INTRODUCTION 2 RETAILING

A set of business activities involved in selling goods and services to consumers for their personal, family, or household use.

A retailer is a business that sells products and/or services to consumers for personal or family use.

Examples of Retailers . . .

Retail Shops . . .

The 10 Largest Retailers in the United States

Rank 1 Company Wal-Mart Main Emphasis Full-line discount stores, supercenters, membership clubs Home centers, design centers

Home Depot

Kroger

Supermarkets, convenience stores, jewelry stores Full-line discount stores, supercenters Membership clubs Supermarkets, drugstores Drugstores Home centers Department stores, specialty stores Supermarkets

4 5 6 7 8 9 10

Target Costco Albertsons Walgreens Lowes Sears Safeway

Retail Process

POS

ERP

Reports & Transactions

Retail formats in INDIA

India is fifth most attractive emerging retail market: a potential goldmine. Indian retail is largest among all industries(200 billion $).

10% - Indias GDP.

Growth rate 20-25%

8% - employment
Potentiality to grow 427 billion $ by 2010 and 637 billion $ by 2015.

Retail formats in INDIA

Malls Hyper marts / Super marts Specialty stores Convenience stores Discount stores Multi brand outlets

Department stores

Growth of Retail in INDIA

INDUSTRY REVOLUTION

Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

Post 1995 onwards saw an emergence of shopping centers. Emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume.

Manufacturers Perspective

Retailers are part of the distribution channel

A Typical Channel of Distribution

Manufacturer Retailer

Wholesaler

Final Consumer

The Retailers Role in the Sorting Process

Distribution Types
Exclusive: suppliers make agreements with one or few retailers that designate the latter as the only ones in a specified geographic area to carry certain brands or products

Intensive: suppliers sell through as many retailers as possible Selective: suppliers sell through a moderate number of retailers

Multi-Channel Retailing
A retailer sells to consumers through multiple retail formats
Web sites Physical stores

Retail Strategy
An overall plan for guiding a retail firm

Influences the firms business activities

Influences the firms response to market forces

Retail Strategy
Merchandise Assortments Location

Customer service

Store Design & Display

mixing

Pricing

Six Steps in Strategic Planning

1.
2.

Define the type of business

Set long-run and short-run objectives

3.
4. 5. 6.

Determine the customer market

Devise an overall, long-run plan Implement an integrated strategy Evaluate and correct

Pay Less + Expect More at Target

Aspects of Targets Strategy

Growth objectives
Appeal to a prime market Employee relations Innovation

Distinctive image
Focus

Commitment to technology
Community involvement Monitoring performance

Customer service
Multiple points of contact

Applying the Retailing Concept

Customer Orientation

Coordinated Effort
Retailing Concept

Retail Strategy

Value Driven Goal Orientation

Eliminating Shoppers Boredom

Customer Service

Activities undertaken by a retailer with the basic

goods and services
Store hours

Parking
Shopper-friendliness Credit acceptance Salespeople

How Retailers Add Value . . .

Doll is developed at manufacturer

Doll is developed in several styles

Doll is offered in convenient locations in quantities of one

Doll is featured on floor display

Doll can be bought on credit or put on lay away

Retail Mix
The combination of merchandise, assortment,
price, promotion, customer service, and store layout that best serves the segments targeted by the retailer.

Types of Competition
1. 2.
Intratype Competition Intertype Competition

3.

Divertive Competition

Intratype Competition

It occurs when two or more retailers of the same type, compete directly with each other for the same households.

Intertype Competition

It occurs when two or more retailers of a different type, compete directly by attempting to sell the same merchandise lines to the same households.

Divertive Competition

It occurs when retailers intercept or divert customers from competing retailers.

Market share or profit

Value-retail stores Early growth

On-line retailers
Single-brand stores

Single-price stores Factory outlet stores

The Retail Life Cycle

Accelerated development

Warehouse clubs
Fast food outlets Convenience stores Supermarkets Department stores

Profit

Market share

Maturity Decline

Malls (?)
Catalog Retailers General store

Future Changes in Retail

Nonstore Retailing

New Retail Formats

Integration of Technology Increased use of Private Labels

Heightened Global Competition

Non store Retailing

Direct Selling

Catalog Sales

E-tailing

New Retail Formats

Super centers

Recycled Merchandise Liquidators Retailers

Heightened Global Competition

Increased Rate of Change Greater Diversity Creation of New Retail Formats

Integration of Technology

Supply Chain Management

Customer Customer Management Satisfaction

M.RAVISHANKAR MBA(AB) 2008-2010 Batch NIFTTEA KNITWEAR FASHION INSTITUTE TIRUPUR

Oxygen024@gmail.com

FIN