Retailing

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"Retail" and "Retail stores" redirect here. For the comic strip by Norm Feuti, see Retail (comic
strip).
Drawing of a self-service store.

Retail consists of the sale of goods or merchandise from a fixed location, such as a department
store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the
purchaser.[1] Retailing may include subordinated services, such as delivery. Purchasers may be
individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities
from manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at
the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary
part of their overall distribution strategy. The term "retailer" is also applied where a service
provider services the needs of a large number of individuals, such as a public utility, like electric
power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping
mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or
full roof to protect customers from precipitation. Online retailing, a type of electronic commerce
used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop
retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and browsing
and does not always result in a purchase.

Contents
[hide]

 1 Etymology
 2 Types of retail outlets
 3 Retail pricing
 4 Transfer mechanism
 5 Second hand retail
 6 Sales techniques
 7 Customer service
 8 Retail Sales
 9 Bibliography
 10 See also
  11 Notes
 12 External links

[edit] Etymology

The Apple Store retail location on the Magnificent Mile in Chicago.

The world's only Garmin retail location is located on the Magnificent Mile in Chicago.

Retail comes from the French word retailler, which refers to "cutting off my hands, clip and
divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in
small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, off my
toes paring".[2] Like the French, the word retail in both Dutch and German (detailhandel and
Einzelhandel respectively), also refers to the sale of small quantities of items.

[edit] Types of retail outlets

San Juan de Dios Market in Guadalajara, Jalisco
Inside a supermarket in Russia

A marketplace is a location where goods and services are exchanged. The traditional market
square is a city square where traders set up stalls and buyers browse the merchandise. This kind
of market is very old, and countless such markets are still in operation around the whole world.

In some parts of the world, the retail business is still dominated by small family-run stores, but
this market is increasingly being taken over by large retail chains.

Retail is usually classified by type of products as follows:

 Food products
 Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc.
 Soft goods - clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy:

 Department stores - very large stores offering a huge assortment of "soft" and "hard
goods; often bear a resemblance to a collection of specialty stores. A retailer of such store
carries variety of categories and has broad assortment at average price. They offer
considerable customer service. For example: Food World in Bangalore.
 Discount stores - tend to offer a wide array of products and services, but they compete
mainly on price offers extensive assortment of merchandise at affordable and cut-rate
prices. Normally retailers sell less fashion-oriented brands. However the service is
inadequate.;
 General merchandise store - a hybrid between a department store and discount store;
 Supermarkets - sell mostly food products;
 Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled on
pallets or steel shelves; warehouse clubs charge a membership fee;
 Variety stores or "dollar stores" - these offer extremely low-cost goods, with limited
selection;
 Demographic - retailers that aim at one particular segment (e.g., high-end retailers
focusing on wealthy individuals).
 Mom-And-Pop or Kirana Stores: is a retail outlet that is owned and operated by
individuals. The range of products are very selective and few in numbers. These stores
are seen in local community often are family-run businesses. The square feet area of the
store depends on the store holder.
 Specialty Stores: A typical specialty store gives attention to a particular category and
provides high level of service to the customers. A pet store that specializes in selling dog
food would be regarded as a specialty store. However, branded stores also come under
this format. For example if a customer visits a Reebok or Gap store then they find just
Reebok and Gap products in the respective stores.
 Convenience Stores: is essentially found in residential areas. They provide limited
amount of merchandise at more than average prices with a speedy checkout. This store is
ideal for emergency and immediate purchases.
  Hypermarkets: provides variety and huge volumes of exclusive merchandise at low
margins. The operating cost is comparatively less than other retail formats. A classic
example is the Metro™ in Bangalore.
 Supermarkets: is a self service store consisting mainly of grocery and limited products on
non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The
supermarkets can be anywhere between 20,000-40,000 square feet. Example: SPAR™
supermarket.
 Malls: has a range of retail shops at a single outlet. They endow with products, food and
entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore, Express
Avenue in Chennai.
 Category Killers or Category Specialist: By supplying wide assortment in a single
category for lower prices a retailer can "kill" that category for other retailers. For few
categories, such as electronics, the products are displayed at the centre of the store and
sales person will be available to address customer queries and give suggestions when
required. Other retail format stores are forced to reduce the prices if a category specialist
retail store is present in the vicinity. For example: Pai Electronics™ store in Bangalore,
Tata Croma.
 E-tailers: The customer can shop and order through internet and the merchandise are
dropped at the customer's doorstep. Here the retailers use drop shipping technique. They
accept the payment for the product but the customer receives the product directly from
the manufacturer or a wholesaler. This format is ideal for customers who do not want to
travel to retail stores and are interested in home shopping. However it is important for the
customer to be wary about defective products and non secure credit card transaction.
Example: Amazon and Ebay.
 Vending Machines: This is an automated piece of equipment wherein customers can drop
in the money in machine and acquire the products. For example: Soft drinks vending at
Bangalore Airport.

