Levy 9e: Retailing Management
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Retailing Management, 9/e

Michael Levy, Babson College

ISBN: 007802899x
Copyright year: 2014

Feature Summary


New Focus on Big Data and the Use of Analytical Methods in Retailing
Big data is the collection and analysis of data sets so large and complex that they cannot be handled using traditional data processing techniques. Retailers are at the forefront of the big data phenomena. For example, Wal-Mart processes over 100 million transactions per hour through its POS terminals in stores around the world. Its customer database contains over 2.5 petabytes of data, which is equal to nearly 170 times the data in all of the books in the Library of Congress. In Chapter 11 (Customer Relationship Management) of the 9th edition, we extend the discussion of how retailers use frequent shopper programs to collect customer data by including a new section on the analysis of big data to improve decision-making. Some examples of the use of analytical method discussed in the new edition are:

  • Improving store design and promotion planning using market basket analysis (Chapters 11, 15, and 17)
  • Two approaches for SKU rationalization (Chapter 11, 12)
  • Optimizing the timing and depth of mark down decisions (Chapter 14)
  • Targeting promotions to increase effectiveness (Chapters 11, 15)
  • Dynamic pricing (Chapter 14)
  • Determining where merchandise categories should be placed in a store and website (Chapter 17)
  • Scheduling store employees to make sure there are an appropriate number of sales associates at different times of the day and days in the week. (Chapter 15)
We have added a number of new illustrations (Retailing Views) of how retailers such as CVS and Kroger are using these retail analytics to gain a competitive advantage. The executive profile for Chapter 11 outlines how an entrepreneur built a successful consulting business by developing and implementing the use of retail analytics on big data.

New Attention to Social Media
Over the last five years, there has been an explosion in the use of social media. Facebook, Twitter, Pinterest, and Instagram are now part everyone's vocabulary. The revision to Chapter 15 (Retail Communications) focuses on how retailers are using social media to provide more information about their offering and to build relationships with their customers. Examples of other applications of social media, illustrated with an icon in the margin, that are new in this edition are:

  • The impact of social media and a multi-channel offering on the consumer buying process (Chapters 3, 4)
  • Discussion on how to build a retail community using social media (Chapter 5)
  • Executive briefing on a young social media manager working for a fashion apparel retail chain on how she develops relationships with fashion bloggers (Chapter 15)
  • The use of social media in developing an integrated marketing communication program (Chapter 15)
  • Illustration of how REI (Chapter 15), Build A Bear (Chapter 3) and American Girl (Chapter 11) use social media to build a sense of community and loyalty among their customers
  • New Retailing View highlighting the social media elements of "Pining" and "Likes" (Chapter 4)

New Illustrations of Mobile Channel as Part of a Multichannel Offering
This edition expands on the cutting edge treatment of the role of the Internet in retailing. Now most retailers are multi-channel since they have added an Internet channel to their store and/or catalog offering. In the past, the text has included a chapter that specifically discusses the opportunities and issues facing multi-channel retailers. Now we have expanded our discussion of the mobile channel in Chapter 3 and throughout the textbook. For example, we have:

  • Reviewed the benefits and limitations of the mobile channel compared to other channels (Chapter 3).
  • Outlined the impact of mobile on shopping behaviors such as showrooming and how retailers are dealing with the increased ease of getting price information (Chapters 3, 14).
  • Discussed the role of mobile in providing a seamless, omni-channel interface for customers (Chapter 3).
  • Described the use of mobile in delivering coupons and in-store promotions (Chapter 15).
  • New Retailing View on Staples' mobile strategy and how it reaches out to its customers through their smart phones (Chapter 15)

New Discussions on Social Responsibility of Retailers
The retail industry has a major impact on important social issues such as global warming, immigration, health care, and working conditions in less developed economies. Our illustrations of the role retailers play in addressing social welfare issues are highlighted with legal/ethical icons in the margins. Some new examples examined in this edition are:

  • New Retailing View on Wal-Mart's greener supply chain (Chapter 10)
  • Consumer interest in green and local products (Chapter 4).
  • New Retailing View of buying green on an Amazon-owned site – (Chapter 10)
  • New Retailing View on Amazon's price check apps and showrooming
  • Expanded discussion of privacy issues arising from collecting customer data, (Chapter 11)
  • Ethical issues in sourcing merchandise globally (Chapter 13).
  • New Retailing View on how Grupo Elektra is improving the lifestyle of Latin America's working poor (chapter 1)
  • New Retailing view on TOMS shoes social objectives (Chapter 6)
  • Sustainability issues in store operations (Chapter 16) and design (Chapter 17).
  • Role of retailing in advancing the welfare of people at the bottom of the pyramid (Chapter 1)

