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Retail MarketingThe marketing issues facing a fast-changing sector
Director, Oxford Institute of Retail Management, Saïd Business School, University of Oxford, UK
Over the last forty years, retailers have become much more active in their own right within the value chain. Indeed, large, professionalised organisations now run most of the retailing in western economies and are beginning to do so in emerging economies. Retailing is the eighth biggest sector of the world... read moreeconomy in terms of total market value and accounts for 7% of total value-added and 10% of the UK’s working population. The retail sector makes direct contributions to GDP and employment, but also makes indirect contributions to demand and economic growth through its work with suppliers and business service firms, as well as to the UK’s social and environmental performance. In addition to being substantial commercial enterprises, such retailers have also become trusted brands with, in some cases, retailers’ own label brands being regarded as of similar or higher quality than those of branded manufacturers. At the same time, innovative new retail enterprises can be found amongst small- and medium-sized enterprises. Retailing is now the legitimate focus of business strategy, marketing, operations management and other conventional business disciplines, but particularly marketing.
At the heart of this transformation lies the recognition that retailers are much closer to their consumers than any other organizations in the value chain. As such, retail marketing comprises a critical discipline. Over and above the issues facing conventional marketers, retail marketers – as McGoldrick suggests – must “manage a very large product assortment, deal with the complexities and risks of selecting new locations, and successfully manage a constant and direct interface with their customers.” (McGoldrick, 2002). Some retail brands (not always the largest) perform as cultural innovators, creating or assisting in the creation of trends for new products and services; or making such products and services more widely available to larger sections of the population. For example, clothing retailer Zara’s quick response, vertically integrated business model made an opportunity of the transience of fashion to create distinctive competitive advantage, whilst Marks & Spencer’s growth of its Simply Food smaller format store was explicitly designed to bring ‘convenience foods to more convenient locations’. A retailer with strong brand equity will be able to convey clearer value to customers which in turn will provide a more rigorous basis for a retail firm’s success.
The scale and reach of retailing means that any talk series, case study or text book would find it challenging to address every marketing issue faced by the sector. However, this series is carefully selective. It aims to identify a number of important perspectives on the characteristics and development of marketing in the sector internationally. It does so through a judicious mix of:
• Analysis and insight from senior commentators and academics, introducing appropriate concepts and frameworks in retail marketing, and
• Practitioner contributions designed to illustrate the experience of particular businesses, sectors or geographies.
The objectives of the series are to demonstrate the important contributions of both creativity and imagination, as well as of the measured and scientific application of consumer market analysis, which are required for the development of effective retail marketing strategies