Final Retailing

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1 “Managing Retail Stores” RETAILING …An Introduction Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Often people think of retailing only as the sale of products in stores. However, retailing also involves the sale of services: overnight lodging in a motel, a doctor’s consultation, a haircut, a video tape rental, or a home delivered pizza. When countries grow, they buy more things. More products become available. They need more shelf space. The result: a retail revolution. That’s what’s happening in India today. A new generation of retail outlets is emerging, which will change the landscape of the countries cities. With 12 million retail outlets, India can claim the distinction of truly being a nation of shopkeepers. Yet, unlike the USA, which has 1 million shops, India can hardly be called shopper’s paradise. The unorganized sector that comprises of the retail sector ranges from grocery stores to

Transcript of Final Retailing

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RETAILING

…An Introduction

Retailing is the set of business activities that adds value to the

products and services sold to consumers for their personal or family use.

Often people think of retailing only as the sale of products in stores.

However, retailing also involves the sale of services: overnight lodging in

a motel, a doctor’s consultation, a haircut, a video tape rental, or a home

delivered pizza.

When countries grow, they buy

more things. More products become

available. They need more shelf space.

The result: a retail revolution. That’s

what’s happening in India today. A new

generation of retail outlets is emerging,

which will change the landscape of the

countries cities.

With 12 million retail outlets, India can claim the distinction of truly

being a nation of shopkeepers. Yet, unlike the USA, which has 1 million

shops, India can hardly be called shopper’s paradise. The unorganized

sector that comprises of the retail sector ranges from grocery stores to

the corner shops and stalls that stock soaps and sweets and are spread

across six lakhs villages and thousands of small towns. The organized

sector, on the other hand, comprises largely of chain stores limited mainly

to major metropolitan cities. Only 2% of India’s retailing sector is

organized.

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History of RETAILING

Beginnings of Retail Trade

1. Early Trade

When man started to cultivate and harvest the land, he would

occasionally find himself with a surplus of goods. Traditionally Mom & Pop

run the retail business having Shop in the front & house at the back. More

than 99% retailers function in less than

500Sq.Ft of area.

Thus markets were formed. These early

efforts to swap goods developed into

gatherings that are more formal. When

a producer who had a surplus could

not find another producer with

suitable products to swap, he may have

allowed others to owe him goods. Thus early credit terms would have

been developed. This would have led to symbolic representations of such

debts in the form of valuable items and eventually money.

2. Early Markets

After, the Industrial Revolution, there was a change in the pattern of

production of goods and services. Handmade articles were replaced by

machine made ones and were made in bulk. Marketing this bulk

production was a challenge that was faced. Slowly, small-scale retailing

developed into medium and then large-scale retailing.

The basic chain of distribution that was operational in the olden days

remained unchanged. The producers produced in bulk, the wholesalers

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purchased goods from them and sold them to retailers in small quantities.

The retailers sold these to the end consumers as per their requirements.

3. The First Shops

Eventually, markets would become permanent fixtures i.e. shops.

These shops along with the logistics required to get the goods to them

were, the start of the Retail Trade.

How Retail Developed

1. Peddlers and Producers

The Retail Trade is rooted in two groups, the peddlers and producers.

Peddlers tended to be opportunistic in their choice of stock and

customer. They would purchase any goods that they thought they could

sell for a profit. Producers were interested in selling goods that they had

produced.

2. General Store

This division continues to this day with some shops specializing in

specific areas, reflecting their origins as outlets for producers and others

providing a broad mix, known as General Store. Although specialist shops

are still with us, over time, the general store has increasingly taken on

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specialist products. Customers have found this to be more convenient

than having to visit many shops - thus the term “Convenience Store”

has also been applied to these shops. As the popularity of general stores

has grown, so has their size. This combined with the advent of Self-

Service has lead to the Supermarket, or malls

3. Self-Service Stores

Up until the introduction of self-service stores, customers would

simply ask the shopkeeper for their goods. The shopkeeper would price

them (weighing them if necessary), pack them in a bag or other container

(often supplied by the customer), tot up the bill and receive payment.

There was a personal one-to-one relationship between customer and

shopkeeper.

Now scenario has changed, this new type of shopping was more

efficient and many customers preferred it. Although personal service

stores remain to this day, this new concept started a rapid growth of self-

service stores in the United States, India etc... Other countries were slow

to take up the idea, but there has been a steady rise in the global amount

of self-service stores ever since.

 

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Retailing includes all the activities involved in selling goods of services of the final consumers for

personal, non-business use. A retailer or retail store is any business enterprise whose sale

volume comes primarily from retailing.

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Definition OF RETAILING

The word retail is derived from the French word retailer, which means to

cut off a piece or to break bulk. A retailer may be defined, as a

“Dealer or trader who sells goods in small quantities”

or one who repeats or relates’.

PHILIP KOTLER

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NATURE OF RETAILING

Retailing includes all transactions in which the ultimate consumers

are the buyers. The buyer intends to consume the product through

personal, family or household use. A retailer is a business entity that

purchases product for reselling them, to the ultimate consumer. Retailing

often takes place in stores or service establishments, but it also occurs

through direct selling, direct marketing and vending machines outside the

stores.

Retailing is important to the national economy of any country. The

number of retailers has remained relatively constant for the past twenty

years. But the sales volume has increased.

Retailing may include subordinated services, such as delivery.

Purchasers may be individuals or businesses. In commerce, a retailer

buys goods or products in large quantities from manufacturers or

importers, either directly or through a wholesaler, and then sells

smaller quantities to the end-user but now there are various in retail

industry. As we know “that change is what, which is permanent in

nature”. Retailers add value, provide services and assist in making

product selections. Retailer image can enhance the value of the product

through the shopping experience, availability or convenience such as

home shopping. Through its location, a retailer can facilitate comparison-

shopping. Product value is also enhanced as retailers offer services such

as technical advise, delivery, credit and repair services. Retail sales

personnel can also demonstrate to customers how a product can help

address their needs or solve a problem.

The value added by retailers is significant for both producers and

ultimate consumers. Retailers are the critical link between producers and

ultimate consumers because they provide the environment in which

exchanges with ultimate consumers occur. Ultimate consumers benefit

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through retailers’ performance of marketing functions that result in the

availability of broader arrays of products. Retailers play a major role in

creating time, place and possession utility.

Leading retailers such as Wal-Mart, The Home Depot, Macy’s and

Toys “R” Us, big bazaar, hyper mart offer consumers a place to browse

and compare merchandise to find just what they need. Such traditional

retailing is being challenged by direct marketing channels that provide

home shopping through catalogues, television and internet. Traditional

retailers are responding to this change in the retail environment in various

ways. Wal-Mart has joined forces with fast-food giants like McDonald’s and

PepsiCo to attract consumers and offer them added convenience of eating

when they shop.

New store formats and advances in information technology are

making the retail environment highly dynamic and competitive. The key

to success in retailing is first to have a strong customer focus

with a retail strategy that provides the appropriate level of

service, product quality and innovativeness that consumers

desire. Partnership among non-competing retailers and other marketing

channel members are providing new opportunities for retailers.

Retailers are also finding global opportunities. Toys “R” Us is now

opening more international units than domestic stores, a trend that is

likely to continue for the near future.

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IMPORTANCE OF RETAILING

As the final link between consumers and manufacturers, retailers

are a vital part of the business world. Retailers add value to products by

making it easier for manufactures to sell and a consumer to buy.

The need for increased customer focus in a global competition has

led to growing popularity of retailing. This is because the corporate have

started realizing the significant role that retailing plays:

Sorting: Manufacturers sell their entire lot to retailers and

consumers prefer to choose in small quantities from a wide range of

products. Thus the retailer ‘sorts’ out a wide variety of goods and provides

convenience to consumers in the form of ‘one-stop shopping’.

Dissemination of Information to consumers and other channel

members: Retailing enables more consumer awareness of new products,

product differentiation and new categories introduced in the market. Also

manufacturers can be informed about sales forecast, delays in shipping,

consumer complaints, defective parts, inventory turnover etc. In fact,

many goods are developed in consultation with the retailers.

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SCOPE OF RETAILING

As with most other business activities, retailing is extremely

competitive, and the mortality rate of retail establishments is relatively

high. The basic competition is price competition, but this is moderated

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somewhat by such non-price forms of competition as convenience of

location, selection and display of merchandise, attractiveness of the retail

establishment itself, and intangible factors such as reputation in the

community.

Competition for sales has led to a blurring of traditional product

lines in retailing, and many establishments offer a much wider variety of

merchandise than their basic classification would indicate (e.g.,

drugstores may carry food, clothing, office supplies, hardware, etc.

