Retailing from three different perspectives, Characteristics, Activities performed by Retailers, Organized Retail Trade, Advantages of organized retail, Types of Retailing, Store & Non-Store Retailing, Internet Retailing, Catalog Retailing (Mail-order retailing), Direct Selling (door-to-door retailing), Tele Selling, TV Home Shopping, Vending Machines (Automatic Retailing), Retail Formats, On the basis of Merchandise Offered or Store Strategy Mix, Super Market, Hyper Market, Shopping Mall, Form of Ownership, Independent, Retal, Franchising, Leased Department, Co-Operative Outlet

1. Retail ManagementRetail Management

2. 2
Retailing from three different perspectives:
Suppose we manage a manufacturing firm that makes
vacuum cleaners. How should we sell these items?
We could distribute via big chains such as Best Buy or small
neighborhood appliance stores,
Have our own sales force visit people in their homes, or
Set up our own stores (if we have the ability & resources to
do so).
We could sponsor TV infomercials or magazine ads,
complete with a toll-free phone number.

3. 3
Suppose we have an idea for a new way to teach school
going students how to use computer software for spelling
and vocabulary. How should we implement this idea?
We could lease a store in a strip shopping center and run
ads in a local paper,
Do mailings to parents and visit children in their homes.
In each case, the service is offered “Live”. But there is
another option: we could use an animated Web site to teach
children online.

4. 4
Suppose that we, as consumers, want to buy apparel.
What choices do we have?
We could go to a department store, discounter store or an
apparel store.
We could go to a shopping center or order from a catalog.
We could look to retailers that carry a wide range of clothing
or look to firms that specialize in one clothing category (such
as leather coats).
We could surf around the Web and visit retailers around the
globe.

5. 5
Retailing Overview
Every sale of goods & services to the final
consumer—ranging from automobiles to apparel to
meals at restaurants to movie theater tickets.
The word ‘retail’ has been derived from the French
word ‘retaillier’ means‘to cut a piece off’ or ‘to break
bulk’. Simply, it implies a first-hand deal with the
customers.
A retailer is a ‘dealer or trader who sells goods in
small quantities’.

6. 6
Retailing Overview
An organization selling to final consumers—
whether it is a:-
Manufacturer’s
Wholesaler
Retailer
is doing retailing.
Retailing does not have to include a “retailer”.
Manufacturers, importers,non-profit firms and
wholesaler act as retailers if they sell
goods/services to final consumer.

7. 7
Goods may reach to consumer :-
(In Person) (Through Stores, Streets)
Through Mail,
Telephone, (At Consumer’s home)
Vending Machine,
Internet
Retailing encompasses the sale of services also.
Example: Haircut , airlines travel, restaurant etc.
Retailing is the last stage in the distribution process.
Retailing does not have to involve a store.
Retail sales driven by:
People’s ability (Disposable income)
Willingness (Consumer confidence) to buy.

8. 8
Retailing involves selling products and services to
consumers for their personal or family use. Department
stores, like Shopper stop, Pantaloon, discount stores like
Wal-Mart and K-Mart, and specialty stores like Music Word
for audio, Tanishq for jewellery, Mc Donald etc are all
examples of retail stores.
Service providers, like dentists, hotels and hair salons, and
on-line stores, like Amazon.com, are also retailers.

9. 9
Many businesses, like Home Depot, are both wholesalers
and retailers because they sell to consumers and building
contractors.
Other businesses, like The Limited, are both manufactures
and retailers. Regardless of other functions these
businesses perform, they are still retailers when they interact
with the final user of the product or service .
Manufacturer
Distributors/
Wholesalers
Retailers
Consumers

10. 10
Characteristics
1. Personal Interaction with Customer.
2. Lower Average amount of sales transaction.
Reasons: Purchase in small quantities.
Lower disposable income
Precautions: Average levels of stock.
Order levels.
Popularity of different brands.
3. Point-of-Purchase display & promotions
Impulse purchase: Ex: Chocolates, snack foods, candy, cosmetics,
magazines etc.

11. 11
4. Larger number of retail business units
 Factors to be considered:
• Availability of factors of productions & market
(manufacturers)
• Potential demand
• Supply of merchandise
• Store image
Retailers
The number of operating units in retail is the highest compared to other
constituents of the value chain, primarily to meet the needs for geographic
reach and customer accessibility.

