Business model in retail

8/7/2019 Business model in retail

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Business model in retail


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Business chooses to server its customers

and stakeholders

Dictate the product/services Pricing policy, communication strategy

Size and look

Location of his retail store.


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Classification of Retail formats

Classification

Store base

retailing

Non-store

Retailing

Service

Retailing

Ownership Merchandise


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Basis of Ownership

Independent retailer

Chain retailer

Franchise Leased departments

ConsumerCo-operatives


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Independent retailer

Owns and operates

only one retail outlet

Family members

Passed from

generation to

generation

Eg local baniya/kirana/panwala

Amarsons, Premsons


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Chain retailer

Two or more outlets

operated under

common ownership

Similarity in the

merchandise offered,

the ambience,

advertising and

promotions

Eg- Van Heusen,

Food World, Music

world


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Advantages

Bargaining power with the suppliers

Cost effectiveness

Disadvantage-not possible to take into account

regional or rural and urban preferences.

- Attention to each of the storesbecomes fairly restricted.


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Franchising

Contractual agreement between the

franchiser and the franchisee.

Conduct business under an establishedname as per a particular business format

Product or trade mark franchise

Abusiness format franchise


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Product franchise

Sells the products

and operates under

the franchisers name.


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Leased departments

Shop-in-shops

Section of a department in a retail store is

leased leased department Expand product offering to the customers


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Consumer co-operatives

Owned by its member customers

May rise because of dissatisfied

consumers whose needs are not fulfilledby the existing retailers.

Example Sahakari Bandar


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Basis of the Merchandise

offered Convenience sores

Super markets

Hyper market Specialty stores

Departmental stores

Off price retailers Factory outlets

Catalogue showrooms


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Convenience stores

Small stores located near residential areas

Opened for long hours

24x7 Limited line of convenience products like

eggs, bread, milk

3000-8000 sq ft(Int) , 500-1000 (India) Targeted at customers who want to make

their purchase quickly.


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In & out

International retailers 7-Eleven, Circle K,

Albert Heijn


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Supermartket

Large, low cost, low margin

High volume, self serviced operations

designed to meet the needs for food,groceries and other non-food items.

8000-20000(Int) , 800-5000(India)

&

0%foodstuff and everyday commodities

Nilgiris, Food world, Subhiksha


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Hypermarket

Hypermarche combination of a

supermarket and a department sore.

C

arrefour (Sainte Genevieve des BoisnearParis)

80,000-22,0000 sq.ft (Int) 40,000-

75,000(India)

35% of selling space devoted to non-

grocery products


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Store offers large depth in product mix

Food and non food items

Apparel. CDs, DVDs, footwear Low price for the products is key attraction

for the customer

Eg Big Bazaar, Wal-Mart.


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Specialty sores

Particular type of merchandise

High level of service or product information

being made available o customer Narrow product line

Deep assortments

Apparel, jewellery, sporting goods,furniture

5000-8000(Int) 2000-5000( India)


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Example- Crossword, Music world

The Gap, IKEA, High & Mighty (

International players)


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Department stores

Aristide Boucicaut founder of department

sore Bon Marche

Selling different types of goods under oneroof

Large scale retail outlet

75,

000+ (

Int), 5

000-

40000(

Ind)

50000-100000SKU

Marks & Spencer's, Harrods(Int)


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Westside, Lifestyle, Shoppers stop


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Off price retailers/Factory

Outlets Product sold less than retail price

Off price retailers buy manufacturers

seconds, overruns and off seasons atdeep discount

Odd sizes, unpopular colours or with minor

defects


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Catalogue showroom

Specialise in hard goods

Consumer electronics, house ware,

jewelley Catalogue

Argos


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Category killers

Speciality retailers

Large selection in the chosen product

Economical prices 50,000+, 15,000+

Toys R Us, Toys Kemp

The Loft 15,000 sq ft


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Warehouse clubs

Offers a variety of goods, in bulk

Limited number of product items

1,04,000 sq ft 1,70,000 sq ft Eg Sams club


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Other formats

Super warehouse stores

Limited assortment store

Super centre Wholesale club


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Super warehouse store

A hybrid warehouse/superstore

50,000 + items

High quality perishable and reduced prices


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Limited assortment

A low price outlet

Minimal service

2,000 items Numerous private label products


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Super center

A large food-drug combination store

Mass merchandiser

170,000 sq ft 40% - grocery items


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Non-store

Retailing directly to the consumers

Direct selling and direct response

marketing Direct selling direct personal

Direct response marketing create

awareness through non personal medium


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Direct selling

Personal contact with the end customers

Cosmetics, jewellery, food and nutritional

products 3,000 crore- turnover

Women -70%

Modicare, Amway Party plan or Multilevel


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Direct response

Includes various non personal

communication

Catalogue retailing/ Mail order

Television retailing

E-tailing

Business model in retail

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