Some stores take a no frills approach, while others are "mid-range" or "high end", depending on
what income level they target.

Other types of retail store include:

 Automated Retail stores are self service, robotic kiosks located in airports, malls and
grocery stores. The stores accept credit cards and are usually open 24/7. Examples
include ZoomShops and Redbox.
 Big-box stores encompass larger department, discount, general merchandise, and
warehouse stores.
 Convenience store - a small store often with extended hours, stocking everyday or
roadside items;
 General store - a store which sells most goods needed, typically in a rural area;

Retailers can opt for a format as each provides different retail mix to its customers based on their
customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to
display products well and entice the target customers to spawn sales.
A food vendor in India

Adidas store in Tel Aviv, Israel

[edit] Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup
amount (or percentage) to the retailer's cost. Another common technique is suggested retail
pricing. This simply involves charging the amount suggested by the manufacturer and usually
printed on the product by the manufacturer.

In Western countries, retail prices are often called psychological prices or odd prices. Often
prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly
displayed, there can be price discrimination, where the sale price is dependent upon who the
customer is. For example, a customer may have to pay more if the seller determines that he or
she is willing and/or able to. Another example would be the practice of discounting for youths,
students, or senior citizens.

[edit] Transfer mechanism

There are several ways in which consumers can receive goods from a retailer:

 Counter service, where goods are out of reach of buyers and must be obtained from the
seller. This type of retail is common for small expensive items (e.g. jewelry) and
controlled items like medicine and liquor. It was common before the 1900s in the United
States and is more common in certain countries.[which?]
 Delivery (commerce), where goods are shipped directly to consumer's homes or
workplaces. Mail order from a printed catalog was invented in 1744 and was common in
the late 19th and early 20th centuries. Ordering by telephone is now common, either from
a catalog, newspaper, television advertisement or a local restaurant menu, for immediate
service (especially for pizza delivery). Direct marketing, including telemarketing and
television shopping channels, are also used to generate telephone orders. Online shopping
started gaining significant market share in developed countries in the 2000s.
 Door-to-door sales, where the salesperson sometimes travels with the goods for sale.
 Self-service, where goods may be handled and examined prior to purchase, has become
more common since the 1920s.

[edit] Second hand retail

See also: Charity shop

Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods to
the shop to be sold. In give-away shops goods can be taken for free.

Another form is the pawnshop, in which goods are sold that were used as collateral for loans.
There are also "consignment" shops, which are where a person can place an item in a store and if
it sells, the person gives the shop owner a percentage of the sale price. The advantage of selling
an item this way is that the established shop gives the item exposure to more potential buyers.

[edit] Sales techniques

Behind the scenes at retail, there is another factor at work. Corporations and independent store
owners alike are always trying to get the edge on their competitors. One way to do this is to hire
a merchandising solutions company to design custom store displays that will attract more
customers in a certain demographic. The nation's largest retailers spend millions every year on
in-store marketing programs that correspond to seasonal and promotional changes. As products
change, so will a retail landscape. Retailers can also use facing techniques to create the look of a
perfectly stocked store, even when it is not.

A destination store is one that customers will initiate a trip specifically to visit, sometimes over
a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot
traffic, which is capitalized upon by smaller retailers.

[edit] Customer service

According to the bookDiscovery-Based Retail,[3] customer service is the "sum of acts and
elements that allow consumers to receive what they need or desire from your retail
establishment." It is important for a sales associate to greet the customer and make himself
available to help the customer find whatever he needs. When a customer enters the store, it is
important that the sales associate does everything in his power to make the customer feel
welcomed, important, and make sure he leave the store satisfied. Giving the customer full,
undivided attention and helping him find what he is looking for will contribute to the customer's
satisfaction.

