Discussion on Retailing

Definition of Retailing

Retailing is a broad term used for the distribution process of the product or service to the end user. However, the product is sold from the point of view of the purchaser who uses the product (Piron and Young, 2001).
Retailer is a company or an organization that collects its most of the revenues from the retailing process. In the supply chain of any product or service, the retailers provide an essential link between the manufacturers and the final consumers. The retailing process is all about having more and more customers for your product or service by using the best advertising and marketing strategies in the market. The retailing includes all the steps from inventory to storage of the product and collecting the payments from the customers (Troiville, Hair and Cliquet, 2019).
Introduction to Lewis Group

Lewis group is the most famous retailing company in the South Africa founded in Cape Town in 1934 for the household furniture, the electrical appliances and the electronics of the domestic use. The Lewis groups had more than 700,000 customers, 8248 permanent staff and 794 stores across all the areas in the country. This large number of customers makes it the number one retailing company that provides the electrical appliances and household furniture on credit. The company decided to launch the online brand in 2017. The focus of the company in the online store was to sell the quality home products and the kitchen wares with the help of the online networks.

Types of retailers

The retailing business is very diverse and can be classified into many different types of retailers on the base of many structural and organizational terms (Hristov and Reynolds, 2015). The retail stores may vary in their size, the kind of the product or service they offer and the ownership of the store. The basis for classification of the retailers may be the type of product they offer, the size of the stores, the type of the ownership and management of the company. If we talk about the Lewis Group, the types of the retailers in which this company fits in are the single line retailers, the specialty retail stores and the fixed shop retailers. The Lewis group has considerably large corporation structure and has the credibility in the product of the household furniture and the electrical appliances.

Product Strategy

The product strategy of the Lewis Group is to provide the high-end quality of the household furniture, house wares, the electrical appliances in the South African region on credit and cash. The company focuses on the diversification strategy. The company started in 2014 a Beares brand and focused on the diversification in the market by diverting attention to the cash sales instead of the classic credit sales. The Beares brand helped the company acquire the high-end target in the market and is now being retailed from the 127 stores of the company. In 2017, the company started to increase its stores outside South Africa. This act of increasing the number of stores added to the revenues of the company and increased them by 14.47%. Moreover, the working of the company on United furniture outlet (UFO) helped the company attract higher income customers and get the sales of the products on cash. This strategy is also helped to increase the revenues of the company by 14.7% in the respective time span.

Retail outlets of the Company

The company is focused on the diversification strategy and is increasing the size and number of the retail stores in the region. In the recent years, the increase in the number of retail outlets has collected a large proportion of the revenues for the company. Therefore, the company is aimed at the enhancement in the size and number of the retail outlets in the local as well as international market. In the local market, the company has 127 stores and its brand named Beares had earned the huge revenues in all the retail outlets in 2014. After it, the company aimed at increasing the number of outlets more and more and in the same way it added up the revenues.

Trends in the company

The Lewis Group has earned the first place in the household furniture and electrical home appliances in the market. It has a significant name in the 4 to 7 categories of the living standard measurement (LSM). The company has been enabled to capture a large proportion of the customers in the market in the LSM (Beck and Rygl, 2015). United furniture outlet (UFO) has been capturing the high-end customers in the upper income market. Moreover, its brand Beares has been a viral product in 2014 that has collected a large amount of revenues for the company. INspire is a very nominal and outstanding effort of the company to make it stand in the field of online market. It has also added to the enhancement of the company’s revenues and earned a huge mark up.


There are many changes that have affected the retail outlets’ performance in the region. First of all, the COVID-19 pandemic has adverse effects on the economy and growth of the retail outlets. It has caused the most difficulty in the management of the retail outlets all over the world. Several lock down issues and social distancing has made it very difficult to collect the revenues in these cases (Journal of Retailing Special Issue – Empirical Generalizations in Retailing, 2012). Moreover, the trading conditions in South Africa are comparatively weaker and had a significant impact on the market and retail outlets of the company. Moreover, the capital management and certain financial risks had been affecting the performance of the retail outlets of the company in the region. However, the company has not been unaware of these issues and has acted upon the possible strategies and approaches to overcome these conditions.

