viii CONTENTS

48 Sources of competitive advantage

48 Market penetration and diversification
49 Portfolio analysis
49 Competitive marketing objectives
50 Marketing strategy in relation to HRM and finance strategy
50 Chapter summary
51 Exercises and questions
51 References
52 Further reading
53 Case study: WH Smith upbeat despite sales doldrums

55 CHAPTER 3
Retail consumer behaviour and market segmentation
56 Introduction
56 Retail consumer behaviour and attitudes
57 Consumer motivation and needs
58 Consumer decision-making
61 Experiential consumer behaviour
61 Influences on consumer purchasing behaviour
66 Customer loyalty
67 Negative consumer behaviour
72 Customer profiles
73 Retail marketing research
76 Chapter summary
76 Exercises and questions
77 References
80 Further reading
81 Case study: Targeting the female consumer

83 CHAPTER 4
Retail product and brand management
84 Introduction
84 New product development
86 The Product Life Cycle
91 Retail product assortment
92 The product/service continuum
93 Brand management
94 Brand names
95 Brand identity and brand image
95 Brand equity
95 Brand extensions
96 Retail brand positioning – perceptual maps
98 Rebranding
98 Branded and own-label merchandise
102 Chapter summary
103 Exercises and questions
104 References
104 Further reading
106 Case study: GLOBAL brands – ups and downs: Consumers luxuriate in shopping
on the web

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 2 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

Introduction
This chapter introduces key themes which will be expanded upon in later sections. It
offers an overview of the history of retailing and the development of retail marketing
theory, then categorises types of retailer and retail business formats before specifying
recent trends which have impacted upon retailing. Retail marketing has achieved an accel-
erated rate of change in recent years, with multichannel retailing and Corporate Social
Responsibility (CSR) at the forefront of this change (Berman and Evans, 2010; Freestone
and McGoldrick, 2008). Additionally, new retail formats are developing, responding to
the demands of increasingly sophisticated consumers in highly segmented markets and
in emerging economies. These factors are counterbalanced by the need for retailers in
various parts of the world to deal with the ongoing repercussions of the global economic
crisis which began in 2008. Retail sales form a significant part of the economy, with the
global retail market being valued at US$10,500 billion in 2010, groceries being worth
63 per cent of the retail sector (Datamonitor, 2011). In recent decades, several large retail-
ers have become more powerful than the manufacturers and brands that supply them
with products (McGoldrick, 2002). Furthermore, the annual financial turnover of the
world’s largest retailer, Walmart, is greater than the gross domestic product (GDP) of
most countries, as it generated revenue worth $476,294 million in 2013 and employs over
two million staff worldwide (Walmart, 2014) (see Table 1.1). Walmart’s financial turnover
is currently close in size to the GDP of Norway at $417 billion and Saudia Arabia at $435
billion in the same year (World Bank, 2012). Although most retailers operate on a small
scale, they form a high proportion of the market and the retail sector is very significant to
the world’s economy. Walmart itself began as a small family store in 1962. Consequently,
it is useful to be aware of the operation of the many small-to-medium enterprises (SMEs),
as they form the majority of the retail sector in most countries and some of them may
become dominant retailers in the future.

Definitions of retailing
Gilbert (2003) defines retail as ‘any business that directs its marketing efforts towards
satisfying the final consumer based upon the organisation of selling goods and services
as a means of distribution’ (p. 6). This typifies the traditional perspective on retailing as
an exclusively business-based enterprise. However, Lusch et al. (2011) offer a slightly dif-
ferent perspective, stating that retailing ‘consists of the final activities and steps needed
either to place a product in the hands of the consumer or to provide a service to the con-
sumer . . . the last step in a supply chain that may stretch from Europe or Asia to your
hometown. Therefore, any firm that sells a product or provides a service to the final
consumer is performing the retailing function’ (p. 4). Both of the definitions offered here
indicate that the scope of retailing incorporates companies selling services directly to
consumers via their businesses. Retailers can be seen to comprise banks and petrol sta-
tions through to firms in the leisure sector, such as restaurants, gyms and hairdressers.
Definitions of retailing have traditionally been reliant on the notion of retailing being
confined to business-to-consumer (B2C) markets. However, retailing is an activity that
is not restricted to taking place within the business sector, as charities and other not-for-
profit organisations also engage in retailing to support their income. The advent of sales
transactions via the internet on websites such as eBay has also resulted in the increasing
power of the consumer-to-consumer (C2C) market. It would be useful to think about this
situation from your own viewpoint, considering to what extent, if at all, you, your friends
and family have moved towards buying in C2C markets in recent years.