The diversity of retailing

is evident in he many forms

this commercial activity now

takes, including vending

machines, hawkers door-to-

door sales, telephone sales,

mail-order houses, specialty

stores, department stores,

supermarkets, discount

houses, and consumer

cooperatives. Whatever forms

it takes, however, the essence

of good retailing remains the

same: attractive, appropriate

merchandise offered for sale

in an attractive, eye-catching

manner at a reasonable price

at a convenient location.

TYPES OF RETAILING

Retailing involves a direct interface with the customer and the

coordination of business activities from end to end- right from the concept

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or design stage of a product or offering, to its delivery and post-delivery

service to the customer. The industry has contributed to the economic

growth of many countries and is undoubtedly one of the fastest changing

and dynamic industries in the world today.

TYPES OF RETAIL OPERATIONS:

Retail operations enable a store to function smoothly without any

hindrances. The significant types of retail operations consist of:

• Department store

• Specialty store

• Discount/Mass Merchandisers

• Warehouse/Wholesale clubs

• Factory outlet

Retail Management System targets small and midsize retailers

seeking to automate their stores. The package runs on personal

computers to manage a range of store operations and customer

marketing tasks, including point of sale; operations; inventory control and

tracking; pricing; sales and promotions; customer management and

marketing; employee management; customized reports; and information

security.

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CLASSIFICATION OF RETAIL SECTOR

The Indian retail sector can be broadly classified into:

a) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing

sector. Traditional types of retailers, who operate small single-outlet

businesses mainly using family labour, dominate this sector .In

comparison, malls account for a small proportion of food sales in India.

However the growth rate of super malls sales has being significant in

recent years because greater numbers of higher income Indians prefer to

shop at super stores/malls due to higher standards of hygiene and

attractive ambience.

classification of retail sector

health &beauty products

clothing and footwear

home furniture & household goodsdurable goods

leisure & personal goods

food retailers

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b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on

health and beauty products .Here small, single-outlet retailers dominate

the market. However, in recent years, a few retail chains specializing in

these products have come into the market. Although these retail chains

account for only a small share of the total market , their business is

expected to grow significantly in the future due to the growing quality

consciousness of buyers for these products .

c) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and

markets operate allover India. Traditional outlets stock a limited range of

cheap and popular items; in contrast, modern clothing and footwear

stores have modern products and attractive displays to lure customers.

However, with rapid urbanization, and changing patterns of consumer

tastes and preferences, it is unlikely that the traditional outlets will

survive the test of time.

d) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this

market, very few large and modern retailers have established specialized

stores for these products. However, there is considerable potential for the

entry or expansion of specialized retail chains in the country.

e) DURABLE GOODS

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The Indian durable goods sector has seen the entry of a large number

of foreign companies during the post liberalization period. A greater

variety of consumer electronic items and household appliances became

available to the Indian customer. Intense competition among companies

to sell their brands provided a strong impetus to the growth for retailers

doing business in this sector.

f) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities

have encouraged consumer expenditure on leisure and personal goods in

the country. There are specialized retailers for each category of products

(books, music products, etc.) in this sector. Another prominent feature of

this sector is popularity of franchising agreements between established

manufacturers and retailers.

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THE RETAILING BOOM

In the past years, a lot has been written about the so-called

revolution in the Indian retail sector and the boom it has supposedly been

experiencing.

Magazines of all genres have routinely come out with cover stories

on this subject though most of the time, their coverage has been almost

unanimously based on the growth of a few leading retail businesses e.g.

Shoppers Stop, Trent (Westside), RPG Group (Food world, Music world,

Giant), Pantaloon/Big Bazaar, Landmark Group (Lifestyle) and a handful of

others.

Again, most of the time, the euphoria has been largely been based

on the metro, upwardly mobile consumer. No wonder, despite all the

about the retail revolution in India, the share of the "organized" retail

remains an insignificant 2 per cent or so of the total consumer spending in

India.

Is it, therefore, a wasted effort to write one more column on this

subject? It is believed that this time, there are some very interesting signs

of fundamental change in the consumer and retail business environment

in India that are likely to give an unprecedented momentum to the growth

of modern retailing in India.

First significant change is that in all the cities where modern retail

formats have made some presence, the average Indian consumer has

given them a big "thumbs up" by and large. Giant and Big Bazaar are

some of the more recent examples that are drawing in consumers across

a wide swath of socio-economic classification.

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The rapid growth of Big Bazaar (soon to be joined in by expansion of

Giant, and a likely entry of Trent/Tata Group later this year in a similar

format) testifies this, and in turn, this will lead to many other major

business houses in this sector very shortly. The consumer appreciation

has not only been limited to the national players.

Specialty players like Loft (footwear retailing), Vijay Sales and Vivek

(consumer durable retailing), Fab India (clothing/accessories) and even

local players (e.g. Bombay Selection and Mehrasons in Delhi) have been

able to draw consumers from the traditional high streets to new swanky

malls and/or modern, large footprint stand-alone stores.

Hence, the growth in organized retail is no longer determined only

by the growth plans of the existing national players -- new entrants as well

as local/regional players making rapid expansion beyond their traditional

markets will be actually driving the growth now.

The second significant change is that from the end of 2004 and

through almost 2007, India will see the coming to market of new, large

shopping malls almost every week. Next year alone is likely to have at

least 50 new malls ready for opening, and 2006 seeing opening of as

many as 150!

The year 2006 may see another 100 or more ready for possession. This

makes entry into retailing far easier for almost all kinds of entrants, for

almost all kinds of formats and scale of operations. The rentals are likely

to settle down at about Rs 40 -- Rs 60 per sq ft per month making most

retail businesses financially very viable. Scaling up will also is easy for the

new entrants once they have got their initial business models right and

resources (financial and human) put in place. The easier availability of

space will therefore encourage retail start-ups in high potential categories

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such as food and grocery, consumer durables, furniture and furnishings,

jewellery etc.

Financial resources themselves would be very easy from 2004 itself.

The forthcoming IPO of Shoppers Stop is likely set very encouraging

benchmarks for raising capital from the primary markets, and thereby

attracting adequate interest of various categories of investors including

VCs to look at funding retail ventures at various stages.

The fourth significant change is the likely entrance of many leading

international brands/retail businesses in India initially through the

franchising route, and subsequently through direct retailing route when

the FDI policy on retail is liberalized (hopefully soon after the next general

elections).

With the increased

attractiveness of India,

many top international

brands are reportedly poised

to make an entry into India

this year. These may include

Calvin Klein, Tommy Hilfiger,

Athlete's Foot, Tiffany,

Bvlgari etc. More are

evaluating options, and

should make their presence

in 2005 and beyond,

creating a multiplier effect in

various formats and product

categories giving further

stimulus to growth of organized retailing.

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At last, therefore, we can rightly say that Indian retail sector may well see

an onset of a revolutionary phase and very rapid growth can be forecast

in the immediate future.

RETAIL MARKETING BRINGS MODERNIZATION IN THE PEOPLE’S LIFE

Its have everything what everyone want and have fun for some time

you feel bore when you can have window-shopping too. Everyone feel

comfortable and regarding budget all are well calculated everything is

displayed and itemized there will be a effect but this is minimized by the

way he has done shopping because shopping at bazaars makes

purchasers mind something like a person are going to buy something

modern, stylish, safer, you can ask for replacement, worthy and no

irritating at the time when you want to buy anyone can choose from

multiple items   so no one feel this won’t show any effect may be 2 or 3

% but it feel that is not a effect and now way days everything in kirana

and big mall are almost same but  mall are more always safer and

satisfied its almost something like coming for shopping and having

short picnic with family or

friends.

It is arguably the most

glamorous store in the world; it’s

also an instantly recognizable

global brand universally

associated with luxury and

quality.

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Shopping MallsThe new shopping malls that have been expanding their footprint

across Indian cities are well designed, built on international formats of

retailing and integrated with entertainment and restaurants to provide a

complete family experience. Over 300 malls are expected to be built over

the next two years and most Indian cities with over a million populations

will be exposed to this modern method of retailing.

Shopping malls have existed in India since several decades but were

designed and built to house several shops in a single facility. These malls

also known as Shopping Arcades offered only rows of shops, most of

which were small stores that promised bargains for their various wares.

These Shopping Arcades tried to maximize on their store space and did

not offer any areas for recreation and entertainment.

The present day malls are a creation of the past few years post

2000. They are designed professionally using a lot of international

experience and combine

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shopping with a lot of brand building, recreation, food and

entertainment. Malls also have a large format store that serves as their

anchor for shopping and a prominent restaurant that anchors the food

needs of visitors.

Most malls also feature a multiplex cinema that offers entertainment

to the visitors of the mall. Finally, the mall has large atria and open spaces

to allow visitors and families to hangout.

These new format malls are coming up in all the major cities of

India. The cities that are seeing the first rush of malls are New Delhi,

Noida, Gurgaon, Chandigarh, Mumbai, Pune, Bangalore, Ahmadabad,

Chennai, Kochi, Hyderabad, and Kolkata.