Task 2
A retailer “will be able to choose between several strategic alternatives and implement them through different tactics adopted in the day-to-day management of retail operations”. These strategic alternatives are based on in the retail mix that includes definitions of store environment, pricing policy, line of products, advertising and promotion, attendance and services, and location and expansion, which will be analyzed in the subsequent sections.
Store Environment
The store environment is a relevant strategic factor in the purchasing behavior of consumers (TURLEY 2002). According to Donovan and Rossiter (1994, p. 291), “the pleasure induced by the store environment seems to be an important cause for consumers stay longer in the store and spend more money than intended”. For Turley and Chebat (2002), the store’s environment and design can be divided into five categories:
• Exterior: The size and shape of the store, the facade, parking and the neighborhood.
• General Interior: includes lighting, music, colors, smells, temperature and cleaning.
• Layout and Design: It consists of variables such as product grouping, flow of
people and corridors, furniture and layout of check-outs.
• Point of sale decoration and material: includes point of sale displays,
signage, product displays and kiosks.
• Human Factors: Characteristics of employees, uniforms, density and full store.

Distribution and Location Strategies
One of the main questions about location strategy concerns the decision to concentration and geographical dispersion. In the first, the company focuses its stores on geographic region. “By concentrating activities in a region, the retailer becomes more in tune with the market preferences of this area and, thus, is able to attend more fully meet the needs of these consumer segments” (PARENTE, 2000). Also, according to Parente (2000), the concentration allows the company to reach some competitive advantages, such as: higher productivity in fixed costs, better adjustment of your marketing effort to the needs of consumers in the region and discourages the installation new competitors in the region. Geographic dispersion consists of the location of stores in different regions seeking to reduce risks associated with concentration in a single city or region

The main objective of distribution of channel is the bridging of the overall gap that exists between the producer or manufacturer as well as the user or customer irrespective of whether the respective parties are located within a specific community or between different countries. This specific channel of distribution is considered as the most effective as well as efficient method through which the specific product is easily placed and transferred into the hands of the customer. This distribution channel comprises of various institutions that provide the facilitation of any transaction or exchange of any physical product. The traditional chain of distribution provides a representation of the chains of either the businesses or intermediaries through which the final goods, products, appliances or services are acquired by the buyers. The different channels of distribution include wholesalers, distributors as well as retailers. Online means are also considered as an effective distribution channel. Other types of distribution channels include direct, indirect as well as dual distribution channels. Whereas among the different strategies of distribution, the major ones include mass distribution, selective distribution as well as exclusive distribution. On the basis of the strategic approach the total number as well as type of intermediaries are selected. The main aim is that the distribution channel that is employed provided a specific value to the consumer. The supply chain model of the Lewis Group Limited is developed on the basis of the merchandise that is delivered by the suppliers to the respective stores. The distribution centers as well as the warehouses are not operated by the group. Every store under the Lewis Group Limited comprises of a storage facility that is located in close proximity with the store location. Most of the storage facilities for the merchandise are also located in areas which possess low level of retails as compared to the retail space. Along with this each store under the Lewis Group Limited possesses vehicles specified for delivery. These stores in turn have a direct effect on the merchandise and equipment that is delivered to the specific customers. This distribution strategy that has been adopted by the group provides various benefits since it provides limitation to the building up of stock that is obsolete as well as provides overall reduction in the markdowns. Along with this it also provides an overall improvement in various levels of service since the stores manage to commence with an average of approximately 90% deliveries within the time sale timeframe of 24 hours. Both the supply chain as well as the distribution strategy of the group are supported through an effective shipping process that is world-class along with logistics suppliers. With these logistics suppliers the Lewis Group Limited has managed to establish effective strategic partnerships that provide the enabling of high as well as efficient levels of services for the customers. The omni-channel retail comprises of an approach towards sales that involves many channels and is focused on the provision of an effective customer experience with regards to whichever way the client shops that is personally from the store or any online mode.
Competitor of Lewis Group:

The supply and distribution chain and strategy for Philips Company is based on the development of effective as well as long term relationships with the strategic suppliers. These relationships with the suppliers play a significant role for the company for fast and efficient marketing. These suppliers are supported by the company in terms of bringing about improvements on a continuous level as well as efficiency in terms of operational functioning. In return these suppliers are expected to comply with the highest standards and specifications laid out and specified by the company in terms of sustainability, quality and ethics.
Philips Company has developed an effective eco-system of innovative partners in the supply chain through which effective collaboration can be established and maintained. The professional relationships that are developed by the company with the suppliers and distributors are based upon the feelings of mutual trust, transparency as well as clear accountability. Along with this in accordance with the requirements of the supply chain security the overall flow and distribution of goods is secured in order to prevent any kind of tampering, any access to the distribution of good that is not authorized as well as preventing any inclusion of goods that are not familiar. In order to develop an effective partnership in terms of supply, Philips Company provides a secure access to both the customers and the suppliers that requires a single sign-on to the processes and tools of the supply management. Thus, the suppliers play a crucial role in the company and carry out delivery services for the products and merchandise of high quality through supply of parts and services, materials and products.

