1.BASICS OF RETAILING_1 (1).ppt

8/14/2019 1.BASICS OF RETAILING_1 (1).ppt

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RETAILINGIntroduction


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What is retailingRetail ing is - sale of goods and services to final consumer last stage in the distribution process, while

wholesaling is an intermediate stage last link in the Supply Chain- connecting the bulk

producers of the commodities to the finalconsumers.

Covers diverse products inlcuding services andleisure


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Who is a retailer?

Some one who does not effect anysignificant change in the product exceptbreaking the bulk.

Final stock point who makes product orservice available to the consumerwhenever required

Offers value proposition to consumer byeasy availability of the desired product inthe desired sizes at the desired times


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Distribution channel and SortingProcess


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Top Ten Retailers WorldwideRank Retailer No of stores

ownedSales in FY-00 US$

Millions

1 Wall-Mart Stores Inc. (USA) 4178 $180,787

2 Carrefour Group (France) 8130 $61,047

3 The Kroger Co. (USA) 3445 $49,000

4 The Home Depot, Inc. (USA) 1134 $45,738

5 Royal Ahold (Netherlands) 7150 $45,729

6 Metro AG (Germany) 2169 $44,189

7 Kmart Corporation (USA) 2105 $37,0288 Sears, Roebuck and Co.

(USA)2231 $36,823

9 Albertson's, Inc. (USA) 2512 $36,726

10 Target Corporation (USA) 1307 $36,362


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Retail formats

In-Store Retailers operate fixed point-of-sale locations located and designed to attract a high volume

of walk-in customers

Non-Store Retailers reach out to the customers at their homes or

offices.


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Major formats of In-StoreRetailing

Format Description The Value Proposition

Branded Stores Exclusive showrooms either owned orfranchised out by a manufacturer.

Complete range available for a givenbrand, Certified product quality.

Speciality Stores Focus on a specific consumer need,carry most of the brands available.

Greater choice to the consumer,comparison between brands possible

Department Stores Large stores having a wide variety ofproducts, organized into differentdepartments, such as clothing, housewares, furniture, appliances, toys, etc.

One stop shop catering to variedconsumer needs.

Supermarkets Extremely large self-services retailoutlets.

One stop shop catering to variedconsumer needs.

Discount Stores Stores offering discounts on the retailprice through selling high volumes andreaping the economies of scale.

Low prices.

Hyper-mart Larger than a Supermarket, sometimeswith a warehouse appearance,

generally located in quieter parts of thecity

Low prices, vast choice availableincluding services as cafeterias.

Convenience Stores Small self-service formats located incrowded urban areas.

Convenient location and extendedoperating hours.

Shopping Malls An enclosure having different formatsof in-store retailers, all under one roof.

Variety of shops available close to eachother.


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Non-store retailers

Reach out to the customers at their homes oroffices.

Use internet for communication (also known as

e-tailing ) Business by broadcasting of infomercials Broadcasting and publishing of direct-response

advertising publishing of traditional and

electronic catalogues Door-to-door solicitation and temporary

displaying of merchandise (stalls)


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Indian Scenario

For Indian retailing, things started to changeslowly in the 1980s, when India first beganopening its economy

Textiles sector (with companies like BombayDyeing, Raymond's, S Kumar's and Grasim) wasthe first to see the emergence of retail chains

Later on, Titan, maker of premium watches,

successfully created an organized retailingconcept in India by establishing a series ofelegant showrooms.


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Indian scenario. latter half of the 1990s saw a fresh wave of entrants in

the retailing business, like - FoodWorld, Subhiksha andNilgiris in food and FMCG; Planet M and Music World inmusic; Crossword and Fountainhead in books

As of the year ending 2000 the size of the Indianorganized retail industry was estimated at around Rs.13,000 crore

Retail industry is gathering momentum and is expectedto grow by 30 per cent in the next 5 years and to touchRs.45,000 corres


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Organised retail industry in India

Segment Market Size (Rs.Crore) Textiles and clothings 4050

Jewellery 2,000-2,500

Consumer Durables 1500 Footwear 1,300-7,500

Food and personal care 1000

Non-Store retail 900 Luggage, watches andtyre 500

Books and music 390


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Retailing formats in IndiaRetailer Current Format New Formats. Experimenting With

