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Topic

Types of Retailers

PPT 2-1 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Evolution of Retail formats

• SUPERMARKETS- 1930’s saw the emergence of


supermarkets- emergence of discount stores
• The first hypermarket that was developed , was Carrefour in
France , in 1963.
• It gave consumer a choice and picking up by making
comparison

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Evolution of Retail formats

• SPECIALITY STORES , MALLS AND OTHER FORMATS-


• Specialty chains developed in the 80’s,as did the large
shopping malls – to provide consumer’s needs in single self
contained shopping area
• The Times Square , Kaula – Lumper, is world’s largest
complex and biggest shopping mall in Asia

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Evolution of Retail formats

• RISE OF THE WEB – The world of retail changed again when


in 1995 , Amazon. COM opened its doors to a world wide
market on the web
• With the growth of the WWW, both retailers an consumers can
find suppliers and products from anywhere in the world

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Business Models In Retail

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Major Store Based Retailer

• Convenience Store (500-


1500sq.ft)
 Small residential retailers or retail chains
consisting of small neighborhood stores
 Open long hours
 Carry limited lines of higher-turnover
necessities
 One-stop shopping
 Open in conjunction with Gas stations
• Ease of shopping , routine rapport
e.g Spencer’s (Daily , Express) , Bharati Retail
(Easy Day) , Tesco (Fresh and Easy) , Om
Daily Needs (Pratidin), Food world express –
mini marts, Reliance fresh

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Convenience Store Strategy Mix

Prices:
Location:
Average to
Neighborhood
Above average

Atmosphere and
Merchandise: Services:
Medium width Average
and low depth
of assortment; Promotion:
average quality Moderate

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Major Store Based Retailer

 Super Market :- (800-


5000sq.ft.)
• Relatively Large , low cost , low margin
, high volume , self service operation
designed to serve total needs for food,
laundry and household maintenance
products
• e.g., Asda, Kroger, Tesco , Nilgiri’s ,
Food Bazaar , food world Super Market
(Spencer & Co.), More , Spar Super
Markets, Namdhari’s fresh, Margin Free
(specialty supermarkets in south India )

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Supermarket Strategy Mix

Location: Prices:
Neighborhood Competitive

Atmosphere and
Merchandise: Services:
Extensive width and Average
depth of assortment;
average quality; Promotion:
manufacturer, private, Heavy use of
and generic brands newspapers, flyers,
and coupons

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PPT 2-11
Major Store Based Retailer

• Department Store (500-


40,000sq.ft.)
• Several product lines – (Largely non-food)
Typically clothing, home furnishing , and
household goods - with each line operated
as a separate department managed by
specialist merchandisers.
• One stop shop
• E.g Marks and Spencer’s , Lifestyle,
Globus , Shopper’s Stop, Pantaloons,
Westside , Pyramid , Ebony.

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Department Store Strategy Mix

Location: Prices:
Business district, shopping Average to
center or isolated store Above average

Atmosphere and
Merchandise: Services:
Extensive width and Good to excellent
depth of Promotion:
assortment; average to Heavy ad and catalog
good quality use; direct mail;
personal selling

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Major Store Based Retailer

Hypermarkets:

• Range between 80,000 and 220,000 square feet and combine supermarket,
discount, and warehouse retailing.
• Full line of groceries and general Merchandise .
• Product assortment includes furniture, large and small appliances, clothing, and
many other items with discounts .
• Hypermarkets originated in France.
• E.g., Spencer’s Hyper , Reliance Mart , Big Bazaar , Star India bazaar, metro cash
and carry, Bharati -Wal-Mart,SPAR first Hypermarket in Mangalore(44000sqft.), Max
Hypermarket in Bangalore
At present Reliance Retail's largest hypermarket (1.65 lakh sq ft), under the
brand name of Reliance Mart is operational in Ahmadabad

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Major Store Based Retailer Types

Specialty store : (2000-5000Sqft.) (Category Killers)


• Focuses on brand of particular category
• Narrow product line with a deep assortment
• Level of service is high .
• Croma , Vivek’s – Multi line Specialty retailers
• Gili , Crossword , Planet M , Music world , Zara , Wills classic , Wills Clublife , Nik-Nish
(life style Gift chain)
• Toys ‘R’U , Home Depot in home improvement category , Best Buy in electronics ,
Staples in office supply , amazon.com in books , Ebay-online auction site

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Specialty Store Strategy Mix

Location: Prices:
Business district or Competitive to
shopping center Above average

Atmosphere and
Merchandise: Services:
Very narrow width and Average to excellent
extensive depth of
assortment; average to Promotion:
good quality Heavy use of displays
Extensive sales force