[edit] Retail Sales

US Retail Sales 1992-2010

The Retail Sales report is published every month. It is a measure of consumer spending, an
important indicator of the US GDP. Retail firms provide data on the dollar value of their retail
sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the
advanced one. The advanced estimated data is based on a subsample from the US CB complete
retail & food services sample.[4]

It has been published by the US Census Bureau since 1951.

[edit] Bibliography
 Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century: current
and future trends. New York: Springer Verlag. ISBN 3540283994.

[edit] See also

 List of department stores by country
 Point of sales
 Point of sales terminal
 Retail concentration
 Retail design
 Retail software
 Retailing in India
 Shopping mall
 Specialist store
 Stand-alone store
 Store manager
 Supermarket
 Tuangou
 Variety store
 Visual merchandising
 Wardrobing
[edit] Notes
Wikibooks has a book on the topic of
Marketing
Look up retailing or retail in Wiktionary, the free dictionary.

1. ^ "Distribution Services". Foreign Agricultural Service. 2000-02-09.

http://www.fas.usda.gov/info/factsheets/China/distribution.html. Retrieved 2006-04-04.
2. ^ Harper, Douglas. "retail". Online Etymology Dictionary.
http://www.etymonline.com/index.php?term=retail. Retrieved 2008-03-16.
3. ^ Philip H. Mitchell 2008, Discovery-Based Retail, Bascom Hill Publishing Group ISBN
9780979846793
4. ^ US Census Bureau Retail sales Retail SalesRetail Sales Definition

[edit] External links

 ECRoPEDIA - Free Global Collection of Retail/FMCG Best practices by ECR
Community
 Investopedia.The Industry Handbook: The Retailing Industry

Retrieved from "http://en.wikipedia.org/wiki/Retailing"

Categories: Retailing | Business
Hidden categories: All articles with specifically marked weasel-worded phrases | Articles with
specifically marked weasel-worded phrases from March 2009
The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The retail sector of
Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with
the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast.
The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers
drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making
recess for the retail sector of Indian economy.

With the onset of a globalized economy in India, the Indian consumer's psyche has been changed.
People have become aware of the value of money. Nowadays the Indian consumers are well versed with the
concepts about quality of products and services. These demands are the visible impacts of the Retail Sector of Indian
Economy.

Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national &
international products, the with help of print and electronic media. The social changes with the rapid economic growth
due to trained personnels, fast modernization, enhanced availableness of retail space is the positive effects of
liberalization.

The growth factors of the retail sector of Indian economy:

 Increase in per capita income which in turn increases the household consumption
 Demographical changes and improvements in the standard of living
 Change in patterns of consumption and availability of low-cost consumer credit
 Improvements in infrastructure and enhanced availability of retail space
 Entry to various sources of financing

The infrastructure of the retail sector will evolve radically. The emergence of shopping malls are going steady in the
metros and there are further plans of expansion which would lead to 150 new ones coming up by the year 2008. As
the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in
food trade. The non-food sector, segments comprising apparel, accessories, fashion, lifestyle felt the significant
change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large
supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena,
with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC
Ashirbad, fast foods chains like McDonald's, KFC, beverage parlors like Nescafe, Tata Tea, Caf 頃 offee and Barista,
the Indian food habits has been altered. This stores have earned the reputation of being 'super saver locations'.

With the arrival of the Transnational Companies(TNC), the Indian retail sector will confront the following round of
alterations. At present the Foreign Direct Investments(FDI) is not encouraged in the Indian organized retail sector but
once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail
sector in India.

The future trends of the retail sector of Indian economy:

 The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
 No one single format can be assumed as there is a huge difference in
 cultures regionally.
 The most encouraging format now would be the hypermarts
 The hypermart format would be further encouraged with the entry of the TNC's

Indian Retail Scenario

The retail scenario is one of the fastest growing industries in India over the last couple of years. India retail sector
comprises of organized retail and unorganized retail sector. Traditionally the retail market in India was largely
unorganized; however with changing consumer preferences, organized retail is gradually becoming popular.
Unorganized retailing consists of small and medium grocery store, medicine stores, subzi mandi, kirana stores, paan
shops etc. More than 90% of retailing in India fall into the unorganized sector, the organized sector is largely
concentrated in big cities. Organized retail in India is expected to grow 25-30 per cent yearly and is expected to
increase from Rs35, 000 crore in 2004-05 to Rs109, 000 crore ($24 billion) by 2010.

