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Retail Buying

Notes competition for in-store shopping is coming via the “e-commerce” route on the Internet. Each
day, more and more. Yet another off-site operation, the shopping channels on television, is
cutting into sales that were formerly made in stores. This format enables the in-home shopper
to see the actual merchandise and be able to interact with the broadcast’s sellers if there are
questions to be answered. With sales recorded at more than twenty thousand per hour during
some of the time slots, this is an outlet that requires a constant flow of merchandise. With each
of these fast-growing off-site retail segments, buyers are becoming more important than ever
before. Not only must they purchase merchandise for a defined consumer base, but they must
also consider a much broader trading area than that of the traditional store buyers.

5.1 Catalog Retailing

Before the buyer’s role in purchasing for catalogs can be explored, it is necessary to examine the
different types of companies that use catalogs to reach their markets. Some traditional retailers
integrate their in-store and off-site ventures, whereas others have separate divisions for each
type of outlet. Others are “catalog-only” merchants, who use only the direct-mail approach to
selling their goods.

5.1.1 Department Stores

The backbone of retailing for the past hundred years has been the department store. Whether it
was a visit to the company’s flagship or to a branch location, the consumer was able to find a
wealth of merchandise to satisfy his or her needs. Augmenting the in-store purchasing arena
was and is an assortment of catalogs that are either directed to the store’s regular customers or
to others in the hope that they will become customers. The department stores are structured
either as full-line operations or specialized stores.
Full-line Department Stores

Stores such as Macy’s, Bloomingdale’s, and Carson Pirie Scott are full-line stores. They feature
complete merchandise assortments that include apparel for the family, accessories, home
furnishings, electronics, and in some cases, specialty foods. The merchandise featured in the
stores is often also sold in the catalogs. The buyers merely select some of the merchandise that
has been earmarked for their stores for insertion in the catalogs. While this is standard practice,
a new route is being taken by some of the major retailers.

Example: In companies like Macy’s, a great deal of attention is being paid to the catalog
operation. To make a full-scale effort in this direct retailing venture, Macy’s has now opened a
separate catalog division in which a full merchandising team has been put in place to make all
of its purchases. In this way, the company is able to address the merchandise needs of people
well outside its regular trading areas.

Specialized Department Stores

When the department store organization first appeared on the scene, it was a format that featured
a wide assortment of hard goods and soft goods. Soon after its introduction, some merchants felt
that by restricting its product line to a narrower classification it could provide more depth in
specific merchandise. Thus the specialized department store was born. Typical of those companies
doing business today are Saks Fifth Avenue, Nordstrom, Neiman Marcus, Fortunoff, and Bergdorf
Goodman. As is the case in their stores, the catalogs they produce specialize in one or a few
merchandise classes.

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