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Major Store Based Retailer

• Discount Stores : expected to grow 30-


40 per cent every year
• Value retailing
• Standard Merchandise sold at lower prices with
lower margins and higher volumes.
• Discount retailing has moved into specialty
merchandise stores, such as discount sporting-
goods stores, electronics stores, and bookstores.
• E.g., Ansal Plaza Discount Circuit, My Dollar
store, Target in USA , Future groups’s Brand
Factory, Arvind Mills Ltd’s Megamart, Vishal
Megamart, Provogue's Promart, The Loot
• Onlinedeals.in

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Full-Line Discount Store
Strategy Mix

Location:
Prices:
Business district, shopping
Competitive
center or isolated store

Atmosphere/Services:
Merchandise: Slightly below
Extensive width and average to average
depth of
assortment; average to Promotion:
good quality Heavy on newspapers;
price-oriented; selling

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Major Store Based Retailer

• Factory Outlets : (off price retailers )


• Merchandise bought at less than regular wholesale prices and sold at less than
retail:
• Often left over goods , overruns and irregulars.
• They focus on mass selling and reaching economies of scale or selling the stock
left after the season is over.
• Typically these are Franchise outlets located away from the main markets
• Bangalore’s malabar Market , Mehrauli Gurgaon Road
E.g. Factory Outlets – Levis , Reebok , Wrangler , Brand factory

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Airport retailing

• In past airport retailers were fast food outlets, tiny gifts store, newspaper stands .
• Every large and medium airport are full blown shopping areas.
• Small airports also have atleast fast food retailer or vending machines.
• Airport stores are smaller, carry fewer items, and have higher prices.
• Longer shopping time as the airport is open 24 hrs.

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Railway Retailing

• Railway Retailing – Metro railways, Shatabadi


• 3.5lakh- 4 lakh commuters
• Tata Group , Reliance , Future Group have shown keen
interest in retailing

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Flea Market

• Flea Market – Traditional Marketplace


• Good Bargain
• Janpath in Delhi
• Crawford and Zaveri bazaar in Mumbai
• Weekly Flea Markets

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Major Store Based Retailer.

• Malls:
• These are the largest form of retail
formats.
• They provide an ideal shopping
experience by providing a mix of all
kinds of products and services, food and
entertainment under one roof.
Examples are Sahara Mall, TDI Mall ,
Shipra mall , EDM , Great India Place ,
Cross River mall

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Nonstore Retailing

• Internet Retailing
 Also known as interactive home shopping or
electronic retailing
 Includes both new dot-com companies and
traditional retailers attempting additional
market penetration
 Increase company diversification
• Vending Machines
 Increasingly popular
 Extent of use varies from country to country

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Nonstore Retailing

• Direct Selling
 A retailing venue whereby a salesperson, typically an independent
distributor, contacts a consumer, demonstrates product use and benefits,
takes orders and delivers the merchandise
 Direct selling firms are most active in the growth markets (in emerging
markets, in particular)

• Network Marketing
 Variation on direct selling
 Involves signing up sales representatives to go into business for
themselves with minimal start-up capital and sell more "distributorships"
and merchandise
 Network marketing is growing rapidly, especially in emerging markets
• Avon and Mary Kay (cosmetics) , Amway (household supplies)
• Tupperware (plastic containers

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Television shopping

• Television shopping allows consumer to make a direct purchase without


leaving their armchair.
• In this product is shown in TV. in detail and orders are received through
mail, telephone ,fax or internet.
• Product is often delivered free of cost.
e.g Naptol.com

• Cutting of middlemen. • Consumers usually want touch and feel


the products.
• Convenience
• In case of goods like clothing etc. which
• Full range of products from electronics to
consumer wants to try will suffer.
ayurveda is available.
• Consumers can see the products and its
features.

Sky digital, TV shopping network, Gem shopping network, Food TV,Skyshopping

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Catalogue Marketing

• This shopping is similar to internet • Product cannot be physically


shopping. seen.
• In this type of retailing a consumer • Reach is not that large as of
can shop from home with the help of internet.
catalogue of products.
• Poor mail distribution system in
• Modern mail order customers are India.
called “reluctant shoppers” i.e. they
dislike going shopping out. • Unable to gain enough customer
confidence.

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Answer the following question
Think

• Which of the store based retail formats discussed are most


vulnerable to competition from Internet retailers? Why? Which is
least Vulnerable? Why?

Questions to ponder: Is online the future of retailing , Is


Indian govt. considering a move to allow FDI in online
retail ,Whether this will make physical stores irrelevant ,
How Indian e-retail is different compared to the global
market , What lessons can be learnt from the mature
markets like China & America.

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