Sir Frederick John Dealtry Lugard was born on 22 January, 1858. Between 1901 and 1928…
MODERN TRENDS IN RETAILING
New trends have been introduced in retailing business because of the dynamic nature of commercial activities. In order to enhance and facilitate business activities, new ideas and techniques have been introduced.
- After sale services.
- Vending machines.
- Credit card.
Branding is the act of attaching a trade name to a product so as to distinguish it from the products of other firms. It allows for standardization of goods. In other words, branding means given name or mark to a product in accordance with the trade mark Act in order to distinguish it from similar products manufactured by other producers. Branding means that a firm gives a distinctive name to its products. In other words, branding is a general term covering brand names, designs and symbols which may be used by a producer to distinguish its goods from that of other organisations. Branding as a modern trend in manufacturing is a prerequisite for product differentiation. It is used to prevent product adulteration.
Advantages of Branding
The benefits of branding in retailing are:
- Assurance to buyer: Brand name on the product is an assurance to the buyer that he is buying the same product with the same quality.
- Goods are easily recognized: Branded goods are easily recognized.
- Expansion of market size: Popular brand names become household words and thus help to expand the market for the product.
- Makes services viable: Branding of goods makes both self-service and pre-packaging viable.
- Standardisation of products: Branding is used to standardize products and makes retailing easy as customers know the particular brand they want.
- Brand Loyalty: It also ensures brand loyalty.
- Form of advertisement: Branding is a form of advertisement.
Disadvantages of Branding
- High cost of advertising.
- Branding can create false buying on the part of the customers.
Self-service allows the customer to go round and select the products he wants without the help of shop attendants. In other words, self-service system is adopted by the retailer in order to encourage people in helping themselves rather than being served. The goods are displayed with price tags for customers to move around and select their choices without assistance from the shop attendant. Baskets and trolleys are provided to ensure effectiveness. It can be found in large scale retailing like supermarkets, departmental stores, etc. The goods selected are checked and paid for on leaving the shop. Self-service as a trend in retailing is enhanced by appropriate packaging and display.
Features of Self-service
- Choice of goods: Customers move around to select their choice of goods.
- Few shop attendants: Only few shop attendants are required.
- Use of price tags: Goods are displayed with price tags.
- Use of trolleys: The use of trolleys and baskets are permitted.
- Pre-packaging of products: Goods are prepackaged with price tag fixed.
- Payments are made at the desk: Goods are paid for at the desk on leaving the shop.
- These is impulse buying: Goods are displayed to encourage impulse buying.
- Large space is required: There is the need to provide large space for easy movement of customers.
Facilities Required for Operation of Self-service
To encourage self-service, the following necessary facilities should be put in place by a retail shop:
- Attractive shelves: There should be attractive shelves where goods are well displayed.
- Packaging of goods: Proper packaging of goods with price tags should be done.
- Large space required: Spacious floor should be provided to facilitate free movement of customers.
- Provision of trolleys and baskets: Trolleys and baskets should be provided for effective service.
- Security should be provided: Security should be beefed up to minimise shoplifting or pilfering.
- Provision of pay desks: Pay desks have to be installed at strategic locations within the shop.
- Employment of qualified cashiers: Cashiers with automatic cash registers should be deployed.
- Provision of packaging spaces: There should be provision of spaces for packaging to attract more customers.
Advantages of Self-service
- Customers freedom of choice: Customers have freedom to select their choice of goods.
- Saves time: It saves time and labour since bargaining is avoided.
- Overhead cost is reduced: There is no need to waste money in employing many sales attendants, therefore, overhead cost is reduced.
- There is impulse buying: It encourages impulse buying.
- Customers convenience: It ensures the convenience of customers.
- Increase sales: It leads to more sales of goods.
Disadvantages of Self-service
- Problems of pilfering: It creates high opportunities for pilfering.
- Increase running costs: It increases running costs as large space is required.
- Incure additional cost: Additional cost will be used to provide trolleys, baskets, etc.
- Lack of opportunity to check goods: The customers do not have ample opportunity to inspect pre-packaged goods.
- Less attention: Less personal attention is given to customers.
- After-Sales Services
After-sales service refers to the service provided to customers in the form of home delivery, installation and maintenance of products purchased from the shop. In other words, after-sales services are extra services which retailers render to their customers after purchasing their products in order to ensure constant patronage. The service is sometimes made available to a customer after he has purchased a product. After-sales services is an essential component of modern marketing methods. This may include replacement, maintenance and repairs of faulty parts.
Advantages of After-Sales Service
The benefits of after-sales service in retailing are:
- Attraction for customers: It is used as extra attraction for customers to patronize a particular retail shop.
- There is guarantee: It is associated with giving of guarantee in the form of repair work or routine maintenance which creates goodwill and confidence.
- Competitive tool: It is used as a competitive tool by retailers.
- Use to cope with complexity: It is used to cope with the greater complexity of goods being manufactured which are sold through retail outlets.
Disadvantages of After-Sales Service
- Higher price: Higher price may be charged for extra service.
- Wrong advise: Customers may be wrongly advised by the service provider or attendant.
Pre-packaging is a system whereby goods are packed, wrapped or put inside containers, weighed and priced before they are arranged on the shelves in a store. In other words, it is a technique where by retailers sell goods already weighed, measured and packaged by manufacturers.
