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RETAIL

MANAGEMENT
1novv.ion
- What is all about Retail
1. Retail
2. Retailing
3. Retail Industry
4. Retailer
- Retailer
1. Characteristics,
2. Functions
3. Decision Variables
4. Rise of Retailer
- Back Ground Story
1. Evolution of Retail in India
2. Scenario of Retail in India
3. Key challenges of Retail in India
4. Indian Retailing is Moving
5. Economic Significance of Retail in India
6. GDP Growth
7. FDI in Retail
- Drivers of Retail
- keta|| 8eLall who cuLs off or sheds a small plece from someLhlng ketoll
meoos sellloq qooJs ooJ setvlces lo smoll poootltles Jltectly to coosomets
- keta|||ng a seL of buslness acLlvlLles LhaL adds value Lo Lhe producLs and
servlces sold Lo consumers for Lhelr personal or famlly use
- keta||er ls a buslness man LhaL sells producLs and/or servlces Lo consumers for
personal or famlly use
- keta||ers 8ellance 8eLall Pollday lnn Mcuonalds More Sublksha Spencers
- keta|| Industry 1he lndusLry whlch comprlses of all Lhe above ls called 8eLall
lndusLry lL ls one of Lhe fasLesL growlng lndusLrles ln lndla Comprlslng of
organlzed and unorganlzed secLors
#0vi
8eLall 1he word 8eLall orlglnaLes from a lrenchlLallan word 8eLaller
someone who cuLs off or sheds a small plece from someLhlng
lL lmplles a flrsL hand LransacLlon wlLh Lhe cusLomer occuples an
lmporLanL place ln Lhe world economy
keta|| conslsLs of Lhe sale of goods or merchandlse from a flxed
locaLlon such as a deparLmenL sLore bouLlque or klosk or by mall ln
small or lndlvldual loLs for dlrecL consumpLlon by Lhe purchaser
8eLall esLabllshmenLs are ofLen called shops or sLores
#0viin
8eLalllng seL of buslness acLlvlLles LhaL adds value Lo Lhe producLs and servlces
sold Lo consumers for Lhelr personal or famlly use lL lnvolves a dlrecL lnLerface
wlLh Lhe cusLomer and Lhe coordlnaLlon of buslness acLlvlLles from end Lo end
rlghL from Lhe ConcepL or deslgn sLage of a producL or offerlng Lo lLs dellvery and
posL dellvery servlce Lo Lhe cusLomer
ccotJloq to lblllp kotlet ketollloq locloJes oll tbe
octlvltles lovolveJ lo sellloq qooJs ot setvlces to tbe flool coosomets fot
petsoool ooo bosloess ose
#0viin 1nvv.,
- 8eLall lndusLry has broughL ln phenomenal changes ln Lhe whole process of
producLlon dlsLrlbuLlon and consumpLlon of consumer goods all over Lhe world
- ueveloped Lconomles are uslng Lhe reLall lndusLry as Lhelr vlLal growLh lnsLrumenL
- SLrengLh of Lhe reLall lndusLry lles ln lLs ablllLy Lo generaLe large volume of
employmenL
- uue Lo Lhe Clobal upward Lrend of reLall lndusLry lndla are also plannlng Lo Lap Lhe
enormous poLenLlal of Lhe reLall secLor
- opular brands llke anLaloons 8lg 8azaar rapldly lncreaslng Lhelr markeL share ln
Lhe reLall secLor
- Lmergence of sLrong reLall secLor can conLrlbuLe lmmensely Lo Lhe economlc
developmenL of any counLry
#0vi0
reLaller ls a person who purchases a varleLy of goods ln small quanLlLles from
dlfferenL wholesalers and sell Lhem Lo Lhe ulLlmaLe consumer Pe ls Lhe lasL llnk ln
Lhe chaln of dlsLrlbuLlon from Lhe producer Lo Lhe consumer
8eLaller ls a erson or genL or gency or Company or CrganlzaLlon who ls
lnsLrumenLal ln reachlng Lhe Coods or Merchandlse or Servlces Lo Lhe Lnd user or
ulLlmaLe Consumer
#0vi0 .nvv.0i.i..