New Focus on Globalization of the Retail Industry
Retailing is a global industry. With a greater emphasis being placed on private-label merchandise, retailers are working with manufacturers throughout the world to acquire merchandise. In addition, retailers are increasingly looking to international markets for growth opportunities. For instance, Carrefour, France's hypermarket chain and the second-largest retailer in the world, is focusing its growth investments in 25 countries but not in France where its headquarters are located. Some examples of the global retailing issues, identified with icons in the margins, examined in this edition are:

  • New Retailing View on Wet Markets in Shanghai (Chapter 1)
  • New Retailing View --For China's High-End Fashion Consumers, 'Italy' Now Just A Bullet Train Away (Chapter 7)
  • Executive Briefing describes how the CEO of Outback Steakhouse International deals with international expansion (Chapter 5)
  • New Retailing View of 7-Eleven in Indonesia (Chapter 5)
  • Retail efficiencies in different economies (Chapter 1).
  • Two executive briefings from senior managers in retail companies headquartered outside the U.S (Chapters 2, 17).
  • Five of the new cases at the end of the text are based on retailers operating outside of the U.S.

New - Each chapter offers key Learning Objectives in the beginning of the chapter then a numbered icon appears adjacent to the appropriate material in the chapter. These same objectives are linked to the material in Connect Marketing. These online tools greatly facilitate student learning.

New Pedagogical Feature in each chapter – Each chapter has 4 to 6 Retailing Views – vignettes that describe how a retailer deals with the issues raised in the chapter. We have added a discussion question to each of these Retailing Views to motivate students to develop a better understanding of the application of the concepts presented in the text. Over 50 percent of the Retailing Views are new and the rest have been updated. Some examples of the Retailing Views in the ninth edition are:

  • Avon's direct selling channel in Brazil (Chapter 3)
  • Urban Outfitter targeting Millennium customers (Chapter 4)
  • Private equity firms invest in retailers (Chapter 6)
  • Stage Stores get a big payoff from locating in small towns (Chapter 8)
  • Macy's use of employment branding to attract talent (Chapter 9)
  • Costco's mastery of assortment planning (Chapter 12)
  • IKEA's unique store design (Chapter 17)
  • Zappos excellent customer service by speaking with one voice (Chapter 18)

11 New Cases – There are 11 brand new cases in 9e including: Blue Tomato: Internationalization of a Multichannel Retailer (Austria), Staples Inc., Parisian Patisserie "Maison Ladurée": The Conquest of the US Market (France), Starbucks' Expansion into China, Wal-Mart: Pioneer in Supply Chain Management, Tiffany & Co. and TJX: Comparing Financial Performance, Sephora loyalty programs: A comparison between France and the US, Mel's Department Store Under New Management, Kroger and Fred Meyer: Sourcing Products in a Global Marketplace, Target and its New Generation of Partnerships, Zipcar: Delivering Only as Much Driving as You Want. Five of these cases are about global issues. All 38 cases in the textbook are either new or updated with current information.

18 New Videos – There are 18 new videos, many of which are coordinated with discussion questions on Connect Marketing for Retailing Management. The new videos are: Panera Bread's Commitment to Excellence;; Working for the Best: The Container Store; Wal-Mart's Public Image Campaign; McDonald's Taps Ethnic Subcultures for Ongoing Growth; Bass Pro Shops: Maximizing the In-store Experience; Inside one of Amazon's busiest days; Customer service at Ritz Carlton and Apple; Future of Retail; The Mobile Factor [The Connected Consumer]; Tesco virtual stores in Korea; RFID Network Retail; Starbucks Human Resource Management; and Lord & Taylor Shoe Department.

New! LearnSmart ensures your students are learning faster, studying more efficiently, and retaining more knowledge. It pinpoints concepts the student does not understand and maps out a personalized study plan for success. Based on students' self-diagnoses of their proficiency, LearnSmart intelligently provides students with a series of adaptive questions. This provides students with a personalized one-on-one tutor experience.