Task 3
The main focus of the Lewis Group Limited is the incorporation of a diversification strategy in its distribution and sales strategy which is why the company is working towards bringing about an increase in the overall size and total number of retail stores that are deployed within the region. In the recent years there has been a significant increase in the total number of retail outlets established in various location points. This has led to the development of a large proportion regarding revenues for the specific company. Each store under the Lewis Group Limited possesses vehicles specified for delivery. These stores in turn have a direct effect on the merchandise and equipment that is delivered to the specific customers. This distribution strategy that has been adopted by the group provides various benefits since it provides limitation to the building up of stock that is obsolete as well as provides overall reduction in the markdowns. The main aim regarding distribution and retails for Lewis Group Limited has been the provision of overall enhancement in overall size and number of the total retail outlets located in both the local as well as international markets. With this aim of bringing about an increase in the total number of outlets, the company has managed to provide additions in the revenues. Philips Company on the other hand work and focus towards the establishment of effective relationships with the suppliers for provision of a safe functional as well as environmentally sound working environment, in order to develop a viable distribution infrastructure for the provision of appliances and merchandise from suppliers to customers. The main belief here is the strategic development of relationships with the suppliers and supporting them in terms of improvement and operational efficiency in order to ensure a faster level of marketing for the recent innovations and products. Philips Company has developed its own distribution channels and networks for all the product lines. These distribution channels have been developed for the supply of domestic appliances and other equipment for personal care. The main focus regarding the establishment of these distribution channels was the exemplification of the development of the overall distribution networks for the company. The major and significant business history for Philips Company has been its distribution chain in China where Philip’s products and appliances were exported. In order to spread its services at a global scale, a large number of people are hired for the sales and services section. Similar to the Lewis Group Limited, Philips Company has also set up different and large-scale plants and warehouses to effectively carry out the sales and distribution activities of their instruments, products and devices. Whereas for the marketing of the products, the company has appointed distributors at a local scale along with scale subsidiaries. Along with commencing with proper dispatch of goods, extra services are provided through the installation of products and servicing. The overall success of the company has been attributed to the effective distribution strategy which includes the setting of goals for each channel leading to the growth in sales figure as well as strengthening the image of the company. Like the Lewis Group Limited, Philips Company has also focused towards the expansion of its service and customer care centers in various locations ranging up to 125 to 190 in number along with the hiring and deployment of approximately 900 technicians that are trained to provide appropriate help wherever necessary along with recording any complaints. Another distribution and sales service that makes the distribution strategy of Philips Company different from the Lewis Group Limited is distribution through the dispatching of products and appliances through the direct strategic sales methodology through online service. The company provides an official website which provides the consumer with the services for purchasing of the goods and products that are desired. Along with this the company has also established effective working relations with other shopping sites regarding sales and distribution through which more items can be easily sent from manufacturers to customers through the portals of these shopping sites. For Philips Company the internet service has proved to be an effective distribution and sales channel along with a service for the collection of relevant information. In order to communicate and reach with the consumers therefore along with internet services the company also partially relies on the distribution centers, departmental stores as well as retailers that are located at various points. Along with these various improvisations have also been made on the distribution policy by the company through allocation of small-scale territories to the distributors.

Task 4
Customer service is part of the essential services, that is, it is a part of the gear that, without it, the machine does not work. But when it is structured to offer a unique and efficient experience, the results are much more satisfactory.
Starting with the achievement of customer satisfaction, who not only continues to shop regularly at the store, but also promotes and defends the brand to other individuals who are part of the target audience. In other words, it strengthens your reputation and generates new sales opportunities.

