Page 669 - Encyclopedia of Business and Finance

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Retailers

Franchises. Franchising is a contractual agreement 3. Needs, wants, and decision-making processes that
between a franchiser and a franchisee that allows the fran- retail consumers use
chisee to operate a retail outlet using a name and format
developed and supported by the franchiser. Approxi- Among the list of consumer trends that are greatly affect-
ing retail sales today are the growth of the elderly popula-
mately one-third of all U.S. retail sales are made by fran-
chisees. Some of the most-well-known franchises in tion, as the baby boomers age; the rapidly growing
minority segments of the U.S. population; the importance
America are McDonald’s, Subway, and Dunkin’ Donuts.
of shopping convenience, with consumers wanting one-
stop shopping; and the rising number of two-income fam-
Mail-Order Retailing. The mail-order retailing of the late
ilies.
1800s has developed into two types of nonstore retailing:
(1) general-merchandise and specialty catalog retailers and Another response to the changes in consumers’ pref-
erences is a form of co-branding in which two retailers
(2) direct-mail retailers. General-merchandise catalog
share a location. McDonald’s has developed partnerships
retailers offer a broader variety of merchandise in catalogs
that are periodically mailed to their customers, while spe- with Wal-Mart and Home Depot, and Starbucks has
opened cafés in more than 100 Barnes & Noble book-
cialty catalog retailers focus on specific categories of mer-
chandise. Direct-mail retailers typically mail brochures stores.
and pamphlets to sell a specific product or service to cus-
tomers at a particular time. Direct-mail and catalog retail- ONLINE RETAILING
ing are attractive business opportunities because a business Since its inception in the mid-1990s, online retailing con-
can be started with minimal inventory and can use exist- tinues to grow. Online sales in 2004 rose 23.8 percent to
ing mailing lists to tailor its mailings to a targeted market. $141.4 billion, which represented approximately 5 per-
cent of total retail sales. Online sales of cosmetics and fra-
MODERN-DAY RETAILING grances were expected to grow 35 percent, while the sales
Retailing is experiencing international expansion, with of over-the-counter personal care were projected to rise 32
percent. Early in the twenty-first century, retailers have
many retail organizations opening stores and expanding
attained growth by launching country-specific sites in
beyond the borders of the United States. The most com-
monly targeted countries or regions are Mexico, Europe, order to attract the growing number of international con-
sumers.
China, and Japan. U.S. retailers have strong incentives to
expand globally because U.S. markets are saturated in SEE ALSO Channels of Distribution; Discount Stores;
terms of the number of stores, available locations, and Electronic Commerce; Franchising; International Busi-
competition. Experts believe that some American retailers ness; Marketing; National Retail Federation;Target
have a natural advantage when competing globally Marketing; Wholesalers
because of such factors as technology and the emulation of
American culture abroad. Like foreign companies enter-
BIBLIOGRAPHY
ing the United States, however, American companies
Berman, Barry, and Evans, Joel R. (2006). Retail management: A
entering into these countries face specific government reg- strategic approach (10th ed.). Upper Saddle River, NJ: Pal-
ulations, different cultural traditions, and a variety of lan- grave Macmillan.
guages. Fortune 1000 ranked within industries. (2004, April 5). Fortune,
Today, the success of small retailers and major retail p. 54.
corporations depends on how much they embrace the Hatch, Denny (1998, September). Eight hundred years young.
retailing concept. The retailing concept is a management Target Marketing, 21(9), 5.
orientation that focuses a retailer on determining the Hendrickson, Robert (1989). The grand emporiums. New York:
needs of its target market and satisfying those needs more Stein and Day/Scarborough House.
effectively and efficiently than its competitors. Three crit- Levy, Michael, and Weitz, Barton A. (2004). Retailing manage-
ical environmental factors affect retailing: ment (5th ed.). Boston: McGraw-Hill/Irwin.
U.S. Department of Commerce, Bureau of the Census. (2003.)
1. Competition, because each department store, spe- Retail trade establishments, employees and payroll. Statistical
cialty store, and other type of retail outlet is compet- Abstract of the United States (123rd ed.). Washington, DC:
ing against all others for the consumer’s dollar Author, p. 660.
2. Consumer demographic and lifestyle trends and the
impact they will have on retail strategies Patricia A. Spirou

646 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION