Retail Management Unit 1 (1)

7/28/2019 Retail Management Unit 1 (1)

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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

The Pre-marketing

Era

Dominance

of the

Wholesaler

Dominance

of the

manufacturer

Era of theRetailer

Age of

the

Consumer


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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

PRODUCT

MIXPRICE

OWNERSHIP

BASED

SERVICES

RETAILING


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STORE BASED(operate from a physically brick & mortar

environment)

On the basis ofproduct 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 asit 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 andprovides 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 respectivestores.


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5. Category killers/Category SpecialistBy 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 goodsOften 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 ofprice 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 ofcommon 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, offseasons & less pricess

Eg: Pantaloon factory outlets, Levis FOs

Some Other formats are:

Discount department storesOutlet stores

Limited assortment stores

Dollar stores: traditional format selling 20-80% ofgroceries & 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 thecatalogue, 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 followsa pattern having identifiable attributes)

3. Conflictual Theory (conflict between 2

opposite type of retailers leads to a newformat)


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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 cost-cutting 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

Documents

Retail Management Unit 1 (1)