RETAILING AND ELECTRONIC COMMERCE  52:630:368 Fall 2003 -3 credits
Sec 01: T-TH 3:00 - 4:20pm  –  BSB 106
Dr. Carol Kaufman-Scarborough, Associate Professor of Marketing - Office:  BSB 219
Office Hours: Tuesday 10:00 - 11:00 and Thursday 2:00 to 3:00, and by appointment
PREREQUISITE: 52:630:201 Principles of Marketing (NO EXCEPTIONS!)

1. My office at school is Business and Science 219.  I am generally in on class days.  Please leave a message or call my home office if you need to reach me in an emergency.  If you need an appointment and cannot make these office hours, please see me to schedule another time.

2. Telephones:
Rutgers Office Phone:856-225-6592 / Rutgers Fax:  225-6231/Secretaries: 225-6218
Home Office Phone/Fax: 429-1045 (ans. Machine and fax, late calls ok)

E-MAIL:  ckaufman@crab.rutgers.edu. This is the best way to reach me with your questions.  You should each have an E-mail account and know how to use it; if you have never used E-mail before, please make an appointment with me.  Periodically, during the semester, you will be sent class notes, questions, hints, and ideas to keep you up to date.

Course Description/Objectives

This course provides the student with a comprehensive view of retailing and an application of marketing concepts in a practical retail managerial environment.We will analyze current multi-channel retail strategies among bricks-and-mortar and web-based firms.  Retailing is changing today, and the successful business will know how to identify, adapt, and plan with the changes, without moving away from its core competencies.  We will consider:  the development of a retail format and its strategy, the analysis of a target market, demographic analysis related to site selection, retail personnel issues, and category management. Buying, financial analysis, and pricing will also be investigated.

The course will investigate the changing role of e-commerce in retailing as a major topic.  However, we will also cover the major building blocks of retailing, such as site-selection and display analysis.  We will look historically at some firms that have failed, such as W.T.Grant, some that have changed, such as WaWa, and some that are newly-evolving, such as Amazon.com. You are expected to read in advance of each class and think about how you’d respond to the questions that are noted on this syllabus. An outline of each topic’s notes is provided on my web page so that you can come to class prepared and ready to think!  Much of our class time will be spent in discussion of case examples. Many are in the text, so bring it regularly. Course projects are designed to enable students to build skills in retail anthropology, demographic analysis for site selection, and identification of “best practices” for online retailers.

Teaching Methodology

Retailing today takes advantage of cutting-edge technologies, such as geodemographic mapping, website development, and database management.  If you work with me, you will build strong analytical skills for retail market evaluation and have current retail information at your fingertips.  You are expected to be up-to-date in class readings and make connections between retail strategies with topics discussed in class.

My approach in teaching this class is to consider you as the future business leaders in Southern New Jersey, not merely as students who are attempting to complete a class (although some of you may fall into this category!). My goal is to place you on the cutting edge of knowledge in making strong and actionable recommendations to retailers.

Grading Policies


           Date 
Requirement 
  Points
 Every class  Participation and in-class exercises, discussion papers, advance preparation and discussion of web exercises  10 points
Thursday Sept. 25th  Homework 1:  Retail Anthropology:  Customer traffic flow, crowdedness, and accessibility  10 points
Thursday, October 9 Midterm:  concepts, examples, applications
Chapters 1-8, chapter 18, handouts, notes, exercises
 20 points
Thursday, October 30 Homework 2:  Location, Location, Location!Skills:  retail site analysis, use and analysis of demographic data, mapping skills  20 points
Nov. 18th, 20th GROUP TERM PROJECT: 
Best Practices of Online Retailers
 20 points
Thurs, Dec. 18th
2 – 5  pm
Final Examination 20 points

TEXT:  Retail Management:  A Strategic Approach (9th edition) by Barry Berman and Joel R. Evans.  Macmillan Publishing Company, New York  2003.The text web page is http://www.prenhall.com/bermanevans

a. A major feature of this text is that it provides many skills for small retail businesses, which simply are not found in other comparable textbooks.  The cases and examples are full of up-to-the-minute problems and decisions of actual retail firms, and provide you with a wealth of information.

b. Another important feature is the integration of E-commerce information.  We will use the internet throughout the course and develop skills you need for retailing on the Web.

c. I will be using several other texts, articles, and references in presenting course material. While we will follow the outline order of your text, classes will present in-depth discussions of major TOPICS in Retailing and E-Commerce.

d. Updated outlines of class topics are posted on my web page, generally after each lecture. This will help pinpoint important topics.  However, the notes do not substitute for class! I will indicate when a specific set has been updated.

