Retail Categories: Target Markets Served

The first classification looks at the type of markets a retailer intends to target. These categories are identical to the classification scheme we saw in the Distribution Decisions Tutorial when we discussed the levels of distribution coverage.

  • Mass Market – Mass market retailers appeal to the largest market possible by selling products of interest to nearly all consumers. With such a large market from which to draw customers, the competition among these retailers is often fierce.
  • Specialty Market – Retailers categorized as servicing the specialty market are likely to target buyers looking for products having certain features that go beyond mass marketed products, such as customers who require more advanced product options or higher level of customer service. While not as large as the mass market, the target market serviced by specialty retailers can be sizable.
  • Exclusive Market – Appealing to this market means appealing to discriminating customers who are often willing to pay a premium for features found in very few products and for highly personalized services. Since this target market is small, the number of retailers addressing this market within a given geographic area may also be small.

Retail Categories: Product Offerings

Under this classification, retailers are divided based on the width (i.e., number of different product lines) and depth (i.e., number of different products within a product line) of the products they carry.

  • General Merchandisers – These retailers carry a wide range of product categories (i.e., broad width), though the number of different items within a particular product line is generally limited (i.e., shallow depth).
  • Multiple Lines Specialty Merchandisers – Retailers classified in this category stock a limited number of product lines (i.e., narrow width).  However, within the categories they handle, they often offer a greater selection (i.e., extended depth) than is offered by general merchandisers. For example, a consumer electronics retailer, such as Best Buy, would fall into this category.
  • Single Line Specialty Merchandisers – Some retailers limit their offerings to just one product line (i.e., very narrow width), and sometimes only one product (i.e., very shallow depth). This can be seen online where a relatively small website may sell a single product, such as computer gaming software. Another example may be a small jewelry store that only handles watches.