RETAILING

Introduction

What is retailing
Retailing is sale of goods and services to final consumer last stage in the distribution process, while wholesaling is an intermediate stage last link in the Supply Chain- connecting the bulk producers of the commodities to the final consumers. Covers diverse products inlcuding services and leisure

Who is a retailer?
Some one who does not effect any significant change in the product except breaking the bulk. Final stock point who makes product or service available to the consumer whenever required Offers value proposition to consumer by easy availability of the desired product in the desired sizes at the desired times

Distribution channel and Sorting Process

Top Ten Retailers Worldwide

Rank 1 2 3 4 5 6 7 8 9 10 Retailer Wall-Mart Stores Inc. (USA) Carrefour Group (France) The Kroger Co. (USA) The Home Depot, Inc. (USA) Royal Ahold (Netherlands) Metro AG (Germany) Kmart Corporation (USA) Sears, Roebuck and Co. (USA) Albertson's, Inc. (USA) Target Corporation (USA) No of stores owned 4178 8130 3445 1134 7150 2169 2105 2231 2512 1307 Sales in FY-00 US$ Millions $180,787 $61,047 $49,000 $45,738 $45,729 $44,189 $37,028 $36,823 $36,726 $36,362

Retail formats
In-Store Retailers
operate fixed point-of-sale locations located and designed to attract a high volume of walk-in customers

Non-Store Retailers
reach out to the customers at their homes or offices.

Major formats of In-Store Retailing

Format Branded Stores Description Exclusive showrooms either owned or franchised out by a manufacturer. The Value Proposition Complete range available for a given brand, Certified product quality.

Speciality Stores
Department Stores

Focus on a specific consumer need, carry most of the brands available.

Large stores having a wide variety of products, organized into different departments, such as clothing, house wares, furniture, appliances, toys, etc. Extremely large self-services retail outlets. Stores offering discounts on the retail price through selling high volumes and reaping the economies of scale. Larger than a Supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city Small self-service formats located in crowded urban areas. An enclosure having different formats of in-store retailers, all under one roof.

Greater choice to the consumer, comparison between brands possible

One stop shop catering to varied consumer needs.

Supermarkets Discount Stores

One stop shop catering to varied consumer needs. Low prices.

Hyper-mart

Low prices, vast choice available including services as cafeterias.

Convenience Stores

Convenient location and extended operating hours. Variety of shops available close to each other.

Shopping Malls

Non-store retailers
Reach out to the customers at their homes or offices. Use internet for communication (also known as e-tailing) Business by broadcasting of infomercials Broadcasting and publishing of direct-response advertising publishing of traditional and electronic catalogues Door-to-door solicitation and temporary displaying of merchandise (stalls)

Indian Scenario
For Indian retailing, things started to change slowly in the 1980s, when India first began opening its economy Textiles sector (with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim) was the first to see the emergence of retail chains Later on, Titan, maker of premium watches, successfully created an organized retailing concept in India by establishing a series of elegant showrooms.

Indian scenario.
latter half of the 1990s saw a fresh wave of entrants 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 the Indian 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 5 years and to touch Rs.45,000 corres

Organised retail industry in India

Segment Market Size (Rs. Crore)

Textiles and clothings

Jewellery

4050
2,000-2,500

Consumer Durables
Footwear Food and personal care

1500
1,300-7,500 1000

Non-Store retail
Luggage, watches and tyre

900
500

Books and music

390

Retailing formats in India

Retailer Shoppers' Stop Ebony Crossword Piramyd Pantaloon Subhiksha Vitan Current Format Department Store Department Store Large bookstore Department Store Own brand store Supermarket Supermarket New Formats. Experimenting With Quasi-mall Quasi-mall, smaller outlets, adding food retail Corner shops Quasi-mall, food retail Hypermarket Considering moving to self service Suburban discount store

Foodworld
Globus Bombay Bazaar

Food supermarket
Department Store

Hypermarket, Foodworld express

Small fashion stores Aggregation of Kiranas

Efoodmart
Metro S Kumar's

Aggregation of Kiranas
Cash and carry Discount store

Without retailing we have lived and we are living then why this sudden fad for RETAILING !!

Key drivers of retailing

Benefits to customers Benefits to manufacturer Benefits to wholesaler Benefits to retailer Benefits to Government Potential employment opportunities

Key Terms to know

Exclusive distribution Intensive distribution Selective distribution

Distribution channel comparison

Factor No. of buyers Potential for conflict Suppliers support Suppliers sales Retailers assortment Product image Competition Exclusive Medium Medium Highest Lowest Medium Highest Medium Intensive Highest Highest Medium Highest Highest Medium Highest Selective Lowest Lowest Lowest Lowest Lowest Lowest Lowest

Marketing concept of retailing

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.

Steps in Strategic Planning

1. Define type of business 2. Set long run and short run objectives for sales/profit/market share/image etc 3. Determine customer market (target customer) 4. Long run plan to direct firm and employees 5. Implement integrated strategy combining store location, product assortment, pricing and advertising and displays 6. Review, evaluation and correction of strategy

Total Retail Experiencethe WOW! factor

Parking to check-out Pleasing setting Colour schema Music to pamper senses Floor arrangement, displays Staff assistance, courtesies, help, guidance Shopping comfort

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 special orders, delivery policies, customer follow up etc

Relationship retailing
Establish and maintain long-term bonds Customer satisfaction, service Respect customer check list Hard to lure new customers, hence retain the one you have Win-win approach strategy

Retailing Road ahead.

A growing population, growing income levels, growing middle-class families, a young workforce and zooming consumer confidence is fuelling the retail sector

Catch it young! Go with the growth !!

Current Scenario

CONSOLIDATION

Year is 2008 is an inflection point for modern retail in India Rising costs of real estate was one of the major stumbling blocks for retail to develop For the first time in many years, we are witnessing fall in real estate costs and retail business is becoming more and more viable People costs and operational costs are also stabilizing Signs of consolidation are distinctly visible for modern retail business in India

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.
(Range of merchandise, Convenience of shopping, Time to travel, Socio-economic background and culture)

Guide a small web-based retailer on relationship retailing.

MODERN RETAIL- Its impact on growth

As modern retail grows, so will be its impact on domestic growth By 2012 modern retail will directly employ over 1.6 million people at shop floors Most of them come from lower income groups and lesser educational backgrounds, who cannot employed in other sectors Retail will create millions of more jobs in support services like security, mall and facilities management, construction and supply chains McKinsey & Co point out that for the government level, modern retail will help improve indirect tax collection by 1% add to GDP Growth Play a role in controlling inflation As modern retailers acquire size and scale, plays a far more decisive role in the countrys economic growth and development IT, Hospitality, Multiplexes and Real Estate enjoy fiscal incentives but not modern retail sector