Quick facts on Indian Retail sector

 Indian Retail sector is the fifth largest global retail destination.

 India retail market is dominated by the unorganized sector.
 The top five companies in retail hold a combined market share of less than 2%.
 The Indian retail market has been ranked by AT Kearney's eighth annual Global Retail Development Index
(GRDI), in 2009 as the most attractive emerging market for investment in the retail sector.
  Currently the share of retail trade in India's GDP is around 12 per cent, and is estimated to reach 22 per cent
by 2010.
 According to Government of India estimate the retail sector is likely to grow to a value of Rs. 2,00,000 crore
(US$45 billion) and could yield 10 to 15 million retail jobs in the coming five years; currently this industry
employs 8% of the working population.
 India continues to be among the most attractive countries for global retailers. According to the Department of
Industrial Policy and Promotion, approximately US$ 47.43 million was the amount of Foreign Direct
Investment (FDI) inflow as on September 2009, in single-brand retail trading.

More than 80% of the retail sector in the country is concentrated in the large cities. A study reveals that among the
more than 20 locations, for organized retail in India, Mumbai was found to be the most preferred location followed
closely by Bengaluru in the second position.

Key Players in Indian Retail Sector

 AV Birla Group has a strong presence in apparel retail and owns renowned brands like Allen Solly, Louis
Phillipe, Trouser Town, Van Heusen and Peter England. The company has investment plans to the tune of
Rs 8000 – 9000 crores till 2010.
 Trent is a subsidiary of the Tata group; it operates lifestyle retail chain, book and music retail chain,
consumer electronic chain etc. Westside, the lifestyle retail chain registered a turnover of Rs 3.58 mn in
2006
 Landmark Group invested Rs. 300 crores to expand Max chain, and Rs 100 crores on Citymax 3 star hotel
chain. Lifestyle International is their international brand business.
 K Raheja Corp Group has a turnover of Rs 6.75 billion which is expected to cross US$100 million mark by
2010. Segments include books, music and gifts, apparel, entertainment etc.
 Reliance has more than 300 Reliance Fresh stores; they have multiple formats and their sale is expected to
be Rs 90,000 crores ($20 billion) by 2009-10.
 Pantaloon Retail has 450 stores across the country and revenue of over Rs. 20 billion and is expected to
touch 30 million by 2010. Segments include Food & grocery, e-tailing, home solutions, consumer
electronics, entertainment, shoes, books, music & gifts, health & beauty care services.

Retail and recession

The global economic slump has had its impact on the India retail sector. One of the earliest players in the Indian retail
scenario Subhiksha's operations came to a near standstill and required liquidity injection. Vishal Retail secured
corporate debt restructuring (CDR) plan from its lenders while other players like the Reliance Retail run by Mukesh
Ambani and Pantaloon led Kishore Biyani by went slow on expansion plans and even scaled down operations.
However, during the last quarter a bit of confidence was restored as the economy showed signs of growth.

Future Trends

 Lifestyle International, a division of Landmark Group, plans to have more than 50 stores across India by
2012–13.
 Shoppers Stop has plans to invest Rs250 crore to open 15 new supermarkets in the coming three years.
  Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million this fiscal to add up to existing 2.4 million sq
ft retail space. PRIL intends to set up 155 Big Bazaar stores by 2014, raising its total network to 275 stores.
 Timex India will open another 52 stores by March 2011 at an investment of US$ 1.3 million taking its total
store count to 120. In the first six months of the current fiscal ending September 30, 2009, the company has
recorded a net profit of US$ 1.2 million.
 Australia's Retail Food Group is planning to enter the Indian market in 2010. It has plans to clock US$ 87
million revenue in five years. In 20 years they expect the India operations to be larger than the Australia
operations.

The Road Ahead

Industry experts predict that the next phase of growth in the retail sector will emerge from the rural markets. By 2012
the rural retail market is projected to have a total of more than 50 per cent market share. The total number of
shopping malls is expected to expand at a compound annual growth rate of over 18.9 per cent by 2015. According to
market research report by RNCOS the Indian organized retail market is estimated to reach US$ 50 billion by 2011.