The next run-up of the malls will be the second level cities of India that

includes Visakhapatnam, Coimbatore, Trivandrum, Raipur, Bhopal, Surat,

Jaipur, Kanpur, Luck now, Ranchi, and Dehra Dun.

The new malls are air-

conditioned and have spacious

areas and accesses, which

make them a true breath of

fresh-air from the earlier

arcades and shop line streets

that used to be the available

options for Indian customers.

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Definition

A mall is defined in the

Webster Dictionary as

"a large self-service

grocery store selling

groceries, food

products, and

household goods".

It was also defined in a

court ruling at the

State of New York

Court of Appeals in 1971

as

"A Retail Market that sells foods, convenience goods, and

household merchandise arranged in open mass display."

Malls: The new face of retail

market

Robust GDP growth,

stronger currency reserves and

ever-improving market and

operating environments are

propelling the Indian market

through a period of stellar

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growth - and the retail community is responding with newer formats and

innovative products. The economy of India has shown a remarkable

increase driven by overall political and social stability.

The decade-old economic reforms have engendered a new, shop-till-

you-drop breed of middle class Indians who, having tasted the shopping

experience of big cities overseas, have fuelled a demand that was

inevitable -- the rise of the shopping malls. Centrally air-conditioned malls

with piped music, high-speed lifts and escalators, underground parking

space, a multiplex movie theater, multi-cuisine restaurants and a host of

national and international brands, these malls generates approximately

25,000 footfalls each, per day, with figures doubling on weekends.

Sobha Group has set its eyes on launching the largest retail mall in

the country. Retail Biz tracks the unprecedented move that is ready to

add a new chapter in the history of Indian retailing. It is estimated that

there are 450 malls in various stages of development across India, 60 in

the greater Delhi area alone. This trend has attracted several major global

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retail players to India. International style shopping has finally come to

India - and with a splash.

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WALK FROM TRADITIONAL MARKETS TO

SHOPPING MALLS...

A new idea whose time has come when arrives cannot be bunged by

anyone. Especially when it proposes an essentially finer monetary and

behavioral value scheme to its clientele, it gradually takes over the old

way, and other stakeholders have no option but to acknowledge and

transform accordingly. Modern retailing is one such inevitable reality,

which has started taking a spin in the traditional retail scenario and is

soon liable to capture the retail sector and further enhance its compass.

All elements in the delivery chain better accept it and prepare, rather than

trying to rob the customers of a superior way of life by promulgating

fallacy and protecting stakes.

The question, which then arises in the face of this foreseeable

change, is the future of the traditional outlets (Kiranas) with a network so

intense that most of us have a kirana store within five minutes of our

residence. The Kiranas also operate on a low-cost model with family-

owned properties (an extension of the house), with most of the family

working in the store itself. They cater to impulse needs at short notice,

and early opening and late closing times, which suit many families. The

supermarkets on the other hand propose an elite ambience with economy

for all sectors of the society.

This paper deals with the dilemma of calling this confrontation -

competition or conflict. Both rivalries have competitive advantages. The

kirana will have a low cost structure, convenient location and customer

intimacy. Modern trade large outlets will have product width and depth,

disintermediation and technology. Like in any competitive market, the

smartest survives and the consumers win.

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Indian retailing is unorganized and due to its feudal structure and

inefficiency need for Organized

Retailing is being felt day by

day. Organized retailing not

only provides better customer

services but also facilitates

easy and smooth handling for

the government. At the same

point of time if FDI is also

approved in Indian Retailing, it

would not only streamline the

retailing of India, but would

further accelerate expansion of

markets. There is enormous

scope for foreign players in

Indian economic conditions,

and if somehow FDI be

extracted, it would supplement not only the customers by better services

but also the government by capital inflow, generating employment and by

becoming big source of tax revenue.

The Transformation…

In the last five years, (2001-2006) Indian retailing industry has seen

exceptional augmentation. Where the country was in the dominance of

unorganized retailing, the organized retailing sector has now emerged in a

momentous way and is contributing significantly to the growth of Indian

retail sector. It is predicted that organized retail will form 10% of total

retailing by the end of this decade (2010). Cultural and regional disparity

in India is the major challenge in the face of retailers. Therefore, there is a

scope for a variety to formats to co-exist in India.

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EXAMPLE Every person wants changes in their life. From this example, it is

clear that how person has changed their mind according to the life style.

The example:

Absolutely, without any

doubt the mall culture has

gripped Indians and they

seem love every bit of it. In

the early, no one has thought

that our every need will be

satisfied under – one- roof

mall in. there is various

numbers of people that had

thronged the place. It seemed

to be some kind of a huge people procession out there.

In earlier days (about a decade back), if you wanted to do any kind

of shopping, one had couple of places to go (or should I say streets) like

Laxmi Road or Main street (every city has shopping streets like these,

especially in the downtown area), where small shoppers line up across the

roads. Bargaining to extract the best price was common place- and it had

its own charm too.

However, everything has

changed now. The younger and

older generation alike prefers

buying stuff from huge malls

where one not only gets variety,

but also quality too at moderate

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prices. Even for your everyday grocery, buying superstores have come up

at every nook and corner

Supply chain and logistics

management: key to

success in RETAILING

"Interdependence is a higher

value than independence"

As rightly said by Stephen Covey, the

value of interdependence is as much

important in the business of Retail as it is

important in the business of life. Standing on the threshold of a retail

revolution and witnessing a fast changing retail landscape, the retail

sector is poised for a big leap.

Currently retail sector in India accounts for Rs. 55,000 crore ($12.4

billion) business at current prices in the calendar year 2006, increasing its

share to 4.6% of the total Indian Retail Value that stood at Rs. 12,00,000

crore ($270 billion). With the potential of crossing Rs 2, 00,000 crore ($45

billion) business by the Year 2010, generating employment for some 2.5

million people in various retail operations and over 10 million additional

workforce in retail support activities including contract production &

processing, supply chain & logistics, retail

real estate development & management

etc.; the retail sector is growing at a

scorching pace of about 37 percent in

2007 and expected to grow by 42 per cent

in 2008. With this enormous growth, the

retail sector is also facing challenges on

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the fronts of escalating real estate cost, scarcity of skilled workforce and

structured supply of merchandise.

FUTURE GROUPFuture Group is the country's leading retail

business group that caters to the entire

Indian consumption space. It operates

through six verticals: Future Retail

(encompassing all lines of retail business),

Future Capital (financial products and

services), Future Brands (all brands owned or

managed by group companies), Future Space

(management of retail real estate), Future Logistics (management of

supply chain and distribution) and Future Media (development and

management of retail media spaces).

Some of its leading retail formats include, Pantaloons, Big Bazaar,

Central, Food Bazaar, Home Town, etc…

Future Group is working on the vendor network as well as the

logistics network. The company has identified up to 40 anchor vendors,

each with turnovers of US$45 million, to achieve economies of scale. The

group is also keen to ensure that its smaller vendors are able to reach

turnovers of around US$1 million and a growth rate of 40% annually, to be

able to pass on the benefits of scales. The company is also working

towards bringing its 1,200 vendors online, like Wal-Mart.

Going further in this direction, the Future Group has also launched

Future Logistics initially aimed at handling the supply chain logistics of the

group. However, sensing immense opportunity in this area, the company

is now looking to offer its services to its 1000-odd vendors, spread across

consumer related goods, to reach a targeted turnover of about Rs.700

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crore by 2010.The thrust at present will be on modes of surface transport

like roads and rail only. However, at a later stage, sea and air modes

might also be considered as per the requirement, said sources.

In India, Future group derives significant economies of scale in

managing their supply chain. With more than 170000 products, the

company maintains a strong supplier relationship in a partnership mode,

avoiding the exploitative supplier – buyer transactional philosophy. The IT

enabled back-end operations and supply chain management increases the

reliability and efficiency of the business.

As part of the operation, Future Group is also undertaking to reduce

its warehousing costs through a consolidation process. In a country like

India, where most retail stores are located in the heart of the city—where

rents are high and storage space is scarce—supply chain management

has even more serious business implications. Future Logistics now handles

two-and-a-half million SKUs (or stock keeping units) a day across the

Future Group's various retail formats around the country. By 2010, this

number is expected to increase to more than 30 million SKUs a day. Even

with 98% accuracy, some 600,000 pieces will not be delivered correctly,

resulting in an estimated sales loss of more than Rs 4 crore a day.

The biggest driver in consumer logistics is going

to be zero defects in managing the

supply chain. While infrastructure,

technology, automation, processes

and people will all play an important

role, zero defects can only be achieved

through vertical integration across the

entire supply chain—from raw material

supply, production, wholesale and

retail. Here is an attempt to simplify the

analysis of a retailing company.