New! SmartBook™—Fueled by LearnSmart—SmartBook is the first and only adaptive reading experience available today. Distinguishing what a student knows from what they don't, and honing in on concepts they are most likely to forget, SmartBook personalizes content for each student in a continuously adapting reading experience. Reading is no longer a passive and linear experience, but an engaging and dynamic one where students are more likely to master and retain important concepts, coming to class better prepared. Valuable reports provide instructors insight as to how students are progressing through textbook content, useful for shaping in-class time or assessment. As a result the adaptive reading experience found in SmartBook, students are more likely to retain knowledge, stay in class and get better grades.


Connect®Marketing is an online assignment and assessment solution that connects students with the tools and resources they'll need to achieve success. McGraw-Hill Connect Marketing helps prepare students for their future by enabling faster learning, more efficient studying, and higher retention of knowledge. Connect Marketing offers you and your students powerful tools and features that optimize your time and energies, enabling you to focus on course content, teaching, and student learning. Connect Marketing also offers a wealth of content resources for both instructors and students. This state-of-the-art, thoroughly tested system supports you in preparing students for the world that awaits. For more information about Connect, go to, or contact your local McGraw-Hill sales representative for access to an instructor account. Features of Connect are:

  • LearnSmart ensures your students are learning faster, studying more efficiently, and retaining more knowledge. It pinpoints concepts the student does not understand and maps out a personalized study plan for success. Based on students' self-diagnoses of their proficiency, LearnSmart intelligently provides students with a series of adaptive questions. This provides students with a personalized one-on-one tutor experience.
  • Interactive Applications provided for each chapter of the textbook allow instructors to assign application-focused interactive activities, engage students to "do" marketing, stimulate critical thinking, and reinforce key concepts. Students apply what they've learnt and receive immediate feedback. Instructors can customize these activities and monitor student progress.

Get Out and Do It!
These exercises are found at the end of each chapter. These exercises suggest projects that students can undertake by visiting local retail stores, surfing the Internet, or using the student Web site. A continuing assignment exercise is included so that students can engage in an exercise involving the same retailer throughout the course. The exercises are designed to provide a hands-on learning experience for students.

Strategic Focus
The entire textbook is organized around a model of strategic decision making outlined in Exhibit 1–6 in Chapter 1. Each section and chapter relates back to this overarching strategic framework. In addition, the second section of the book focuses exclusively on critical strategic decisions, such as selecting target markets, developing a sustainable competitive advantage, building an organizational structure and information and distribution systems to support the strategic direction, building customer loyalty, and managing customer relationships. The text explores in depth the resources that retailers use to develop sustainable competitive advantage, such as

  • Selecting store location (Chapters 7, 8).
  • Developing and maintaining human resources (Chapter 9).
  • Managing information systems and supply chains (Chapter 10).
  • Managing customer relationship management and collecting and analyzing big data to make better decisions (Chapter 11).
  • Developing unique private label merchandise (Chapter 13)
  • Providing outstanding customer service (Chapter 18)

Financial Analysis
The success of any retailer, like any other business, depends on its ability to make a profit, provide an adequate return to its owners, and be financially stable. The financial problems experienced by some well-known retail firms, like Circuit City, Sharper Image, and K-B Toys, highlight the need for a thorough understanding of the financial implications of strategic retail decisions. Financial analysis is emphasized in selected chapters, such as Chapter 6 on the overall strategy of the firm using the strategic profit model and the financial strength of retailers using cash flow and ratio analysis, Chapter 11 on the evaluation of customer lifetime value, and Chapter 12 on retail buying systems. Financial issues are also raised in the sections on negotiating leases, bargaining with suppliers, pricing merchandise, developing a communication budget, and compensating salespeople.

Implementing a Retail Strategy
Although developing a retail strategy is critical to long-term financial performance, the execution of strategies is as important as the development of the strategy. Traditionally, retailers have exalted the merchant prince—the buyer who knew what the hot trends were going to be. While we provide a thorough review of merchandise management issues, the emphasis in retailing is shifting from merchandise management to the block and tackle activities of getting merchandise to the stores and customers and providing excellent customer service and an exciting shopping experience. Due to this shift toward store management, most students embarking on retail careers go into distribution and store management rather than merchandise buying. Thus, this text devotes an entire chapter to information systems and supply chain management and an entire section to store management.

Up-to-Date Information
Retailing is a very dynamic industry, with new ideas and formats developing and traditional retailers constantly adapting to the changing environment or suffering financially. Most of the examples provided in the text have taken place in the last two years.

