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Chap 10. Channel Institutions - Retailing

Retailing includes all activities involved in selling consumer products directly to ultimate consumers. There are various types of retailers like specialty stores, department stores, supermarkets, and convenience stores. Retailers can be organized as corporate chains, voluntary chains, cooperative societies, or franchise organizations. Retailers focus on optimizing costs and demand while ensuring high inventory turnover and profitable operations. Retailers also aim to optimize service levels compared to competition. Private labels offer retailers higher margins and bargaining power with national brands. Modern retail formats in India include supermarkets, hypermarkets, department stores, grocery and pharmacy chains. Trends show rising incomes and literacy increasing consumer choices and bargaining power.

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92 views18 pages

Chap 10. Channel Institutions - Retailing

Retailing includes all activities involved in selling consumer products directly to ultimate consumers. There are various types of retailers like specialty stores, department stores, supermarkets, and convenience stores. Retailers can be organized as corporate chains, voluntary chains, cooperative societies, or franchise organizations. Retailers focus on optimizing costs and demand while ensuring high inventory turnover and profitable operations. Retailers also aim to optimize service levels compared to competition. Private labels offer retailers higher margins and bargaining power with national brands. Modern retail formats in India include supermarkets, hypermarkets, department stores, grocery and pharmacy chains. Trends show rising incomes and literacy increasing consumer choices and bargaining power.

Uploaded by

Ankur Mehta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Chap 10.

Channel Institutions - Retailing

Retailing
Retailing includes all the activities involved in selling or renting consumer products and services directly to ultimate consumers for their personal or home consumption.

Type of retailer Specialty store Department store Super market Convenience store ( kirana store) Discount store Corporate chains Voluntary chain

Characteristics Narrow product line with deep assortment- apparel, furniture, book Several product lines in different departments- shoppers' stop, big bazaar Large, low cost, low margin, high volume, self service operation with a wide offering Small stores located in residential areas, open long hours all days of week, reliance fresh Standard merchandise sold at lower prices for low margins- subhiksha More outlets commonly owned and controlles by 1 firm: globus Wholesaler sponsored group on independent retailers

Retailer co-ops

Independent retailers with central buying operations and common promotions Co-operative societies of groups of consumers operating their own storesfarmers, industrial workers and so on. Contractual arrangement between the producer and retailers- selling the producers products execlusively

Consumer co-ops

Franchise organization

Retailers can at times be wholesalers but the reverse may not be possible. Retailers focus on the cost side and the demand side of the business. They need to be profitable with optimum inventory. The inventory turnover has to be high even if the margins are low so that the profitability is ensured. The second is to optimize services levels to the shoppers compared to competition.

Retailers own brands/ private lables


Advantages: They are as good as the major brands but are priced less as they have cost advantage. They provide higher margins to the retailer. If successful, they give better bargaining power to the retailers. They can demand better terms from the national company brands. The task of merchandising becomes simpler.

Some salient features of retail in India


Grocery outlets Traditional Supermarkets Other grocery outlets Total In 2003 52,73,310 2314 7,62,114 60,37,738 Total 4,05,743 drugstores In 2003 Traditional medical 2,76,058 Cosmetic stores 1,29,685

Modern retail format in india(2003)


Name Supermarkets Apna bazar Food world samaviyka Triveny Vesta Dis.store chain: Subhiksha Margin free Trinethra 87 87 51 114 72 10 10 10 No. Amudham Sabka bazar Arambagh Nilgiris Adanis Sahakari bhander Supplyco Janatha bazra Basco 27 21 18 16 15 15 13 12 10

Maratha stores 18

Kendriya bhander 36

Modern retail format in india(2003)


Name Hyper mkt: Big bazzar Giant Dept. chains: Shoppers stop Pantaloon Westside ebony Grocery chain: Raj rajya sahakari 6 11 8 8 6 6 1 No. Shreyas Convenience chain: Bpcl in & out convenio HP speedmart akbarallys Club HP 79 15 14 8 8 5

Modern retail format in india(2003)


Name Health & pharmacy chain: Appollo 85 No.

Raj rajya sahakari 36 Health & glow Himalaya ayurvedic 14 13

Medicine shoopee 09

Private label in India


Westside, benzer , globus , pantaloons and shoppers stop. Summary Sponsored by companies or corporate Focus is on ambience and making shopping pleasure Use latest technology for customer care and SCM Effectively manage operating costs

Even within organized retail, different formats could mean a different value proposition for the consumers: Supermarkets by definition normally deal with food and household products.( food world, big bazaar, shubhiksha) Department stores offer a much wider variety- focus is more on apparel.(globus, shoppersstop) Hypermarkets and discount stores where the focus is on best prices in large stores with a wide choices. ( big bazaar) There could also be specialty stores with a single product category but exyensive choice (RBK)

For unorganized retail form:


All outlets are owned either by individuals or by family Formats include kirana stores, pan/ beedi stores, chemists, general stores Would probably employ 95% of the people who are in retail Provide personalized services and convenience. Open for very long hours Do not find the need for use of technology

Trends in retailing in India


The income levels are rising and with it the requirement of variety and willingness to pay the price if the value is right. The expansion of communication channels has a great influence on the product choices expected. Increased literacy in both urban and rural areas makes the consumer more conscious of his bargaining power. Growing no of nuclear families in urban areas. The increased influence of the retailer through the product offering and the additional facilities he provided.

Rural markets and consumers want whatever is available in urban areas and are willing to pay the price for it. The advantages of bargaining with bigger volumeseconomies of scale. Entry of the corporate sector in retailing The influence of foreign players on the retail sector with the opening of FDI Entrepreneurs willing to look at investments in the retail sector Emergence of the store as a brand

Some trends in retailing already in the western are also in India soon:
New retail format keep coming up. Ex. Includes ATM at bus stations, convenience stores at petrol pumps and beverage vending machines. New retail forms also get quickly replicated and lose their novalty. Ex. Food and grocery retailers like nilgiris, which were unique at one time, are no longer so. Competition is very severe bet diff kinds of stores against the corner grocer.

Broad categories of retailers are of two varietiesmass merchandisers( like big bazaar) or specialty retailers( like reebok stores) Leading modern retail formats with all-under-one-roof policy are still the preferred destination for shoppers Ex. the huge rush when big bazaar announce their discount sales is a clear indication of this. The modern retailers are professionally managed and operated as many of them are corporate. Technology is becoming a critical and competitive tool.

Modern retail is not just a place for buying goods, but also a place to meet other people and socialize.

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