like within the

metropolitan area, or in central business
district.
● Locate your store, where your target
markets are available.

“Don’t let your market comes to you, you come

to your market or make your store accessible to
your customers.”
1st Activity:
Consider that you are a retailer selling on Divisoria/Tiangge, then
put yourself in a situation that you are surrounded by many
competitors, selling the similar product that you are offering. What
will be your retail strategy in order to attract more customers to and
encourage them purchase your product? Explain your answer in no
more than 2 paragraphs.