RETAIL MANAGEMENT, 2/E

Chetan Bajaj, Director, Sona School of Management, Salem, Tamil Nadu Rajnish Tuli, Director, Millward Brown, South East Asia, Singapore Nidhi Varma Srivastava, Director, Millward Brown, India
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Chapter - 2 RETAIL ORGANIZATION

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The changing structure of retailing

All dynamic developments in retailing (department stores,
warehouse clubs, and hypermarkets) are responses to a changing environment Changing customer demand, new technologies, intense competition, and social change create new opportunities even as they shake up existing business The Internet and web technologies have itself created a myriad of opportunities for web based business model of retailing This has created competition for the retailer in order to maintain and grow its share of market and compete within its band of retailers For e.g.: Bharat Petroleum - Making A Difference through Innovative Retailing
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Theories of structural change in retailing

Retailing has always been a dynamic industry. There are certain theories of how firms evolve and change the industry in the process. They are: The wheel of retailing The dialectic process Natural selection

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The wheel of retailing

It was proposed by Malcomb McNair at Harvard University. It is basically a theory of cyclical or circular development. The wheel of retailing concept describes how retail institutions transform during their evolutionary life cycles.

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The dialectic process

This second theory holds that retailing evolves through a dialectic process- the blending of two opposite store types into a superior form. For example- Fabindia and Nalli offer both a wide array of customer services and a broad assortment of specialized merchandise.

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Natural selection
According to this theory, retail stores evolve to meet changes in the micro-environment. The retailers that successfully adapt to technological, social, demographic, economic, and political changes are most likely to grow and prosper.

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Classification of retail units

Bases for classification of retail units Nature of ownership Operational structure Length and depth of merchandise Nature of service Types of pricing policy Types of retail location Method of customer interaction

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Retailers classified on the basis of ownership

Sole proprietorship

Partnership
Joint venture Limited liability company (public and private)

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Retailers classification on the basis of operational structure

Independent retail unit Retail Chain Franchise

Size and structural arrangements in franchising: 1. Manufacturer-retailer 2. Wholesaler-retailer franchise 3. Service sponsor-retailer Leased departments Co-operatives

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New areas

Leased department or Shop-in-shop Co-operative outlets Largest consumer cooperative society Major initiatives Benefits To Consumers Target market Revised positioning

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Types of retail location

Retailers at freestanding locations Retailers in business-associated locations Retailers in specialized markets Retailers at airports

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Variety of merchandise mix

Departmental stores

For e.g: Ebony, Globus, Lifestyle, Pantaloon, Shoppers Stop, and Westside Discount Stores For e.g.: S Kumars S-MART Discount Chain, Margin Free Market, and Subhiksha Specialty Stores For e.g.: Footware - Speciality Store Khadder- Khadi Specialty , Gautier , Vivek , and Titan Hypermarkets For e.g. : Pantaloons Big Bazaar ,Giant, and FoodWorld
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Methods of customer interaction

Retail transactions are carried out through face-to-

face interaction between retailers and customers in the case of retail stores. There are certain methods: Store retailers like candles for sale during a Diwali mela at Dilli Haat. Non-store retailers Electronic retailing like Internet and Mobile Association of India (IAMAI)

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Catalogue and direct mail retailing

Factors for the success of catalogue retailing:

- Convenience: customers can shop when it is convenient for them in accordance to their schedule - Time saving: one save resources on account of time and travelling cost and parking problems - Information: relevant product information is available in detail - No time limits: no undue pressure to buy unlike as in retail store shopping For example FABMALL --- E-RETAILER

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Direct selling
Person-to-person selling:
- Party-plan or group presentations - Multilevel network

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Television shopping
Television shopping is retail format where existing and

prospective customers watch a TV programme demonstrating a product and then place an order for the same by telephone, e-mail or Internet Three types of television shopping: cable channels meant for shopping, infomercials, and direct-response advertising shown on TV (For example: Asian Sky Shop, TSN, TVC, TSNM)

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Vending machine retailing

A form of non-store retailing where products or services

are placed in a machine and are dispensed to customers when they deposit cash or use plastic money (credit or debit card) Vending machines vending machines offer consumers greater convenience 24 hours a day, and have replaced many services formally requiring a human interface

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