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 Table 1.1 Top 20 global retailers

2013 2013
parent parent # 2008–
Retail 2013 company/ company/ countries 2013

M01_GOWO8747_01_SE_C01.indd 3
revenue net retail group group of retail
rank Country revenue revenue net income operation revenue
(FY13) Name of company of origin (US$m) (US$m) (US$m) Dominant operational format 2013 2013 CAGR

1 Wal-Mart Stores, Inc. U.S. 476,294 476,294 16,695 Hypermarket/Supercenter/Superstore 28 3.3%

2 Costco Wholesale Corporation U.S. 105,156 105,156 2,061 Cash & Carry/Warehouse Club 9 7.7%

3 Carrefour S.A. France 98,688 101,844 1,812 Hypermarket/Supercenter/Superstore 33 −3.0%

4 Schwarz Unternehmens Treuhand KG Germany 98,662 98,662 n/a Discount Store 26 6.5%

5 Tesco PLC U.K. 98,631 100,213 1,529 Hypermarket/Supercenter/Superstore 13 2.9%

6 The Kroger Co. U.S. 98,375 98.375 1,531 Supermarket 1 5.3%

7 Metro Ag Germany 86,393 86,393 588 Cash & Carry/Warehouse Club 32 −0.9%

8 Aldi Einkauf GmbH & Co. oHG Germany 81,090 81,090 n/a Discount Store 17 5.5%

9 The Home Depot, Inc. U.S. 78,812 78,812 5,385 Home Improvement 4 2.0%

10 Target Corporation U.S. 72,596 72,596 1,971 Discount Department Store 2 2.9%

11 Walgreen Co. U.S. 72,217 72,217 2,450 Drug Store/Pharmacy 2 4.1%

12 CVS Caremark Corporation U.S. 65,618 126,761 4,592 Drug Store/Pharmacy 3 6.0%

13 Casino Guichard-Perrachon S.A. France 63,468 64,613 2,023 Hypermarket/Supercenter/Superstore 29 11.1%

14 Groupe Auchan SA France 62,444 63,859 1,109 Hypermarket/Supercenter/Superstore 13 4.0%

15 Amazon.com, Inc. U.S. 60,903 74,452 274 Non-Store 14 26.7%

16 Edeka Zentrale AG & Co. KG Germany 59,704 61,399 n/a Supermarket 1 5.9%

17 Aeon Co., Ltd. Japan 57,986 64,271 835 Hypermarket/Supercenter/Superstore 10 3.9%

18 Woolworths Limited Australia 54,457 55,974 2,258 Supermarket 2 4.3%

19 Seven & I Holdings Co., Ltd. Japan 54,258 56,600 1,890 Convenience/Forecourt Store 18 −0.1%

20 Lowe’s Companies, Inc. U.S. 53,417 53,417 2,286 Home Improvement 4 2.1%

3
Source: Deloitte Global Powers of Retailing 2015 (available online at: http://www2.deloitte.com/global/en/pages/consumer-business/articles/global-powers-of-retailing.html)

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 4 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

History and development of retail marketing

Retailing has always been interconnected with consumers’ lifestyles and broader histori-
cal trends. Humans have continually engaged in consumption of different kinds to meet
various needs, including survival and self-esteem, and therefore they have always been
consumers. Retailing is a somewhat recent intervention in consumption. While humans
were initially dependent upon their own small communities for the products they con-
sumed, retailing developed alongside improved communication and transport channels
which helped to connect communities on a wider scale through trading. Consumers both
influence and react to the environmental conditions in which retailing operates by making
purchases which reflect and impact upon the prevailing political, economic, societal and
technological factors of the time.
Retailing has developed from a primarily localised system of providing product and
services, where customers often knew the tradesperson producing the goods personally.
Markets have existed for thousands of years (Evans, 2011) and in mediaeval times they
became widespread, enabling producers to distribute goods regularly across a greater
distance, even across continents in the case of certain products such as spices. For example
in Leicester, the marketplace was established in the late 13th century and it remains in the
same location in the centre of the city over 800 years later (Leicester Market, 2012). By
the 14th century, Britain was dotted with market towns to which many people migrated
for work, often adopting the names of their trade rather than place of birth as surnames,
and retailing therefore had a major impact on society. More than a third of overseas trade
in this period passed through London, reinforcing the significance of the capital city as
a trade centre (Rubin, 2006). Traditional markets remain a central part of the economy
and culture in many cities around the world (see Figure 1.1). The origin of language used
in retailing demonstrates the close relationship between retailing and marketing. Around
1520, the word ‘shopkeeper’ entered the English language, signifying a seller, rather than
a tradesperson, followed by a new verb in the mid-16th century, ‘marketing’, to mean ‘the
act of buying and selling in a central place’ (Byrne Paquet, 2003:19).

