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By : Er. Deg. Prof. Lokesh Mahajan Dated : 26/8/2011 30/8/2011 NIFT, Kangra
8/26/2011 Er. Deg. Prof. Lokesh Mahajan NIFT, Kangra
Index
Overview of Retailing Environment
Definition, History & evolution , Size of Indian Retail Current Scenario & Emerging Trends
Store Formats
Type of retailers , Types of ownership , Non store Retail Types of retailers on the basis of ownership Service price & Merchandise.
Index
Store Organization
Organogram / Structure of various retail formats
NIFT, Kangra
NIFT, Kangra
Definitions
Retailing: is the set of business activities that adds value to product & services sold to consumers for their personal or family use. Retailer: is a business that sells products or services to consumers for their personal or family use. Distribution Channel: is a set of firms that facilitate the movement of products from point of production to POS to ultimate consumer.
8/26/2011 Er. Deg. Prof. Lokesh Mahajan NIFT, Kangra
Retailing in India.
Retail is the new buzzword in India. The global Retail development Index has ranked India first, among the top 30 emerging markets in the world. It is believed that India has the potential to deliver the fastest growth over the next 50 years. While barter would be considered to be oldest form of retail trade, since independence , retail in India has evolved to support the unique needs of country, given its size and complexity
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Retail in India has evolved to support the unique needs of our country, given its size and complexity Haats, Mandis and Melas have always been a part of the Indian landscape. They still continue to be present in most parts of the country and form an essential part of life and trade in Various areas. The PDS (Public Distribution System) would easily as the single largest retail chain existing in the country. The evolution of the PDS of Grains in India has its origin in the rationing system introduced by the British during world war II
The system was started in 1939 in Bombay and subsequently extended to other cities and towns. the system was abolished post war but however attaining independence India was forced to reintroduce it in 1950. There was rapid increase in the ration shops ( being increasingly called the Fair Price Shop or FPSs) The Canteen Stores Department and the Post Offices in India are also among the largest network of outlets in the country reaching population across the country.
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The Khadi & Village industries (KVIC) was also set up post independence. The cooperative movement was again championed by the government.
India's Largest retail Chains: 1. 2. 3. PDS: 463,000 Post offices: 160,000 KVIC: 7,000
4.
CSD Stores:3,400
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In the past decade, the Indian marketplace has transformed dramatically. However from the 1950,s to the 80,s, investment in various industries was limited due to low purchasing power in the hands of the consumer and the governments policies favoring the small scale sector. The first attempts at organized retailing were noticed in the textiles sector. One of the pioneers in this field was Raymonds which set up stores to retail fabric.
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Raymonds distribution network today comprises 20,000 retailers and over 256 exclusive showrooms in over 120 cities of the country Other textile manufacturing who set up their own retail chains wee Reliance- which set up Vimal showrooms and Garden Silk Mills, which set up Garden Vareli showrooms.
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Established formats Kirana shops Convenience/ department stores PDS/ fair price shops Pan/ Beedi shops
Emerging Formats Exclusive retail outlets Hypermarket Internal retail Malls / Specialty Malls Multiplexes Fast food outlets Service galleries
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2.
the increase in disposable income in India. The average middle class family's disposable income rose by more than 20% between 1999-2003. Diminishing difference between Rural and urban India: Rural India accounts for over 75% of India population and this in itself offers a tremendous opportunity for generating volume driven growth. Tax benefit. In year 2002-03 LIC sold 50% of its policies in rural India. Same BSNL also sold its 50% connection in small towns .
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0 2%
4% 4% 7%
1% 1% 2% Food & Grocery Clothing Durables Jewelry & Accessory Home Furnishing Health & beauty Medical Services 77% Footwear Books & Music
NIFT, Kangra
NIFT, Kangra
Store Formats
NIFT, Kangra
Types Of Retailers
Retail Formats Types
Food Retailer
Nonstore Retailers
Department Stores
Drug store
Super Market
Electronic Retailers
TV home Shopping
Supercenters
Vending M/c
Specialty Stores
Off-Price Retailer
Warehouse Clubs
Direct selling
Food Retailers
Super Markets: is self service food stores offering groceries, meat & produce with limited sales of non food items such as health & beauty. Eg. More, Reliance fresh Supercenters: is fastest growing retail category & large stores ( 150,000 220,000 sq.ft.) that combine super market with full-line discount stores. Eg. Bharti Wal-Mart. Hypermarkets : are also large (100,000 300,000 sq.ft.) combination 60-70% of food & 30-40% of general merchandise. Eg. Hypercity , Bigbazar, Star Bazar etc. Warehouse Clubs: are retailers that offers a limited & irregular assortments of food & general Merchandise with little service at low price for ultimate consumers. Eg. Costco
8/26/2011 Er. Deg. Prof. Lokesh Mahajan NIFT, Kangra
Cont.
Category Specialist : are big box discount stores that offers a narrow but deep assortment of merchandise. Eg. Pantaloon Extreme Value Retailer : are small, full line discount stores that offer a limited merchandise assortments at very low price. Eg. Dollar store. Off Price Retailers : offer an inconsistent assortment of brand name merchandise at lowest prices. Eg. Loot
NIFT, Kangra
Cont
Home/TV shopping: is a retail format in which customer watch TV programme that demonstrate merchandise & then place order on telephone. Eg. Asian sky shop. Vending Machines: is nonstore format in which merchandise or service are stored in a machine and dispensed to customer when they deposit cash or use card. Eg. Pepsi Vending M/c , Bislery Veda
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Types of Ownership
Its the 4 type of retail format. Previous formats based upon merchandise & services they sell but this way based upon to classify retailers by their ownership.
Independent, Single store format: Corporate Retail Chains: is a company that operates multiple retail units under common ownership & usually has centralize decision making for defining & implementing strategies. Eg. ABG, Reliance Franchising: is contractual agreement between a franchisor & franchisee.
NIFT, Kangra
NIFT, Kangra
NIFT, Kangra
6 Ps
Promotion
Product
Place
Retail Mix
Price People Physical evidence
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Target Market
Presentation
Place
Price
Product Offering
The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.
Public Relations
Publicity
Sales Promotion
Location
Location Decisions Freestanding Store
Mall
Shopping Center
Disadvantages
Expensive leases Failure of common promotion efforts Lease restrictions Anchor store domination Direct competitors
Price
Low Price High Price
Good Value
Quality Image
Trading Up
Retail Strategy
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RETAILING STRATEGY-PRICING
How much mark-up?
Allow for Shrinkage and discounting OR Use Everyday Low Pricing Benchmark or Signpost Items items used by consumers as an index of overall price level of the store I.e. How much do they sell T shirts for?
Freestanding Store
Strip Location
Destination stores Power centers
Multichannel Retailers
Unique Merchandise
Vendor Relations Customer Service Multiple Source of Advantage
Growth Strategies 8/26/2011 Er. Deg. Prof. Lokesh Mahajan NIFT, Kangra