asL lnk ln Lhe chaln of ulsLrlbuLlon
uevelops ersonal conLacL wlLh Lhe consumer
rovldlng Maxlmum saLlsfacLlon Lo Lhe consumer
ssembllng of Coods from varlous sources
rovldlng one sLop uesLlnaLlon
rovldlng servlces along wlLh Lhe goods offered
rovldlng large varleLy of goods
rovldlng deLalled lnformaLlon abouL Lhe producLs
#0vi0 vii,
lorm
1lme
lace
Cwnershlp
#0vi0 Ivn.ion.
reak|ng u|k
Merchand|se
Assortment
rov|d|ng serv|ce 1o
customers
no|d|ng
Inventory
Iunct|ons of
keta||ers
#i.0 o{ n0 #0vi0
1oday reLall has emerged as a separaLe funcLlon by lLself 1he envlronmenL
ln a large organlzed reLall sLore ls slgnlflcanLly dlfferenL from LhaL ln a
LradlLlonal mom and pop sLores
roxlmlLy of Lhe CusLomer ClosesL Lo Lhe consumer Pe ls Lhe flrsL
conLacL polnL LhaL Lhe consumer has
1he 8lse of Consumerlsm laces more knowledgably and demandlng
consumers 8uslness exlsL Lo saLlsfy needs and wanLs demand and
expecLaLlons have forced reLall organlzaLlons Lo change Lhelr formaLs
and producLs offerlngs
1he lnLroducLlon of Lhe rlvaLe abel 8eLall shelf space ls now of
prlme lmporLance
1echnology olnL of scale scannlng sysLems and Lhe barcode a
wealLh of lnformaLlon ls now avallable Lo Lhe reLaller Lnables Lo
undersLand cusLomer proflle producLs purchased
#0vi0 - I0.i.ion (viv0.
ustomer Serv|ce
Store Des|gn
and D|sp|ay
Merchand|se
Assortment
ommun|cat|on
M|x
Locat|on r|c|ng
keta||
Strategy
.ononi. ini{i.vn.0 o{ #0vi
lndla ls raLed as flfLh mosL aLLracLlve emerglng reLall markeL poLenLlal goldmlne
s per a reporL of kMC Lhe annual growLh of deparLmenL sLores ls esLlmaLed aL 24
8anked second ln a Clobal 8eLall developmenL lndex of 30 developlng counLrles drawn abouL by 1 kearney
8eLalllng ln lndla employs around 17 of populaLlon and promlses Lo employ more ln Lhe near fuLure
1he LxLraordlnary role played by reLall secLor Lhrough ouL Lhe world ln lncreaslng producLlvlLy of consumer
good and servlces are commendable lL ls becomlng a ma[or lndusLry by creaLlng mllllons of employmenL
opporLunlLles Lo people dlrecLly and lndlrecLly ls greaLly admlred
8eLalllng lndusLry becomlng one of Lhe mosL dynamlc secLors ln lndla wlLh numerous players [umplng lnLo
Lhls markeL makes lL compeLlLlve and lucraLlve
Crganlzed reLall secLor ls servlng Lhe needs and asplraLlons of hlgh end and mlddle class cusLomers
urban LmploymenL ccordlng Lo WC Lhe reLalllng wlll creaLe addlLlonal elghL mllllon [obs Lhrough
reLalllng ln lndla and wlll beneflL populaLlon by employlng urban youLh
8ural LmploymenL ConLracL farmlng ls Lhe new manLra of Lhe laLesL Lechnology and equlpmenL sclenLlflc
farmlng ls done by Lhe farmers
- lnlLlaLlon re 1990's uomlnaLed by manufacLurers 8aLa 8ombay uyelngCovL lnlLlaLlves
were MoLher ualry kendrlya 8andar
- ConcepLuallzaLlon 1990 2003 ure lay reLallers who enLered Lhe MarkeL anLaloons
lfe sLyle lnLernaLlonal 8rands Mc uonalds LLc
- 8eLall Lxpanslon 2003 2010 cLlve phase ln Lerms of growLh enLry of new players and
developmenL of new formaLs WlLh Lhe lul pollcy of 2003 2006 allowlng slngle brand
