1.retailing introduction

8/8/2019 1.Retailing Introduction

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RETAILING

Introduction


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What is retailing

Retailing is -

sale of goods and services to final consumer

last stage in the distribution process, whilewholesaling is an intermediate stage

last link in the Supply Chain - connecting the

bulk producers of the commodities to thefinal consumers

Covers diverse products including services

and leisure


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Who is a retailer?

Some one who does not effect anysignificant change in the product except

breaking the bulk. Final stock point who makes product or

service available to the consumerwhenever required

Offers value proposition to consumer byeasy availability of the desired product inthe desired sizes at the desired times


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Top Ten Retailers Worldwide

Rank Retailer No of stores owned Sales in FY-00 US$ Millions

1 Wall-Mart Stores Inc. (USA) 4178 $180,787

2 Carrefour Group (France) 8130 $61,047

3 The Kroger Co. (USA) 3445 $49,000

4 The Home Depot, Inc. (USA) 1134 $45,738

5 Royal Ahold (Netherlands) 7150 $45,729

6 Metro AG (Germany) 2169 $44,189

7 Kmart Corporation (USA) 2105 $37,028

8 Sears, Roebuck and Co. (USA) 2231 $36,823

9 Albertson's, Inc. (USA) 2512 $36,726

10 Target Corporation (USA) 1307 $36,362


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Retail formats

In-Store Retailers

operate fixed point-of-sale locations

located and designed to attract a highvolume of walk-in customers

Non-Store Retailers

reach out to the customers at their homes oroffices


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Major formats ofIn-Store

Retailing

Format Description The Value Proposition

Branded Stores Exclusive showrooms either owned or

franchised out by a manufacturer.

Complete range available for a given

brand, Certified product quality.

Specialty Stores Focus on a specific consumer need, carry

most of the brands available.

Greater choice to the consumer,

comparison between brands possible

Department Stores Large stores having a wide variety of

products, organized into differentdepartments, such as clothing, house

wares, furniture, appliances, toys, etc.

One stop shop catering to varied

consumer needs.

Supermarkets Extremely large self-services retail

outlets.

One stop shop catering to varied

consumer needs.

Discount Stores Stores offering discounts on the retail

price through selling high volumes and

reaping the economies of scale.

Low prices.

Hyper-mart Larger than a Supermarket, sometimes

with a warehouse appearance, generallylocated in quieter parts of the city

Low prices, vast choice available

including services as cafeterias.

Convenience Stores Small self-service formats located in

crowded urban areas.

Convenient location and extended

operating hours.

Shopping Malls An enclosure having different formats of

in-store retailers, all under one roof.

Variety of shops available close to each

other.


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Non-store retailers

Reach out to the customers at their homes or

offices.

Use internet for communication (also known ase-tailing)

Business by broadcasting of infomercials

Broadcasting and publishing of direct-response

advertising publishing of traditional andelectronic catalogues

Door-to-door solicitation and temporary

displaying of merchandise (stalls)


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Indian Scenario

For Indian retailing, things started to changeslowly in the 1980s, when India first beganopening its economy

Textiles sector (with companies like BombayDyeing, Raymond's, S Kumar's and Grasim)was the first to see the emergence of retailchains

Later on, Titan, maker of premium watches,successfully created an organized retailingconcept in India by establishing a series ofelegant showrooms.


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Indian scenario.