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COMPETITIVE FORCES

In an attempt to understand the retail industry in India, an analysis

of the industry has been done using the five competitive forces as started

by Michael porter. The five forces model is a strategic tool that is used to

analyze the attractiveness of the industry structure. The five fundamental

of competitive forces:

Entry of competitors: The case of entry for competitors to enter

the market and to start competing and the barriers to entry which may

exist.

Threat of substitutes: The ease, with which a product or a

service can be substituted, especially made cheaper.

Bargaining power of buyers: The position of the buyers, can they

work together to gain efficiencies buying.

Bargaining power of supplier: The position of the sellers. Do

many suppliers exist or is there a existence of only a few suppliers.

Rivalry among the existing players: the level of competition

between the existing players, the size and the strength of the players in

the industry.

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Threat of new entrants:

In the case of retail sector, there exists a high

threat of new entrants as the sector itself is in a nascent stage

and is growing. Limited barriers to entry exist. Government

regulation of FDI in the country can be seen as a barrier to

entry. Other barriers to entry may be the inability to build

economies of scales, substantial capital requirements in

terms of investment in store location , high costs in terms of

supply chain efficiencies etc… product differentiation or the

lack of product differentiation could also be seen as a threat

to entry.

Threat of substitutes:

The presence of substitute products can lowers the

attractiveness and profitability because they limit price levels. The

Industry competitiors

rivalry among existing

firms

Potential Entrants

Buyers Subsitutes

Suppliers

Bargaining power of suppliers

Threat of new entrants

Bargaining power of buyers

Threat of substitute profits or services

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threat of substitute products is a function of the buyer’s willingness

to buy a substitute product and is influenced by the relative price

and performance of substitutes and the cost of switching to

substitutes.

In Indian retail, the threat of substitutes is very high.

The unorganized retailing in India is still the largest wherein cheaper

versions of products are available this still services most of the

middle and poor income families in the country.

Bargaining power of suppliers:

The price at which the product is available to the

retailer for selling to the end consumer is very important in retail, as

it plays a large role in the actual profitability. If suppliers have high

bargaining power over a company, then the company’s industry is

less attractive.

The suppliers to the retailing industry are the

companies who provide the finished products to make various retail

products. The bargaining power of suppliers varies from the

products suppliers. The bargaining power of suppliers is low because

there are large numbers of potential suppliers in the market.

Therefore, the prices become competitive. The emergence of

private labels in apparel and food has infact played role in

controlling the bargaining power of supplier.

Bargaining power of buyers:

The bargaining power of buyers I greater when there

are few dominant buyers and many sellers in the industry, the

products are standardized and the suppliers do not threaten to

integrate forward into the buyers industry.

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In retail, the bargaining power of buyers is fast increasing

and can be termed as a moderate to high, depending on the product

or service. The buyers are most powerful in the retailing industry. In

an age of informed consumers, meeting the buyer’s expectation in

terms of product, price and service is increasingly becoming

difficult.

Intensity of rivalry:

The intensity of rivalry between competitors in an

industry depends on the structure of competition – for example,

rivalry is more intense where there are many small or equally sized

competitors; rivalry is less when an industry has a clear market

leader.

In case of the retail sector in India as is in many parts of

the world, is a highly fragmented sector. Retailer’s need to take

these factors into consideration and work towards creating

economies of scale. The time span needed to achieve the critical

mass will be crucial in the ability to build a competitive edge over

competitors. Retailer will also need to focus on recognizing industry

trends early and building the ability to covert them in the market

place. Standardization of needs and wants of the consumer in divers

market like India.

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Life cycle in RETAIL

The concept of product life cycle as explained by “PHILIP KOTLER” is

also applicable to retail organizations. This is because the retail

organizations pass through identifiable stage of innovation, development,

maturity and decline. This is what is commonly termed as the “Retail Life

Cycle”.

Attributes and strategies change as institutions mature. The “Retail

Life Cycle” is a theory about the changes through time of the retailing. It

is claimed that retail institutions how an S-shaped development curve’

through their economic life. The S-shaped development curve’ has been

classified in to four main phases:

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Innovation:

A new retail organization is born; it improves the convenience or

creates other advantages for the final customers, which differ

sharply from those offered by other retailers. This is the stage of

innovation, where the organization has few competitors. Since it is a

new concept, The rate of growth is fairly rapid and the management

fine-times its strategy through experimentation. Levels of

profitability are moderate and this stage can last up to five years,

depending on the retailer.

Accelerated growth:

The retail organization faces raped increases in sales. As

the organization moves to stage two of growth which is the stage of

development, a few competitors emerge. Since the company has

been in the market for while, it is now in a position to pre-empt the

market by establishing position of leadership. Since the growth is

imperative, the investment level is also high, as is the profitability.

This stage can last from five to eight years. However towards the

end of this phase, cost pressures tend to appear.

Innovation

Growth

MaturityProfit

Decline

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Maturity:

The retailing still gores, but competitive pressures are felt

acutely form newer forms of retailing that tend to arise. Thus, the

growth rate tends to decrease. Gradually, as markets become more

competitive and direct competition increases, the rate of growth

slows down and profits also start declining. This is the time when

the retail organization needs to rethink its strategy and reposition

itself in the market. A change may occur not only in the format but

also in the merchandise mix offered.

Decline:

The retail organization losses its competitive edge and

there is a decline. In this stage, the organization needs to decide if it

is still going to continue in the market. The rate of growth is

negative, profitability, declines further and overheads are high.

The retail business in India has only recently seen the emergence of

organized, corporate activity. Traditionally, most of the retail

business in India was constituted of small owner-managed

businesses. It is hence difficult to identify a retail organization which

has passed through all the four stages of the retail life cycle.

Bit a few years ago, most cities in India had a few independent

retailers in the private sector.

Example: Mumbai had sores like Akbar ally’s, premsons.

Amarson, big bazaar etc… the store initially offered apparel,

imitation, jewellery, cosmetic perfumes and home fashion. It also

had a customer loyalty programme, place, which many stores at

that time did not offer.

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A retailer can succeed in moving back to the growth phase

after reaching it stage of maturity with a certain format and a

certain mix of products.

RETAIL marketing mix

The basic function of retail is to provide the right goods to

the consumer, at the right place and time, however, in today’s

competitive world.

How does a retailer inform the customers about the

product that he has an offer?

How does he lure them to visit and hop at his store?

How does he achieve the sale stages?

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The marketing tools that a retail organization uses to

pursue its marketing objectives are termed as the retail marketing

mix. Let see the components of the retail marketing mix:

Product:

One of the main elements of the retail marketing mix is the products

or the services that the store offers to the customer.

Products are also termed as merchandise. The different

products that the store offers are together termed as the

merchandise mix.

A merchandise line consists of a group of products that are

closely related because they are intended for the same end

users are sold to the customer group or fall within the same

price range. For example, if It considers the menswear

section at a department store, the merchandise line would

comprise of formal wear, casual wear, accessories etc…

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Product price

Place/locationCustomer service

Presentation

People

Promotion

“Managing Retail Stores”

Retail marketing mix

The variety of the merchandise mix refers to the number of different

merchandise lines that the retailer stock in the store. Thus, the

merchandise lines in department store would be menswear, ladies

wear, children’s wear, home fashion, jewellery etc… the same in

case of a grocery retailer would comprise of cereals, pulses,

personal care products, ready-to-serve foods, packaged goods like

biscuits, snacks etc…

Price:

Pricing is an integral part of the retail marketing mix. The

price policy that the organization decides to follow depends on

the customer which the target audience for its range of products.

It also depends on whether the product of ten is unique or has

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other substitutes available. The various pricing policies that a

retail firm can adopt, which deals with retail merchandise.

Place:

For a very long time, the location of the retail store was

considered to be the most important elements of the retail

marketing mix. However, with the advances in technology and

the advent of television shopping.

Promotion:

The advertising budget, sales promotion, publicity and

public relation play a very important role in the competitive world

of retailing. Retailers need to develop a communication strategy

includes with their target market and the products that they

stock in the store.

Presentation:

The manner in which the merchandise is presented

at the store level is very important. This aspects not only deals

with the store layout and the ambience created, but also with

visual merchandising, visual merchandising is the orderly,

systematic and intelligent way of putting stock on display in the

retail store. Many large retail organizations employ visual

merchandisers to aid the store in the function.

Customer service:

The support services that a retailer offers have

become very important today. The credit policies and the product

returns policies need t5obe clear not only the sales staff, but also

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the end customers. Relationship marketing, customer

relationship management are the new buzzwords in the industry

today and all these are aimed at enhancing the customer service.

People:

Retailers operate in a unique environment. The retail

industry is characterized by a large number of inexperienced

workers, ho need to put or long hours of work. Most of the time,

these employees are in direct contact with the customers and

they face irate or unreasonable customers.