12. 12
Activities performed by Retailers
Arranging
assortments
Breaking bulk
Holding
Inventory
Providing
services

13. 13
1. Arranging Assortment
• Is a selection of merchandise
• Substitutable items of multiple brands, SKUs & Price points.
 Factors while devising assortment plans for the store:-
• Profitability with merchandise mix
• Store layout
• Level of compatibility between the existing products.
• Example: Food World, Subhiksha

14. 14
2. Breaking Bulk
Means physical repackaging of the products in small lot
2. Holding Inventory
“too little stock will hamper the sales volume, whereas, too much
stock will increase the retailer’s cost of operation.
4. Extending Services
• “Add-on-Services”
• Offer credit
• Home delivery
• After sales services
• Information on new products
• Example: Time Zone

15. 15
Organized Retail Trade
• Organized retail stores are characterized by large professionally
managed format stores. They provide goods and services that appeal
to customers, in an excellent ambience that is conducive for
shopping, created based on consumer preference analysis, and offer
good value as some of the benefits of large-scale purchases are
passed on to consumers.
• Organized retailing refers to trading activities undertaken by
licensed retailers who are registered for sales tax and income tax.
• These include corporate backed hypermarket and retail chains and so
on.
• Organized retail sector in India is targeted at high-income urban
customers.
• The organized retail trade has shown a tremendous growth in our
Indian industry

16. 16
Share of Organized Retail in India
1999 2002 2005
Total Retail (in
billion INR)
7000 8250 10000
Organized Retail
(in billion INR)
50 150 350
% Share of
Organized Retail
0.70% 1.80% 3.5%

17. 17
Table 1.2 Organized Retail Format
Specialty stores Hyper market
Convenience stores Franchise stores
Department stores
Discount stores
Supermarkets

18. 18
Advantages of organized retail
• Convenience of browsing and choosing through
products—no barriers.
• Choice of ‘everything under one roof’.
• Heavy discounts on certain items like snack
foods, electronic goods, and groceries.
• Loyalty cards/schemes.
• Better and specialized service at certain store.
• Specialized stores.

19. 19
Table 1.3
A glance on Unorganized and organized retail
trade
Organized retail
trade
• skilled manpower
• leveraging technology
• effective inventory
management
• high investment
• sales forecast
Unorganized retail
trade
• Unskilled manpower
• less focus on
technology usage
• Un- managed
inventories
• low cost of operations
• individually
owned/managed

20. Types of RetailingTypes of Retailing

21. 21
Store Retailing
• Store retailers operate from fixed point-
of-sale locations to attract a high volume
of walk-in-customers.
• Use mass-media advertising to attract
customers.
• They sell products and services to the
customers for personal or household
consumption.

22. 22
Non-Store Retailing
Internet Retailing
(E-tailing)
Catalog Retailing
(Direct Mail Retailing)
Direct Selling
(tele-selling)
TV Home Shopping
.
Vending Machine
(Automatic Retailing)
Customer
As per study, 12% of global retail sales will be through Non-Store formats
by year 2010.

23. 23

24. 24
Internet Retailing
 Retailers communicate with customers and offer products
and services for sale over the internet.
 Electronic retailers range in size from Amazon. COM with
over $ 3.0 billion annual sales to niche players such as
www.dilmatea.com which sells tea from Sri Lanka.
 2005 – 250 million users connected to the internet.
 Success of Internet will depend on whether the Indian
consumer has access and how they use or perceive
Internet Shopping.

25. 25
Catalog Retailing (Mail-order retailing)
 A non-store format where the product or service is
communicated to a prospective customer through a Catalog.
 Direct Mail (letters, brochures etc) is a form of Catalog retailing.
 It is convenient. ( during festive)
 Operation costs is less as—
No sales people to be hired, trained or paid.
 Drawback: involve considerable expenditure in preparation &
mailing of catalog.
 Example: Indiatimes Shopping, Oriflame

26. 26
Factors witnessing the success of Catalog retailing:
• Convenience
• Time-saving
• Information
• No time limits : there is no undue pressure to buy unlike the retail
store shopping.
Guidelines for Catalog Retailing
• Must reflect brand identity
• Avoid clutter
• Use of text along with pictures
• Catalog has to sell as a whole not pieces
• An order form should be included

27. 27
Direct Selling (door-to-door retailing)
• It is a retail format which involves personal contact between
salesperson/retailer and customers in a convenient location,
either at the customer’s home or at work, and demonstrate the
product’s benefits, takes an order and delivers the merchandise
to the customer.
• More than 1000 companies world wide selling through this
manner.
• Example: Avon, Oriflame, Eureka Forbes, Amway, Modicare.

