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Specialty Retail Outlet: Merchandise Assortment

Specialty stores focus on a narrow but deep assortment of merchandise in a specific category like clothing, toys, or sporting goods. They offer more knowledgeable customer service than department stores. Specialty stores allow retailers to tailor their strategies and merchandise to specific target markets. Consumers value the distinctive products and knowledgeable staff over price. Specialty stores are often testing grounds for new products before wider distribution.

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Devika Varma
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91 views

Specialty Retail Outlet: Merchandise Assortment

Specialty stores focus on a narrow but deep assortment of merchandise in a specific category like clothing, toys, or sporting goods. They offer more knowledgeable customer service than department stores. Specialty stores allow retailers to tailor their strategies and merchandise to specific target markets. Consumers value the distinctive products and knowledgeable staff over price. Specialty stores are often testing grounds for new products before wider distribution.

Uploaded by

Devika Varma
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SPECIALTY RETAIL OUTLET

Specialty store formats allow retailers to refine their strategies and tailor the merchandise to
specific target markets. A specialty store is not only a type of store but also a method of retail
operations – namely, specializing in a given type of merchandise. Examples include children’s
clothing, men’s clothing, candy, baked goods, gourmet coffee, sporting goods and pet supplies.
A typical specialty store carries a deeper but narrower assortment of specialty merchandise than
does a department store. Generally, specialty stores’ knowledgeable sales clerks offer more
attractive customer service. The format has become very powerful in the apparel market and
other areas. In fact, consumers buy more clothing from specialty stores than form any other type
of retailer. UniverCell, Toys’R’Us, Sports World, Reliance Timeout and Landmark are examples
of successful chain specialty retailers.

Consumers usually consider price to be secondary in specialty outlets. Instead, the distinctive
merchandise, the store’s physical appearance, and the caliber of the staff determine its
popularity. For example, Next, a national retail chain has grown quickly by offering high-tech
products for consumers. The retailer avoids price wars by packing products with distinguishing
features, creating all-in-one product combinations, and keeping pace with demand for innovative
products. Because of their attention to the customer and limited product line, manufacturing
often favors introducing new products in small specialty stores before moving on to larger retail
and department stores.

Small specialty stores also provide for a low-risk testing ground for many new products. Reebok,
for instance, often uses athletic footwear retailers as its venue for new shoe introductions.

Merchandise assortment

Narrow variety, with very deep assortment (20000 – 40000 SKUs)

Location

Stand alone, power strip centers

National expansion and consolidation

Communication Mix

Electronic and Print media

Wholesaling to Business Customers and Retailing to Consumers

Pricing

Lower than conventional stores (category killers)

Store Design and Display


Size: 50000-120000 sq. ft.

Product launch and promotions

Usually only 1 checkout line

Customer Service

Modest
SUPERMARKETS
Consumers are spending about a tenth of their disposable income in supermarkets. Supermarkets
are large, departmentalized, self-service retailers that specialize in food and some nonfood items.
In spite of the declining sales from increased competition from discount stores, demographic and
lifestyle changes have also affected the supermarket industry. One major change has been the
increase in dual income and single-parent families that eat out more are just too busy to prepare
meals at home.

As stores seek to meet consumer demand for one-stop shopping, conventional supermarkets are
being replaced by bigger superstores, which are usually twice the size of supermarkets.
Superstores meet the needs of today’s consumers for convenience, variety and service.
Superstores offer one-stop shopping for many food and nonfood needs , as well as in many
services – including pharmacies, flower shops, salad bars, in-store bakeries, takeout food
sections, sit-down restaurants, food sections, video rentals, dry-cleaning services, shoe repair,
photo processing and banking. Some even offer family dentistry or optical shops. This tendency
to offer a wide variety of nontraditional goods and services under one roof is called scrambled
merchandising. In addition to including a liquor store, floral department, and pharmacy, they also
lease space to fast food outlets and local banks.

To stand out in an increasingly competitive marketplace, many supermarket chains are tailoring
marketing strategies to appeal to specific consumer segments. Most notable is the shift toward
loyalty marketing programs that reward loyal customers carrying frequent shopper cards with
discounts or gifts. Once scanned at the checkout, frequent shopper cards help supermarket
retailers electronically track shoppers’ buying habits. Customers use their card each time they
shop to get special discount on items. The consumer purchase data stored in the database can be
further used in determining customer preferences. If management sees that a customer buys
flowers regularly, then it sends that customer a coupon redeemable in its floral department.

Merchandise assortment

Large variety, with fewer assortments (100000 – 150000 SKUs)

Location

Free-standing stores

Communication Mix

Electronic and Newspaper insert ads

Pricing

Average/Every Day Low Pricing (EDLP)


Store Design and Display

Size: 20000 – 50000 sq. ft

Basic and special displays for products

6-10 checkout lines

Customer Service

Limited

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