Course Policies

Preparation:  Assigned chapters and cases should be read prior to their discussion in class.  Web assignments MUST be read prior to class.  Class meetings will organize retail concepts, clarify the material and correlate real examples from the business world. Handouts, notes, and films will be included on examinations.

Attendance and Late Work, etc.:   Excessive absences will be reflected in the final grade.  All assignments must be handed in on time; late work will receive reduced credit.  No makeup exams will be scheduled without prior notification and a physician's excuse.

Participation:  You are expected to participate in class; just sitting there isn't enough.  Your contributions are expected to help the class learn and understand the topics under consideration.  Negative participation (talking, unnecessary interruptions, etc.) will result in deductions from the participation component of your grade. Here is where excessive absences come in; you can’t participate if you are not in class.

Academic Dishonesty Policy:  Cheating in any form will result in a grade of "F" being submitted in this course.  Cheating is just that:  it cheats YOU of learning and understanding the material covered in class.

Testing:  You are expected to be in class at the scheduled exam times.  The instructor MUST be notified IN ADVANCE if you are unable to take an exam on time.  Make-up tests are given only in the case of an extreme emergency or serious illness.  Substantiation is required.

Incompletes and Problems:  If you find that you are having trouble completing course work or need further explanation of class topics, please schedule an appointment with the instructor.  If you need this class for graduation, you should be sure that your performance is up to standard throughout the course.

It is too late to wait until the last week of classes to ask for help.  Office hours are held throughout the entire semester for this purpose. "Incompletes" will only be given through prior consultation with the instructor, under extreme circumstances.
 
 

Reserve Articles – online and at the reserve desk

The articles below are on electronic and hard-copy reserve. Go to the library web site, IRIS, click on “Reserve Desk”, and input my name “Scarborough, Carol” or “Retailing and E-Commerce”. You can print the articles out for yourself. You can also borrow them from the Reserve desk. You will need to use these articles for the Group Term Project.

Childers, Terry L., Christopher L. Carr, Joann Peck, and Stephen Carson (2001), “Hedonic and Utilitarian Motivations for Online Retail Shopping Behavior,” Journal of Retailing, Volume 77, Number 4  (Winter), 511-535.

Mandel, Naomi and Eric J. Johnson (2002), “When Web Pages Influence Choice:  Effects of Visual Primes on Experts and Novices,” Journal of Consumer Research, Vol. 29 (September), 235-245.

Menon, Satya and Barbara Kahn (2002), “Cross-category effects of induced arousal and pleasure on the Internet shopping experience,” Journal of Retailing, Volume 78, Issue 1, 31-40.

Wolfinbarger, Mary and Mary C. Gilly (2003, “eTAILQ:  Dimensionalizing, measuring, and predicting etail quality,” Journal of Retailing, Volume 79, Issue 3, 183-198.
 
 

Assignments

The entire syllabus plus weblinks can be found at my webpage: http://crab.rutgers.edu/~ckaufman/
NOTE:  Dates are approximate; any changes will be announced in class.
 

1:  Sept 2, 4
Chapter 1:  Introduction and overview; changes in retailing, what’s happened to the dot-com’s?
Go Over Homework 1
Chapter 2:  Building and Sustaining Relationships through customer value
What are basic principles of good retailing?  How can retailers create customer value? What about customer complaints?  Does e-tailing correct some of the complaints? Or create new ones? What is meant by the buzzword “relationship marketing?”  Lifestyle marketing?
a.   Have you visited the Promenades at Sagemore (Marlton) on Rt. 73? How have they built relationships with their customers? How does this center differ from a traditional enclosed mall?
b.   Stew Leonard’s – what can we learn about customer service?
 

2:  Sept 9th, 11th
Chapter 2 (cont), Chapter 3:  Strategic Planning in Retailing
Developing a retail strategy:  what is your mission?  What are your goals?  Who are your customers?  If so, what is the marketing mix and location that will let you achieve your goals? How can you control your activities and predict those factors that you cannot control?
a. Using a service concept typology:  Patronage builders, patronage solidifiers, basics, disappointers
b. Service retailing:  intangibility, inseparability, perishability, and variability
c. Using consumer evaluative factors for service quality evaluation (Figure 2.9)
d. Strategic planning process, Figure 3.1; retail consistency
e. Read and be ready to discuss Schlotzsky’s Deli Case on page 77. Is the use of PDA’s realistic?
f. How can retailers use the concept of positioning in creating their desired image? Goodwill Industries
g.   The Impact of the Legal environment on retailing.  What do you know about the Americans with Disabilities Act (ADA) and retailing responsibilities under \
Title III.
Application:  Target
 

3: Sept. 16, 18
Chapter 18, Retail Atmospherics, Establishing and Maintaining a Retail Image
What are the elements of retail atmospherics?  How can the retailer design their store environment in order to maximize customer satisfaction?  Can these same ideas be applied to e-commerce?  How can web sites be designed in order to maximize customer satisfaction?

