BASICS OF

RETAIL
OPERATIONS
PRACTICAL-1
 SRI RAMA BBA RETAIL
MANAGEMENT AND E-
ROHAN COMMERCE
CHAKKA

R
etailing refers to all activities
involved in selling the goods or
services to the final consumers
for personal or non-commercial usage. In
the recent times, as the retail markets
have developed its form customers are
getting more & more attracted
towards Retail Markets. Change in 2006 2020
income structure, consumer tastes &
preference, demographic & geographic
profile are some of the key factors that
are driving towards growth in Retail Business.

There is a rapid growth of population these days. The population in

2030 and 2050 is expected to be 1.5 billion and 1.7 billion respectively.
In the below picture, we can see that India would be the most populated
country in the world by 2050. This will lead to rise in consumption and
thus urges the need to have a strong and developed retail sector. Retail
outlets offer a wide variety of products & services to the customers to
meet their demands thus resulting into the growth of Retail Sector.
Rising population is also the reason behind why developing countries
want to put more FDI in the Indian Economy. On August 28th 2019, the
government allowed 100% FDI into retail sector.  

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 Advance technology has made it easier for the retailers to handle
large scale business & cater the needs of consumers. With the
introduction of computerized billing system, electronic media &
marketing techniques, barcode system has changed the face of retailing
in providing products & services to customers. Also, the use of online
market has driven the retail sector towards advanced growth structure.

Increase in the number of working population has resulted in

increase in the income structure in urban as well as rural areas.
Nuclearization of families these days resulted in reducing expenditures
and thus increasing their disposable income.  People nowadays tend to
adopt to western lifestyle by trying new things & improve their look thus
increasing the spending habits & giving an opportunity to grow & expand
retailer’s business.

The above graph clearly shows that the Gross Household Disposable
Income kept increasing constantly every year and has reached up to 130
million approximately in 2018. This implies that the consumption also will
rise constantly.

 Today’s Indian Retail market has entered in rural areas creating a

big competition, as the rural population has become more literate &
quality conscious. These high potential rural populations have thus

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enabled the retailers to enter rural market & develop new products &
strategies to meet their demands. Also, it has created employment
opportunities for the rural people thus heading towards growth &
development.

The
Rural Tech Project aimed at developing the technology in rural areas
and had succeeded very well in the past few years. This can be told as
the driving factor of growing retail in rural areas also.

Organised retail deals in high volume and are able to enjoy

economies of large-scale production and distribution. They eliminate
intermediaries in distribution channel. Organised retailers offer quality
products at reasonable prices. Example: Big Bazaar, Dmart. The retail
sector nowadays has such a wide scope that it gives opportunity for
profit and attracts new business groups for entering into this sector.

EXAMPLES OF ORGANISED RETAIL

Co
n su
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merism is an idea that encourages the acquisition of goods and services
in ever-increasing amounts. With the emergence of consumerism, the
retailer will get a more knowledgeable and demanding consumer. As the
business exist to satisfy consumer needs, the growing consumer
expectation has forced the retail organizations to change their format of
retail trade.

Apart from the opportunities, there are challenges faced by Retail

industry nowadays too. Customers can prove very demanding and they
are increasingly looking for unique experiences that allow them to build
and customize their own products. Shoppers want interaction,
memorable experiences, fast and quality services. Thus, there is a need
for customisation.

When transitioning between online and in-store experiences,

customers not only want the same products to be available, they also
want their experience to be seamless. This means, if they are a regular
online customer, they want to be treated like a regular customer when
they visit a brick-and-mortar location. If they made an online purchase
earlier in the day, the in-store systems should already have a record of it.

Operating a retail business is undoubtedly a hard job, and

managing internal communication is no exception. The complexity of this

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process will depend on the size of the business, how many stores there
are, the number of workers.

The biggest challenge for manufacturers is aligning with the right

channel partner. A channel partner is a company that partners with a
manufacturer or producer to market and sell the manufacturer's products
and services.

Collection of revenue is also a huge challenge for big companies.

For instance, they might enter a transfer pricing agreement with retailers.
This means they push their goods to retailers for a certain cost, and
demand the retailers pay them within the credit period. They don’t focus
much on how the retailer recovers his cost and profit. If the retailers are
not able to sell and earn profits, its difficult for them to repay back within
credit period.

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