forelgn reLallers Lo Lake up 31 sLake ln [olnL venLure wlLh a local flrmLhe lnLervenlng years
saw Lhe enLry of several premlum brands(Cloolglo rmanl versace eLc) mosLly Lhrough
[olnL venLures
- CrowLh 2010 onwards 8eLall chalns are now ln more sLandardlzlng phase
v.[ ovnv o, o{ #0vi
;ovion o{ #0vi in 1nviv
- 8arLer ls consldered as Lhe oldesL form of reLall Lrade lL supporLed Lhe unlque needs of
Lhe counLry
- PaaLs Mandls and Melas have always been a parL of Lhe lndlan andscape
- 1he kvlC (khadl and vlllage lndusLrles) was seL up posL lndependence 1here were
abouL 7030 kvlC sLores across Lhe counLry MaharashLra 8ombay 8azaar whlch runs
sLores under Lhe label sahakarl 8andar and pna bazaars run a large chaln of co
operaLlve sLores
- lnlLlally sLep Lowards llberallzaLlon were Laken ln Lhe perlod of 1983 90
- Many resLrlcLlons on rlvaLe companles were llfLed by Lhe CovernmenL
- Larly 1990's Lhe lndlan economy slowly progressed from belng sLaLe led Lo becomlng
My lrlendly"
.0nvio o{ #0vi in 1nviv
- fLer posL llberallzaLlon economy had opened up and a new large mlddle class wlLh
spendlng power had emerged furLher shaplng Lhe reLall secLor
- Lmergence of Lhe modern lndlan housewlfe managlng home and work led Lo a demandlng
for more producLs and servlces beLLer shopplng amblence more convenlence and one
sLop shopplng whlch fuelled Lhe growLh of a deparLmenLal sLores super markeLs and oLher
speclalLy sLores
- 8eLalllng ls Lhe mosL acLlve and aLLracLlve secLor and lL ls aL an lnLresLlng crossroads
- 1he emergence of reLalllng ln lndla has more Lo do wlLh Lhe lncreased purchaslng power of
buyers especlally posLllberallzaLlon lncrease ln producL varleLy and lncrease ln economles
of scale wlLh Lhe ald of modern supply and dlsLrlbuLlons soluLlon
- Whlle Lhe reLalllng lndusLry lLself has been presenL slnce ages ln our counLry lL ls only Lhe
recenL pasL LhaL lL has wlLnessed so much dynamlsm
- 1he reLall sales are aL Lhe hlghesL polnL ln hlsLory and new Lechnologles are lmprovlng reLall
producLlvlLy Lhough Lhere are many opporLunlLles Lo sLarL a new reLall buslness reLallers
are faclng numerous challenges
v.[ ovnv o, o{ #0vi
- 1radlLlonally reLalllng ln lndla can be Lraced Lo
1he emergence of Lhe nelghborhood 'klrana' sLores caLerlng Lo Lhe convenlence of
Lhe consumers
Lra of governmenL supporL for rural reLall lndlgenous franchlse model of sLore
chalns run by khadl vlllage lndusLrles Commlsslon
- 1980s experlenced slow change as lndla began Lo open up economy
- 1exLlles secLor wlLh companles llke 8ombay uyelng 8aymonds S kumars and Craslm
flrsL saw Lhe emergence of reLall chalns
- aLer 1lLan successfully creaLed an organlzed reLalllng concepL and esLabllshed a serles
of showrooms for lLs premlum waLches
- 1he laLLer half of Lhe 1990s saw a fresh wave of enLranLs wlLh a shlfL from
ManufacLures Lo ure 8eLallers lor eg lood World Subhlksha and nllglrls ln food and
lMCC laneL M and Muslc World ln muslc Crossword and lounLalnhead ln books