28. 28
• Range of Product & Services sold are:
Cosmetics, personal care product, kitchen ware, carpets,
insurance, travel etc.
• India reports total sales of Rs. 13.74 billion through direct
selling. Amway the market leader registered the annual
sales of over Rs 5 billion.

29. 29
Trends that have increased the use of Direct Selling are:
• High costs of driving, including traffic congestion & parking problems.
• Shortage of retail help (sales force) at retail stores.
• Long check-out lines (Big Bazar)
• Increasing number of working women's.
• Availability of credit cards
• Time pressure on consumer
• Growth of computer power and communication technology.
Direct selling has minimal support of advertising and large
dependence on Word-of-Mouth publicity.

30. 30
Tele Selling
• It is a telephone based retail format for ---
--making appointment.
--information exchange for sale over the phone.
• Expensive as compare to direct mail because labour cost
involved.
• A study shows tele-selling generate 5 times the results
produced by direct mail.
• It involves a set of activities:
1) set targets
2) compilation of data base
3) script writing
4) call opening

31. 31
TV Home Shopping
• Retail format in which customers watch a TV programme
demonstrating merchandise & then place orders for the
products over the telephone.

32. 32
• Different ways to communicate the target audience:
• Through Infomercial (informative commercial), where,
between scheduled TV programs, advertisements for
products are aired and orders solicited from viewers.
• Through 30 or 60 minute capsule, covering various
products, with in depth demonstrations.
• Example: Asian sky shop, HSN (home Shopping
Network), TSN, Tele-brands (India) and Star Wamaco
(International player).

33. 33
Vending Machines (Automatic Retailing)
• A retail format in which the merchandising is stored in
a machine and dispensed directly to the customers
when they deposit cash or use a credit card.

34. 34
• 24 hours service.
• Location : near railway stations, airports, shopping
malls commercial and office complexes.
• Range of products:
snacks,
candy,
soft drinks,
vegetables,
ice-cream, condom, post-cards, monetary
transactions etc…

35. Retail FormatsRetail Formats

36. 36
On the basis of
Merchandise Offered/
Store strategy mix
On the basis of
Ownership
Department Store
Specialty Store
Discount Store
Super Market
Hyper Market
Convenience Store
Shopping Mall
Independent Retailer
Retail Chain
Franchising
Leased Department
Co-operative Outlets

37. On the basis ofOn the basis of
Merchandise Offered orMerchandise Offered or
Store Strategy MixStore Strategy Mix

38. 38
Department Store
• Carry a broad variety & deep assortment of product, offer
some customer services, & are organized into separate
department for displaying merchandise
• Deals in clothing, personal care & cosmetic, books &
stationeries, home furnishings, electronics, paint, hardware,
toys etc.
• Provide a distinctive shopping experience to customers on
account of services (home delivery, use of credit card,
restaurants, cloakroom & changing room etc.
• Prices relatively high due to:-
Trained sales staff
High capital investments

39. 39
Department Store
• Usually, located within planned shopping centers
• Large format apparel department stores are Ebony, Globus,
Lifestyle, pantaloon, shoppers stop, Westside. Akbarally’s, the
Bombay store & Benza in Mumbai, Chermas & Meena Bazaar in
Hyderabad
• Upcoming as a department stores such as, Appeal—fashion store
in west Delhi, Baniya store in Jammu (offering gifts, dry fruits,
sports material, apparel, home fashion, curtains, bed sheet etc)
• International players: Marks & Spencer, Sears, J.C. Penny,
Harrods, Selfridges.

40. 40
Specialty Store
• Store specializing in a particular type of merchandise or
single product of durable goods such as home furniture &
household goods, consumer electronics & or domestic
electrical appliance, beauty & health care. For example, a
store that exclusively sells cell phones or video games would
be considered specialized
• Characterized by a high level of services or product
information being made available to customers
• Selling area ranges around 8000 sq.ft.
• International Players: The Gap, IKEA, High & Mighty, Big &
Tall, Pep Boys, Autozone (Auto parts)

41. 41
Specialty Store
• Indian Players: Gautier (furniture), Titan (watches), Tanishq
(jewellery), Music World, McDonald, Pizza Hut & Nirula’s
for food services, Paroline fitness station, Carbon from
peakok Jewellery, Park avenue from Raymonds men’s
specialty store, Khadder—Khadi specialty (Kolkata based
company)

