Category Killer

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Category Killer
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A category killer (also referred to as power retailer or category specialist or specialist market) is an enormous specialty store that focuses on an individual product line and an very large amount of products and competes by offering budget price ( W. Pride, R. Hughes, J. Kapoor 2009, page 412) and thus, can kill a category of commodity for other retail traders (W.Lavy, Weitz 2007 p.50), predominantly for specialty stores.

This term is used for a firm operating in one specific classification with a very wide range (S. Finne, H. Sivonen 2008, Page 87). The service level forthcoming by category killers is generally kept at a low level. Self-service approaches are generally applied to sell commodity, but assistance is offered if required by the clients. (J.Zentes, D. Morschett, H.Schramm-Klein 2007, page 33).

Instore design and store architecture are kept very simple and offer a shopping experience that is dominated chiefly by pricing and size (A.Wileman, M.Jary 2016, p.78).

The strategy of category killers

The strategy of low operating costs in terms of rents,low-cost design, personnel costs (expenses related to employee remuneration, insurance and taxation) etc., combined with huge purchasing power, normally leads to high asset productivity (e.g. stock rotation or space). This makes category killers one of the retail formats with the highest growth rates over latest years.

Category killers have gained market share mostly at the cost of specialty stores, because of assets in terms of price and product assortment. Category killers are currently established in many non-food classification such as:

  • consumer electronic goods
  • furniture, sports
  • office products
  • do-it-yourself
  • toys or pets
  • baby products
  • the format is still opening out into new categories (J.Zentes, D. Morschett, H.Schramm-Klein 2007, page 33).

Traditional retailers and category killers

Entry of a category killer frequently affects many traditional retail traders and may concentrate the market to a few players. Category killers can be found in many merchandise areas. The surge of category killers has made life difficult for many department stores (S.Finne, H.Sivonen 2008, page 87).

Category killers and Internet

The existing trend is for an increasing share of category killers to move into E-business. Over the internet, a category killer may combine big, geographically spending power and maintain wide range (S.Finne, H.Sivonen 2008, page 87).

References

Author: Edyta Pach