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The people who work at the front-end of a retail organization are

very important, as they are the face of the origination for the

customers. Their attitude, behavior, manners and product

knowledge plays a very important role in building long-term

relations with the customers.

CUSTOM RETAIL DISPLAY STANDS

Successfully displaying collectibles or merchandise comes down to

one variable: location! Whether you are trying to effectively arrange a

retail store or simply show off a collection of valuable coins, where the

display case is situated will make or break your efforts. Working hand in

hand with location to appeal to an onlooker is the specific type of display,

meaning the materials used, the size, and the overall aesthetic value to

the exhibit.

Those in the retail business understand that dressing up a product is

often the difference in a slow day and selling out. Customers should be

impressed with the product from the moment they set eyes on it. This

same concept can be applied to unique collectibles at home too. The key

is showing off the product with an appropriate display. It can be difficult

finding the perfect fit for whatever you are trying to show off. In order to

get the most attractive setup for their product some retailers often use

custom made display stands.

No matter your needs, display cases should meet the standards of

size, materials, general aesthetics, and overall harmony of the pre-

existing room and its décor. Typical manufactured display stands are

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produced in large quantities that are designed to fit a general theme, but

rarely are a perfect match. In the retail world and in our homes this is just

not good enough. Decorating styles within a home are well thought out

and most times consistent throughout in order to reinforce a theme or

common tie among the décor.

The best store designs that make people feel comfortable, reinforce

the store branding, and show products well are done with custom display

fixtures using matching colors and materials. The lighting on products can

also be critical. Custom display fixtures allow specific supplemental

lighting or many times spot lighting to show off merchandise in with

dramatic flair.

Additionally, custom display cases and custom retail stands can be

designed for exact space requirements so the maximum amount of

merchandise can be displayed per square foot.

Custom displays are made according to the exacting needs of the

store owner. One can indicate the exact dimensions, material, finish, and

color they would like. A good custom retail display company will work with

its customer in designing the best fit for their desired location and product

to display. Many of these displays will be manufactured from scratch and

provide exactly the unique look you are in search of. If you are artistically

inclined it is even possible to provide a sketch to the display maker and

they will be able to produce what you have envisioned for the store or for

showcasing at home.

There are hundreds of reasons why we would want to display a

product or collectible. Many have perfected their methods by using

custom display cases at a show, in a retail store, and often in their home.

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Regardless of where they are used, the results from using custom retail

displays speak for themselves; give them a shot.

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THE CUSTOMER IS ALWAYS RIGHT...

AND OTHER MYTHS

For too many years there have been some

"accepted truths" in business. The belief in

these "accepted truths" and the dogged

determination by some "experts" to defend

and cling to them have caused no end of

problems in the workplace. Businesses

have started and failed at an alarming

rate.

Why do they fail? The problem most of the time

is that they are working hard on the wrong things. They are following the

ratings of high paid "experts" who are building sand castles at low tide.

They have bought into systems of "excellence" that don't work.

Myth #1: The customer is always right

WRONG! We know more about our own products and services than 90%

of our customers can ever expect to understand. The customer seldom

understands their needs as well as a salesperson might.

Many years ago, a travel agent refused to book a customer’s family into a

hotel an acquaintance had recommended—a hotel where the customer

could "save some money." Jim explained, "You are already spending a lot

of money on this trip. I won't book you into a cheap hotel that might wreck

your vacation." Now the cynical will say, "Oh, he wanted the extra

commission." But we drove by the original hotel and I can tell you we were

glad Jim insisted we spend an extra $20 per night. Jim knew his business

better than we knew what we wanted. Jim was just doing his job.

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Your employees already know that the customer is not always right. They

have to deal with them every day. One of the quickest ways to hurt

yourself is to adopt a policy that the customer is always right.

Myth #2: "The customer is #1"

WRONG! Your employees are #1! If you believe that your employees are

not the most important people who step through the doors of your

organization each day you are in trouble. If you are not letting your

employees know that they are #1, you are doomed to failure!

Bob Gee, a long time V-P of a major appliance distributor in Arkansas, tells

the story of a retailer who explained that, "We can have the best products

in the world, the most knowledgeable and best salespeople, the best price

and credit policy in five states, but if our delivery guy gets grease on the

customer's carpet and doesn't handle the situation right, we may never

see her again. "Meanwhile the customer is being assaulted with choruses

of "That's not my department" or "I'm sorry but company policy will not

allow that." Employees at the same time are being trained to smile and

listen carefully while the customer is exploding and spewing outrage all

over the showroom floor. And I still hear managers and owners tell me

"You just can't get decent help these days."

Myth #3: Quality customer service is "Knowing what the customer

wants and giving it to them"

WRONG! Quality customer service is understanding the customers'

expectations and then gaining a reputation for exceeding those

expectations. If we assumed that the customer always knew what they

wanted our world would look significantly different. We have to

understand the customer's expectations and their perceptions of our

business. If the industry expectation is that we can deliver a pizza in 20

minutes and we fail to do that, then the customer perception is that we

don't take seriously our commitment to service..

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Myth #4 "Our mission is to make a profit”

WRONG! Our mission is to grow and survive. To paraphrase, Peter

Drucker "Profits are like food, we need them to live but they are not our

reason for living." Making a profit is far too shallow an incentive to be the

mission of our organization.

Try to draw a mental picture of your employees leaping from bed each

morning with one enthusiastic thought in their mind, "Oh Boy, another

opportunity to go to work and make my bosses company a good profit!".

Serve the customer first, then the profits will come. Customers and profits

will come in direct proportion to our capacity and desire to give the

customer more than they expect.

Myth #5 "I need more satisfied customers "

WRONG! "You want missionaries!" George owns and manages George's

Distinctive Men's Wear in a prominent location in a major shopping mall.

George is proud of his 12 years of success, he has many satisfied

customers and his sales increase each year. George, however, is in

trouble, his market share is going down and he can track a down turn in

normal sales volume whenever his four major competitors in the mall

have major sales events.

George's customers are satisfied, but they are not necessarily loyal. They

depend on George to give them quality at a fair price and them come

back when it is convenient and when they need him. But they shop

elsewhere when they think the prices will be better. Satisfied customers

are fickle. If the customer only feels satisfied, he or she will likely continue

buying from us until a competitor offers better price. Satisfied customers

leave us all too often and for reasons we consider, unreasonable. That's

why George needs to go past earning satisfied customers. He needs

missionaries. Customers that not only shut out competitors but who also

bring us more customers with their praise of our services cleaners. Ask

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yourself what they do to earn your respect. Now offer your customers the

same level of service.

RETAILING business scenario

Retail is such a part of everyday life that people often take it for

granted, but it is one of the fastest changing, most dynamic industries

in the world today. Today, perhaps more than ever before, retailing is a

mirror of society. The diversity, variety & change in society offer an

opportunity for retailers to respond and succeed. Retail today is a

combination of revolution and evolution.

The retail industry will continue to evolve and change. With

increasing interest in non-store retailing (catalogue shopping, online

shopping, home delivery), companies will have to redefine and plan

new shopping environments that make shopping experience as

enjoyable as possible. While unique displays add flavor to the store's

interior, merchandising displays help the customer learn about a

product and to promote an impulse purchase and is much more

preferable.

In order to survive in today's tough retail climate, companies must

continually innovate in ways to create stronger, more direct links with

their customers. At the same time retailers must focus on the most

demanding customers who want customization, value and service. New

store designs must assault the consumer's sense of sight, sound,

Taste, touch and smell-preferably all at the same time. In this

environment, merchandising and especially displays is more important

than ever, as being top-of-mind will keep the brand growing.

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RETAIL STORE management tips

The job of a retail store manager is overseeing the everyday running

of a retail store. Some of the key retail services performed by a retail

store manager are: Meeting sales and personal targets as well as

customer satisfaction via maximizing the shopping experience of

customers; Managing all aspects of the operations of the store in order to

ensure maximum sales as well as profitability. Retail management also

includes focusing on key initiatives in business, daily cost control in

operations, risk management, payroll management, loss prevention,

inventory management, marketing execution, and store presentation.

Retail store

managers should have

organizational skills which

includes the ability of

paying attention to detail

as well as following-up

matters. The job also

involves the capability of

managing multiple

priorities along with

management skills like

communication, recruiting, training, and coaching. Here are some tips

that can help you to become a successful retail store manager:

The customer is always right: Yes, that age-old saying holds true even

today. The customer is the most important facet of any business. Hence,

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as a retail store manager you need to ensure that the whole team

comprehends that, and behaves as if they do.

Make the customer feel special: Everybody likes feeling special. So,

when you are with a customer, give him or her your exclusive attention,

listening closely to whatever they may be saying to you. During that time

don’t let anything else interrupt you.