Balanced Approach
The ninth edition continues to offer a balanced approach for teaching an introductory retailing course by including descriptive, how-to, and conceptual information in a highly readable format.

Descriptive Information
Students can learn about the vocabulary and practice of retailing from the descriptive information throughout the text. Examples of this material are:

  • Leading U.S. and international retailers (Chapter 1)
  • Management decisions made by retailers (Chapter 1).
  • Types of store-based and nonstore retailers (Chapter 2 and 3).
  • Approaches for entering international markets (Chapter 5).
  • Location options (Chapter 7).
  • Lease terms (Chapter 8).
  • Organization structure of typical retailers (Chapter 9).
  • Flow of information and merchandise (Chapter 10).
  • Branding strategies (Chapter 13).
  • Methods for communicating with customers (Chapter 15).
  • Store layout options and merchandise display techniques (Chapter 17).
  • Career opportunities (Appendix 1A to Chapter 1).

How-to Information
Retailing Management goes beyond this descriptive information to illustrate how and why retailers, large and small, make decisions. Procedures with examples are provided for making the following decisions:

  • Managing a multichannel operation (Chapter 3).
  • Scanning the environment and developing a retail strategy (Chapter 5).
  • Analyzing the financial implications of retail strategy (Chapter 6).
  • Evaluating location decisions (Chapter 8).
  • Developing a merchandise assortment and budget plan (Chapters 12).
  • Negotiating with vendors (Chapter 13).
  • Pricing merchandise (Chapter 14).
  • Recruiting, selecting, training, evaluating, and compensating sales associates (Chapter 16).
  • Designing the layout for a store (Chapter 17).
  • Providing superior customer service (Chapter 18).

Conceptual Information
Retailing Management also includes conceptual information that enables students to understand why decisions are made, as outlined in the text. As Mark Twain said, "There is nothing as practical as a good theory." Students need to know these basic concepts so they can make effective decisions in new situations. Examples of this conceptual information in the ninth edition are:

  • Customers' decision-making process (Chapter 4).
  • The strategic profit model and approach for evaluating financial performance (Chapter 6).
  • Price theory and marginal analysis (Chapters 14 and 15).
  • Motivation of employees (Chapter 16).
  • In-store shopping behaviors (Chapter 17).
  • The Service Gaps model for service quality management (Chapter 18).

Student-Friendly Textbook
This ninth edition creates interest and involves students in the course and the industry by making the textbook a "good read" for students. We use Refacts (retailing factoids), Retailing Views, and retail manager profiles at the beginning of each chapter to engage students.

  • Refacts - We have updated and added more interesting facts about retailing, called Refacts, in the margins of each chapter. Did you know that the first use of an Internet retail channel was on August 11, 1994, when a CD by Sting was sold by NetMarket over the Internet? Or that the teabag was developed by a Macy's buyer and pantyhose was developed by a JCPenney buyer? Or that Chipotle is by far the largest purchaser of natural meat in the United States.
  • Retailing Views - Each chapter contains either new or updated vignettes called Retailing Views to relate concepts to activities and decisions made by retailers. In the ninth edition, over 50 percent of Retailing Views are new and the remaining have been updated. The vignettes look at major retailers, like Wal-Mart, Walgreens, Target, Kohl's, Neiman Marcus, and Macy's that interview students on campus for management training positions. They also discuss innovative retailers like REI, Starbucks, Zara, Mango, Amazon, The Container Store, Sephora, Forever 21, Chico's, and Bass Pro Shops. Finally, a number of Retailing Views focus on entrepreneurial retailers competing effectively against national chains.
  • Profiles of Retail Managers - To illustrate the challenges and opportunities in retailing, each chapter in the ninth edition begins with a brief profile, in their own words, of a manager or industry expert whose job or expertise is related to the material in the chapter. These profiles range from Debbie Harvey, President of Ron Jon Surf Shop and Ken Hicks, CEO of Footlocker include people who have extensive experience in a specific aspect of retailing, like Tim Hourigan, Human Resource VP Home Depot, and Moussa Coulibaly, Senior VP of Planning at Dick's Sporting Goods. The profiles illustrate how senior executives view the industry and suggest career opportunities for college students. They also provide students with firsthand information about what people in retailing do and the rewards and challenges of their jobs and careers.

Instructors: To experience this product firsthand, contact your McGraw-Hill Education Learning Technology Specialist.