Types of Retail Formats

Yashi Vajpeyi

Introduction
The word retail has its origin in French word retaillier and means to cut a piece or to break bulk. Retailing is the sale of goods and services to the ultimate consumer for personal, family or household use. According to Kotler: Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use

Classification of Retail Store Store Based

Form of Ownership Independent Ret. Chain Ret. Franchise Leased Departments Merchandise Offered Paan Kiosks Convenience outlets Kirana Outlets Exclusive outlets Multi- Brand Outlets Department Stores Supermarkets Hypermarkets

Consumer Co-op.

Discount stores

Non-Store Based
Direct Selling Mail Order Telemarketing

ATMs

Basis of Ownership Independent Retailer Proprietor run show

One to One rapport with the customer

More near to customer Doesnt have economies of scale Chain Retailer Chain of outlets representing same category Same owner : UBS, Westside, Planet M, Wills Sport Economies of scale in buying and promotions Difficult to give local preference

Franchisee Contractual agreement between Franchisee and Franchiser Franchisee conducts business under the name of Franchiser Franchisee has to follow the standards of conducting business by the Franchiser Standards : Retail Layout, Customer service, Merchandise mix Franchisee has to pay certain percentage of sales as return to Franchiser

Leased Outlet Space in the Department store, or an outlet in the mall may be acquired on lease Shop owner here is independent of managing his business in his own way Good way for department store to increase their product offering Space is available on lease at Airports, Railway stations Shop-in-shop system runs on lease basis Shop-in-shop helps to penetrate the market

Shop-in-shop displays fraction of merchandise sold in their anchor stores

Consumer Co-operatives
Retail institution owned by its member customer Aim is to provide essential commodities at reasonable price

Social objective rides over profit objective

Being Govt. body gets special discount Kendriya Bhandar operates network of 112 stores out of which 102 are self service stores. Apna Bazaar in Mumbai, Super Bazaar in Delhi. Not doing well as they were more relevant in scarce economy

Many centers bleeding with losses because of poor management and corruption

Based on Merchandise
Paan Kiosks Backbone of Indian distribution system Apart from traditional paan and tobacco products, stocks cold drinks and confectionery products Off late has started stocking biscuits, beverages and other convenience product Wider and deeper penetration in Indian landscape

Convenience Stores Haphazard town planning has in fact assisted in the growth of this category of outlet These serve as locality outlet selling perishables and impulse and convenience category items Like Milk, Bread, dry cell, shoe polish, biscuits, detergents, chips, cold rub, toothbrush, tea

These may range from 50 sq. ft to 500 sq. ft

Kirana stores
Size may be the same as Convenience stores Basically stocks foodgrains, maida, besan etc. Also stocks convenience items like toothpaste, detergents noodles Exclusive Outlets Outlets which exclusively stocks a single brand Provides exclusivity to the brand Located in shopping markets and malls Generally popular in shopping products (Nike) and Durables (Videocon Plaza, Onida Arcades) Successful in Major Metros

Multi-brand Outlets (MBO)

For shopping products and durables

It provides choice and aids comparison shopping

Specialty Stores They are characterised by narrow product line with deep assortment

Specialty stores generally are of apparel, jewellery fabrics, sports goods, furniture etc.
Shagun

Department Stores
Carry several product lines Typically clothing, home furnishings, household goods Each line is operated as separate department managed by specialized buyers and merchandisers Countering threat of discount stores by promotional pricing Stepping up the use of store brands Some are adding web selling Mark & Spencer has collaborated with Amazon.com Westside, Shoppers Stop, Globus, Pantaloons

Discount stores
Carry standard merchandise sold at lower price Very low margin and higher volumes are key consideration Cut expenses by offering few services Operates in warehouse type of facility

Margin Free Largest retail chain 214 outlets within Kerala Every month opens 12 outlets, turnover 600 crores Offers upto 40% discount There are 12 lakh margin cardholders in Kerala

Supermarkets

Relatively large, low-cost, low-margin, High volume self service operation

Serves consumers total need of food and household products

Size varies from 8,000 to 20,000 sq.ft

Concept of EDLP (Everyday Low pricing) ASDA, Tesco, Nilgiris, Foodworld, Subhiksha

Subhiksha started from Chennai in 1997 has 143 stores, Turnover-235 cr.
Caters to home delivery around 16,000 delivery every month

Aim is to set outlet every 2 kms. in residential area having avg. monthly income more than Rs 4000

Hypermarkets They are the giant supermarkets Hypermarket concept was pioneered by Carrefour in France Other facility on the site includes cafeteria, bank and petrol stations, pharmacies They are generally located on the outskirts of the city Walmart, Big Bazaar

Wholesale Club (Cash and Carry)

They are meant for selling to traders in bulk

Ex: Metro of Germany, a world leader in wholesale business, started in 1967, employes 70,000 people

First outlet was opened in India at Bangalore in 2003

Primary Customer groups are HoReCa Hotels, Restaurants, Catering Any organisation which purchases anything from detergent to office equipments Here customer needs to hold a membership card Follows Self-Service for any buyers Household customer can also buy in bulk

Category killers Toys R Us, Loft footwear (Mumbai) Loft stocks about 100 brands, has facilities like pedicure, cobbler, jogging track, 15,000 socks, shoe shiners, insoles, laces, shoe cleaners