Introduction to Retailing

Retaillier
Retailing consist of business activities
involved in selling of goods & services to
consumer for their personal, family or non-
business use.

A retailer is a businessman who sells
products and/or services to consumers for
personal or family or non-business use.
Top 10 Retailers World Wide
Rank
Retailer Home Country Sales
1 Wai-Mart Stores,Inc. USA $202,011
2 Carrefour Group France $62,216
3 The Home Depot ,Inc. USA $53,553
4 The Kroger Co USA $50,098
5 Royal Ahold Netherlands $48,239
6 Metro Ag Germany $43,816
7 Target Copporation USA $39,176
8 Albertsons USA $37,931
9 Sears,Roebuck and Co USA $37,328
10 Kmart Corporation USA $63,151
TOTAL TOP 10 $612,520
The Four Ps of Marketing
Distribution
Retailers are part of the
distribution channel
Retailers are part of the
distribution channel
Product
Price
Promotion
Distribution Channel
Distribution Channel
PPT 1-4
Accounting
Finance
MIS
Operations
Marketing
Human Resources
Retailers are a Business Like Manufacturers
Reasons for studying Retailing

Retail functions in distribution

Characteristics of Retailing
It offers direct interaction with customers.
It sales products/services in small
quantities.
Customer service plays vital role.
Sales promotion is offered heavily at this
point.
Location and layout are critical factors.
Evolution of retailing in India
Roots of retailing can be traced in
weekly bazars and melas.
Traditional age saw the emergence of
kirana stores. (Convience stores or mom
and pop store)
Government came up for rural retail. (Khadi
& Village Industries Commision- KVIC)
Economy opened in late 1980s .
And in late 1980s with the opening up of economy
retailing in India experienced great change.
Retailing Functions
Identifying Customer Demands
Management of Merchandise
Convenience of timing
Convenience of location.

Retailing principles
Clear definition of objectives
Duties and responsibilities.
Unity of command
Supervision and control
Monitoring human resources
Responsibility and authority

Global Retailing Trends
Going internationalization
Enhancing service offerings
Expanding private brands

Reasons for Retail growth
Emergence of nuclear family concept.
Growing Indian young population
Increased disposable income
FDI in retail
E commerce
Low cost of operations


Low cost of operations

Decision Variables for Retailers
Customer Service
Store Design
and Display
Merchandise
Assortment
Communication
Mix
Location Pricing
Retail
Strategy
TYPES / BUSINESS MODELS IN RETAIL
CLASSIFICATION ON THE BASIS OF
OWNERSHIP
CLASSIFICATION ON THE BASIS OF
THE MERCHANDISE OFFERED
NON-STORE RETAILING (OTHER)
CLASSIFICATION ON THE BASIS OF
OWNERSHIP

INDEPENDENT RETAILER
CHAIN RETAILER
FRANCHISE
LEASED DEPARTMENTS
CONSUMER CO-OPERATIVES

INDEPENDENT RETAILER

OWNERSHIP IS WITH INDIVIDUAL OR FAMILY
GIVES EASE IN ENTRY AND EXIT
FLEXIBILITY
IN INDIAN RETAIL INDUSTRY MOST STORES
BELONG TO THIS CATEGORY
QUICK DECISION MAKING
CAPITAL LIMITATIONS
LIMITED BARGAINING POWER WITH SUPPLIER
CANNOT GAIN ECONOMIES OF SCALE
LIMITED USE OF TECHNOLOGY
LACK ADVERTISEMENTS
CHAIN RETAILER

OPERATES MUPTIPLE OUTLETS UNDER COMMON
OWNERSHIP
ALL STORES HAVE SIMILARITY IN MERCHANDISE
OFFERED
BARGAINING POWER WITH SUPPLIER
ECONOMIES OF SCALE
SHARING OF FINANCE AND FACILITIES
CENTRALIZED BUYING AND DECISION MAKING
ADVERTISEMENTS
FLEXIBILITY MAY BE LIMITED
HIGH INVESTMENT COST
DECISION MAKING TAKES TIME