Shoppers' Stop Department

Store

Quasi-mall

Ebony DepartmentStore

Quasi-mall, smaller outlets, adding foodretail

Crossword Large bookstore Corner shops

Piramyd DepartmentStore

Quasi-mall, food retail

Pantaloon Own brand store Hypermarket

Subhiksha Supermarket Considering moving to self service

Vitan Supermarket Suburban discount store

Foodworld Foodsupermarket

Hypermarket, Foodworld express

Globus DepartmentStore

Small fashion stores

Bombay Bazaar Aggregation of Kiranas

Efoodmart Aggregation of Kiranas

Metro Cash and carry

S Kumar's Discount store


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Without retailing we have livedandwe are living

then why this sudden fad for RETA IL ING !!


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Key drivers of retailing

Benefits to customers Benefits to manufacturer

Benefits to wholesaler Benefits to retailer Benefits to Government

Potential employment opportunities


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Key Terms to know

Exclusive distribution Intensive distribution

Selective distribution


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Distribution channel comparison

Factor Exclusive Intensive Selective

No. of buyers Medium Highest Lowest

Potential for conflict Medium Highest Lowest

Suppliers support Highest Medium Lowest

Suppliers sales Lowest Highest Lowest

Retailers assortment Medium Highest Lowest

Product image Highest Medium Lowest

Competition Medium Highest Lowest


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Marketing concept of retailing


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What is retail strategy?

Over all plan to guide a retail firm Aligning retail firm to competition, market

forces and economy Strategic planning is imperative for the

success of any retail firm.


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Steps in Strategic Planning

1. Define type of business2. Set long run and short run objectives for

sales/profit/market share/image etc

3. Determine customer market (target customer)4. Long run plan to direct firm and employees5. Implement integrated strategy combining store

location, product assortment, pricing andadvertising and displays6. Review, evaluation and correction of strategy


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Total Retail Experience- th e WOW! facto r

Parking to check-out Pleasing setting Colour schema Music to pamper senses Floor arrangement, displays Staff assistance, courtesies, help,

guidance Shopping comfort


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Customer Service

Impacts total retail experience Store hours parking access, shopper friendliness store layout, credit acceptance level and caliber of salesperson

gift wrapping, rest room availability, employeepoliteness, handling special orders, deliverypolicies, customer follow up etc


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Relationship retailing

Establish and maintain long-term bonds Customer satisfaction, service

Respect customer check list Hard to lure new customers, hence retain

the one you have

Win-win approach strategy


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Retailing Road ahead.

A g row ing po pu lat ion ,gro w ing inco m e levels ,gro w ing m idd le-c lass

fam ilies , a you ngw orkforce and zoo m ingco nsu m er con f idenc e i sfu el l in g th e retai l secto r


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Catch i t yo un g!Go w i th th e gro w th !!


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Current Scenario CONSOLIDATION Year is 2008 is an inflection point for modern retail in

India Rising costs of real estate was one of the major

stumbling blocks for retail to develop For the first time in many years, we are witnessing fall in

real estate costs and retail business is becoming moreand more viable

People costs and operational costs are also stabilizing Signs of consolidation are distinctly visible for modern

retail business in India


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Questions for a quick recap

What is retail strategy? How could it beutilized by a small bouquet seller?

What is retailing concept? Define the term total retail experience

Give five suggestions for a new retailer. (Range of merchandise, Convenience of shopping, Time to travel,

Socio-economic background and culture)

Guide a small web-based retailer onrelationship retailing.


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MODERN RETAIL - Its impact on growth

As modern retail grows, so will be its impact on domestic growth By 2012 modern retail will directly employ over 1.6 million people at shop

floors Most of them come from lower income groups and lesser educational

backgrounds, who cannot employed in other sectors Retail will create millions of more jobs in support services like security, mall

and facilities management, construction and supply chains McKinsey & Co point out that for the government level, modern retail will

help improve indirect tax collection by 1% add to GDP Growth Play a role in controlling inflation

As modern retailers acquire size and scale, plays a far more decisive role inthe countrys economic growth and development

IT, Hospitality, Multiplexes and Real Estate enjoy fiscal incentives but notmodern retail sector

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