Retail organization and classification of retail units

1. RETAIL ORGANIZATION AND
CLASSIFICATION OF RETAIL
UNITS

2. RETAIL ORGANIZATION
 The term retail organization refers to the basic format or structure
of a retail business designed to cater to the needs of the end
customer. Recently, some scholars have started referring to India as a
nation of shopkeepers. This epithet has its roots in the huge number
of retail enterprises in India, which were over 12 million in 2003.
About 78% of these are small family businesses utilizing only
household labour.

3. A RETAIL UNIT COULD BE
OWNED BY:
 Manufacturer (e.g., company owned retail outlets)
 Wholesaler (e.g., Vastra outlet in Rajouri in New Delhi)
 Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow)
 Consumer (consumer owned grocery stores in man y residential societies)
 Co-operative society (e.g., Mother Dairy milk booths in Delhi)
 Government (e.g., Cottage Emporia)
 Ownership shared among franchiser and franchisee (e.g., Archies Gallery)

4. CLASSIFICATION OF
RETAIL UNITS
 Conceptual classification of a business unit provides the marketers
with strategic guidelines, useful in the design of retailing strategy.
Besides, retail businesses are extremely diverse and there are quite a
few types of retail units. Therefore, retail units are classified on
multiple of ownership, geographical locations, kind of customer
interaction level of services provided etc.

5. 1. RETAILERS CLASSIFIED
ON THE BASIS OF
OWNERSHIP

6. INDEPENDENT RETAILER
An independent retailer owns only
one retail unit. The management has
direct contact with the customers and
can quickly respond to their needs.

7. CHAIN STORES
 A chain retailer operates multiple
outlets under common ownership. It
usually engages in some level of
centralized purchasing and decision
making.

8. FRANCHISING
 It involves a contractual arrangement between a franchisor and a retail
franchisee, which allows the franchisee to conduct a given business under
established name and according to a given pattern of business.
 The franchisee pays an initial fee and a monthly share of gross sales in exchange
for the exclusive rights to sell goods and services in a specified area.
 Franchising is a retail organizational form in which small businesses can benefit
being a part of a large retail institution.

9. STORE BASED RETAIL
STRATEGY MIXES

10. FOOD ORIENTED
RETAILERS

11. FOOD ORIENTED RETAILERSType of
Retailer
Size
(000
sq.
ft.)
Location
Merchandi
se
Prices
Servic
es
Promoti
on
Convenien
ce Store
2 -
3
Neighbourh
ood
Medium
width and
low depth
of
assortment
; average
quality
Avera
ge
Avera
ge
Moderat
e
Supermark
et
20 -
50
Neighbourh
ood
Extensive
width and
depth of
assortment
; average
quality;
manufactur
er, and
generic
brands
Avera
ge
Avera
ge
Heavy
use of
newspap
er, flyers
and
coupons,
self-
service

12. CONTD..
Type of
Retailer
Size
(000 sq.
ft.)
Location Merchandise Prices Services
Promotio
n
Hypermarket 100 -
300
Community
shopping
centre or
isolated site
Wide variety of
food (60 – 70
%) and general
merchandise
(30-40%)
Low Average Low
Warehouse
store
100 -
150
Secondary
site, often in
industrial
area
Moderate width
and low depth;
emphasis on
manufacturer
brands bought
at discounts
Very
low
Low Little or
none

13. GENERAL MERCHANDISE RETAILERS
Type of
Retailer
Siz
e
(000
sq.
ft.)
Location
Merchandis
e
Prices Services
Promotio
n
Specialty
Stores
4 -
12
Business
district or
shopping
centers
Very narrow
width of
assortment;
extensive
depth of
assortment;
average to
good quality
Competitiv
e to above
average
Average
to
excellent
Heavy use
of
displays,
may have
extensive
sales
force.
Category
Specialists
50
-
120
Stand
alone,
power
strip
centers
Narrow
variety but
very deep
assortment
Low Low to
high
Low to
Moderate

14. CONTD..
Type of
Retailer
Size
(000 sq.
ft.)
Location Merchandise Prices Services Promotion
Discount
Store
60 -
80
Stand
alone,
power strip
centers
Broad variety,
Low to average
assortment
Low Low Heavy use of
newspaper ads,
price oriented
messages
Factory
outlets
20 -
30
Outlet
malls
Average variety,
deep but
varying
assortment
Low Low Use of
newspapers,
brands not
advertise,
limited
workforce
Flea
Market
Street
(market
area)
Average variety,
average and
varying
assortment
Low Low low
Drug
Stores
3 - 15 Stand
alone, strip
centers
Narrow variety,
average to deep
assortment
Average
to high
Average Low to average

