understand what customers want and what competitors
are offering.
• Retailing plays an important role in the U.S. economy. One
out of four workers in the United States works for a
retailer or for a company selling products to a retailer.
VIII. Appendix 1A: Careers in Retailing
• Retailing offers exciting and challenging career
opportunities. Few other industries grant as many
responsibilities to young managers.
• In addition, retailing offers almost immediate
accountability for talented people to reach key
management positions within a decade. Starting salaries
are competitive, and the compensation of top
management ranks among the highest in any industry.
See PPT 1-32, 1-33, and 1-34.
A. Career Opportunities
• Career opportunities in retail firms occur in
merchandising/buying, store management, and corporate
staff functions.
1. Store Management
• Successful store managers must have the ability to lead
and motivate employees. Store management involves all
administration and development, and community
relations.
2. Merchandise Management
• Merchandise management attracts people with strong
analytical capabilities, an ability to predict what
3. Corporate Staff
• Corporate staff opportunities include positions in MIS,
operations/distribution, promotions/advertising, loss
prevention, finance/control, real estate, store design, and
human resource management.
B. Attractiveness of Retailing Careers
1. Immediate Responsibility
• Management trainees in retailing are given more
responsibility more quickly than their counterparts in
other industries.
2. Financial Rewards
• Compensation varies according to the amount of
responsibility.
• Because information systems enable retailers to assess the
sales and profit performance of each manager, and even
each sales associate, the compensation of retail managers
is closely linked to objective measures of their
performance.
3. Opportunities for Advancement
• While the growth rate of retail parallels the growth rate of
the overall economy, many opportunities for rapid
ANSWERS TO SELECTED “GET OUT AND DO IT!” QUESTIONS
Students should notice the importance of the 4th quarter for retail sales during the winter
holiday season. Many types of U.S. retailers posted their highest sales in the 4th quarter,
including Home Furnishings Retailers, Electronics and Appliances Retailers, and Jewelry
Stores. If students looked at the breakdown of the retailer type, e-com/mail order, jewelry
would have a significant percent of sales in November and December.
Some students may see a difference in March and April where Easter may fall in either
month depending on the year.
Students’ answers will vary considerably here. Some students may take a more long-term
view looking to Buyer or Planner positions which call for a variety of skills including strong
organizational and analytical skills, excellent verbal and written communication skills and
extensive computer experience. These positions also require several years of prior
experience in lower-level buying positions. Other students may find these positions to be
more quantitative or analytical than their interests lie.
Students looking at entry-level positions, as well as those seeking more creative positions or
those with a broader focus, may be attracted to the entry-level Fashion Assistant or Product
Assistant positions. These positions request a less comprehensive skill set as well as less
emphasis on prior job experience.
5. INTERNET EXERCISE Choose one of the top 20 retailers (Exhibit 1-4). Go to the company’s
website and find out how the company started and how it has changed over time.
From the Exhibit of the Top 20 retailers, students can see that in general, European retailers
have been more successful in expanding to more countries as compared to U.S. retailers. In
expansion less of a priority for them. Students will also note that food retailing dominates
among the largest retailers.
6. INTERNET EXERCISE Go online to the websites of Whole Foods or The Container Store. In a
brief paragraph, describe how this retailer is taking steps to contribute to a social or ethical
cause.
Whole Foods “[creates] economic partnerships with the poor in developing-world
communities that supply our stores with product” through its Whole Planet Foundation.
The company also runs the Whole Kids Foundation (“supporting schools and inspiring
families to improve children’s nutrition and wellness”) and the Whole Cities Foundation
(“bringing fresh, nutritious food and broader access to healthy eating education to
ANSWERS TO DISCUSSION QUESTIONS AND PROBLEMS
1. How do retailers add value to the products bought by consumers?
Retailers add value in several ways. First, retailers provide an assortment of products and
2. What is your favorite retailer? Why do you like this retailer? What would a competitive
retailer have to do to get your patronage?
Whatever selection is made, ask students to concentrate on the specific aspects of retail
strategy, such as: (1) intended target market of the retailer; (2) nature of merchandise and
services and the specific consumer needs sought to be satisfied; (3) product variety and
assortments carried; (4) store location strategy; (5) pricing strategies; (6) specific service
strategies; (7) strategies designed to attract and retain customers; and, (8) strategies
specifically designed at gaining a long-term advantage over competitors.
3. What are the benefits and limitations of purchasing a home entertainment system
directly from a number of component manufacturers rather than from a retailer?
Students may indicate benefits typically associated with “removing the middleman” such as
reduced price and effort in completing the transaction.