Latter half of the 1990s saw a fresh wave ofentrants in the retailing business, like -FoodWorld, Subhiksha and Nilgiris in food and

FMCG; Planet M and Music World in music;Crossword and Fountainhead in books

As of the year ending 2000 the size of theIndian organized retail industry was estimated

at around Rs.13,000 crore Retail industry is gathering momentum and is

expected to grow by 30 per cent in the next 5years and to touch Rs.45,000 crores


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Organized retail industry in India

Segment Market Size (Rs. Crore)

Textiles and clothing 4050

Jewellery 2,000-2,500

Consumer Durables 1500

Footwear 1,300-7,500

Food and personal care 1000

Non-Store retail 900

Luggage, watches andtyre

500

Books and music 390


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Retailing formats in India

Retailer Current Format New Formats. Experimenting With

Shoppers' Stop Department Store Quasi-mall

Ebony Department Store Quasi-mall, smaller outlets, adding food

retail

Crossword Large bookstore Corner shops

Piramyd Department Store Quasi-mall, food retail

Pantaloon Own brand store Hypermarket

Subhiksha Supermarket Consideringmoving to self service

Vitan Supermarket Suburban discount store

Foodworld Food

supermarket

Hypermarket, Foodworld express

Globus Department Store Small fashion stores

Bombay Bazaar Aggregation of Kiranas

Efoodmart Aggregation of Kiranas

Metro Cash and carry

S Kumar's Discount store


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Without retailing we have lived

and

we are living then why this sudden fad for

RETAILING !!


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Key drivers of retailing

Benefits to customers

Benefits to manufacturer

Benefits to wholesaler

Benefits to retailer

Benefits to Government

Potential employment opportunities


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Issues in Retailing

o How can we best serve our customers

while earning a fair profit?

o How can we stand out in a highlycompetitive environment where

consumers have too many choices?

o How can we grow our business, whileretaining a core of loyal customers?


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The Philosophy

Retailers can best address these

questions by fully understanding and

applying the basic principles ofretailing, as well as the elements in

a well-structured, systematic, and

focused retail strategy.


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The High Costs and Low Profits

ofRetailing


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ATypical Channel of

Distribution

Manufacturer

Wholesaler

Final

Consumer

Retailer


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The Retailers Role in the

Sorting Process


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DistributionT

ypes Exclusive: suppliers make agreements with

one or few retailers that designate the latter as

the only ones in a specified geographic area tocarry certain brands or products

Intensive: suppliers sell through as many

retailers as possible

Selective: suppliers sell through a moderatenumber of retailers


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Figure 1.7 Comparing

Distribution Types


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Applying the Retail Concept

Customer Orientation

Coordinated Effort

Value driven

Goal Orientation

Retailing

Concept

Retail

Strategy


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What is retail strategy?

Over all plan to guide a retail firm

Aligning retail firm to competition,

market forces and economy

Strategic planning is imperative for the

success of any retail firm.


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Steps in Strategic Planning

o Define type of business

o Set long run and short run objectives for

sales/profit/market share/image etco Determine customer market (target customer)

o Long run plan to direct firm and employees

o Implement integrated strategy combining

store location, product assortment, pricing

and advertising and displays

o 6.Review, evaluation and correction of strategy


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Total Retail Experience-

the WOW! factor

Parking to check-out

Pleasing setting

Colour schema

Music to pamper senses

Floor arrangement, displays

Staff assistance, courtesies, help,

guidance

Shopping comfort


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Customer Service

Impacts total retail experience

Store hours

parking access, shopper friendliness

store layout, credit acceptance

level and caliber of salesperson

gift wrapping, rest room availability,employee politeness, handling specialorders, delivery policies, customer followup etc


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Relationship retailing

Establish and maintain long-termbonds

Customer satisfaction, service Respect customer check list

Hard to lure new customers, henceretain the one you have

Win-win approach strategy


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Retailing Road ahead.

A growing population, growingA growing population, growing

income levels, growing middleincome levels, growing middle--classclass

families, a young workforce andfamilies, a young workforce andzooming consumer confidence iszooming consumer confidence is

fuelling the retail sectorfuelling the retail sector


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Catch it young!

Go with the growth !!

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Questions for a quick recap

What is retail strategy? How could it be

utilized by a small bouquet seller?

What is retailing concept? Define the term total retail experience Give

five suggestions for a new retailer.

Guide a small web-based retailer on

relationship retailing.

1.retailing introduction

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