Figure 1.1 Valencia indoor market

Source: with permission from Christina Goworek

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 HISTORY AND DEVELOPMENT OF RETAIL MARKETING 5

Figure 1.1 (continued)

Ultimately, traditional methods of selling have developed into a sophisticated, global

network for the exchange of goods and services. The Industrial Revolution began in
the  18th century with the introduction of machinery utilised for mass production.
Additionally, swifter transport via railways in the 19th century led to easier transporta-
tion of goods, helping to facilitate the development of larger-scale retailing. Key retailing
innovations have been introduced in different decades, some of which have proceeded to
dominate the retail market. For example, in the 1940s, the supermarket was an innovative
retail format which was destined to eventually take over from local specialist shops in the
Western world (Blythman, 2004; Byrne Paquet, 2003).
Businesses can adopt either a production orientation or a marketing orientation. A
production orientation tends to have an internal focus, prioritising the technical aspects of
products and manufacturing processes, with marketing being viewed mainly as a way of
divesting the company of the resulting goods, with the emphasis on selling. The develop-
ment of marketing has been entwined with the progress of retailing. Marketing’s origins
lie in the Industrial Revolution, when manufacturing became increasingly productive
due to the widespread use of machinery. This resulted in a higher availability of products
and a wider need for advertising and distribution channels to deliver them to consumers.
Organisations with a marketing orientation take the reverse approach to a production
orientation in that they are outward-looking and consider consumers’ needs first before
seeking potential opportunities to develop products and services to meet those needs. As
Blythe (2009:8) states: ‘The idea of placing customers at the centre of everything the com-
pany does is basic to marketing thought: this idea of customer centrality is the key concept
in marketing’. Retailing is generally far more aligned with a marketing orientation than a
production orientation in that retail organisations very rarely manufacture the products
that they sell and their business is to regularly deal with consumers.
The traditional supply chain starts with manufacturers producing goods then selling
them on to retailers, who in turn sell to consumers. Sometimes intermediaries could be
involved, such as wholesalers who ‘break bulk’ by buying in large quantities and selling
in smaller quantities at a slightly higher price to make it worthwhile for them to offer this
service to small retailers. In effect, brands operate as wholesalers as they mainly have their
products made by manufacturers and then supply it to retailers. However, unlike wholesal-
ers brands provide added value by being responsible for the design and promotion of their

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 6 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

products, thus offering enhanced products and services. Many well-known brands also
have store chains as an opportunity to offer their whole range to customers in a retail envi-
ronment where they have control of the brand identity, with the opportunity to promote
the brand to consumers through their presence on the High Street. Wholesale companies
have become less prevalent in recent years and the dual factors of globalisation and the
internet now challenge the traditional supply chain to create new ways of doing business.
Globalisation and disparities in the cost of living around the world have meant that
much of the manufacture of products sold in the West has moved mainly to the East.
Consequently, companies that used to manufacture in the West have tended to either
close or to become suppliers who still provide a design and product development service
to retailers but arrange their manufacture offshore, rather than being responsible for
production themselves. Suppliers are now more likely to be intermediaries with retailers
than wholesalers are, particularly in the case of medium and large retailers. Furthermore,
the internet has reduced barriers between brands and consumers, so customers can now
quite easily find and order the brands they like online and buy from them directly, without
the intervention of a retailer. Additionally, consumers can now quite easily sell products
to each other that they have made or bought elsewhere, creating a thriving consumer-to-
consumer (C2C) market facilitated by websites such as eBay.

A brief history of retail developments in the UK

A recent history of retail developments is outlined here. The Centre for the History of
Retailing and Distribution provides some useful links on this topic for further investiga-
tion (CHORD, 2014). There is a well-worn phrase that Britain is ‘a nation of shopkeepers’
and the reasons for this are explored by Ugolini and Benson (2002) in their book of this
name, which provides a detailed review of the history of retailing since the 16th century.