Customers feel satisfied when buying prepackaged goods because the correct weight and cleanliness of the goods have been assured. Prepackaging draws the attention of the customer to the goods and also prevents imitation of such goods from any angle . Pre-packaging allows for easy handling and attractive packet of a good selling point. Much of pre-packaging is done by manufacturers, but many super markets now prepackage perishable goods such as meat and vegetable. Since each packet contains a known weight of the goods. Pre-packaging saves time as the customers merely select the weight or seize of the goods they required. Pre-packaging is one of the modern trends in retail trading.
- Packaging is defined as the act of introducing good container for a product so as to make it look attractive. It is also for protecting the product and aids its handling.
Advantages of pre-packaging
- Easy identification of product: Pre-packaging ensures the easy identification of products or goods by customers.
- Relieve of burden: Since pre-packaging is done by the manufacturers, the middlemen are relived of the burden of packaging.
- It ensures quality of goods: Pre-packaging helps to ensure that retailers do not tamper with the quality of the goods.
- Facilitates self-service: Since the packaged goods are standardised, self-service retailing is facilitated.
- Means of advertisement: The goods advertise themselves anywhere they are displayed because they can easily catch the attention of the customers.
- Possibility of branding and labelling: Branding and labelling are possible only when goods are pre-packaged.
- Ease of handling: When goods are packaged, it will be very easy to handle them.
- It eliminates false information: Prepackaging by the manufacturers or by the wholesalers, helps to eliminate false weight and false measurement by unscrupulous retailers.
- Protection of products: Pre-packaging protects the products as they are moved from sellers to buyers or even in the process of the product being used by buyers. This can be in the form of prevention of deterioration, evaporation, loss, etc.
- Protection of buyers and sellers: Prepackaging protects both the buyers and sellers especially for corrosive goods e.g. chemicals like acids.
Disadvantages of pre-packaging
- It is expensive: Pre-packaging is expensive and the cost of packaging is usually passed on to the customers.
- Prevents actual inspection of goods: Prepackaging prevents actual inspection of goods by the buyers.
- Increase in price: The cost of the containers, cans, wrappers, etc are added to the actual price and this makes the price to go higher.
- False information: Buyers at times may be compelled to rely on the information stated on the package and such information may be deceitful or misleading.
- Environmental pollution: End-users of prepackaged goods often litter the streets with wrappers and empty containers and this tends to make the environment untidy and dirty.
- Credit card
Credit card is one of the modern trends in retail trading. It is a system which involves the use of plastic cards to purchase goods and services on credit from specified sellers up to a specify amount and payment for such goods and services are later paid for. One of the major features of credit card is that it eliminates the danger involved in carrying large sum of money in cash from one place to another. With credit cards, the rate of robbery whether personal or banks will be drastically reduced. The use of credit cards in modern days now leads to cashless economy.
Advantages of credit cards
- Promotes credits purchases: Credit cards helps the customers to purchase goods on credit which they could not afford to buy with cash.
- Ease of handling: Credit cards by their nature are small in size but with high quality which can easily be carried from one place to another.
- Increase in profit: Since credit cards involves sales in credit, this does lead to increase in sales which results to increase in profit.
- It eliminates carrying of cash: Credit cards do eliminate the carrying of huge amount of cash from one place to another:
- Reduction in armed robberies: The rate of crime such as armed robberies on individuals or banks is highly reduced as customers buy goods with the use of credit cards.
Disadvantages of credit cards
- No room for bargaining: Since the prices of goods are fixed, customers may not be able to bargain for such goods.
- Inability to recover debts: Credits cards involve the buying of goods on credits, shop owners may face the problem of bad debts.
- Increase in price of goods: Goods and services sold with credit cards are usually associated with high prices.
- It can be faked: Credit cards at times may be faked and this can affect the operation of the business.
- Vending Machine
Vending machine is a retail outlet that automatically dispenses pre-packed items such as drinks stored in it whenever the appropriate value coin is inserted. In other words, vending machine involves the sale of goods to ultimate customers through coin-operated machines. They are located in areas where large number of people congregate such as offices, schools and sports arena.
Consumers’ demand for greater time, place, convenience and concurrent technological development spurred the successful introduction and high demand for the self-contained automatic vending machine in the late 1940s. This mechanical coin-operated machine becomes an important retailing method for making products available where and when store retailing is not feasible. The products are typically small and branded, e.g. candles, soft drinks, cigarettes, snacks, etc.
Advantages of Vending Machine
- Ensures automatic sales: Sales of goods is automatic sales so that the cost of labour is saved. Machines are used instead of human labour.
- Uniform price: All the customers for the same quantity of goods pay uniform price.
- Useful for selling convenience goods: Vending machines are useful in selling convenience goods e.g. Snacks, soft drinks, candles, etc.
- It ensures self-service: Customers serve themselves with the aids of vending machines.
- It eliminate wastage of time: The use of vending machines do not waste time unlike human labour.
- Provision of twenty for hours service: Sales of goods using the vending machine is a 24 hours service for the customers.
Disadvantages of Vending Machine
- No refund of cash balance: Customers may loose money as Vending machine cannot refund any cash balance.
- Limited to a range of goods: Vending machines are used in most cases to sell only one product at a time.
- It encourages pilfery: The use of vending machines do encourage pilfery as machine operators can manipulate machines to their own advantages.
- High price of goods: Goods sold through vending machine may be high as a result of cost of machine itself and other operational costs.
- Low profit: The profit of the retail outlets through the use of vending machine may be low due to high operation costs.
- Reduction in sale: Sales may reduce when machines break down or faulty.