Page 17 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes Warehouse Clubs

A warehouse club is a retail outlet that stocks a limited range of grocery and household products,
some home-orientated goods and some clothing products (usually 3,000-4,000 product lines).
The distinguishing feature of a warehouse club is that you have to become a member to shop
there. Prices are low, and the store environment is extremely basic. Most warehouse clubs
operate in a similar way to a cash and carry outlet in that the goods have to purchased in larger
quantities, but some (for example Costco), allow customers to purchase smaller quantities of
some lines.
Discount Stores

Defining a discount store is not an easy task, because the key characteristic is the price of the
merchandise, which is subject to individual customer perceptions. Discount stores are sometimes
run on the basis of a product range geared by opportunistic buys by the retailer, or they have
planned ranges, sold with an unusually low profit margin.

Example: Emerging strong players who have adopted this type of format are Reliance,
West Side, Trent and Raymond’s in the clothing sector.
Factory Outlets: Factory outlet retailers offer customers a range of seconds-quality and/or
previous season’s.

Charity Shops: Charity shops are usually run on the basis of selling stock that has been donated,
although some, for example Oxfam, also have a range of specifically sourced products.
Non-store Based Formats include electronic retailers, catalogue and mail order sales, direct
selling, vending machine retailing and television home shopping. These will be discussed one
by one in subsequent sections

Task Give at least 5 examples of each type of retail format discussed above. Try to
include as many Indian retailers as possible.

Popular Non-Store Based Retail Formats

Formats under non-store based retailing are:

Electronic Retailers

As a sophisticated and interactive medium, the internet accessed by personal computer is showing
every sign of being accepted as a mainstream shopping mode by an increasingly computer-
literate society. Using the internet to access information has been accepted as part of everyday
life for many sectors of society, and in the process of shopping it has become very useful to
customers as a way of accumulating information about retailers’ product and service offerings
in a relatively fast and convenient manner. As a way of accessing specialist retailers that might
be geographically remote from consumers, the internet provides a channel of discovery for the
consumer, and a way of providing home shopping services for a wider target market for the
retailer. The internet is also an efficient home-shopping device, enabling time-poor or less
mobile consumers to order and take delivery of routinely purchased items such as basic groceries
and household items.

12 LOVELY PROFESSIONAL UNIVERSITY