While these benefits will occur in specific cases, it must be noted that the average
consumer engages in buying dozens of items on a regular basis. Even if all manufacturers
were to offer their products directly to consumers, it can be readily noted that the
information and services that save consumers time and effort as compared to when
consumers attempt to obtain such information by themselves or serve themselves. By
providing an assortment of products and brands in one location – in some cases of
scrambled merchandising, a very wide assortment of products and brands – retailers help
consumers engage in one-stop shopping, thereby saving them the time and effort for other
productive and leisure activities.
4. What retailers would be considered intratype competitors for a convenience store chain
such as 7-Eleven? What firms would be intertype competitors?
Discussion should lead to those convenience stores in the local market offering the
traditional convenience store retail mix including gasoline, snacks, newspapers, coffee, and
a limited variety of grocery items.
5. How does Walmart contribute to and/or detract from the communities in which it
operates stores?
Students may argue either in favor of or against the large discount stores, such as Walmart.
The arguments against may include:
(1) Smaller family-owned firms may not be able to compete on the basis of price with
Walmart and hence would have to close down, resulting in loss of entrepreneurial
opportunities within the community;
On the other hand, the arguments in favor include:
(1) greater product assortment and choice for the consumer at lower prices;
(2) one-stop shopping convenience for the consumer, freeing up the consumer’s time for
other productive and leisure activities;
In general, students would see both the arguments for and against the large store.
However, one could also add that smaller firms providing superior service or other forms of
consumer value apart from price would prevail despite the presence of a large store
competing on the basis of price. Examples include electronics stores that provide greater
consumer information and expertise, or customized services such as portrait framing, etc.
6. The same brand and style of men’s suits are sold at different prices at a department store
like Macy’s and at a specialty store like Men’s Wearhouse. Why would a customer choose
to buy the suit from one store rather than the other?
There are many different reasons why customers choose one retailer over another. Some
customers might choose a department store if they have other shopping needs besides the
7. Compare and contrast the retail mixes of department stores and full-line discount stores.
Use bullet points or a table to list the similarities and differences.
A department store’s retail mix would include:
• Customer Service- Department stores provide a higher level of customer service
with increased sales associate interactions and add-on services like alterations,
shipping and gift wrapping.
• Communication mix- Department stores use advertising, social media, personal
selling and loyalty programs to reach customers.
• Locations- Department stores are typically in malls and act as anchor stores for the
mall.
A full-line discount store’s retail mix would include:
• Customer Service- Discount stores have less customer service than department
stores as they are more focused on keeping the price point down.
• Location- Full line discount stores are usually in strip malls or free-standing locations.
• Merchandise management- The merchandise offered by full line discount stores is
usually a wide variety that is constantly changing depending on the inventory that is
available.
8. An entrepreneur approaches you about how to sell her new writing pens to consumers.
The pens have a unique benefit-they are more comfortable to use than traditional pens.
The entrepreneur is concerned the retailers she has approached want to buy the pens
from her at $10 a piece and then sell the pens in their stores for $18 to consumers. The
entrepreneur is dismayed at the extra $8 the retailers are getting and has decided to sell
the product directly to consumers for $10. She wants to know your opinion. What do you
think? Why?
Students’ answers may vary on this question. Traditionally, the entrepreneur would be
better off selling the pen through the retailer because the retailer already has a client base
and can absorb the cost of promoting the pen. In addition, retailers add value by providing
9. From a personal perspective how does retailing rate as a potential career compared to
others you are considering? Why?
After reading the chapter, some students may already be attracted to retailing as a career,
since they would now have realized the wide variety of opportunities provided in the retail
sector. At the same time, some may compare retailing less favorably to other potential
career paths, such as advertising, or more immediately lucrative endeavors, such as the
10. In this chapter, some socially responsible activities engaged in by retailers are described.
Take the perspective of a stockholder in one of these companies. What effect will these
activities have on the value of its stock? Why might they have a positive or negative
effect?
Sometimes CSR initiatives are expensive for a company, making the value of the stock drop.
However, some CSR initiatives, like building greener buildings and reducing the carbon
Chapter 01 – Introduction to the World of Retailing
CONNECT ACTIVITIES FOR CHAPTER 1
Activity Title
Activity Type(s)
Topic
The Supply Chain
Drag and Drop;
Matching (accessible
version)
Understanding supply
chains
1-1 Identify retail
activities.
Physical Retail
Case Analysis
The importance of
retailing
1-3 Analyze the
changing retail
The Retail Industry
Video Case
Retailing as a career
1-4 Recognize the
opportunities for you
in retailing.
Top Global Retailers
Drag and Drop;
Matching (accessible
The importance of
retailing
1-3 Analyze the
changing retail