FRANCHISE

A FRANCHISE IS A CONTRACTUAL
AGREEMENT BETWEEN THE
FRANCHISER AND FRANCHISEE,
WHICH ALLOWS FRANCHISEE TO
CONDUCT BUSINESS UNDER AN
ESTABLISHED NAME AS PER A
PARTICULAR BUSINESS FORMAT.
FRANCHISE
OWNERSHIP OF STORE IN SMALL
INVESTMENT
ADVANTAGE OF BRAND NAME
STANDARD OPERATING PROCEDURE
ECONOMIES OF SCALE
SHARING OF PROFIT
CONTRACTUAL INFORCEMENTS
CANCELLATION MAY TAKE PLACE

LEASED DEPARTMENT
Concept of shop in shop
A leased department or a counter is leased/
rented to an outside party
Enlargement of market
leased department operators pay for some
expenses
Investment cost can be reduced
Inflexibility of working hours
Goods/ services are limited

CONSUMER CO-
OPERATIVES

Retail store owned by member consumers
Limitations on growth opportunities
Limited goods/ services are offered
Main motive is co-operation not profit

Retail
Formats
Location Space Merchandise Customer
Profile
Example
Supermarket Marketplaces
in Metros
,towns,cities
Large Multiple,Cohesi
ve Food and
household
categories
Family
Profile,Mostly
Loyal
A
Supermarket
Apna
Bazaar,Food
World
Speciality
Store
Strategic Medium
Sized
Focussed Single
Category
Individuals,gro
ups & clusters
of small
class,mediocor
e to high
loyalty
A footwear
store,A
music store
Department
Store
Destination
towns
,Metros &
mega Metros
Large Independent
Categories
Family,High
loyalty
A store with
department
as
SBU,Shoppe
rs Stop.
The Plaza Marketplace
in metros
,Large towns
Large Independent
Categories
Family &
individuals
Heera panna
In Mumbai
CLASSIFICATION ON THE BASIS IF
THE MERCHANDISE OFFERED

CONVENIENCE STORE
SUPERMARKETS
HYPERMARKETS
SPECIALITY STORES
DEPARTMENTAL STORES
OFF PRICE RETAILERS
FACTORY OUTLETS
CATALOGUE SHOWROOMS
CONVENIENCE STORE

Small stores located in residential areas
Offers limited, daily use goods/ services
It gives time and location convenience


SUPERMARKETS

These are large, low cost, low margin, high
volume, self service operations designed to
meet the needs for food, grocery and other
non food items.
store with a selling area between 400 sq m
to 2500 sq m and selling at least 70%
foodstuff and everyday commodities.
Gives comfort of shopping to customers.
High investment cost


HYPERMARKETS

A retail store with a sales area of more than
2,500 sq m, with at least 35% selling space
devoted to non grocery products.
Combination of supermarket and
department store.
Large variety of products offered
Discounted price
Economies of scale
One stop shop

SPECIALITY STORES
Offers narrow goods/ services
Deep assortment of chosen category
Expertise in offered goods/ services

DEPARTMENTAL STORES

Those stores depending on food, clothing
and home related items for at least 10%, but
less than 70% respectively, of their sales.
Departments on different floors
7000 sq m

OFF PRICE RETAILERS
(Discount stores)
365 days discount.
Offers branded merchandise
Offers narrow goods/ services
Economy of scale

FACTORY OUTLETS

Owned by manufacturer
Profitable for customer and manufacturer
Manufacturer can control the market

CATALOGUE SHOWROOMS

Narrow goods/ services are offered
Few samples along with catalogue
It gives ease to retailer
Low investment cost.
Consumer decision making is difficult.
SINGLE PRICE STORE
Offers branded or non branded goods /
services
Appeals budget conscious customers
NON-STORE RETAILING (OTHER)

DIRECT SELLING
MAIL ORDER
TELE MARKETING
AUTOMATIC VENDING MACHINE
WORLD WIDE WEB
DIRECT RESPONSE
HAWKERS
Walton Family (Wal-Mart)
Fisher (The Gap)
Wexner (Limited)
Menard (Menards)
Marcus, Blank (The Home Depot)
Kellogg (Kohls)
Schulze (Best Buy)
Levine (Family Dollar)
Gold (99Cent Only)
List of Retail Entrepreneurs on
Forbes 400 Richest Americans