- osL 1993 onwards saw an emergence of shopplng cenLers
malnly ln urban areas wlLh faclllLles llke car parklng
LargeLed Lo provlde a compleLe desLlnaLlon experlence for all segmenLs of socleLy
- Lmergence of hyper and super markeLs Lrylng Lo provlde cusLomer wlLh 3 v's value varleLy
and volume
- Lxpandlng LargeL consumer segmenL 1he SacheL revoluLlon example of reachlng Lo Lhe
boLLom of Lhe pyramld
- L year end of 2000 Lhe slze of Lhe lndlan organlzed reLall lndusLry ls esLlmaLed aL 8s 13000
crore
vv0 o{ #0vi 1nvv., i. .nvnin
Mom and Pop Store
To Today's RetaiIer
1nvivn #0vi i. ^o;in
1rad|t|ona|]ervas|ve
keach
Government
Supported
n|stor|c]kura|
keach
Modern Iormats]
Internat|ona|
Source of
Lnterta|nment
Ne|ghborhood
Stores]onven|ence
Ava||ab|||ty] Low
osts ]
D|str|but|on
Shopp|ng
Lxper|ence]Lff|c|ency
1nvivn #0vi {v..
1ota| keta|| 8s2000000 core (8s20000 bllllon)
Modern reta|| s|ze 8s164000 core (8s1640 bllllon) 82 per cenL of
LoLal reLall
Lmp|oyment |n modern reta|| 10 dlrecL employmenL ln reLall and
100 lndlrecL employmenL per 8s1 core (8s10 mllllon) sales
1ota| emp|oyment |n modern reta|| 163 mllllon
LsLlmaLed lndlrecL employmenL ln modern reLall 163 mllllon
Dependence on Modern reta|| Cver 18 mllllon people
#0vi 2010: In0 .nv0 o{ Inin. o .on0
Clobal CompeLlLlon global and educaLed cusLomers demandlng more
producL lnformaLlon and llmlLed brand loyalLy
CusLomer ls Lhe one who drlves sales and ln effecL Lhe reLall operaLlon
1echnology wlll play a key role ln creaLlng fuLure successes
CollaboraLlng wlLh suppllers vendors and uslng Lechnology Lo empower
cusLomers may be Lhe new buslness reallLles for reLallers
8eLallers challenge ls Lo choose Lhe cusLomer proflle whom Lo caLer eLc
1he envlronmenLal changes occurrlng wlll force Lhe reLallers Lo re
examlne and reLhlnk Lhelr compeLlLlve sLraLegles
IT - o.n
- 1he Cu growLh raLe ls Lhe mosL lmporLanL lndlcaLor of economlc healLh
- lndlan 8eLall has a conLrlbuLed of 14 Lo Lhe naLlonal Cu
- Crganlzed reLalllng ls pro[ecLed Lo grow aL Lhe raLe of 2330 pa and ls esLlmaLed Lo reach
an asLoundlng 8s 100000 Core by 2010
- 1 kearney has ranked lndla as Lhe 2
nd
most attract|ve reLall markeL
- 1he 8Ml lndla 8eLall 8eporL for Lhe LhlrdquarLer of 2010 forecasLs LhaL Lhe LoLal reLall sales
wlll grow from uS$ 333 bllllon ln 2010 Lo uS$ 3432 bllllon by 2014
- ccordlng Lo a Mcklnsey Company reporL LlLled 1he CreaL lndlan 8azaar Crganlzed 8eLall
Comes of ge ln lndla organlzed reLall ln lndla ls expecLed Lo lncrease from 3 per cenL of Lhe
LoLal markeL ln 2008 Lo 14 18 per cenL of Lhe LoLal reLall markeL and reach uS$ 430 bllllon by
2013
II1 in #0vi
- lul ls a meLhod of allowlng exLernal flnance ln Lo an economy
- lul also faclllLaLes lnLernaLlonal Lrade and Lransfer of knowledge skllls and Lechnology
- lndla ls fasL emerglng as a key desLlnaLlon for lul
- 1 kearney Lhe wellknown lnLernaLlonal managemenL consulLancy recenLly ldenLlfled lndla as
Lhe 'second mosL aLLracLlve reLall desLlnaLlon' globally from among LhlrLy emergenL markeLs
