RETAIL MANAGEMENT

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RETAILING
Final stage of any economic activity Involves all activities in selling goods/services to the final consumer for personal use. Link b/w the producer & consumer Most important channel member An image creator

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THE RISE OF THE RETAILER

Age of the Consumer
Era of the Retailer

The Premarketing Era

Dominance of the Dominance manufacturer of the Wholesaler

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REASONS FOR RISE OF THE RETAILER

Rise of consumerism Proximity to the consumer Growth of private labels Globalization Technology

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CHALLENGES FACED BY RETAILERS

Emergence of new markets Empowered consumers Technology-enabled efficiencies The rise of the e-age

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WHY RETAILING???

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UNDERSTANDING RETAIL FORMATS

CLASSIFICATION OF RETAIL FORMATS

STORE BASED

NON-STORE BASED

SERVICES RETAILING

OWNERSHIP BASED

PRODUCT MIX
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PRICE
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STORE BASED
(operate from a physically brick & mortar environment)
On the basis of product mix offered: 1. Convenience Stores Essentially found in residential areas Provide limited amount of merchandise at more than average prices with a speedy checkout. Ideal for emergency and immediate purchases as it often works with extended hours, stocking everyday;
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2. Supermarkets A self-service store consisting mainly of grocery and limited products on non food items. May adopt a hi-low or an edlp strategy for pricing. Can be anywhere between 400sqm & 2500sqm Eg: foodworld, Food Bazaar, Reliance Fresh etc.

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3. Hypermarkets Combination of supermarket & department store Provides variety and huge volumes of exclusive merchandise at low margins. Operating cost is comparatively less than other retail formats. Selling area between 5000- 15000sqm One-stop shopping Offering food & non-food items. Eg: carrefour, Walmart, Tesco, Big Bazaar etc.

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4. Specialty stores
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 then they find just reebok products in the respective stores.

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5. Category killers/Category Specialist

By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. Stock deep Nallis in Chennai for sarees & Toys Kemp in Bangalore, LOFT in Mumbai (footwear)

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6. 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. Have atleast 50 employees 20000-40000 sqft. Shoppers stop, westside, lifestyle, marks & spencer, harrods etc.
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On the basis of price offered:

1.Consumer Cooperatives Aim at providing essential commodities at reasonable prices Democratic institution owned, managed & controlled by its members for protection of the interest of common consumers. Protects consumer interest & stabilise the prices Eg: Sahakari Bhandar & Apna bazaar in Mumbai & Super Bazaar in delhi.

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2. Off Price Retailers Merchandise sold in odd sizes, unpopular colors, off seasons & less pricess Eg: Pantaloon factory outlets, Levis FOs Some Other formats are: Discount department stores Outlet stores Limited assortment stores Dollar stores: traditional format selling 20-80% of groceries & other consumable products at discounted prices
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NON STORE BASED

1.Catalogue showrooms
Specialise in hard goods such as house wares, jewellery & consumer durables. Customer walks into the showroom, browse the catalogue, specifies the product code & place the order. Eg: Hypercity has joined forces with ARGOS, UK based.

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2. Direct Selling 3. Direct Marketing (Mail order, television retailing) 4. Electronic Shopping 5. Automated Vending/Kiosks 6. Airport Retailing

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SERVICES RETAILING
Selling services rather than merchandise Services like: Ailrlines, automobiles repair, banks, credit cards, education,health care, fitness, hotels, insurance, movies, restaurants etc.

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OWNERSHIP BASED RETAILING

Independent, single store establishments Corporate Retail chains (Walmart, JC Penny etc) Franchising (Haldirams, BR, Dominos , KFC, Lilliput, ferns & petals etc) The Cash & Carry Leased Departments

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THEORIES OF RETAIL DEVELOPMENT

Classified into:
1. Environmental Theory (retail change is attributed to change in environment) 2. Cyclical/Wheel Theory (retail change follows a pattern having identifiable attributes) 3. Conflictual Theory (conflict between 2 opposite type of retailers leads to a new format)
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ENVIRONMENTAL THEORY

Retailers confront an environment which is made up of customers, competitors & changing technology. Retailers who successfully adapt techno, economic, demo & legal changes prosper & vice versa.

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CYCLICAL/WHEELOF RETAILING THEORY

Given by Prof. Malcolm P. McNair

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1. New retailers often enter the market place with low prices, margins, and status. The low prices are usually the result of some innovative costcutting procedures and soon attract competitors.
2. With the passage of time, these businesses strive to broaden their customer base and increase sales. Their operations and facilities increase and become more expensive.

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3.They may move to better up market locations, start carrying higher quality products or add services and ultimately emerge as a high cost price service retailer. 4. By this time newer competitors as low price, low margin, low status emerge and these competitors too follow the same evolutionary process. 5.The wheel keeps on turning and department stories, supermarkets, and mass merchandise went through this cycles.

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CONFLICTUAL THEORY
Conflict exists between operators of similar formats. Retail innovation leads to development of more retail formats Retailing evokes through a dialectic process: blending of 2 opposites to create a new format.

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 Thesis: Individual retailers as corner shops all across the country Anti thesis: Department stores Synthesis: Blending of thesis & antithesis resulting in thriving supermarkets & hypermarkets. It becomes the thesis for next round of evolution.

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Retail Life Cycle

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INDIAN RETAIL SCENARIO

Traditional Business Models: Mandis Haats Melas The local Kirana

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DRIVERS OF RETAIL GROWTH

Economic Growth Growing middle class Demographics (47% of population below 20 & 70% below 40) Changing family structure (working women) Changing consumption basket (Maslows hierarchy) Urbanization

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KEY SECTORS IN INDIAN RETAIL

Food Retail : Food & Grocery Food Services (Restaurants) Apparel : Mens, Womens & Kids wear Consumer Durables :Electronics (TV, Audio, DVD) Utilities (Refrigerators, WM, kitchen appliances, ACs, Vacuum Cleaners)

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Footwear Jewellery Watches Telecom

OTHER SUBSECTORS Fuel Pharma Beauty & wellness Books, Music & gifts BEYOND URBAN BOUNDARIES Hariyali Kisaan Bazaar E-choupal
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THANK YOU

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