How do retailers create desired images in the minds of their customers?  Why is Neiman’s upscale and the Dollar Store a bargain center?  Why do certain people shop at Home Depot, while others prefer their local, neighborhood hardware store?  We will consider all the parts of retail image:  exterior, general interior, store layout, and interior displays.  How do these work together to form a servicescape?  How can store layouts, décor, and displays contribute to customer satisfaction?  What is the impact of the Americans with Disabilities Act?  Browsing in stores and on web sites.
Envirosell  focuses on in-store research:  http://www.envirosell.com/research.html

Chapter 7 – How Can Consumer Behavior Theory Predict Retail Shopping Behavior?

Major CB areas: demographics, lifestyle data, group and individual attributes. How do people shop given the time scarcity they experience?  What are their attitudes towards shopping instore vs. online? Decision process and impulse purchases – research on ADD/ADHD and impulsive consumer behavior
Read and discuss Lowe’s Case on page 207 – understanding the female customer.
 

4:  Sept. 23, 25: Homework 1 –  due Thursday Sept. 25th
Chapter 8: Marketing Research
Tools from Marketing Research: How should information be gathered and processed to take advantage of today’s database and e-commerce technologies. The role of loyalty programs. What is datamining and datawarehousing? What types of data would need to be collected in order to answer specific retail questions. Survey formats. Semantic differentials. Mystery shoppers. What do we need to know about our customers in order to meet their needs?
Application:  Envirosell  focuses on in-store research:  http://www.envirosell.com/research.html

Chapter 4, 5: Ownership and Strategy Mix Issues
Retail institutions can be categorized by ownership, type of store and its typical strategy mix, nonstore sales, and service versus product retailing; why are these classifications useful?  Will independent stores disappear as large chains move into their areas? Will department stores continue to exist?  What are power centers and lifestyle centers? How are these definitions changing today? What are the pros and cons about franchising?
 

5:  Sept. 30, Oct. 2
C. 4 and 5 (continued): How does retailing change over time, and change back again?  What can we learn from classic retail concepts like the “Wheel of Retailing”? Which retailers are likely to survive the next 10 years?  Look at the shaky position of Kmart and the demise of so many dot.coms. Look at the success of WalMart and the increased profits of Amazon.com.  What are some of these firms doing that others are not? How do we know that scrambled merchandising will be profitable? There are certain operational definitions of the various store types that are used by industry to establish benchmarks for performance.  These help us to know if our stores are operating profitably. Let’s consider traditional supermarkets, multichannel supermarkets, and online delivery services.
Width and depth of assortment – p. 351-352.

Chapter 6: Web, Nonstore and Nontraditional Retailing
We will develop skills in website development for retailers, and consider other related forms such as video kiosks and video catalogs.  What info should be built into databases?  What are recommendations for effective web sites.
a.  How DO people use the web? When do people get stuck? What are their fears?
b.  Why CAN’T people shop on the web?  Research about persons with color deficiencies. A web site that allows you to check the color vision of your web site:   http://www.vischeck.com
 

6: October 7, 9
Oct. 7 - Review for Midterm, finish topics; explain and discuss Homework 2
Midterm covers chapters 1-8, and Chapter 18

Oct. 9 – Midterm Exam
 

7:  October 14, 16th
Chapter 9
Have you ever noticed a retail store that just keeps changing owners? Or that goes out of business frequently?  Many times this is related to a poor selection of site. We begin our next section on location and site selection.  Trading area analysis is founded on some of the basic models presented in chapter 9. Let’s try to develop some insight into what factors contribute to a profitable location.  We need to consider concepts such as retail overlap, points of indifference, buying power indexes, and how GIS systems can greatly add to our abilities to make good strategic location choices. What types of relationships are the formulas trying to capture?  Think about Route 73 and Route 70 intersection, and the growth on Rt. 73 just south of that traffic circle. This is a good illustration of trading area overlap.

