THE RETAIL BUSINESS

What Is Retailing
WHAT IS RETAILING

 Retailing- Set of Business Activities that adds

value to the products and services sold to
customers for their personal and family use.
 Retailing is not only the sale of products in stores
– also involves sale of services e.g. selling an
insurance policy ; selling hotel accomodation;
airline ticket etc.
What is Retailing

 All Retailing is not done through stores.

 Non-Store Retailing is also common e.g.
- Direct Selling e.g. Aqua Guard
- Internet Retailing or E-Tailing.
- Catalog selling.
- Channel Retailing – Amway.
Retailers Role in Distribution
Channel
 A Retailer sells products or services or both for
personal and / or family use..
 Retailer must have the Right Merchandise, at
the Right Place, at the Right Price, at the Right
Time, in the Right Quantity, in the Right
Assortment.
 Retailers provide markets for manufacturers to
sell their products.
Retailers Role

 Retailer is the final point that links a

manufacturer to the consumer.
 A Distribution Channel facilitates movement of
products from point of production to the point
of sale to the ultimate consumer.
 Manufacturer – Wholesaler – Retailer –
Consumer.
Retailers Role

 Manufacturers typically make products and sell

them to Retailers or Wholesalers.
 When a manufacturer – like Eureka Forbes – sells
directly to the consumer, it is performing both
the production and retailing business activities.
 Wholesalers satisfy Retailer’s needs whereas
Retailers satisfy the needs of the ultimate
consumer.
Retailers Role

 Some Retail Chains do both retailing and

wholesaling
 They perform wholesale activities when they sell to
other business activities .Hp laptop ,ACER
 Manufacturing, wholesaling and retailing activities
are also performed by individual firms but in such
channels there must be vertical integration.
Retailers Role

 Vertical Integration means that a firm has to

perform more than one set of activities such as
investments by retailers in wholesaling or
manufacturing.
 Many Retailers like Walmart, Safeway, Office
Depot – in India – Bata, ITC, Bombay Dyeing etc.
do both wholesaling and Retailing activities.
Retailers Role

 Other Retailers are even more vertically

integrated. They design the merchandise they
sell and then contract vendors to manufacture
the same exclusively.
Example will be : Jini & Jony.

Explore other retailers who observe this practice

Retailers Functions

 Providing an assortment of products and

services.
 Breaking Bulk.
 Holding Inventory.
 Providing services.
Providing Assortments.

 Supermarkets can carry 15000 to 20000 different

items made by , maybe, 300 different
companies.
 Offering assortments helps customers to choose
from large selection of brands, designs, sizes,
colors and prices in one location.
Providing Assortments

 Manufacturers specialise in producing specific

types of products e.g. Amul makes dairy
products, Cadbury makes chocolates, Kellog
makes breakfast cereals, Hind.Lever makes
toiletries etc.If each manufacturer has its own
store and sold its own products only then a
customer would have to go to different stores to
buy different products for domestic use.
Providing Assortments

 All Retailers specialize in the assortments they

offer.
 Supermarkets offer assortments of food, health
and beauty products e.g. Big Apple, Big Bazar;
Shoppers Stop offers assortments of clothing
and accessories.
 Consumers are well aware of these different
assortments on offer. Even small children are
now aware of what to find and where.
Holding Inventory

 Major function of Retailers is to keep stock in

user friendly packs or sizes for the consumer to
buy as per his needs.
 Thus, consumer need not keep large inventory
at home because he knows that the retailer will
have the stock when he needs it. This is
particularly important for food stuff and
perishables.
Providing Services

 Retailers offer credit to customers.

 Retailers put up attractive display of their
products for the benefit of their customers.
 Sales persons are available to assist customers
with product information etc.
 Multi channel retailers offer flexibility of buying
anytime- day or night.
 Customers have the option of home delivery.
Value Addition

 Giving Assortments, breaking bulk, holding

inventory, providing services, retailers increase
the value that the consumer receives from their
products and services.
Assignment:
Illustrate the above with an example.
Retail Sales

 Retailing affects every facet of one’s life. Every

action in day to day life involves retailing.e.g.
Eating, dressing, furnishing one’s house,
repairing one’s car or bike, buying medicines,
etc.etc. are all part of retail.
 Apart from direct retailing, there are other non-
store retailing like E-Tailing, TV shopping, sale of
movie tickets, hotel rooms, legal assistance etc.