Site Loader
Rock Street, San Francisco






An evolution of retailer
food and general merchandise transport operation

Canadore College

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Satinder Singh A00067064

Devinder Singh A00078854










Supply chain management has evolved from
business necessity to one of the primary focus areas for enhancing competitive

We may imagine a virtual organization
that encompasses a group of trading companies, all working together to maximize
customer service, slash costs and share the profits. By optimizing not only
their internal processes but also their interactions with each other, they
realize benefits of a truly integrated supply chain. This concept is basis for
the revolution in development of supply chain integration and synchronization,
to create “excellent service organizations”.

success and key drivers

The global retail landscape is
changing in some dramatic ways. Retail sales are currently improving.

Retailing is indeed a dynamic
enterprise. The following figure represents a model to describe some of the more
successful retail strategies that have emerged in the last few decades. This
model describes the evolution of retail strategy based on two dimensions:
relative price, which is depicted on the horizontal axis, and relative
offerings, depicted on the vertical axis. Retailers typically fall in one of
four segments: Innovative, Big-Middle, Low-Price and In-Trouble. Retailers
occupying the Innovative segment direct their strategies toward
quality-conscious markets seeking premium offerings; Low-Price retailers appeal
to price-conscious segments; the Big Middle retailers thrive because of their
value offerings, and the In-Trouble retailers are those who are unable to
deliver high levels of value relative to their competitors.

Innovative segment

Driven by intense
competition and choosy consumers, retailers like Trader Joe’s have adopted
innovative retail formats to increase the value of the shopping experience.
Trader Joe’s, the specialty grocery chain, goes beyond offering quality and
variety. It carefully manages the customer experience, so customers have
fun—with a friendly and helpful staff, unique product selection, a sense of
discovery from finding something new on the shelf, and tasty samples. Customers
who enjoy the experience will inevitably buy something they hadn’t originally
intended to. The intent is to design a unique shopping experience that
integrates the consumer into the process to create a lasting, pleasant memory,
and ultimately a loyal customer. Providing consumers with a stimulating experience
and a sense of trial before the purchase, and leaving a strong positive
impression is the primary goal of these retailers.

Low price segment

So, called
“extreme value” retailers like Dollar General, Family Dollar, and 99 Cents Only
Stores are typical examples of retailers in this segment. Extreme value
retailers are general merchandise discount stores that are found in either
lower income urban or rural areas and are much smaller than traditional
discount stores. They compete by offering good value primarily through their
low prices. Whereas the” extreme value” retailers are adding stylish private
brand collections and some luxury goods like frozen shrimp to their assortment,
low prices remain the centrepiece of their strategy.

growth of “extreme value” retailers shows that stocking fast-turnaround items
in 8,000 to 10,000 square foot stores is a good business model. Moreover, they
appeal to today’s time-starved consumers because they are easy to shop, being
small stores primarily located in easy-access strip shopping centres. Even
though the average dollar store transaction is only $9, the average margin of
32 % outpaces convenience stores (29 %), drug stores (27 %) supermarkets (31
%), discounters (24 %) and warehouse clubs (11 %) by keeping prices in check
and offering brand and product mixes valued by customers

The big middle segment

Kohl’s, Lowe’s, and Best Buy are typical examples of retailers in the Big
Middle. Since the Big Middle is the source of the largest potential base of
customers, it is where most successful retailers want to compete in the
long-term, although it is possible to be successful in the short-term using a
different approach. In fact, many of the retailers now in the Big Middle have
gotten there by way of initially providing either an innovative offering or low
price or both, thus providing superior value to customers

For example, Ann
Taylor began by offering innovative products that provided customers with high
levels of value through superior benefits, whereas Target had its start by
providing customers with high levels of value through low prices for good
quality goods by means of its operational excellence. Big Middle retailers have
succeeded in leveraging their innovative or low-price position to transform
their niche appeal to the mass market. They own an entirely different position
in the marketplace by offering innovative merchandise assortments in terms of
depth and breadth at reasonable prices.

Clearly, the big
middle segment retailers have successfully transformed themselves from being
perceived as the innovative leaders or the low-price leaders into a hybrid of
the two that appeals to a much larger customer base. They reposition themselves
by transforming their image as either offering simply innovative merchandise or
low price to being retailers that provide great value in a broader array of merchandise.
The Big Middle is a very competitive and profitable space. Other retailers are
constantly vying for consumers’ attention and a place in the Big Middle. Simply
being in the Big Middle is not sufficient for long-term viability. A case in
point is conventional department stores. Once the darlings of Wall Street, they
are now considered among the dinosaurs of retailing because they have not been
able to sustain superior value through innovative offerings and high levels of
service for the mass market.