To create memorable customer service, whether at the point of sale, in the support and after-sales channels, it is necessary to know the customer’s profile, that is, what are their needs, consumption behavior, values and expectations.
With this information, it is possible to trace who the buyer persona is, or the ideal buyer in retail. This profile will serve as a reference for personalizing each stage of the relationship and sales, improving channels and services according to the elements that are most valued by the target audience.
Some questions that need to be clarified about customers to identify their profile are:
• their geographical position in relation to the point of sale;
• schooling;
• profession, position held, sector in which it operates;
• purchasing power;
• social profile, family composition, gender etc.;
• age group;
• lifestyle, leisure activities;
• main needs;
• digital behavior, using social networks, shopping on the internet;
• social values.

New retail customer service behaviors
Some characteristics, factors and new behaviors, however, can be considered in almost all current retailers, such as the fact that customers have more access to information, seek references, compare prices and ask for opinions on the internet (Ghosh, 2009). They are also more concerned with the company’s values and reputation, they want to buy products that are in line with its principles and positions, such as those considered sustainable or that do not practice animal testing as part of its development process (Ghosh, 2009).

The challenges of retail customer service
Defining the customer’s profile, either in general or for each of its channels, is already a major challenge for the service strategy, but other elements still enter this equation (Ghosh, 2009).
Improve the service experience
Memorable services are those that provide a unique experience, exploring the positive feelings that a customer may have during the purchase or contact with the company.
In other words, he needs to feel that it is important, that the processes are agile and will satisfy him, that the offer is completely personalized and that his needs, basic or not, are being met (Ghosh, 2009). In a face-to-face retail approach, customers want to have the autonomy to analyze the store’s product mix, in addition to having the promptness of a store representative to answer their questions and process the sale. In e-commerce, on the other hand, they want an experience that will overcome the physical barrier, be efficient and also personalized.
It is in this challenge, in fact, that success in mapping the customer’s profile will prove more important, after all, it is necessary to take advantage of information about the consumer’s needs and preferences to create contact experiences that exceed their expectations.
To improve the service experience, one of the possible ways is innovation. The use of data analysis and Artificial Intelligence (AI), for example, can bring important advances in the quality and operation of relationship channels (Ghosh, 2009).
This happens because, when processed, the data can provide the clues to perform a personalized service, among other things, calling the customer by name and making offers compatible with the latest purchases.
In this sense, the AI may be responsible for analyzing the data and converting it into information for decision making and personalization of care. It can also be used to conduct such a relationship in an automated way (Ghosh, 2009).
The chatbots also enter this innovative circuit. They are robots that, among their various functionalities, can use a previously registered database to answer customers on social networks and e-commerce, for example.
Even advanced models of this technology can learn from the new registrations autonomously and without the need for inputs in their databases, which, without a doubt, is innovative and also efficient for the business.

Questionnaire 1 for Lewis Group

  1. How are customers located in the market: centralized or expanded?
  2. Is the company starting operations or does it already have a customer base?
  3. Is the sale direct or does it use distribution channels?
  4. What alternative brand would you use if our product / service was no longer available?
  5. In your opinion, what improvements can be made in the products that the competition currently has?
  6. How likely are you to choose our product / service over competitive products in the market?
  7. To what extent did each of the following aspects influence your decision to break your relationship with us?
  8. Would you be willing to come back with us if we improved areas that you were not satisfied with?
  9. If you have not had a good experience with us, would you improve the following?
  10. Is your relationship with our company currently active or is there no longer a commercial link with us?
  11. Where else would you buy similar products?
  12. In your opinion, what does company offer that other stores do not offer?
  13. What are the points that, in your opinion, should be improved in the store?
  14. Where else would you buy similar products?
  15. In your opinion, what does company offer that other stores do not offer?
  16. What are the points that, in your opinion, should be improved in the store?

  17. Questionnaire 2 for Philips
  18. Does the company know the reasons for customer defection?
  19. The company has actions and or programs to return customers who deserted? Which are?
  20. Where else would you buy similar products?
  21. In your opinion, what does company offer that other stores do not offer?
  22. What are the points that, in your opinion, should be improved in the store?
  23. Is your relationship with our company currently active or is there no longer a commercial link with us?
  24. How is your account manager assisting in your project or has it helped in the past?
  25. Does the company have a customer loyalty program? Which?
  26. Price, product and service level policies are geared to retain customers?
  27. What are the strategies used by the company to customer retention?
  28. Does the company try to get closer to its customers, taking the time to know your needs?
  29. Does the company invest in information technology to maintain customer relationships?
  30. Does the company know the reasons for the defection of customers?
  31. Does the company try to get closer to its customers, taking the time to know your needs?
  32. Does the company differentiate its customers?

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