1950s In the UK, post-World War II rationing1 was in place at the start of the decade, with growing
economic prosperity towards the end. Retailers were mostly small-scale local stores. Manufacturers
had more power than retailers, owing to the Resale Price Maintenance Act (Gilbert, 2003), allowing
manufacturers to control retail prices. Department stores in urban areas were the major store
groups, selling a broad selection of branded products, targeting the growing groups of consumers
with disposable income.

1960s The Resale Price Maintenance Act was repealed in 1964, allowing retailers to gain more power
in relationships with suppliers. A strong economy allowed consumers to have more disposable
income, thereby increasing discretionary spending power, particularly in the new category of the
‘teenage consumer’. Improved transport systems facilitated the wider distribution of products both
nationally and internationally. Boutique fashion shops gained popularity and several expanded into
store chains.

1970s Supermarkets flourished and own-label retailers opened branches throughout the UK, particularly
in the clothing, homeware and electrical sectors. Mail order catalogues thrived by offering a wide
range of products to consumers on a ‘buy now, pay later’ basis. Stores offered consumers access
to large electrical products such as fridges and colour TVs through conveniently spreading out
payments in rental or hire-purchase arrangements.

1980s Company mergers and acquisitions led to store groups dominating sectors within the UK mass
market, e.g. Kingfisher, Storehouse and the Burton Group. Small-scale retailers declined accordingly
(Blythman, 2004; Gilbert, 2003). Market segmentation became used increasingly by retailers, with
menswear store Hepworth being transformed into Next in 1982, aimed mainly at a demographic of
women in their 30s. Out-of-town retail parks were constructed throughout the UK. Electronic point-
of-sale technology was introduced in stores, speeding up customer queues and the transfer of sales
data to retail head offices.

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 HISTORY AND DEVELOPMENT OF RETAIL MARKETING 7

1990s Supermarkets became more acquisitive, buying up smaller competitors to expand their numbers of
outlets and extending their product ranges. The internet was commercialised in 1990, thus enabling
the introduction of online retailing. A financial recession took place from 1990–1991 in the US
and from 1990–1992 in the UK (Hall, 1993; Taylor and Bradley, 1994), affecting retailers adversely.
Chain stores increasingly dominated the mass market. Store opening times were extended due to
pressure from supermarkets and Sunday opening became legal, although typically limited to six
hours. US retailer Walmart entered the UK market through the acquisition of supermarket chain
Asda in 1999.

2000s Supermarkets expanded into the convenience store sector and small-scale stores continued
to decline. By the end of the decade, the groceries sector was led by ‘the big four’: Tesco,
Asda, Sainsbury’s and Morrisons. Internet retailing became an established distribution channel.
Sustainability became more of a priority for UK retailers, with many companies adopting CSR
policies. Own-label retailers continued to dominate, Marks & Spencer (M&S) being the market
leader in clothing. Low-price ‘value retailers’ expanded, benefitting from the economic downturn
which began in 2008, whereas several long-standing High Street retail chains closed down, e.g.
Woolworth, Dolcis footwear and MFI furniture,2 which had opened in the UK in 1909, 1920 and
1964, respectively.

2010s Social and environmental responsibility have become increasingly significant issues for retailers.
M&S’s wide-ranging CSR policies are influencing competitors to adopt CSR strategies as standard
practice. The economic downturn appears likely to have a longer term impact, resulting in
consumers spending more cautiously and several other well-established retail chains faced closure
in the first half of the decade. Fast-changing digital technology affects the ways in which retailers
acquire, sell and promote their products.
1
Rationing was enforced until 1954 by using coupons to restrict the amount of goods such as food, clothing and fuel that UK citizens could
buy, in order to save the country’s resources.
2
It is notable that MFI was revived in 2011 as an internet-only retailer (Centre for Retail Research, 2012) thereby suggesting that this channel
could be more financially viable for a furniture company than using bricks-and-mortar outlets.