Strategic Levers for Retail Success through Value

Retailers who
successfully compete in The Big Middle provide a compelling value proposition
to the customer and are able to quickly respond to market changes. The
successful ones maintain a nimble and flexible mindset and constantly monitor
changes in the marketing environment. They realize that being Retail Success
and Key Drivers 21 flexible and being able to quickly adapt to changes in the
marketplace are key to their survival. Examples of companies that position
themselves to capitalize on market trends abound. Consumers have become more
attracted to “ethical” products which are those that are not produced by
sweatshop labor and the working conditions have met high safety standards.

In 2005 for
instance, U.K. shoppers spent $50 billion on ethical goods and services, with a
concentration on clothing. U.S. demand for ethical products is also high. An
interesting derivative of “ethical” products is a program called Product Red
Label, in which a group of manufacturers and retailers such as The Gap, Emporio
Armani, Motorola, and Apple are producing clothing, cell phones, sunglasses and
a variety of other products in sweatshop-free environments. A portion of the
profits are donated to The Global Fund to Fight AIDS, Tuberculosis, and Malaria
in Africa. 7 Retailers are adjusting their business models to include
philanthropic giving as part of its strategy. Instead of donating to charities
separately from its retail business, retailers are now marketing its products
for the purpose of giving to a charity. Retailers are realizing that being
socially responsible is giving them a competitive advantage and a lifelong
positive reputation in the eyes of consumers.

Retailers that
traditionally did not sell furniture like Costco, Sam’s Club, Wal-Mart, Target
and J.C. Penney have recently expanded their furniture offerings in response to
these trends. Others have been adept at pursuing underdeveloped market
opportunities, for example sales to demographic groups. Designed to appeal to
women, Lowe’s has enjoyed a handsome payoff and a strong competitive position
against well-entrenched retailers like Home Depot. In Germany, Generation
Market, a supermarket chain, is redesigning its stores and offerings to cater to
older consumers. The fundamental key to success lies in retailers’ abilities to
be nimble or flexible in organizing their offerings in response to new
opportunities in the market. Best Buy has experimented in several stores with
retailing and customer service that is appealing to women. The stores have
lowered its audio volume, made the aisles wider, added play areas for children
and most importantly trained its sales people to communicate better with women.
Some stores even have full-time personal shopping assistants to help female
shoppers navigate the store. Other women who do not have any interest in
electronics can recline in a massage chair while a personal shopper gets the
merchandise for them.


companies takes care of the transport of the goods from as little as one
pallet, up to 33 pallets, from partial loads to complete loads and the grouping
of goods, within the country and internationally, from collection through to
1. General goods and hazardous
2. Boxed or loose goods, finished or
part finished.
3. Temperature-controlled products from
-25°C to +15°C.

Merchandise or discount retailers are unique in that they have the equipment
and staff capable of retailing a large variety of goods from a single location.
With the newer formats of retailing and multiple channels evolving, these
retailers now seek ways to ensure seamless shopping experience for their

Business Challenges

1.) Create and
manage a differentiated and localized product assortment

2.) Reduce stock
outs and shrinking margins via more effective Stock Keeping Unit (SKU)
management and revenue rationalization


The respect and
optimisation of delivery times guarantees the customer fast, on-time deliveries
and even when the deadlines are tight. The speed at which operational decisions
are made also greatly facilitates urgent or priority deliveries.


By respecting
all quality and safety certification processes, these retailers are able to
make a strong commitment to both the environment and to excellence in
management. Their high quality of service is also assured by constant
forecasting, risk assessments and careful attention to detail when handling
customer goods, taking into account important factors such as the safe and
hygienic handling of perishables or temperature-controlled goods, the checking
of product purity and safety when loading or unloading the goods.


transport planning helps the retailers to reduce costs and delivery times by
combining the use of their own fleet of new vehicles with that of their
subcontracted partners and affiliates, as well as using multi-modal transport
solutions such as rail-road (trailers on trains).


The traceability
of the products is guaranteed due to their high      performance tracking tools (using
geo-localisation, temperature monitoring, etc.), due to which information is
provided to the customer at any time and in any place. These retailers offer a
safe, high quality and value-for-money service.


The most
effective solution is working with leading retailers across the globe and help
them optimize their merchandizing and supply chain functions which helps
retailers gain strategic insight into store planning and operations, analytics,
price optimization, promotion/markdown management, loyalty, e-commerce and
supply chain automation.

Success Snippets

Help a leading retailer by
re-engineering their Information Technology (IT) landscape to comply with local
fiscal systems and integrate it with their corporate systems within a year to
deliver high business impact.