Please the customer: Although this is touted often, it is seldom

practiced. As a retail store manager, see to it that the sales staff does that

extra bit to make the customer feel pleased, especially as a measure of

calming their displeasure about something. For instance, some special

store giveaways can be packed with their purchases.

Promise less and deliver more: You have heard of the old saying

‘Don’t promise what you cannot deliver.’ Well, by giving more than

whatever you may have promised, you can build a strong customer

rapport, both inside as well as outside the retail store.

Appearances do matter: Although you may dismiss it as a superficial

aspect of a superficial consumerist society, however, there is no escaping

the fact, that the first impressions of the store, including the staff – how

they are dressed and how they behave – do matter. People do care about

the ambience of where they shop.

Display merchandise attractively: A vital part of retail store

management is seeing to it that the merchandise is displayed properly. If

the items are not displayed or seen properly, they won’t be sold in the

numbers that they ought to be. Merchandise should look crisp and new at

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all times. If the items are shop-worn, they should be put in the bargain

section. Items that are usually bought on impulse should be placed on

display close to the cash out area. Also, appropriate sections should be

made for merchandise, and the items should be placed in the correct

sections. Items that are similar in nature should be placed in the same

area.

Items should be shown to advantage: Apart from displaying

merchandise attractively, as a retail store manager, you should also make

sure that the items are placed in such a way that they draw the

customer’s attention. Hiding or stacking merchandise will not attract the

attention of the customer. When thinking about how to display items, try

to imagine what the customers will view with the display. Placing

merchandise at eye level, or a little lower than that, is the best way to

display specials. Placards and signs are also another method of grabbing

the eye of the customer.

Get rid of unsold merchandise: The bottom 10 to 20 percent of the

product lines should be gotten rid of every year to be replaced by new

products. The product lines that are not selling well should be marked

down to half their price in order to sell them off fast.

Clear up shopping areas: While making racks and other display areas

full, clear up other areas. According to studies it has been shown that

having easy shopping areas results in more sales rather than having more

racks and tables cluttering up the store.

Timely ordering of inventory: This is another important aspect of a

retail store manager’s duties. The levels of inventory should be monitored

and kept in adequate amounts at all times. If customers do not find what

they are looking for, they will just go to another store. Hence, the store

manager must keep track of the inventory constantly.

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Hire the right people: A retail manager’s success is largely dependent

on the kind of people he/she helps to hire. The staff that is hired has to

have the ability of making a quantifiable and meaningful contribution to

the store’s performance. In order to be able to rise in the organization, the

store manager has to draw the attention as well as the recognition of the

top management. The correct people will help in showcasing their talents

while they achieve their objectives. In order to get the best out of the rest

of the team, the store manager has to be able to keep them motivated.

Training the staff: However, hiring the right kind of people and keeping

them motivated is just a part of a retail store manager’s path to success.

Part of a retail store manager’s job is to train the staff so that they are

aware of what is expected of them. This will ensure that all the people

involved in the success of the store move in the same direction.

Incorporating time management skills: After hiring the right people,

training them fully, and getting them ready to achieve success, the next

thing a retail store manager has to take care of is managing their time

along with the changing priorities they have to deal with each day.

Long range planning: Therefore, a retail store management job involves

long range planning so that every hour of every day in a week is managed

effectively. The skill of long range planning is what will be appreciated by

the top management, for they look for people who have the ability of

looking forward, and creating concrete plans, in order to increase the

business. A retail manager who can accomplish this will rise in the

organization.

Retail software: These days, there are many retail software that are

available which provide scalability, data integrity, stability, and speed

offering a complete retail management solution, which can be adapted

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according to each type of doing business. From inventory management to

Point of Sale (POS) ticket entry to customer tracking, integrated

purchasing, and monitoring the movement of merchandise, retail software

provides all the capabilities required to run a retail store business more

effectively and efficiently.

Top 10 RETAILERS in India

Miss D'souza rubs her nose as her specks annoy her; she calls out to

Shanta Bhai. “I am leaving for work; please make sure you do the

vegetable shopping today, as I will be getting late.”

Shanta Bhai mutters & just nods. “Oh god, I will have to go and

bargain with these bhajiwala’s because madam is so particular about the

price.” Then she realized actually it’s not such a bad thing, a new

supermarket is open nearby. “I’ll go there, roam in the mall and also shop

in convenience of AC and no bargaining also. Grocery shopping will

actually be fun!”

In the supermarket, she realized they had good price bargains and

was thrilled. She was going to earn some brownie points with Ms D'souza

for purchasing at such cheap rates.

Our very own Shanta Bhai signifies the Indian consumer of today

who wants the right price, ambience and good quality all under one roof.

The lifestyle and mindset-change of the Indian customer has led to a spur

in the retail industry with the total private consumption in 2006 clocking

Rs.20,000 billion according to the Indian Retail Report 2007. Cities like

Mumbai, Bangalore, New Delhi, Hyderabad, and Pune have around 40

malls as of today, which is expected to touch 250 by 2010 (KPMG report).

The Indian retail industry is valued at $270 billion, with organized

retail cornering 4.5 %. The organized pie is expected to see a growth at a

CAGR of 37 % (India Retail Report 2007).

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Source: India Retail Report

Top players:

1. Pantaloon Retail:

It is headquartered in Mumbai with 450 stores across the country

employing more than 18,000 people. It can

boast of launching the first hypermarket

Big Bazaar in India in 2001. An all-India

retail space of 5 million sq. ft. which is

expected to reach 30 mn by 2010. It is not

only the largest retailer in India with a

turnover of over Rs. 20 billion but is present

across most retail segments - Food &

grocery (Big bazaar, Food bazaar), Home

solutions (Hometown, furniture bazaar,

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collection-i), consumer electronics (e-zone), shoes (shoe factory), Books:

music & gifts (Depot), Health & Beauty care services (Star, Sitara and

Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment

(Bowling co.)

One of their recent innovations include e-commerce’ hybrid format

of ’small’ shops , the area for these stores will be 150 sq. ft. fitted with 40

digital screens. Customers will be encouraged to browse through the

entire range of products on digital screen. They will be able to place the

order, the delivery of which will be arranged by the shop to their homes

within a few hours

2. K Raheja Group

They forayed into retail with Shopper’s Stop, India’s first

departmental store in 2001. It is the only retailer from India to become a

member of the prestigious Intercontinental Group of Departmental Stores

(IGDS). They have signed a 50:50 joint venture with the Nuance Group for

Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a

turnover of Rs 6.75 billion.

The first Hyper city opened in Mumbai in 2006 with an area of 1,

20,000 sq. ft. clocking gross sales of Rs. 1 bn in its first year.

Crossword brand of book stores, Homes stop a store for home

solutions, Mother care a concept stocking merchandise related to

childcare are also owned by them. Recently, Raheja’s have signed an MoU

with the Home Retail Group of UK to enter into a franchise arrangement

for the Argos formats of catalogue & internet retailing.

The group has announced plans to establish a network of 55

hypermarkets across India with sales expected to cross the US$100

million mark by 2010.

3. Tata group:

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Established in 1998, Trent - one of the subsidiaries of Tata Group -

operates Westside, a lifestyle retail chain and Star India Bazaar - a

hypermarket with a large assortment of products at the lowest prices. In

2005, it acquired Landmark, India's largest book and music retailer. Trent

has more than 4 lakhs sq. ft. space across the country. Westside

registered a turnover of Rs 3.58 mn in 2006.

Tata’s has also formed a subsidiary named Infiniti retail which

consists of Croma, a consumer electronics chain. It is a 15000-17000 sq.

ft. format with 8 stores as of September 2007.

Another subsidiary, Titan Industries, owns brands like “Titan”, the

watch of India has 200 exclusive outlets the country and Tanishq, the

jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs

6.55 billion.

Trent plans to open 27 more stores across its retail formats adding

1.5 mn sq ft of space in the next 12 DLF malls.

4. RPG group:

One of the first entrants into organized food & grocery retail with

Food world stores in 1996 and then formed an alliance with Dairy farm

International and launched health & glow (pharmacy & beauty care)

outlets. Now the alliance has dissolved and RPG has Spencer’s Hyper,

Super, Daily and Express formats and Music World stores across the

country.

RPG has 6 lakhs sq. ft. of retail space and has registered a turnover

of Rs 4.5 billion in 2006.

It is planning to venture into books retail, with the launch of its own

bookstores “Books and Beyond” by the end of 2007. An IPO is also in the

offering, with expansion to 450+ Music World, 50+ Spencer's hyper

outlets covering 4 million sq. ft. by 2010.

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5. Landmark group:

It was launched in 1998 in India. Lifestyle is spread across six cities,

covering 4.6 lakhs sq. ft. with a turnover of Rs 3.5 billion in 2005. A new

division named Lifestyle International has emerged for their international

brands business comprising Bossino, Kappa and Springfield in their

portfolio.

