section i retail mngt

7/31/2019 SECTION I Retail Mngt

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RETAIL MANAGEMENT



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DEFINITION OF RETAILING

• Retailing is the sale of goods or commodities in small quantities directly to consumers

• Retail is the sale of goods to end users, not for resale, but

for use and consumption by the purchaser



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DEFINITION OF RETAILMANAGEMENT

• Retail management canrefer to the way businessis conducted in the retailsector

•

The stage in which goodsand services are deliveredto their end users.



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FUNCTIONS OFRETAILING

1. Deciding on an appropriate mix of productsand service

- a large number of items for thecustomers

2. Converting larger quantities purchased intoindividual units

- selling in smaller quantities to end

consumers3. Holding inventory

- maintain a large variety of

inventories



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GROWING IMPORTANCE OF RETAILING

• Retailing has become a brand dominatedactivity

• Retailing accounts for a significantproportion of the economy

•

It employs a large proportion of workforce• Turnover is more• Contribution to GDP is more• Retailers play an important role in the

society as employers• Retailers are diversifying into various

sectors



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Factors influencing retailing

1. Computerisation2.

Communication3. Fashion

4. Consumerism



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COMPUTERISATION• Information technology helps

retailing in delivering accurate timelyinformation

• Performance and efficiency can beenhanced

•

Helps in providing better services tothe customers• Due to advanced computerisation

retailers are able to provide accurateroduct mix to their customers



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COMMUNICATION• Communication has made the

world smaller•

Telephones, TV’s, Satellites,internet has facilitated easyexchange of information between

people• Consumers get influenced by

what they see and hear not onlyin their own country but across



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FASHION• The term fashion refers to the way

people live, dress, work or play overthe world

• It varies from country to country andeven region to region

• Radio, TV, cinema, internet etc has agreat impact on fashion

• Fashion is of two types – Classic (fashion remains for long

time)Eg: Blazer



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CONSUMERISM

• Consumer is the king• Consumer is educated

and aware of what ishappening around him

• Demand is increasing forthe products



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THEORIES OF RETAILDEVELOPMENT

1. Environmental Theory2. Cyclic Theory

– A) The Wheel of Retailing – B) The Retail Accordian

Theory – C) The Retail Life Cycle

Theory



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Environmental Theory • Darwins theory says “ survival of the

fittest ”• Retail environment is made up of

customers, competitors, economic, social,political, regulatory, cultural,demographic, competition, technology,fashion, legal etc.

• The birth, success or decline of different

forms of retail enterprise is attributed tothe business environment .• Darwins approach says that those retailers

that successfully adapt to the changes inthe environment are the ones which grow



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Cyclical Theory- Thewheel of retailing

•

In the classic phases of the wheel of retailing there are three stages – Entry,trading up and vulnerability

•

At the entry stage a retailer enters themarket as a low-price , low statuscompetitor with operating expensesreduced to minimum

• As the retailer becomes successful, hetradesup to improved facilities, offersenhanced services and provides additionalproduct line etc. , therefore the costincreases



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THE WHEEL OF RETAILING



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THE RETAIL ACCORDIONTHEORY

•

The retail accordion theorysuggests that retailers initiallyenter a market as a generalretailer, with experience theyfocus down on particular productsectors

• Overtime they begin to diversifytheir offer in order to grow butagain will revert to specialisation



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The Retail Accordion

WideAssortment

Wide

Assortment

NarrowAssortm

ent

Time



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RETAIL LIFE CYCLETHEORY

• The retail life cycle is a theoryabout changes through time of the retailing outlets

• Retail organisations pass throughidentifiable stages of innovation,development, maturity anddecline and this is what iscommonly termed as retail lifecycle



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Innovation

Growth

Maturity

Decline

THE RETAIL LIFE CYCLE

Time



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CONFLICT THEORY • Conflict always exists between

operators of similar formats• Competition between retailers

causes changes in the nature of theretail environment

• Retailing thus evolves through adialectic process i.e. the blending of two opposites to create a new format

• Antithesis +Thesis = Synthesis



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Discountstore

Departmental stores

DiscountDepartment

stores

CONFLICT THEORY

SYNTHESIS

ANTITHESIS THESIS




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The Indian

RetailSector



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INTRODUCTION•

India today is a dynamic combination of demanding consumers, rising levels of consumption and a growing populationbase

•

Retailing in India is one of the pillars of itseconomy and accounts for about 15% of its GDP

•

It creates employment of 8% of the totalnational workforce• Modern trade can be defined as any

organised form of retail• The Indian retail industr is the fifth



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Tr

aditional

For

Establish

ed f orm

Emerging

Formats

The Evolution of retail in India



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Drivers of retail change inIndia

1. Socio-Economic factors2. Changing income profiles

3. The age factor

4. The changing role of women andevolving family structure

5. The changing consumption pattern6. Increased credit friendliness

7. Geographical dispersion of marketpotential



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FOOD AND GROCERY

SIZE: Out of 62% of Indian market only0.8 % is the organised sectorKey players: Food bazaar, Food world,

Trinetra, Fresh, Spinach



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FOOD SERVICES

SIZE::

Size: Out of 57,000 crores only 3940 crores isorganised sectorKey Players: Mc Donalds, Domino’s, Pizza Hut ,

KFC etc.



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CLOTHING AND TEXTILES

Size: Out of 1,13,500 crores only 18% isfrom organised sectorKey Players: Arvind brand, Madura

garments, Raymonds etc



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Size: Out of 41,500 crores only4,300 crores is from organisedsector

Key Players: Videocon, BPL, Tata’s

CONSUMER DURABLES



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FOOTWEAR

Size: Out of 13,750 crores only 5,200 croresis from organised sectorKey Players: Bata India, Metro shoes, adidas,Nike, Reebok Liberty Etc.



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JEWELLERY RETAIL

Size: Out of 52,000 crores only 1,450 isfrom organised sector

Key Players: Tanishq, Gili etc



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BOOKS, MUSIC & GIFTRETAIL

Size: Out of 11,500 crores only 1,450 isfrom organised sectorKey Players: Landmark, Crossword,Oxford bookstore etc



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FUEL AND PETRO RETAIL

Size: Out of total energy consumption of the country 45% is from oil & gas sectorKey Players: Essar, Shell, Reliance, Bharatpetroleum, Hindustan petroleum etc



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1. Retail not being recognizedas an industry in India.2. Trained manpower

shortage3. The high costs of real

estate.

4. Lack of Adequateinfrastructure.

5. Multiple and complextaxation system.

Challenges to retail Development in India



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RETAIL AS A CAREER•

Buying and Merchandising• Marketing• Store operation• Sales• Finance•

Human resources• Technology• Visual merchandising

section i retail mngt

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