Shaurya B (5), Saptarshi D (10), Samir D (14), Rohit J (28), Sushmita K (36), Sneha M (51)

Retail Strategy for 5 different Store Formats

Retail - Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser

Retail Management - A process of promoting greater sales and customer satisfaction by gaining a better understanding of the consumers of goods and services produced by a company.

4

A glimpse of Indian Retail Industry

Accounts for India’s 10% of

total GDP

Employs 8% of the total

Indian population

Market size is expected to grow - US $650 Billion to

US $1.2 Trillion (2020)

Source: CRISIL India Brand Equity

Foundation

CAGR 13%

Retail in DetailRetail

Organized(10%)

Product

Food

WetProcessed

(70%)Dry

Lifestyle

Clothing Music Book Consumer Durables

Pharmaceuticals

Service

Unorganized(90%)

Retail

Store

Global National International

Non Store

Online Television Catalogue Direct Selling

Vending Machine

Classification of Retail Stores

Types of Retail Outlets

• Department store

• Discount store• Warehouse

store• Variety store• Demographic• Mom-And-Pop• Specialty store• Boutique

• General store• Convenience store• Hypermarkets• Supermarket

• Mall• "Category killer" or

specialist• E-tailer

• Vending machine

5 different formats of Retail Outlets

1) Department StoreA department store is a retail establishment offering a wide range of consumer goods in different product categories known as "departments”

• A retailer of such a store should have a variety of categories (clothing, furniture, home appliances, toys, cosmetics etc. ) and a broad assortment of goods which in turn should be used to promote the store.

• The goods should be available at an average price.

• A department stores should be located in an area with a high residential population to target fulfilment of consumers daily needs at one place.

• Such a store requires huge space to operate to store more variety and attract more types of customers.

• Such a store must be very well designed to assist the customer in finding the required products easily with the help of signage etc.

• In India, Big Bazaar, Reliance Fresh and D-Mart are examples of department stores.

2) Mom and Pop StoresMom and Pop stores are small stores run by individuals in the nearby locality to cater to daily needs of consumers, they can also be called local general stores. Traditionally they are unorganized

• Product – Selected items, usually do not offer high-end products

• Price – Differential Pricing, Credit payments

• Place – Depends on i) The land availability of the ownerii) Capital constraints

• Promotion - “Word of mouth” promotion by existing customers, Customer referrals, local print ads, TV promotions, deal of the day, radio and outdoor ads

Repeat business can be achieved through improved customer relationsTrends • Innovation by means of credits• Multiple SKUs (small pack sizes/loosely sold)• Better inventory• Interpersonal communication with

customersThreats • Upcoming retail outlets offering better

variety and discounts• Better customer experience• One Stop Shop solutionsExamples – Kirana shops, locally owned meat shops, “corner” shops such as gift stores, druggist usually run by the same family for generations

2) Specialty StoresSpeciality stores specialize on specific merchandise and have a narrow market focus

Specialty stores are in varied store size including:• Big Retail giants such as Toys “R” Us, The Body Shop, Crosswords• Individual shops/ Small shops such as Decathlon specializing in sportsweara) They have specialized stock unlike general storesb) Specialized information that customers valuec) Pricing is not a priorityd) Customers value brand image, product quality, service

Example: Chumbak

• Quirky designs, vibrant accessories• Vibrancy and cheer associated with Chumbak premium units• Open and modular design for various products• Bright colours and paints adding appealing to the tastes of a particular segment

4) Vending MachinesA vending machine is an automated piece of equipment wherein customers can drop the money in the machine and acquire the products

Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target

a) Products - Groceries, Drinks, Snacks, Children’s toys, Beauty products and cosmetics, Fruits, Vegetables, Handkerchiefs, Towels, Flowers and etc.

b) Place – railway stations, bus stations, offices, retail stores, hotels & motels, skateboard shops, bowling alleys etc.

c) Price - Selling price of a product based on a cost percentage goal, the price at the same level as the competition (or a little lower or higher) and the manufacturer's suggested retail price

d) Promotion - Local and regional trade shows and distributor open houses, social media, advertising, direct marketing, personal selling

e) People – Office goers, school and college students, travellers etc.f) Marketing Strategy - trade shows, industry publications, Internet,

brochures, letterhead, and business correspondence

5) e-tailera retailer selling goods via electronic transactions on the Internet

Product – Offers wide range and variety of productsLocation and Presence-The web address, available globally through internet connection. Can establish a presence through cross promotions (links between sites)Merchandising - Web page layoutPromotional activity - Pricing strategies and campaignsInventory Management - Multiple inventory ownership options, with most prominent being traditional, “just-in-time” and a hybrid of two

Advantages

• Content optimization: Investments in search engine optimization, keyword purchases, and descriptive materials and images

• Content integration and syndication: Such as photos, videos, blogs, recipes, ratings, and reviews

• Point-of-sale (POS) data and analytics

• Low overhead, IT infrastructure, Execution speed ,Low advertising costs, Customer tracking capabilities , Multiple payment options