UIC Business Administration: Retailing

Discuss the following questions

What is retailing? How is the retail business doing at

the moment in this country? Are any retailers doing
particularly well?

What is the difference between a shop, a store, an

outlet?

What is the advantage of department stores? What

are some popular ones in this country?

Do you like shopping in shopping centres, malls, hypermarkets, superstores, retail

parks? Why (not)?

What is a retail chain? Can you think of any?

Matching business models

1. C2C a. Businesses that sell products or sell services to other

businesses.

2. B2C b. Businesses that sell products or provide services to

individuals.

3. B2B c. Individuals that sell products to other individuals.

4. B2B2C d. Third party vendors that sell a company’s products

or services to consumers.

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Research a company below and talk about it.

What do you know about each of them? Choose one of the videos and watch it and
explain it to your group of 4.

Where they are from When they were established

What they are known for What makes them different than the competition

Starbucks https://www.youtube.com/watch?v=1-OJX1rwnl8

IKEA https://www.youtube.com/watch?v=tkfq__rdoD0

Sephora https://www.youtube.com/watch?v=Y9b5HBSpbqs

Chic-fil-A https://www.youtube.com/watch?v=grkHcEyZu04

Imagine you are going to start up a retail store. What sort of store would it be?

What sort of techniques would you use to make sure people see all the products you
have to offer?

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Look at the following store layout. Where would you expect to find these things,
based on what you have read and your own experiences?
store entrance fresh fruit and vegetables meat
milk cereal (cheap and brand name) sugar
eggs

Why do you think they are placed in these areas? Discuss with a partner before you
find out more.

Source: Tullis, Graham, and Tonya Trappe. New Insights into Business. Essex: Pearson Education Ltd., 2000: 26-32.

Video: The Gruen Effect

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The Gruen effect also known as the Gruen Transfer is named after Austrian architect Victor
Gruen who came up with a layout for shopping mall design which took the customers through
the whole store so they would see the maximum amount of products. Upon entry, customers
are surrounded by an intentionally confusing layout and lose track of their original intentions,
which make them more susceptible to more impulse shopping. Watch the video about IKEA
and the Gruen transfer:

Answer these questions:

https://www.youtube.com/watch?v=WYKUJgMRQ7A

1. What percentage of our purchases (shopping) is not planned for?

a. 25% b. 40% c. 50% d. 60%

2. The layout of a store will affect ______________________ which will lead to impulse
buys.

3. Victor Gruen used _____________ and ______________ to showcase products in window

displays.

4. The Gruen effect has led us from shopping to get something to shopping for shopping’s
______________.

5. IKEA employee, Richard La Graauw, says that 20% of our buying decisions are based on
_____________ and ________________.

And 80% is based on ____________________.

6. Layouts:

 Grid layouts emphasize: _________________.

 Freeform layouts encourage _________________ which can take customers see more
parts of the store.
 Racetrack designs create a _________________ that exposes customers to a certain
path of a product.
 IKEA uses a ___________ ____________ through a maze of product displays.

7. ______________ is used to lead customers to different areas in the store

8. Customers normally visit _______________ of a retailer’s floor area

9. What sort of technology is used to measure what in shops to make customers see and buy
more?

Read what Karl McKeever, a visual merchandising consultant, has to say about the
layout of the grocery store.

They have ways of making you spend

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hoppers need to be familiar with the tricks used to manipulate them.

Supermarkets' key weapon is the use of the eye-level display. Experiments have shown that when we
walk down an aisle, we often look only at the shelves that are level with our eyes. That means that
items with the biggest profit margins go at eye-level, while the cheap stuff goes on the floor. If you
want value brands, you'll find them eventually. But you won't buy them on impulse.
Trick number two is the position of the bread and milk – the "destination goods". They are placed at
the back and the middle to ensure you walk past as many other aisles and ends as possible. Stores are
keen for you to walk past clothes, gifts and gadgets – the most profitable lines. The most profitable
impulse buys and special offers are placed on aisle ends – and shops are designed to ensure you pass
as many ends as possible.

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Supermarket design has changed in the past few years. Many now break up the aisles into two
(doubling the number of aisle ends) and put the groceries at the rear of the store, forcing you to walk
through the more profitable non-food areas. But fresh fruit and vegetables are almost always at the
front door. That’s not just to make the store seem fresh. Fruit and vegetables look healthier and
fresher in natural light. In contrast, meat and fish need a clean white light, otherwise they look tired.

Video 2: How the layouts of grocery stores are secretly designed to make you spend
more money -----Starts at .24

1. Where are store entrances and checkouts (the cash till or registers) in the US? In the UK?
Why?

2. How much do Americans spend each trip to the store?

3. What are the 3 items that consumers buy every time they go to the grocery story? Where
are they placed according to the video?

4. What about the most popular items? Where are they placed?

5. Cereal

a. Where are the most profitable cereals placed? Why?

b. The eye level of children?

c. Generic brand cereals or bulk?

d. Healthy or small brand cereals?

6. What is said about end-caps? What are they used for?

7. What was done in Sweden to curb the sale of alcohol?