Chapter 10
Site selection also depends on certain patterns that are often related to locations.  We need to consider what is meant by isolated locations, unplanned business districts, and planned shopping centers.  For instance, Historic Haddonfield attempts to plan, organize, and influence business and community events, much like a shopping mall would.  What will be the Central Business District (CBD) of the future What criteria can be used in evaluating a retail site?
 

8, October 21, 23
Chapter 11 (Human Resources)
Dividing and organizing the tasks in retail organizations.  Basic plans used by retailers.  Selecting, training, compensating, motivating retail employees.  How have some firms built skills and pride into the relatively mundane tasks. Consider the last time you shopped in a bricks and mortar store. Were the sales personnel knowledgeable and courteous?  Are customers turning to the web to avoid poorly trained personnel?
Application VIDEO:  Sears training video “Excelling at Customer Service for People with Disabilities”

Chapter 19, Promotional Strategy
How can a firm relate it promotional strategy to its goals?  What should be the balance among web and traditional promotions? What are the advantages and disadvantages of each type of medium.  Let’s also consider some major firms that base their success on creative image delivery:
 

9: October 28, 30
Homework 2, due Thursday October 30th
Chapters 12 and 13, Operations
We also turn to Operations Management; we will consider both financial and operational planning.  Given the number of retail bankruptcies and reorganizations, what can we learn from those firms in keeping our business healthy?  Montgomery Ward and Bradlees announced their closings. Sears and Home Depot recently closed several stores nationwide.  How did they choose which stores to close?  Will such a move be effective? What are some of the benchmarks that we track in order to make corrections before problems become too large to handle? The Strategic Profit Model provides many cues and the financial ratios are important signals for strategic corrections. See text for some sample benchmarks. These relationships must be in balance for a firm to prosper. Correct retail decisions create the balance. E.g. How much must we sell, at what level of margin, to turn inventory efficiently to stay in business?

Suppose that you were planning how to set up a store format that maximized the right choices for customers, but minimized inventory costs.  In this section, we consider store space, stock allocation, inventory planning, and so forth.  What is meant by prototype stores and how are they developed? What is the impact of category management? How can we use skills from Operations Management to streamline our inventory? How can store shrinkage be controlled?

Application:  discuss K-Mart history and current strategy

10:  Nov. 4, 6
Chapter 14 and Begin Chapter 15:  Developing and Implementing Merchandise Plans

How can information on trends be used to try to maximize on merchandise planning? See table 14-3 for ways that Retail Assortments are generally analyzed.  How can understanding depth and width of assortment help us in creating an efficient merchandise mix that also minimizes inventory costs and stockouts?  How can we determine the optimal mix of brands and sizes? What is category management? How can we develop ways to plan for inventory and for reductions?  How can we plan to have buying resources when we need them (Open-to-Buy).

 VIDEO and case, page 486:  Category management for condiments, discuss extension to web grocers.

11:  Nov. 11, 13
Guest Professors week
Finish Chapter 15 and  Chapter 16 on Financial Merchandise Management
  How can a retailer forecast demand? How can retailers learn about trends and use them to plan their merchandise? How must e-tailers factor delivery times into seasonal web shopping? Consider the disappointing holiday season for December 2000.  Were retailers so far off in their forecasts? See what’s discussed at the International Council of Shopping Centers: http://www.icsc.org/
a.  VIDEO and Case, Planned Purchases and Open to Buy, p. 553.
b.  In-class problem set.
 

12:  Nov. 18, 20
Group Project Presentations on Best Practices in Online Retailing
 
 

13: Nov. 25th, Tuesday Before Thanksgiving
Chapter 17 Pricing in Retailing
How can retailers determine optimal prices?  How can they work with multiple placements of discounts:  coupons, in-store promotions, Web-based promotions, etc.?  How much pricing information is at consumers’ fingertips today?  How is pricing related to demand?  What are some basic types of pricing practices?  How does government regulate the prices that can be charged?  How are discounts related to selling prices and to overall strategies?  Other pricing strategies have evolved that assume that consumers are responsive to price certainty:  e.g. EDLP.  And yet others appeal to the bargain seeker through formats such as dollar stores.
Web exercises:    a.  Comparison web site: http://www.mysimon.com
Will sites like this be able to continue?   http://www.priceline.com
 

14:  December 2, 4
Discuss Chapter 20 Integrating and Controlling Retail Strategy

What are the significant differences between a service retailer and a goods-based business. How does a successful retailer put all this together and maintain the business over time, relating each step in the retail strategy to long- and short-term goals?
 

LAST CLASS – December 9 – Review and discussion

FINAL EXAMINATION:  Thursday December 18, 2-5 pm

NOTE:  Detailed handouts will be given on all assignments.
 