Their retail mix includes Home solutions (Home centre), fashion

(lifestyle, landmark International), value retailing (max retail),

hypermarkets & supermarkets (Max), kids entertainment (Fun city).

They plan to invest Rs. 300 crores in the next two years to expand

on Max chain, and Rs 100 crores on Citymax 3 star hotel chain. They have

already instituted a separate company christened Citymax Hotels (India).

6. Piramal Group

In September 1999, Piramal Enterprises

announced their arrival into retail with the

launch of three retail concepts: India's first true

shopping mall of international standards, called Crossroads; a lifestyle

department store named Piramyd Megastore; and a family entertainment

centre known as Jammin. Piramyd Megastore and Jammin were anchor

tenants for Crossroads (recently sold to Pantaloon for Rs 4 billion). In

2001, the group entered the business of food & grocery retail with the

launch of TruMart supermarkets in Pune.

They have around 18 TruMart stores covering 1.90 lakh sq. ft.

registering a turnover of Rs 37.6 mn in 2005. Piraymd Megatsore’s

contributes more than 70 % to their retail mix with a turnover of Rs 112.8

mn. They plan to open 150 stores covering 75 mn sq ft of retail space in

the next 5 years.

7. Subhiksha

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Subhiksha is a Chennai-based, decade old, no frills, food, grocery,

pharma and telecom, discount retail chain. ICICI Venture Capital holds

24% in the equity capital of Subhiksha. It has more than 500 stores across

the country covering a retail space of more than 1 million sq ft with a

registered turnover of Rs 3.34 bn in 2006. It has a planned investment of

Rs.300 crores to ramp up its operations to 1200 stores by 2008.

New but potential BIG players

8. Bharti-WalMart

Their plans include US$ 7 bn investment in creating retail network in

the country including 100 hypermarkets and several hundred small stores.

They have signed a 50:50 percent joint venture agreement with Walmart.

Wal-Mart will do the cash & carry while Bharti will do the front-end.

9. Reliance

India’s most ambitious retail plans are by reliance, with investments

to the tune of Rs. 30,000 cr ($ 6.67 bn) to set up multiple formats with

expected sales of Rs 90,000 crores ($20 bn) by 2009-10.

There are already more than 300 Reliance Fresh stores and the first

Reliance Mart Hypermart has opened in Ahmadabad. The next ones are

slated to open at Jamnagar, followed by marts in Delhi / NCR, Hyderabad,

Vijayawada, Pune and Ludhiana.

10. AV Birla Group

They have a strong presence in apparel retailing through Madura

garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands

like Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town.

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In other segments of retail, AV Birla Group has announced

investment plans of Rs 8000 - 9000 crores in the first 3 years till 2010.

The acquisition of Trinethra (food & grocery) chain in the south has

moved their tally to 400 stores in the country. Their “More” range of 15

supermarkets are slated to open at Nashik, Pune and other tier II cities in

Western India in 2007.

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Impact of RETAIL INDUSTRY

Retailing is a `technology-intensive' industry. It is quoted that

everyday at least 500 gigabytes of data are transmitted via satellite from

the 1,200 point-of-sales counters of JC Penney to its corporate

headquarters. Successful retailers today work closely with their vendors to

predict consumer demand, shorten lead times, reduce inventory holding

and thereby, save cost. Wal-Mart pioneered the concept of building a

competitive advantage through distribution and information systems in

the retailing industry. They introduced two innovative logistics techniques

- cross-docking and electronic data interchange.

Today, online systems link point-of-sales terminals to the main

office where detailed analyses on sales by item, classification, stores or

vendor are carried out online. Besides vendors, the focus of the retailing

sector is to develop the link with the consumer. `Data Warehousing' is an

established concept in the advanced nations. With the help of `database

retailing', information on existing and potential customers is tracked.

Besides knowing what was purchased and by whom, information on softer

issues such as demographics and psychographics is captured.

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Retailing, as discussed before, is at a nascent stage in our country.

Most organized players have managed to put the front ends in place, but

these are relatively easy to copy. The relatively complicated information

systems and underlying technologies are in the process of being

established. Most grocery retailers such as Food World have started

tracking consumer purchases through CRM. The lifestyle retailers through

their `affinity clubs' and `reward clubs' are establishing their processes.

The traditional retailers will always continue to exist but organized

retailers are working towards revamping their business to obtain strategic

advantages at various levels - market, cost, knowledge and customer.

With differentiating strategies - value for money, shopping

experience, variety, quality, discounts and advanced systems and

technology in the back-end, change in the equilibrium with manufacturers

and a thorough understanding of the consumer behaviour, the ground is

all set for the organized retailers.

It would be important to note, however, that the retailing industry in

India is still a `protected industry'. It is one of the few sectors which still

has restrictions on FDI. Given the current trend in liberalization, it will not

be long before the retailing sector is also thrown open to international

competition. This will see a further segregation of the international

retailing brands and the domestic retailers, thereby injecting much

greater dynamism into the market. That will be when the real action will

begin.

Major retailers in India

• India’s top retailers are largely lifestyle, clothing and apparel stores.

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• This is followed by grocery stores.

• Following the past trends and business models in the west retail giants

such as Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros

and small cities almost doubling their current number of stores.

• These Wal-Mart wannabes have the economy of scale to be low –

medium cost retailers pocketing narrow margin.

RETAILING SCENARIO-INDIA:

The retail scenario in India is unique. Much of its is in the

unorganized sector, with over 12 million retail outlets of various sizes and

formats. Almost 96% of these retail outlets are less than 500 sq.ft. In size,

the per capita retail space in India being 2 sq.ft. Compared to the US

figure of 16 sq.ft. India’s per capita retailing space is thus the lowest in

the world. With more than 9 outlets per1,000 people , India has the

largest number in the world. Most of them are independent and contribute

as much as 96% to total retail sales.

Because of the increasing number of nuclear families, working

women, greater work pressure and increased commuting time,

convenience has become a priority for Indian consumers. They want

everything under one roof for easy access and multiplicity of choice. This

offers an excellent opportunity for organized retailers in the country who

account for just 2% (and modern stores 0.5%) of the estimated US $180

billion worth of goods that are retailed in India every year.

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The growth and development of organized retailing in India is

driven by two main factors – lower prices and benefits the consumers

can’t resist. According to experts, economies of scale drive down the cost

of the supply chain, allowing retailers to offer more benefits offered to the

customer.

The retail business in India in the year 2000 was Rs.400,000 crore

and is estimated to go to Rs.800,000 crore by the year 2005, an annual

increase of 20%.The contribution of the organized retail industry in the

year 2000 was Rs.20,000 crore and is likely to increase to Rs.160,000

crore by 2005.

GROWTH OF RETAIL OUTLETS IN INDIA:

India is rapidly evolving into a competitive marketplace with potential

target consumers in the niche and middle class segments. The market

trends indicate tremendous growth opportunities. Global majors too are

showing a keen interest in the Indian retail market. Over the years,

international brands like Marks & Spencer, Samsonite, Lacoste,

McDonald’s, Swarovski, Domino’s among a host of others have come into

India through the franchise route following the relaxation of FDI (foreign

direct investment ) restrictions. Large Indian companies – among them the

Tata, Goenka and the Piramal groups – are investing heavily in this

industry.

Organizations ready to take on this challenge can leverage the

opportunities offered by a population of more than a billion. The prospects

are very encouraging. Buying behaviour and lifestyles in India too are

changing and the concept of “Value for Money” is fast catching on in

Indian retailing. This is evident from the expansion of the pantaloons

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chain into a large value format, Big Bazaar, and the entry of new discount

stores in food retailing in the South, namely, Subhiksha and Margin Free.

TRENDS IN RETAILING:

The single most important evolution that took place along with the

retailing revolution was the rise and fall of the dotcom companies. A

sudden concept of `non-store' shopping emerged, which threatened to

take away the potential of the store. More importantly, the very nature of

the customer segment being addressed was almost the same. The

computer-savvy individual was also a sub-segment of the `store'

frequenting traffic.

Internationally, the concept of Net shopping is yet to be proven. And the

poor financial performance of most of the companies offering virtual

shopping has resulted in store-based retailing regaining the upper hand.

Other forms of non-store shopping including various formats such as

catalogue/mail order shopping, direct selling, and so on are growing

rapidly.

However, the size of the direct market industry is too limited to deter the

retailers. For all the convenience that it offers, electronic retailing does

not suit products where `look and see' attributes are of importance, as in

apparel, or where the value is very high, such as jewellery, or where the

performance has to be tested, as of consumer durables. The most critical

issue in electronic retailing, especially in a country such as ours, relates to

payments and the various security issues involved.

Recent trends include:

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• Retailing in India is witnessing a huge revamping exercise.

• India is rated the fifth most attractive

emerging retail market: a potential

goldmine.