RETAIL MARKETING CAREERS

Margaret Chaplin, owner of an independent retailer

Chaplin’s butcher’s shop has been located in Groby, boy to deliver meat on a bike, until around 1990. When
Leicestershire, since Victorian times. Margaret Chaplin demand reduced and regulations changed so that vans
and her brother now own the shop that was set up by needed to be refrigerated to deliver meat, Chaplin’s
their great-grandfather and grandfather. The shop is stopped offering a delivery service. Margaret says ‘it’s
at the heart of the old village, which has a very long come full circle now that the big supermarkets deliver
and famous heritage, having been the home of two to customers at home’ and she feels that these com-
former queens of England, Elizabeth Woodville (‘The panies ‘have had a massive effect because you can’t
White Queen’) and Lady Jane Grey (‘The Nine Days compete with them on price’. A Co-operative store
Queen’). The building was originally a house rented has also been based in Groby for over 100 years and
by the Chaplins from Lord Stamford, who owned the recently moved into new larger premises next to Chap-
village, until it was bought by the family in the 1920s lin’s, which has impacted upon the butcher’s sales.
for around £500, when it was partially converted into New housing developments have seen the village
a shop. Margaret began working in the business in the grow substantially since the 1980s, along with super-
1970s when it was owned by her father, alongside other markets to cater for the growing population. Margaret
family members. At that time the shop was thriving and has noticed how the changes in women’s lifestyles have
Margaret delivered meat to people in local villages in a affected the way in which they shop over the years. She
van, especially to farms. The business also employed a says ‘women work now and are not in the village during

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 8 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

Chaplin’s shop in the 1920s and the present day

Source: with permission from Margaret Chaplin

the day, whereas my mother didn’t work when she got the meat is and how to cut it the right way’. Margaret
married, except to help my Dad, and that was what the learnt by example from her father, who was trained as
majority of women did. They tend to shop at one place a master butcher and she learnt how to pluck poultry
now rather than walking to different shops and don’t such as partridges and pheasants as a child. Second,
usually take their children into the shop, whereas this she says ‘you’ve got to have something that attracts
used to be commonplace. Our hours are getting less people into the shop, especially if you’re not estab-
and less because there are just not the people around lished there’. Margaret acknowledges the importance
and it’s gradually declined’. of brand heritage when she says ‘we’re lucky that we
Chaplin’s was originally a vertically integrated busi- run on a name that our grandparents started for us
ness in that they raised some of their own animals and and we try to keep up that tradition of being old-
slaughtered meat on the premises until the 1970s. They fashioned. I’m not sure that it’s always worked but we
also sold meat from animals bought from the cattle have tried to alter things slightly, like setting out meat
market in Leicester, as well as making their own sau- on trays in the shop. If we have too much meat cut
sages. However, when regulations about slaughtering though, it starts to go dark and people don’t want it,
meat changed the amount of work needed to alter the even if it’s okay. We can end up wasting it because
premises meant it was no longer viable to do so and it customers have been indoctrinated into expecting
became more economical to buy meat from abattoirs bright red coloured meat in supermarkets, although it
in the area. Things have now changed to the extent isn’t what it would naturally look like’. Third, Margaret
that the meat is bought wholesale from an abattoir in says that ‘a shop needs to have an image and keep
Staffordshire, as it’s now difficult to find in Leicester- it up, especially when it’s in a small community, and
shire. The business also buys cheese from a wholesaler preferably something that’s not already there, or else
in Leicester and used to sell a range of international you can upset all of the other shops. Then the com-
cheeses that were popular because they weren’t avail- munity goes, people don’t talk to each other as much
able at other shops in the village. However, Margaret and a whole way of life seems to disappear. It’s already
has found that the demand has reduced since the NHS happening. If you go in a big supermarket you don’t
began to advise people against eating products such get the personal touch you get in a small shop where
as cheese that are considered to be high in cholesterol. people will say “hello, how are you?”. Customers still
Margaret also cooks fresh pies and pasties in the shop talk a lot to us and you become a person they can
and she required a training certificate to be allowed confide in. You should try and make friends with cus-
to do this. tomers and enjoy what you’re doing, otherwise there’s
For anyone considering setting up a butcher’s shop no point doing this sort of business, or any other sort.
Margaret says there are several different areas to con- Unless you want to work with people in your commu-
sider. First, she says ‘it’s necessary to understand what nity, setting up a shop won’t work’.