15. NON STORE-BASED RETAIL
STRATEGY MIX

16. DIRECT MARKETING
 It is a form of retailing in which a customer is first exposed to a good or
service through a non-personnel medium (such as direct mail, broadcast or
cable TV, radio, magazine, newspaper etc.) and then orders by mail, phone
(usually a toll free number), fax or by computer.
 Direct marketing can be divided into two broad categories:
• General: General marketing firms offer a full line of products from
clothing to house ware.
• Specialty: Specialty firms focus on narrow product lines.

17. DIRECT SELLING
 It includes both personal contact with consumers in their homes (and other
non-store locations such as offices) and phone solicitations initiated by a
retailer.
 Examples: Carpet selling, vacuum cleaner, other household products,
cosmetics, books, encyclopedia etc.
 It emphasizes convenience in shopping and a personal touch.

18. VENDING MACHINE
 It is a retailing format involving the coin or card operated dispensing of hot
and cold beverages and food or snacks items.
 It eliminates the use of sales personnel.
 It allows round the clock sales.
 Location of the machines can be done according customer’s convenience.

19. WORLD WIDE WEB
 WWW in the field of retailing relates to online retailing.
 It enables retailer’s world wide presence.
 Enhances the retailer’s brand.
 Provides information to the consumers.
 Promotes new products.
 Furnish customer service.
 Cost efficient
 Can announce special offers and also employment opportunities.

20. SINGLE AND MULTI CHANNEL
RETAILING
Single-Channel Retailing:
• If a firm sells to consumers through one format.
Multi-Channel Retailing:
• If a firm sells to consumers by combining store
and non-store retailing- as well as using multiple
store formats.

21. INTEGRATED MULTI-CHANNEL
STRATEGY
 Integrated promotions across channels.
 Ensuring product consistency across channels.
 Having an effective information system that can share data across channels.
 Enacting a store pickup process for items purchased on the web or through a
catalog.
 Searching for multi-channel opportunities with appropriate partners.

22. 2. CLASSIFICATION OF
RETAILERS ON THE BASIS OF
OPERATIONAL STRUCTURE
 Independent retail unit: – The total number of retailers in India
is estimated to be over 5 million in 2003. About 78% of these are
small family businesses utilizing only household labour. An
independent retailer owns one retail unit.
 Retail Chain: – A chain retailer operates multiple outlets (store
units) under common ownership; it usually engages in some level of
centralized (or coordinated) purchasing and decision making.

23.  Franchising: – Franchising involves a contractual arrangement
between a franchiser and a retail franchisee, which allows the franchisee
to conduct a given form of business under and establishments name
and according to a given pattern of business.
 Leased Department or Shop-in-shop:- It refers to department in a
retail store that are rented to an outside party. Usually this is done in
case of department and specialty stores and also at times, in discount
stores.
 Co-operative Outlets: – Co-operative outlets are generally owned
and managed by co-operative societies.

24. 3. CLASSIFICATION OF
RETAILERS ON THE BASIS
OR RETAIL LOCATION
 Retailers in a free-standing location: – Retailers located at a site which is
not connected to other retailers depend entirely on their sore’s drawing power and
on the various promotional tools to attract customers. This type of location has
several advantages including no competition, low rent, better visibility from the
road, easy parking and lower property costs.
 Retailers in a Business-associated Location:- In this case, a retailer locates
his store in a place where a group o retail outlets, offering a variety of
merchandise, work together to attract customers to their retail area, and also
compete against each other for the same customers.

25.  Retailers in Specialized Markets: - Besides the above location-
based classification, we also have in India-retailers who prefer specialized
markets, particularly traditional independent retailers or chain stores. In
India, most of the cities have specialized markets famous for a particular
product category. For example, in Chennai, Godown Street is famous for
clothes.
 Airport Retailing: – For quite some time, duty-free shops and
newsstands dominated the small amount of commercial space provided
at airports. Lately, serious efforts are being made to design new airport
facilities in order to incorporate substantial amounts of retail space.

26. THANK YOU