Engage with large retailers in
the world to successfully execute complex projects for their global operations.
Help the retailers standardize their business processes across the globe,
achieve regulatory compliance for their operations and integrate global
operations to the US headquarters by managing data conversion, building
interfaces and enabling reporting.

Diversity of Retail Formats in General Merchandise

In general
merchandise retailing, a variety of retail formats is used to sell non-food
merchandise to consumers. This diversity results from the plurality of product
groups that are characterised as non-food items. Even though product groups
also vary within the food sector with regard to consumer shopping behaviour,
major differences are seen, particularly between general merchandise and food
items. These differences relate to product characteristics such as perish
ability, specific demand patterns, product value (e.g. in relation to product
size or volume) or turnover rate. For example, while food is usually purchased
daily or several times per week, general merchandise in most cases is purchased
infrequently. Some categories such as cosmetics or household articles are
bought more frequently than others are, for instance TV-sets or computers,
which usually are purchased only every few years.

While in general
merchandise retailing substantial sales are generated by traditional store
based retail formats, non-store formats such as catalogue retailing or
electronic channels are also vitally important. New developments in technology
and customer behaviour in recent decades have led to a change in the relevance
of different retail channels and to the evolution of new retail formats, mainly
in the field of non-store retailing. Another important trend is that many
traditional store-based or catalogue retailers have started to sell their
merchandise through several retail formats. By adding additional retail
channels, they are evolving into multichannel retailers

Formats The major types of store-based retail formats in general merchandise
retailing that will be discussed in this Chapter are drugstores, specialty
stores, category specialists, department stores, full-line discount stores and
variety stores, off-price retail formats and pop-up stores.
Drugstores are specific types of specialty stores that focus on beauty, health
and personal grooming merchandise. In addition, these stores often sell
categories such as food items, magazines or newspapers, stationery, toys or
gifts. Depending on governmental health care policies, in some cases pharmacies
are associated with drugstores and sell prescription pharmaceuticals in
addition to ethical or over-the-counter (OTC) medicine. The product categories
sold in this store format are similar in some respects to food items, mainly in
terms of shopping frequency and purchasing patterns (“near-food items”). In
some statistics, drugstores are therefore classified as food store formats.
Compared with traditional specialty stores, drugstores tend to be more
aggressive on price and apply pricing strategies such as every-day-low-price
(EDLP) strategies or promotion pricing. Important players include Boots,
Walgreens, A.S. Watson or dm-Drogeriemarkt. Drugstores are often located in
city or shopping centres, but are now found more and more at locations such as
neighbourhoods or isolated sites. Thus, they play an important role in
proximity retailing and usually – because of their location strategies and
rather small store sizes with speedy checkout facilities – offer a high degree
of shopping convenience.

Retailer’s logistics and Transport organization

The transport
organization of a company is always prejudiced by logistics decisions aiming
“to move product efficiently along the supply chain”. The characteristics of
retailers’ transport are conditioned by the organization of its transport and
logistics, which differ from company to company. The characterization of
transport and logistics organization can be described by taking different
indicators related to three possible dimensions: the physical transport
operations (transport features), the physical activities and the material and
immaterial assets.

Physical transport

transport operations become more and more integrated into complex logistics
systems. Beyond transport operations, transport firms also deliver various
services of management of flows, input to (and sometimes also management of)
information systems, co-packing, co-manufacturing etc. Freight transport
operations have become more and more complex and differentiated over the past
30 years. Beyond shipping and handling goods, they often include operations
such as the treatment of information flows, the differentiation of goods for
the final customer etc. The conceptual representation of freight transport
exclusively in terms of flow of goods thus becomes less relevant to the
realities of the freight transport sector. That is why the description of the
logistics services has to be associated with the transport indicators

Logistics and Transport services

Logistics and
transport services can also be described in terms of physical activities (e.g.
transport, storage) as well as non-physical activities, related to the
organization modalities of these physical activities (e.g. supply chain design,
selection of contractors, freightage negotiations).

Material and Immaterial Assets

These logistics
and transport activities rely on material and immaterial assets: the transport
fleet, the development of retailers’ regional distribution centres
(centralization or decentralization of the warehousing), or the use of
information technology systems (e.g. EDI, Epos (20)). Fernie and Sparks (21)
identify these assets as key components for retailers’ logistics and transport
strategies. For example, retailers manage warehouses or distribution centres to
enable them to keep stock in anticipation of or to react to sudden changes in
the demand for products. Retailers have also become increasingly concerned with
being able to capture data at appropriate points in the system and to use that
information to have a more efficient and effective logistics operation.

Post Author: admin


I'm Eunice!

Would you like to get a custom essay? How about receiving a customized one?

Check it out