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 THE DEVELOPMENT AND SCOPE OF RETAIL MARKETING THEORY AND PRACTICE 9

The development and scope of retail

marketing theory and practice
Retail marketing is defined by Fernie et al. (2003: 105) as ‘the application of marketing
concepts, theories and actions within the context of retail organisations’. Retail mar-
keting has evolved as a discipline alongside the development of marketing theory and it is
possible for marketing principles to be applied throughout the retail sector. Nevertheless,
retailing has some of its own unique systems that differ from marketing in other sectors,
for example in its usage of distribution and logistics. The marketing mix is a classic mar-
keting model, also known as the 4Ps: Product, Price, Promotion, Place. Since the 1960s,
when the model was developed, these four elements have been viewed as the key areas on
which marketers should focus, ensuring that they are blended effectively to communicate
a consistent message to consumers. However, the marketing mix’s dominant position in
marketing theory has been challenged, as the significance of building positive relation-
ships with customers has been at the forefront of marketing theory and practice in recent
years, via Relationship Marketing and Service Dominant Logic, in which services take
priority over products (Vargo and Lusch, 2004).
There is obviously a great deal of emphasis on the ‘place’ element within the retail
marketing mix, since the physical location of stores has long been the focus of retailing.
However, this is beginning to change somewhat since the advent of electronic retailing
(etailing). Consequently, the marketing mix requires adaptation to make it suitable for
the retail sector; for example, the display of products within stores may have a greater
impact than an advertising campaign could. Whereas a high advertising spend is well
suited to manufacturer brands in order for them to communicate a brand image directly
to consumers, advertising is generally utilised less by retailers because the presence of
their stores ensures that customers are frequently reminded of their existence. In 2011,
24 per cent of the UK’s top 100 advertisers were retailers and 6 per cent were banks, with
42 per cent being manufacturer brands (Nielsen Media Research, 2011). In 2013, fast-
moving consumer goods (FMCG) group Procter and Gamble gained second place on the
list with an annual advertising spend of £177 million and the highest spending retailer
was Tesco at £116 million (Nielsen Ad Dynamix, 2013). Retailers that sell manufacturer
brands benefit from the brands conducting their own promotional campaigns to encour-
age sales of their products.
Many authors have argued for an extended marketing mix or 7Ps , developed to
apply more effectively to service organisations. This extended mix adds people, physical
evidence and process and could be said to be more suited to the retail sector than the
traditional 4Ps (Blythe, 2009). Retail marketing theory and practice have been highly
influenced by the widespread development and implementation of marketing strategies
and techniques in the late 20th and early 21st century. In recent years there has been a
drive towards Relationship Marketing, which has been accompanied by increasing criti-
cism of the marketing mix by academics, owing to its product-centred perspective (dis-
cussed further in Chapter 7). The move towards the Relationship Marketing paradigm
potentially lends itself well to retail marketing, since retailing typically consists of numer-
ous and repeated individual customer–retailer transactions (McGoldrick, 2002).
Retail marketing theory is published primarily within marketing and retailing jour-
nals, with a surprisingly limited selection of books being available on this topic, despite
its significance to the global economy. Academic journals are therefore the best locations
in which to find the widest variety of retail marketing literature. The topic of retailing
also extends outside the arena of marketing to be discussed in several other academic
disciplines, sometimes under the guises of consumer culture or shopping, emphasising its
importance as a social and leisure activity. Anthropologists and geographers have taken an
interest in the social impact of shopping centres (Miller et al., 1998) and retailing has also

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 10 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

been discussed from the perspectives of architecture (Luna, 2005), history (Stobart, 2008)
and sociology (Lury, 1996), among others. These subjects relate in particular to retail con-
sumption, architecture and planning, each of which will be covered later within this book.

