Chap 10 Retailing

8/3/2019 Chap 10 Retailing

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Chap 10. Channel Institutions

- Retailing


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Retailing

Retailing includes all the activities involved

in selling or renting consumer products

and services directly to ultimate

consumers for their personal or home

consumption.


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Type of retailer Characteristics

Specialty store Narrow product line with deep assortment- apparel,furniture, book

Department store Several product lines in different departments- shoppers'stop, big bazaar

Super market Large, low cost, low margin, high volume, self serviceoperation with a wide offering

Convenience store( kirana store)

Small stores located in residential areas, open longhours all days of week, reliance fresh

Discount store Standard merchandise sold at lower prices for lowmargins- subhiksha

Corporate chains More outlets commonly owned and controlles by 1 firm:globus

Voluntary chain Wholesaler sponsored group on independent retailers


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Retailer co-ops Independent retailers with central buyingoperations and common promotions

Consumer co-ops Co-operative societies of groups of consumers operating their own stores-farmers, industrial workers and so on.

Franchise organization Contractual arrangement between theproducer and retailers- selling theproducers products execlusively


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Retailers can at times be wholesalers but the

reverse may not be possible. Retailers focus on

the cost side and the demand side of the

business. They need to be profitable with optimum

inventory. The inventory turnover has to be high

even if the margins are low so that the

profitability is ensured.

The second is to optimize services levels to the

shoppers compared to competition.


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Retailers own brands/ private

lables Advantages:

They are as good as the major brands but are

priced less as they have cost advantage.

They provide higher margins to the retailer.

If successful, they give better bargaining power

to the retailers. They can demand better terms

from the national company brands. The task of merchandising becomes simpler.


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Some salient features of retail in

IndiaGrocery outlets In 2003 drugstores In 2003

Traditional 52,73,310 Traditional medical 2,76,058

Supermarkets 2314 Cosmetic stores 1,29,685

Other groceryoutlets 7,62,114

Total 60,37,738 Total 4,05,743


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Modern retail format in india(2003)

Name No.

Supermarkets Amudham 27

Apna bazar 114 Sabka bazar 21

Food world 72 Arambagh 18

samaviyka 10 Maratha stores 18

Triveny 10 Nilgiris 16

Vesta 10 Adanis 15

Dis.store chain: Sahakari

bhander

15

Subhiksha 87 Supplyco 13

Margin free 87 Janatha bazra 12

Trinethra 51 Basco 10

Kendriya bhander 36


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Name No.

Hyper mkt: Shreyas 5

Big bazzar 6 Conveniencechain:

Giant 1 Bpcl in & out 79

Dept. chains: convenio 15

Shoppers stop 11 HP speedmart 14

Pantaloon 8 akbarallys 8

Westside 8 Club HP 8

ebony 6

Grocery chain:

Raj rajya sahakari 6


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Name No.

Health &pharmacy chain:

Appollo 85Raj rajya sahakari 36

Health & glow 14

Himalayaayurvedic

13

Medicine shoopee 09


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Private label in India

Westside, benzer , globus , pantaloons and

shoppers stop.

Summary

Sponsored by companies or corporate

Focus is on ambience and making shopping

pleasure

Use latest technology for customer care andSCM

Effectively manage operating costs


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Even within organized retail, different formats could

mean a different value proposition for the consumers:

Supermarkets by definition normally deal with food and

household products.( food world, big bazaar, shubhiksha)

Department stores offer a much wider variety- focus is

more on apparel.(globus, shoppersstop)

Hypermarkets and discount stores where the focus is on

best prices in large stores with a wide choices. ( big

bazaar)

There could also be specialty stores with a single product

category but exyensive choice (RBK)


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For unorganized retail form:

All outlets are owned either by individuals or by family

Formats include kirana stores, pan/ beedi stores,

chemists, general stores

Would probably employ 95% of the people who are inretail

Provide personalized services and convenience.

Open for very long hours

Do not find the need for use of technology


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Trends in retailing in India

The income levels are rising and with it the requirement of

variety and willingness to pay the price if the value is right.

The expansion of communication channels has a great

influence on the product choices expected.

Increased literacy in both urban and rural areas makes

the consumer more conscious of his bargaining power.

Growing no of nuclear families in urban areas.

The increased influence of the retailer through the productoffering and the additional facilities he provided.


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Rural markets and consumers want whatever is available

in urban areas and are willing to pay the price for it.

The advantages of bargaining with bigger volumes-

economies of scale.

Entry of the corporate sector in retailing

The influence of foreign players on the retail sector with

the opening of FDI

Entrepreneurs willing to look at investments in the retailsector

Emergence of the store as a brand


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Some trends in retailing already in the western are

also in India soon:

New retail format keep coming up.

Ex. Includes ATM at bus stations, convenience stores at

petrol pumps and beverage vending machines.

New retail forms also get quickly replicated and losetheir novalty.

Ex. Food and grocery retailers like nilgiris, which were

unique at one time, are no longer so.

Competition is very severe bet diff kinds of storesagainst the corner grocer.


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Broad categories of retailers are of two varieties-

mass merchandisers( like big bazaar) or specialty

retailers( like reebok stores)

Leading modern retail formats with all-under-one-roof

policy are still the preferred destination for shoppers

Ex. the huge rush when big bazaar announce their discount

sales is a clear indication of this.

The modern retailers are professionally managed and

operated as many of them are corporate.

Technology is becoming a critical and competitive

tool.


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Modern retail is not just a place for buying goods, but

also a place to meet other people and socialize.

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Chap 10 Retailing