RETAIL MANAGEMENT

What is Retailing?

• Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use.

• A retailer is a business that sells products and/or services to consumers for personal or family use.

Examples of Retailers

• Name the retailers in our city

How retailers add value

• Breaking Bulk-Buy it in quantities customers want

• Holding Inventory-Buy it at a convenient place when you want it

• Providing Assortment-Buy other products at the same time

• Offering Services-See it before you buy

How retailers add value

The value of the product and service increases as the retailer performs functions.

Doll is developed at manufacturer

Doll is developed in several styles

Doll is offered in convenient locations in quantities of one

Doll is featured on floor display

Doll can be bought on credit or put on

layaway

Manufacturer’s Perspective

The Four P’s of MarketingRetailers are part of the

distribution channel

Product

Price

Promotion

Distribution

Distribution ChannelDistribution Channel

PPT 1-4

Retailers are business like manufactures

Accounting Finance Marketing

MISOperations

Human Resources

Decision variable for retailers

Retail Strategy

Customer Service

MerchandiseAssortment

Location

Communication Mix

Pricing

Store Design and Display

Challenges and Opportunities in Indian Retailing

Overview

Retailing World’s largest private industry

Indian retailing Largest employer after agriculture - 8%* of

population Highest outlet density in world

Around 12 mn outlets Still evolving as an industry

Long way to go

Weekly MarketsVillage FairsMelas

Convenience StoresMom and Pop/Kiranas

PDS OutletsKhadi StoresCooperatives

Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls

Traditional/Pervasive Reach

Government Supported

Historic/Rural Reach

Modern Formats/ International

Evolution of Indian retail

Source of Entertainmen

t

Neighborhood Stores/Convenie

nce

Availability/ Low Costs / Distribution

Shopping Experience/Efficie

ncy

Informal retailing Sector Typically small retailers. Evasion of taxes

Difficulty in enforcing tax collection mechanisms

No monitoring of labor laws

Formal Retailing Sector Typically large retailers Greater enforcement of taxation

mechanisms High level of labor usage monitoring

Indian retail

Evolution of Indian retail

Corporate Houses Tatas: Tata Trent RPG group: Food World, Health

and Glow, etc ITC: Wills Life Style Rahejas(ShoppersStop),

Hiranandani(Haiko), DLF(DT cinemas) etc.

Dedicated brand outlets Nike, Reebok, Zodiac etc

Multi-brand outlets Vijay Sales, Viveks etc

Manufacturers/ Exporters Pantaloons, Bata, Weekender

Indian retail

Categories of Indian retail

Modern Format retailers Supermarkets

(Foodworld) Hypermarkets (Big

Bazaar) Department Stores (S Stop) Specialty Chains (Ikea) Company Owned Company Operated

Traditional Format Retailers Kiranas: Traditional Mom and Pop

Stores Kiosks Street Markets Exclusive /Multiple Brand Outlets

Indian retail

Classifying Indian retail

Hypermarket Big Bazaar Giants Shoprite Star

Department store Lifestyle Pantaloons Pyramids Shoppers Stop Trent

Entertainment Fame Adlabs Fun Republic Inox PVR

Indian retailers

Large Indian retailers

The urban consumer Getting exposed to international

lifestyles Inclined to acquiring asset More discerning and demanding

than ever

No longer need-based shopping Shopping is a family experience

Changing Mindset Increasing tendency to spend Post Liberalization children coming

of age 100 mn 17-21 year olds*. Tend to

spend freely. Greater levels of education

Indian consumer

The changing Indian consumer

Low domestic competition Because of fragmented nature of

industry

Lack of exposure to global best practices

Low entry barriers for unorganized retailing

Moderate entry barriers for organized retailing

Wholesale system under-invested leading to 20-40% wastage

Non level playing field issues Wide differences in treatment of

small and large retailers

IndustryChallenges

Challenges in the Industry

Real Estate Costs

Supply Chain Inconsistency

Poor Infrastructure

Lack of Skilled Manpower

issues

Challenges……

Market size Current market size is roughly US$

286 bn* 96% of the 12 Million stores are less

than 500 Sq. ft. Forecast Growth rate for the retailing

industry is roughly 8.3% for 2003-2008

Sales from large format stores would rise by 24-49%**

Formal and modern format retailing would enjoy rapid growth

Anticipated growth

Opportunities

Growth determining factors Government Policy Infrastructure development GDP growth Employment generation and job

creation In several new sunrise industries Implies greater purchasing power

Growth factors

Growth factors

India ranked 1st in the Global A.T Kearney Retail Development Index

India

Russia

China

Advantage India

The Indian advantage

THE SIZE OF THE OPPORTUNITY

Products   

Total Retail Organised Organised

Rs. Billion Retail Retail as %

  Rs. Billion of Total

Food & Grocery 6422 50 1

Textiles & Apparel 980 185 19

Jewelry & Watches 554 30 5

Consumer durables 415 43 10

Pharmaceuticals 364 10 3

Home Solutions 351 32 9

Books, Music & Gifts 115 15 13

Others 1159 111 10

Total 10360 476 5

Distribution International company sets up local

distribution office Supply products to Indian retailers

to sell Also set up franchised outlets for

brand Swarovski, Hugo Boss

Wholesale trading Cash and Carry operations 100% FDI permitted

Metro Cash n Carry

How they are present

International retailers in India: Strategies

Franchise International company gives name

and technology to local partner. Gets royalty in return

In case master franchise is appointed for region or country, he has right to appoint local franchisees Nike, Pizza Hut, Tommy Hilfiger,

Marks and Spencer, Mango Manufacturing

Company sets up Indian arm for production Bata India. It also has right to

retail in India

How they are present

International retailers in India: Strategies

Career Opportunities in RetailingStart Your Own Business

• Walton Family (Wal-Mart)• Fisher (The Gap)• Wexner (Limited)• Menard (Menard’s)• Marcus, Blank (The Home Depot)• Kellogg (Kohl’s)• Schulze (Best Buy)• Levine (Family Dollar)• Gold (99Cent Only)

List of Retail Entrepreneurs on Forbes 400 Richest Americans

Misconceptions About Careers in Retailing

• Don’t need college• Low pay• Long hours• Boring• Dead-end job• No benefits• Everyone is part-time• Unstable environment

Why You Should Consider Retailing

• Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job• Starting pay average with great benefits - Some retailers pay graduate school• No two days are alike• Buying for financially oriented people• Management for people people

Types of Jobs in Retailing

Most entry level jobs are in store management or buying, but…

retailers also have staff specialists:--accounting and finance--real estate--human resource management--supply chain management--advertising--public affairs

Thank you

Work hard to get what you like

Or else

You will be forced to like what you get!!!