• Estimated to be US$ 200 billion, of

which organized retailing (i.e. modern

trade) makes up 3 percent or US$ 6.4

billion.

• As per a report by KPMG the annual

growth of department stores is

estimated at 24%.

• Ranked second in a Global Retail

Development Index of 30 developing countries drawn up by AT Kearney.

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Opportunities in Indian organized

RETAIL SECTOR

The opportunities in Indian organized retail sector are many for this

sector is witnessing a boom.

The retail industry in India amounted to US$ 200 billion in 2006, and

out of this amount the Indian organized retail sector amounted to US$ 6.4

billion. The opportunities in India organized retail sector can be judged

from the fact that by 2010 it is expected to rise to US$ 23 billion.

The various opportunities in the organized retail sector in India are

mainly there for the Indian consumers behavior pattern has changed. Now

the Indian consumer gets more hefty pay- packages, is younger, a large

number of women are working, western influences, and more disposable

income have opened a lot of opportunities in Indian organized retail

sector. The Indian consumer wants to shop, eat and get entertainment in

one place and is have also given Indian organized retail sector an

opportunity to grow.

The Indian government in 2005 allowed foreign direct investment (FDI) in

single brand retail to 51%. This have opened up a lot of opportunities in

India organized retail sector. In fact 325 departmental stores, 300 new

malls, and 1500 supermarkets are being built which shows the

tremendous opportunities in the organized retail sector in India.

Many Indian companies seeing the various opportunities in organized

retail sector in India have entered it. Pantaloons have decided to

increase its retail space to 30 million square feet with an investment of

US$ 1 billion. Reliance Industries Limited is targeting for annual sales of

US$ 25 billion by 2011. It is planning to invest US$ 6 billion in order to

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open 1,500 supermarkets and 1000 hypermarkets. Bharti Telecoms is

planning a joint venture with Telco a global retail giant worth £ 750

million.

The opportunities in the organized retail sector in India have also

increased with the desire of many global retail giants to set up shop here.

The global retail giants who are entering the Indian organized retail sector

are:

Tesco

Wal- Mart

Metro AG

Carrefour SA

The opportunities in Indian organized retail sector are varied and it must

be fully exploited by the Indian retailers.

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BIG BAZAAR {Detail Story}

India's answer to global

hypermarkets like Wal-Mart and Carrefour

is right here in Big Bazaar - India's first

hypermarket chain in the lines of global

discount chains. BIG BAZAAR, the

hypermarket chain was introduced in

India by Pantaloon Retail (India) Ltd in

the year 2001 in Calcutta and was

followed by stores in Hyderabad and Bangalore in

a short span of 22 days. Today there are more than 20 Big Bazaars all

over India with an average of 40,000 Sq. ft. area (1, 40,000 Sq. ft. in

Malad)

“Jo bazaar mein milta hai, who sab yahan milta hai, is how

Rakesh Biyani, Director, Pantaloon Retail (India) limited describes Big

Bazaar. The Bazaar is a term commonly used for the market or

marketplace. Whenever any of us need anything, the simplest way to go

is to go to the Bazaar. Big Bazaar represents a location where a customer

can shop for anything that he needs, for which he would normally visit a

bazaar or the market.

Findings:

Big Bazaar is very well positioned.

One of the successful ventures of big bazaar – Food Bazaar is also

very successful.

Big Bazaars annual income is more than that of Pantaloons.

Big Bazaars annual promotional expense is almost double to that of

Pantaloons.

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In addition, the stores are very well maintained where as the

cleanliness is considered and Big Bazaar also has a customer help

desk at the entrance of the store.

In addition, customers can find many sales executive willing to help

during their shopping.

CUSTOMERS FEEDBACK

THIS SURVEY DONE BY BIG BAZAAR

1. How often do you go for shopping?

Regularly

Monthly

Half- Yearly

Yearly

2. What do you generally buy?

Clothing

Jewellery

Leather Articles

Cosmetics

Gift Articles

Others (please specify)

3. Where do you normally go for shopping?

Shoppers Stop

Pantaloons

Linking Road

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Big Bazaar

4. What makes you visit all this stores or place?

Product Range

Service

Quality

Ambience

Price

Brand Name

5. Have you ever tried Bargaining at this Branded Retail outlet?

6. If not (why?)

7. DO you think collection changes according to fashion? (please specify)

8. Do you think Branded retail gives you value for your hard earned

money?

Yes

No

9. Any suggestions/improvements for any particular Retail outlet

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Customers Feedback

The following Feedback big bazaar has got is form 20 people almost all of

whom have visited all the stores. This will give you a general public’s

perception of the stores and also retailing at these stores.

1) How often do you go for shopping?

People were not really sure whether they did go for shopping monthly or

yearly. Majority of them said it all depends on the mood or even on some

special occasions.

2) Where do you normally go for shopping?

Panta

loons

Shopp

ers S

top

Lifes

tyle

Akbar

allys

Big Baz

aar

Wes

tside

0

5

10

15

20

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This was a multiple choice question. What I conclude from the graph is

that people do visit all the stores. But the graph clearly shows that largely

people like to visit Pantaloons for their shopping. The major competition is

between Pantaloons, Lifestyle

3) What do you generally buy?

clothing Jewellery Leather Ar-ticles

Cosmetics Gift Articles0

2

4

6

8

10

12

14

16

18

20

All the stores being exclusive brands in clothing most of the people go to

the store to buy the same. Along with that, things such as cosmetics, gift

articles and leather articles also had a reasonable but less demand.

4) How do you rate the following: (for each store)

Ambience

Price

Quality

Variety

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Salesmen behavior

In this question customers rated the shopping experience at all the stores

according to the following five criterions:

a). Ambience got a rating of an average 7 which clearly shows that it is

quite well maintained in all the stores. Akbar ally’s got the least rating and

big bazaar, pantaloons, lifestyle and Shoppers Stop all are very close to

each other.

b). Price is a very discouraging factor at all the stores. An average rating

of just 2 makes obvious the expensive nature of all the stores. Only Big

Bazaar got the best rating.

c). Quality got an extensive high around of 8.5 which shows that the

standards maintained at the store are quite high. Pantaloons got the best

rating followed by Shoppers Stop, Lifestyle and Westside

d). Variety getting a rating of 7.5 illustrates that the customers has

ample range of products to choose from.

e). Salesmen Behaviors was rated as low mean of 4 which indicates

that the customer-employee relationship is quite undeveloped. In this

category again Akbarallys and Westside losing out badly with rating of just

1 and 3 respectively, big bazaar has got good rankings

5) DO you think collection changes according to fashion in all the

stores?

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Panta

loon

s

Shopp

ers

...

Life

style

Akbar

allys

Big B

azaa

r

Wes

tsid

e02468

1012141618

6) DO you think Branded retail gives you value for your money?

A) Considering the review, 75% of the total customers agreed that, Yes,

the store did give them the value for their hard earned money. But the

rest 25% did not feel so.

7) Any suggestions/improvements for any particular Retail outlet?

A) All the stores except for Big Bazaar should compromise on pricing,

provide better guarantee on products and also improvement in the

exchange policies.

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Conclusion

After analyzing the retail industry, I can conclude that Retailing has

come to occupy a prominent position in today’s modern society.inspite of

the Indian are still through traditional trade.nevertheless, modern

organized retail format is slowly gaining acceptance and can easily be

said to be emerging as a sturdy contender among consumers. Typically,

the evolution of the retail trade can be studied by having a look at four

key components-consumers behaviour, trade structure, the retailer-

manufacturer relationship and competition. it is said that organized

modern retail has altered t he first paradigm of consumer behaviour the

profile of the modern format shopper can easily be described as an

affluent one with higher and more disposable income, although they face

the paucity of time to explore a detailed shopping experience .however,

such consumers have also revealed a willingness to pay a premium,

provided they receive better service quality at retailed outlet

Today the market sees more of organized retailing mainly due to

the following reasons-increase in per capita spending by consumers,

rapidly growing middle class and double income households, rising

workforce with global trade, exposure of international taste and lifestyle

though media, increase in the usage of credit and debit cards.

Some of the factors attracting global retailers to India could be :

improved living standards and continuing economic growth increase in

India’s GDP,growth of retailing industry sheer size and potential on India’s

consumer market, friendly business environment, growing spending

power and brand conscious customers aspiring to own quality and

branded products.

The factors which have played a key role in the development and

growth of the organized retailing industry are consumer pull, changes in

social structure and consumer behaviour, retailers proximity to

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consumers, evolution of family owned establishments, emerging rural

markets, changes occurring in retail scenario, global retailers call for FDI

and corporate interest in retailing.

“Big is beautiful. Malls are all very good for shopping, but the kirana store is for the odd

quantities in life. Like when you need one-fourth of a packet of rice.”