Sources of Information on Retailing and E-Commerce

1.  Library: http://www.libraries.rutgers.edu/rul/indexes/biz/biz.shtml
a. Business and Industry Database on the RU Library Web site
b. Dow Jones Interactive: This is a premier source linking you to the Wall Street Journal (domestic and international editions), the New York Times, the Washington Post, and others. You should use this daily for all your classes.
c. ABI-Inform

2. The Journal of Interactive Marketing, available through KnowThis.com journals online:
http://www.knowthis.com/publication/online/journalsonline.htm

3.  eLab at Vanderbilt
http://ecommerce.vanderbilt.edu/about/mission/

4. E-Commerce Times:  http://www.ecommercetimes.com/

5. Nua internet:  This is one of the most informative about global media habits and use:
http://www.nua.com/surveys/

6. National Retail Federation: http://www.nrf.com/
NRF and its Internet retailing initiatives recently combined with Shop.org, the leading trade association for online retailers
http://www.shop.org/

7. International Council of Shopping Centers:
http://www.icsc.org/
http://www.icsc.org/ecommerce/

8. Comprehensive Marketing Site:
http://www.knowthis.com/index.html
Retail section:  http://www.knowthis.com/retail/genretailing.htm
Internet Marketing section:  http://www.knowthis.com/internet/internet.htm
 


Homework 1:  – Retail Anthropology
Due Thursday, Sept 25:  worth 10 points

This assignment requires you to conduct some retail investigation in the field.  Your report should be presented in summary style (like this description) and should be 4-5 pages long. Examples of this type of research are found at this URL:  http://www.envirosell.com/research.html

Professional retail analysts often hire consulting firms to conduct studies that watch how consumers act and move in store settings. This is called “Retail Anthropology.”  There are several issues that can help retailers make sure that their store design is optimized for their customers. We’ll look at three specific ones:  customer traffic flow, crowdedness, and accessibility.  You will compare three retailers on these attributes.  For this exercise, use simple rating scales from 1-10, where a “10” is best and “1 “is worst. Make a chart like the one below to summarize your findings.

a.  Visit three retail stores in an industry that interests you, such as department stores, discount stores, clothing stores, hardware stores, electronics stores, etc. Describe the industry, the three stores you picked, and tell why you selected each.

b.  Customer traffic flow:  In each store, first watch how people move through the store. Do they follow similar paths? Are they attracted by certain displays or areas of the stores? Is the traffic flow efficient?

c. Secondly, compare how crowded each store is. Are the aisles wider in one store versus the other? Do customers get in each other’s way?

d. Finally, are all the stores equally accessible to people with disabilities?  Do they have: automatic doors, ramps, handicapped accessible restrooms, water fountains, fitting rooms (if applicable), checkout counters? Are displays accessible to people in wheelchairs?  If needed, is braille used? Hearing devices?

e. Fill in your chart and briefly discuss your findings.  Were there patterns in the ways that customers behaved?  Were certain stores “better” than others?  What would you recommend if you were a consultant?

f.  Could the stores you visited use e-commerce to improve in these three areas?
 
 
Stores
Traffic Flow
Crowdedness
Accessibility
Overall Score
Store 1, name and address        
Store 2, name and address        
Store 3, name and address              


 Retail Marketing, Fall 2003 Class Information Sheet

NAME: __________________________; preferred EMAIL ___________________________

Your major ____________________________________________________

Employment?___________________________________________________

Approximate Hours per Week______________________________________

Suggested Group (maximum 4 other classmates)
 
 
 

Please consider the following topics carefully.  Determine your first, second, and third choices. Also please indicate any class members with whom you would prefer to work. You may hand in preferences for an entire group. Hand in by September 9th.

____ 1. Best Practices in Online Apparel Retailing

___  2. Best Practices in Online Book Retailing

___  3. Best Practices in Online Home Electronics Retailing

____ 4. Best Practices in Online Home Décor Retailing

___  5. Best Practices in Online Discounter Retailing

____ 6. Best Practices in Online Food Retailing (e.g. grocery, specialty)

____ 7. Best Practices in Online ________ Retailing

Please circle the preferred presentation date for your group:
Tuesday, Nov. 18th
Thursday, Nov. 20th

__________________________________________________________________________
Other Marketing Courses taken in the past?
 
 

Other Marketing Courses being taken this semester?
 
 

Any retail experience or skills?
 
 

Do you shop on the Internet?___________   Why? ________________________
 
 
 

What would you like to learn in this class? Any specific topics of interest?