- lL has made lndla Lhe cause of a good deal of exclLemenL and Lhe cynosure of many forelgn
eyes
- conLrlbuLlon of 14 Lo Lhe naLlonal Cu and employlng 7 of Lhe LoLal workforce ln Lhe
counLry
- 1he reLall lndusLry ls deflnlLely one of Lhe plllars of Lhe lndlan economy
- lul up Lo 31 per cenL under Lhe CovernmenL rouLe ls allowed ln reLall Lrade of Slngle 8rand
producLs accordlng Lo Lhe ConsolldaLed lul ollcy documenL.
-
1nvivn #0vi i. ^o;in
CreaLe awareness
MeeL cusLomer expecLaLlons
8ack end managemenL
ConsolldaLlon
0, .nv0n0. o{ #0vi in 1nviv
ocaLlon
Merchandlse
rlclng
1argeL udlence
Scale of CperaLlons
Ii;0. o{ #0vi
Soclo Lconomlc facLors
Changlng lncome roflles
1he ge facLor
1he changlng role of Women and Lvolvlng lamlly SLrucLure
1he changlng consumpLlon 8askeL
lncreased CredlL lrlendllness
Ceographlcal ulsperslon of MarkeL oLenLlal
.on.v.ion
The greater availability of personal credit and a growing vehicle population to improve mobility also
contribute to a trend towards annual retail sales growth of 11.4 per cent.
With the expanding middle and upper class consumer base, there will also be opportunities in ndia's
tier and cities.
BM further predicts that sales through MGR outlets will increase by 154 per cent to reach US$ 15.29
billion by 2014. This is a consequence of ndia's dramatic, rapid shift from small independent retailers
to large, modern outlets.
ndia, its forecast market share of 13.9 per cent in 2010 is expected to increase to 14.3 per cent by
2014.
ndia has been ranked as the most attractive nation for retail investment among 30 emerging markets
by the US-based global management consulting firm, A T Kearney in its 8th annual Global Retail
Development ndex (GRD) 2009.
ndia remains among the leaders in the 2010 GRD and presents major retail opportunities
Established retailers are tapping into the growing retail market by introducing innovative store formats.
Spencer's Retail, More (owned by Aditya Birla Group) and Shoppers Stop (owned by K Raheja Group
#0o.
According to a report titled 'ndia Organized Retail Market 2010', published by Knight Frank ndia in
May 2010 during 2010-12, around 55 million square feet (sq ft) of retail space will be ready in
Mumbai, national capital region (NCR), Bangalore, Kolkata, Chennai, Hyderabad and Pune. Besides,
between 2010 and 2012, the organized retail real estate stock will grow from the existing 41 million sq
ft to 95 million sq ft.
Foreign direct investment (FD) inflows between April 2000 and April 2010, in single-brand retail
trading, stood at US$ 194.69 million, according to the Department of ndustrial Policy and Promotion
(DPP).
According to a market research report published in June 2008 by RNCOS titled, 'Booming Retail
Sector in ndia', organized retail market in ndia is expected to reach US$ 50 billion by 2011
Number of shopping malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to
2015
Apparel, along with food and grocery, will lead organized retailing in ndia.