RETAIL MANAGEMENT,

2/E
Chetan Bajaj,
Bajaj Director,
Sona School of Management, Salem, Tamil Nadu
Rajnish Tuli,
Tuli Director,
Millward Brown, South East Asia, Singapore
Nidhi Varma Srivastava,
Srivastava Director,
Millward Brown, India
Oxford University Press 2010

Chapter - 1
RETAILING: ROLE, RELEVANCE
AND TRENDS

Oxford University Press 2010

What is
retailing?
Retailing: a conclusive set of activities or
steps used to sell a product or a service to
consumers for their personal or family use
Retailer: a person, agent, agency,
company or organization instrumental in
reaching the goods, merchandise, or
services to the ultimate consumer
Countries that have enjoyed the greatest
economic and social progress have been
those with a strong retail sector
Over the last decade there have been
sweeping changes in the general retailing
business
Oxford University Press 2010

Retail industry and

Retail business is the largest private

economy

industry
Retail is ahead of finance and engineering
and contributes over 8 per cent of GDP in
the western countries
Over 50 of the Fortune 500 and about 25
of the Asian Top 200 companies are
retailers
Today, in some developed countries, retail
businesses have shares as large as 40 per
cent of the market
The significance of the retail business has
increased with
the fast growth in the
Oxford University Press 2010

Retail industry in India

Retail forecasts in India:
- the business in India is expected to reach Rs.
25,000
billion in 2008
- growth of organized retailing in both food and
non-food
segments
- proportion of sales through organized
retailing estimated,
increase by 8% in 2010
Emergence of organized retailing:
-India to have over 700 shopping malls by
2015
(400 operational
malls in 2010)
Oxford University Press 2010

Contd
50 million square feet of total mall space in

India, expected to sprout in six metros (Delhi

and Mumbai) and seven non-metros in 2008
40 per cent of the total mall space to be
concentrated in the National Capital Region

Oxford University Press 2010

Characteristics of
retailing
Direct end-user interaction
Sole point in the value chain to provide

platform for promotions

Sales at the retail level is generally in smaller
unit sizes
Location is a critical factor for retail business
Retail services are as important as core
products
A larger number of retail units as compared to
other members
present in the value chain
Oxford University Press 2010

Functions of retailing
Sorting
Breaking bulk
Holding stock
Additional services
Channel of communication
Transport and advertising functions

Oxford University Press 2010

Activities performed by
retailers
Arrange for assortment of offerings
Breaking quantity
Holding stock
Extending services

Oxford University Press 2010

Categorizing retailers
Number of outlets
Margin vs Turnover
Location
Size

Oxford University Press 2010

Trends in retail formats

Mom and Pop Stores and traditional kirana

stores
E-commerce
Department Stores
Discount Stores
Category Killers
Specialty Stores
E-tailers
Oxford University Press 2010

Relationships between
retailers and suppliers
The retail sector is critically dependent on its

suppliers for effective operation and the

profitability of its business
Several socio-economic and demographic
factors are considered by manufacturers for
identifying the ideal retail format mix for its
products
This is illustrated by the washing soap category
in India and the resultant retail format
preferences Oxford University Press 2010

Retail format mix adopted

by manufacturers for
Soap is targeted towards women as they are
soaps
the chief decision-makers in soap purchase.
Medicated positioning like germ killing and
anti-bacterial are marketed to families.
About 75% of the soaps are bought through
these following types of outlets.
Kirana stores
Pan-beedi shops
Department stores
Oxford University Press 2010

Retail strategy
Define the business of the firm in terms of

orientation towards a particular sector

Set short-term and long-term objectives with
regard to image and profitability
Identify the target market and direct efforts on
the basis of the customers characteristics and
needs
Decide the broad direction the company must
take in future
Implement
an
integrated
plan
that
encompasses all aspects of retailing like
pricing, location, and channel decisions
Evaluate and revise the plan depending on the
Oxford University Press 2010

Retail concepts
An essential part of the retailing strategy, the
retailing concept is essentially a customercentred, company-wide approach to developing
and implementing a marketing strategy. The
retailing concept covers four broad areas:
Customer orientation
Goal orientation
Value driven approach
Coordinated effort
Oxford University Press 2010

The changing face of retailing

Role of the Internet

- Does the size of the retail organization play a big

part in adapting easily to the Internet?
- Is the product/service offering also a prime
determinant of cyber retailing?
Branding through retailers
- How do retailers choose which brands to
display?
- Why do many new products fail in the
marketplace
- How can manufacturers maximize the brand
opportunity in a given retail outlet?
- What is future of Lifestyle Clustering?
- Vertical retail concepts are increasing in
popularity
Oxford University Press 2010

Drivers of success in the

retail
sector
Customers
are the driving force in change
Re-evaluating the marketing plan
Advanced education for retailers is critical for

growth
Strong visual recognition
The workplace challenge
Planning for success

Oxford University Press 2010