Retail industry associations

The British Retail Consortium (BRC) is the main trade association for UK retailers, cov-
ering all product sectors, and its mission is ‘to make a positive difference by advancing
vibrant and consumer-focused retail’ (BRC, 2014). Most of the major High Street retailers
are members of the BRC and they fund the organisation by contributing a fee based on
the size and turnover of the company. The BRC runs conferences, roundtable discussions,
webinars and training, as well as producing publications about the sector, many of which
can be accessed for free from their website. Another key function of the BRC is to lobby
government on behalf of the sector.
Retail Trust is another industry-wide body that was founded in 1832. Retail Trust
comprises various charitable initiatives, one of the most well-known being Cottage
Homes, which can support former retail industry workers with accommodation in their
retirement. Other initiatives include retailCORe, which helps people develop careers and
opportunities in retail and retailRIGHT, a project to help develop future retail leaders
with pre-employment training and work experience (see www.retailtrust.org.uk). Rich-
ard Boland, Chief Executive of the Retail Trust, explains how this charity operates and
offers his views on the industry as a whole:
It’s the longest established and largest charity servicing the industry. Our mission is
to improve the lives of all of those involved in retail: yesterday, today and tomorrow,
including all of those supplying retailers, so it’s not just those employed in shops,
it’s also the support services. Retail is the biggest single employment group in the
UK and the nearest equivalent to it would be the National Health Service (NHS).
However, retailing can be quite fragmented and one in four people working in retail
work in small, family-type businesses, so it cuts across the spectrum, ranging from
some of the largest to some of the smallest companies, which makes it unique.
This is an industry with a high element of young workers. A quarter of
16–24-year-olds who are working are employed in retail, so this industry has strong
links with young people. Historically the Retail Trust has been more known for our
retirement homes and now we’re focusing more on younger people. Retail is often
students’ first ever experience of working life and I don’t think we recognise this
enough in the UK and think about how it might affect our views on employment.
We need to think how to make students feel this industry is something worth
staying in, rather than something they just view transiently while they’re being
educated. It’s an industry where you can start as a shelf-stacker when you’re 16
and end up being the CEO. The only way you understand the customer is by being
on the shop floor. Knowing how to serve the customer is more important than
academic prowess, so it’s quite a democratic industry. We can support those who
want to get into retail and can offer benefits such as bursaries and grants. We
could do a lot more of that kind of work if only students would make themselves
known to us. We’re available to support them but they may not even realise that.
Various other industry bodies are available to serve the retail sector. The British Inde-
pendent Retailers’ Association focuses on supporting smaller retailers (see www.bira.
co.uk). The IMRG was set up over 20 years ago to cater for online retailing (see www.
imrg.org). There are also industry bodies concentrating on specific retail sectors, such as
the National Farmers’ Retail and Markets Association (see www.farma.org.uk). As well
as providing useful information and various other forms of support, all of these retail
trade associations can be viewed as potential employers for those interested in a career
that can impact upon many different companies in the retail sector.

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 RETAIL BUSINESS FORMATS 11

Retailer categories
Retail stores can be categorised as described in Table 1.2. Evans (2011) believes that
modern retailing formats such as those listed below have evolved from previous versions,
rather than being completely new innovations. To emphasise this, Evans (2011:9) states
that ‘modern retailing is the accumulation of incremental steps over time’.

Retail business formats

Retailers can be categorised by the business format in which they operate, alongside the
categories of retailers mentioned above. It is viable for a store to fit into more than one
category in Table 1.3. For example, a store could be both a multiple and a specialist, such

Table 1.2 Retailer categories

Retail format Description

Specialist store Offers a narrow line of products, e.g. groceries or electricals

Department store Offers several product lines of mainly manufacturer branded goods,
located in separate departments

Variety chain Sells a variety of product lines, but unlike the department store, these
are mostly under the store’s own label

Supermarket Self-service store selling groceries and household products

Superstore/hypermarket Large self-service store selling groceries and/or other products

Convenience store Small store selling groceries and household products, traditionally
located in residential areas

Catalogue store Offers a wide selection of goods at competitive prices, stocked in a

warehouse and collected by customers from the store

Discount store Offers a discount on standard prices, either by stocking in high

volume or to sell off discontinued products

Outlet store Sells discounted merchandise, usually from previous seasons, outlet
stores are often grouped together in an outlet village

Market trader/stallholder Individual rented stall, usually selling a narrow range of merchandise
at low prices

Table 1.3 Retail business formats

Business format Description

Chain store/multiple Two or more outlets under the same name, product buying usually
centralised

Independent store Individual store or small chain of stores which does not belong to
another company

Retail co-operative A retailer which is owned by its members and has centralised buying

Franchise A franchisee runs a store via a contract to sell the franchisor’s goods
or services, under the name of the franchisor’s company

Concession A retailer which rents a proportion of space within another retailer’s

store

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 12 CHAPTER 1 INTRODUCTION TO RETAIL MARKETING MANAGEMENT

as sports footwear chain ‘Foot Locker’. While chain stores and independent stores are
mutually exclusive, co-operatives are usually chain stores and independent retailers with
a small number of outlets can be chain stores.
A recent development in retailing has been the use of temporary or ‘pop-up’ shops (see
Figure 1.2). This is when a store is rented on a short-term basis, often for the purpose of
promoting a specific brand which does not ordinarily have its own stores. Pop-up shops
became popularised in the mid 2000s and fashion brands in Japan were early adopters of

Figure 1.2 Pop-up store

Source: with permission from City Dressing, www.citydressing.co.uk

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