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RETAIL MANAGEMENT
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RETAILING
Final stage of any economic activity
Involves all activities in selling goods/services
to the final consumer for personal use.
Link b/w the producer & consumer
Most important channel member
An image creator
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THE RISE OF THE RETAILER
The Pre-marketing
Era
Dominance
of the
Wholesaler
Dominance
of the
manufacturer
Era of theRetailer
Age of
the
Consumer
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REASONS FOR RISE OF THE
RETAILER
Rise of consumerism
Proximity to the consumer Growth of private labels
Globalization
Technology
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CHALLENGES FACED BY
RETAILERS
Emergence of new markets
Empowered consumers Technology-enabled efficiencies
The rise of the e-age
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WHY RETAILING???
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UNDERSTANDING RETAIL
FORMATS
CLASSIFICATION
OF
RETAIL FORMATS
STORE
BASED
NON-STORE
BASED
PRODUCT
MIXPRICE
OWNERSHIP
BASED
SERVICES
RETAILING
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STORE BASED(operate from a physically brick & mortar
environment)
On the basis ofproduct mix offered:
1. Convenience Stores
Essentially found in residential areas
Provide limited amount of merchandise at more
than average prices with a speedy checkout.
Ideal for emergency and immediate purchases asit often works with extended hours, stocking
everyday;
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2. Supermarkets
A self-service store consisting mainly of grocery
and limited products on non food items.
May adopt a hi-low or an edlp strategy for pricing.
Can be anywhere between 400sqm & 2500sqm
Eg: foodworld, Food Bazaar, Reliance Fresh etc.
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3. Hypermarkets
Combination of supermarket & department store
Provides variety and huge volumes of exclusive
merchandise at low margins.
Operating cost is comparatively less than other
retail formats.Selling area between 5000- 15000sqm
One-stop shopping
Offering food & non-food items.
Eg: carrefour, Walmart, Tesco, Big Bazaar etc.
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4. Specialty stores
Gives attention to a particular category andprovides high level of service to the customers.
A pet store that specializes in selling dog food
would be regarded as a specialty store.
However, branded stores also come under this
format.
For example if a customer visits a reebok then
they find just reebok products in the respectivestores.
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5. Category killers/Category SpecialistBy supplying wide assortment in a single
category for lower prices a retailer can "kill" that
category for other retailers.
Stock deep
Nallis in Chennai for sarees & Toys Kemp in
Bangalore, LOFT in Mumbai (footwear)
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6. Department stores
Very large stores offering a huge assortment of
"soft" and "hard goodsOften bear a resemblance to a collection of
specialty stores
A retailer of such store carries variety of categories
and has broad assortment at average price.They offer considerable customer service.
Have atleast 50 employees
20000-40000 sqft.
Shoppers stop, westside, lifestyle, marks &spencer, harrods etc.
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On the basis ofprice offered:
1.Consumer Cooperatives
Aim at providing essential commodities at
reasonable prices
Democratic institution owned, managed & controlled
by its members for protection of the interest ofcommon consumers.
Protects consumer interest & stabilise the prices
Eg: Sahakari Bhandar & Apna bazaar in Mumbai &
Super Bazaar in delhi.
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2. Off Price Retailers
Merchandise sold in odd sizes, unpopular colors, offseasons & less pricess
Eg: Pantaloon factory outlets, Levis FOs
Some Other formats are:
Discount department storesOutlet stores
Limited assortment stores
Dollar stores: traditional format selling 20-80% ofgroceries & other consumable products at discounted
prices
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NON STORE BASED
1.Catalogue showrooms
Specialise in hard goods such as house wares,
jewellery & consumer durables.
Customer walks into the showroom, browse thecatalogue, specifies the product code & place the
order.
Eg: Hypercity has joined forces with ARGOS, UK
based.
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2. Direct Selling
3. Direct Marketing (Mail order, television
retailing)
4. Electronic Shopping
5. Automated Vending/Kiosks
6. Airport Retailing
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SERVICES RETAILING
Selling services rather than merchandise
Services like: Ailrlines, automobiles repair,banks, credit cards, education,health care,
fitness, hotels, insurance, movies, restaurants
etc.
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OWNERSHIP BASED RETAILING
Independent, single store establishments
Corporate Retail chains (Walmart, JC Penny etc)
Franchising (Haldirams, BR, Dominos , KFC,Lilliput, ferns & petals etc)
The Cash & Carry
Leased Departments
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THEORIES OF RETAIL
DEVELOPMENT
Classified into:
1. Environmental Theory (retail change is
attributed to change in environment)
2. Cyclical/Wheel Theory (retail change followsa pattern having identifiable attributes)
3. Conflictual Theory (conflict between 2
opposite type of retailers leads to a newformat)
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ENVIRONMENTAL THEORY
Retailers confront an environment which is
made up of customers, competitors &
changing technology.
Retailers who successfully adapt techno,
economic, demo & legal changes prosper &
vice versa.
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CYCLICAL/WHEELOF RETAILING THEORY
Given by Prof. Malcolm P. McNair
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1. New retailers often enter the market place with
low prices, margins, and status. The low prices
are usually the result of some innovative cost-cutting procedures and soon attract
competitors.
2. With the passage of time, these businesses
strive to broaden their customer base and
increase sales. Their operations and facilities
increase and become more expensive.
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3.They may move to better up market locations, start
carrying higher quality products or add services
and ultimately emerge as a high cost price service
retailer.
4. By this time newer competitors as low price, low
margin, low status emerge and these competitors
too follow the same evolutionary process.
5.The wheel keeps on turning and department
stories, supermarkets, and mass merchandise went
through this cycles.
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CONFLICTUAL THEORY
Conflict exists between operators of similar
formats.
Retail innovation leads to development of more
retail formats Retailing evokes through a dialectic process:
blending of 2 opposites to create a new format.
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Thesis: Individual retailers as corner shops all
across the country
Anti thesis: Department stores
Synthesis: Blending of thesis & antithesis
resulting in thriving supermarkets &
hypermarkets. It becomes the thesis for
next round of evolution.
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Retail Life Cycle
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INDIAN RETAIL SCENARIO
Traditional Business Models:
Mandis
Haats Melas
The local Kirana
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DRIVERS OF RETAIL GROWTH
Economic Growth
Growing middle class
Demographics (47% of population below 20 & 70%
below 40)
Changing family structure (working women)
Changing consumption basket (Maslows hierarchy)
Urbanization
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KEY SECTORS IN INDIAN RETAIL
Food Retail : Food & Grocery
Food Services (Restaurants)
Apparel : Mens, Womens & Kids wear
Consumer Durables :Electronics (TV, Audio, DVD)
Utilities (Refrigerators, WM,
kitchen appliances, ACs,
Vacuum Cleaners)
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Footwear
Jewellery
Watches
Telecom
OTHER SUBSECTORS
Fuel
Pharma
Beauty & wellness
Books, Music & gifts
BEYOND URBAN BOUNDARIES Hariyali Kisaan Bazaar
E-choupal
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THANK YOU
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