Global Retailing

Global Retailing is any retailing activity that crosses national boundaries. For centuries entrepreneurial merchants have ventured abroad to seek out merchandize and to establish retail operations. Today’s global retailing scene is characterized by great diversity.

Diversity in the Global Retailing Scene

Department stores literally have several departments under one roof, each representing a distinct merchandise line and staffed with a limited number of salespeople.

Speciality retailers are narrowly focussed on one top of offering.

Supermarkets are departmentalised, single-story retail establishments that offer a variety of food and non-food items, mostly on a self-serve basis.

Convenience stores offer some of the same products as supermarkets, but the merchandise mix is limited to high-turnover convenience and impulse products.

Discount retailers have an emphasis on low prices. There are full-line discounters, dollar stores or also warehouse clubs.

Hard discounters sell a tightly focussed selection of goods at rock-bottom prices.

Hypermarkets are a hybrid retailing format combining the discounter, the supermarket, and warehouse club approaches under a single roof.

Supercentres offer a wide range of aggressively priced grocery items plus general merchandise in a space that occupies about half the size of a hypermarket, key to Walmart’s growth strategy.

Superstores or category killers specialise in selling vast assortments of a particular product category.

Shopping malls consist of a grouping of stores in one place

Global Trends in Retailing

Large-Scale Retailers

There is a trend towards fewer but larger retailers worldwide. This is particular relevant in grocery retailing. Three factors contribute to this trend:

• Increase in car ownership
• Increase in the number of households that have refrigerators and freezers
• And increase in the number of working wives

Example: Hypermarket Tiendas Excito in Venezuela

• Venezuela’s retail sector essentially consists of family owned shops
• The new hypermarket ‘Tiendas Excito’ promised low prices due to volume purchasing centralized warehousing and computerized inventory control – all revolutionary in this local context
• One month after the hypermarket opened its doors, sales were 35% above expectations

Renewed Interest in Smaller-Scale Retailers

While larger-sized retail outlets are increasing in numbers, independent stores are dominant players in many markets and will be for some time to come.

Example: Procter & Gamble

• Disappointed with its percentage of sales coming from developing countries, the company aimed to add one billion additional customers in the next few years, specifically targeting woman in developing countries.
• P&G’s plan focused on placing its products in so-called “high-frequency stores” or tiny shops often run inside of someone’s house.
• The company estimated that there were 20 millions such stores worldwide, only 2,5 million which carried P&G products

International Retailers

The Number of International Retailers is Rising.

Most originate in advanced industrial countries and spread to both the developed and the developing countries in the world. The trend was started by a number of large retailers in mature domestic markets that saw limited growth opportunities at home compared to the potential opportunities overseas.

Example: McDonald’s, KFC, Walmart

Among the most successful international retailers have been franchises such as McDonalds and KFC and discount retailers such as Walmart.

Despite the challenges of entering foreign markets, the internationalization of retailing has been facilitated by a number of factors such as enhanced data communication, new forms of international financing and lower governmental barriers of entry.

Online Retailers

The internet has opened an entirely new channel for retailers and manufactures to sell their products.

Since online retailing crosses borders; consumers can reach any store anywhere with a legitimate internet address. Online retailing requires a large connected population. Some parts of the world have reached near 100% adoption rates of e-commerce.

Examples: US based online retailers such as Amazon.com have expanded abroad with specific “stores” in the United Kingdom and Germany. The most active online purchasers come from South Korea where 99% of internet users shop online.