42. 42
Discount Stores
• Offers wide assortment of goods, limited or no
services & low prices
• Offers both Private brand and National brand
• Less fashion merchandise is carried
• Subhiksha, Wal-Mart, K-mart, Target

43. 43
Super Market
• Self-service food store offering groceries, meat & fresh
produce, dairy products
• Deals in non-food items also such as house-hold appliances,
some apparel items, pharmacy products, health & beauty
product
• Other services– banks, cafes, child care centers, photo
processing etc
• Selling area 25000 to 50000 sq. ft.
• Food World outlets, Nilgiris, Food Bazaar & vitan, Kroger,
Safeway

44. 44
Hyper Market
• It is a super store which combines a supermarket and a
department store. Basically taken from a French word
hypermarche
• Large retail facility which carries an enormous range of
products under roof, including full lines of groceries and
general merchandise
• Selling area 100000 sq. ft. to 300000 sq. ft.
• Food articles (60-70%) & Non-Food articles (30-40%)
• Product ranges: clothes, jewellery, hardware's, sports
equipment, cycles, motor accessories, books, CD’s, DVD’s,
videos, TV’s, electrical equipment, computers. Also deals in

45. 45
Hyper Market
• Hypermarkets are designed to attract customers from a
significantly large area with their unique ranges and low
prices.
• Key retailers—Carrefour, Wal-Mart, Meijer, Target (Super
Targets), Tesco (Tesco Extra Stores), Giant, Big Bazaar &
Star India Bazaar

46. 46
Convenience Store
• Is a small store or shop located near residential areas that
sells items such as candy, ice-cream, soft drinks, lottery
tickets, newspapers and magazines, along with a selection of
processed food and perhaps some groceries
• Often located alongside busy roads, in densely-populated
urban neighborhoods, near railway stations or other
transportation hubs. In some countries most convenience
stores have longer shopping hours, some being open 24
hours.
• Selling area ranges from 2000 to 3000 sq. ft.
• International players: 7-Eleven, Circle K, Albert Heijn &

47. 47
Shopping Mall
• Shopping Mall is an arrangement of retail stores & providing
the right mix of shopping food courts & entertainment and
parking facilities.
• Retail space is shared by retailers (tenants), who will pay
the developers of the Mall—rent or lease payment for
putting up the shop within the Mall premises.
• Example: In Banglore—The forum, Central, Sigma Mall etc,
In Mumbai—Inorbit

48. Form of OwnershipForm of Ownership

49. 49
Independent Retailer
• Generally operates one outlet and offers personalized
services, a convenient location & close customer contact. In
India, stores like local baniya / kirana store & the panwala
are some examples of independent retailers
• About, 96% of all the retail businesses in India, are
managed and run by independents, including barber shops,
drycleaners, furniture stores, bookshops, neighborhood
stores
• Easy entry, require low investment and little technical
knowledge
• On other hand, most independent retailers fail because of

50. 50
Retail Chain
• When two or more outlets are under a common ownership, it
is called a retail chain.
• Characterized by similarity in the merchandise offered to
the consumer, the ambience, advertising and promotions.
• Example: Wills Sports (ITC), Louis Philippe, Van Heusen
(Madura Garments), Arrow (Arvind Mills) & department
stores like Globus, Westside & Shopper's Stop, Food World,
Planet M etc.
• Biggest advantages: bargaining power with the suppliers
• Attention to each of the stores becomes fairly restricted

51. 51
Franchising
• It is a contractual agreement between the franchiser and
the franchisee, which allows the franchisee to conduct
business under an established name as per a particular
business format, in return for a fees, and a share of the
profits
• Example: Archie’s Stores, McDonalds, Pizza Hut, Nirula’s,
Dominoes, Baskin Robbins, Aptech, NIIT and Subway

52. 52
Leased Department
• Popularly know by Shop-in-Shops. When a section of a
department in a retail store is leased/ rented to an outside
party, it is termed as a leased department.
• It is the best method for retailers to expand their product
offering to the customers
• In India, many large department stores operate their
perfumes and cosmetics counters in this manner. Example:
Timex Watches
• In China, most department stores are 100% leased
departments or Shop-in-shops

53. 53
Co-operative Outlets
• It is generally owned and managed by co-operative societies
• Examples: Sahakari Bhandar’s and Apna Bazaar shops in
Mumbai and Super Bazaar in Delhi and Kendriya bhandar

54. DiscussionsDiscussions