Retail Management

IIM Udaipur
Sessio Topic Intended Learning References/
n no. Outcome Material
What is/ is not Retailing; Instructor’s PPT on
Introduction , Types of Retailing; Differences Introduction to
1 Taxanomy, Scope of between F & G and Specialty Retailing + India
retail Retailing; Sociological aspects Backgrounder
of Retailing
The 2 virtuous cycles of Instructor’s PPT on
Retailing; the flip side effects Modern vs
Virtuous cycles,
of Retailing; the Value Traditional Retail in
2 Traditional vs Modern
Propositions of Modern vs India
trade
Traditional Retailing; Profiling
of Modern retail Shoppers
The Opportunites and Walmart In India
Retailing in India -
Challenges in Modern Retail in case – Group
3 opportunities &
India; Entry Strategies in presentations +
challenges
Modern Retail in India class discussion
The Why and How of using Eddie Bauer case –
Omni Channel Omni channel Retailing Group presentations
4
Strategies + class discussion

The Strategic Framework to Instructor PPT on 8

evaluate Retail ; the Retail Ways to Win in
8 Ways to win in Retail
Concept; Catchment Retail + Class
5 - The Pentagon &
definitions; The Pentagon & discussions; Videos
Triangle model
Triangle model and its uses+ on Retail concepts
Sessio Topic Intended Learning References/
n no. Outcome Material
The Diagnostic Framework Instructor PPT on
to evaluate Retail; FANS Store Ebitda
Store ebitda model ; Analyses and its Modelling + FANS
6,7 SRM ; SPM ; Fans applications; Store Ebitda Analyses + Class
Analyses modelling and its uses + discussion
Solutioning approaches +
SRM & SPM Models in Retail
The Role of Supply Chain in
Zara Fast Fashion
Supply chain Retail Strategy case – Group
8
Management Presentations +
class discussions
The Role of Customer Nordstrom -the
Centricity in Retail in Turnaround case –
creating Competitive Group
Service excellence & advanrage presentations +
9
HR Management class discussions
+ videos on
Customer
Centricity
Franchising and its Why Pizza Hut case –
and How; How to analyse a Group
Components Weightage

25%
Quiz 1 (Prof. Dasaratharaman)

25%
Quiz 2 (Prof. Venkat)

25%
Case Analysis + Submissions (Prof.
Dasaratharaman)

15%
Case Analysis (Prof. Venkat)

Class Participation 10%

Introduction to Retailing

Kannan Dasaratharaman
What do you understand by Retailing?
 What do you understand by Retailing?
• Last mile transaction with the end consumer/
customer/ shopper
• In the B2C space ( as opposed to B2B)
• Study of the “ process of exchange of Value”
 What do you understand by Retailing?
• Last mile transaction with the end consumer/
customer/ shopper
• In the B2C space ( as opposed to B2B)
• Study of the “ process of exchange of Value”

Retailer STORE Shopper

What is Shopping and what are its
Objectives?
 What is Shopping?
• Case A:
• You go to the store and are looking for Colgate Active Salt
toothpaste.
• You do not find your SKU but find many other SKUS of
Colgate
• Was the Shopping trip successful?

• Case B:
• You find the SKU you are looking for but you had to stand in
queue for 30 mins to Check out.
• Was the Shopping trip successful?
 Retailing : A Shoppers perspective
• What are the 2 things that need to be satisfied
in a successful Shopping trip?
 Retailing : A Shoppers perspective
• What are the 2 things that need to be satisfied in a successful Shopping trip?
• You get the Product you were looking for:
– Right Quantity/ sku
– Right Quality
– Right Price
– Right Place
• You had a good Shopping experience
– Ease of shopping / access
– Ease of Check out
– Service : during and after Purchase

• Shopping = Product + Experience

• Retailing = Study of How to give the Shopper the Product + Experience they Expect!

• Why We Buy – The Science of Shopping by Paco Underhill = The Experience of Shopping
 Taxonomy of Retail
• What are the different types of Retail ?
 Taxonomy of Retail
Total Retail

Specialty
F&G Retail
Retail

Brick & Brick &

Online Retail Online Retail
Mortar Retail Mortar Retail

Modern
Modern Traditional Retail
Retail Retail
Traditional
retail
 Some Retail Terms
• Range ?
• Assortment?
• Gondolas?
• End Caps?
• Aisles? Power aisles ? ( pronounced ‘ailes’)
• Check out counters?
• Bagging?
 Some Retail Terms
• Range ?
– The number of different kinds of Articles ( Categories and Sub
Categories available in the Store....eg ( Oral care, Hair care, electronics,
jewellery..etc....)

• Assortment?
– The number of Shopper choices within any one Sub category
– Eg. Different brands and varieties in Soap or Toothpaste
SUB Sub Sub Sub
• Range = WIDTH Cat 1 Cat 2 Cat 3 Cat 4
• Assortment = DEPTH SKU1
SKU2
SKU3
SKU4
SKU5
 Some Retail Terms
• Gondolas? = Shelves ( where products are displayed)

• End Caps?= Shelf ends ( which are leased out to Brands for a fee)

• Aisles? Power aisles ? ( walkways within the store through which

shoppers traverse....)

• Check out counters? (counters where the billing and bagging takes
place)

• Bagging ? ( The activity of stuffing your purchases post billing into

‘carry bags’)
 Types of F & G Retail
• Really governed by Size and what that correlates to: ( differs from country to country…..)

– Daily / Convenience stores ( 2000 – 4000 Sqft)

– Super markets ( 5000 – 12000 sq ft)
– Hyper Markets ( 15000- 50000sqft)

• Obviously the more the space , the wider the selection of goods in the store..........

– Gourmet Foods
– Fruit and Vegetables
– Fish and Meat
– Wine and Spirits
– Live Bakery

• The Hypermarket range Plus

– Apparels
– Electronics
– Other White Goods
– Jewellery
– Home
–
Types of Specialty Retail ?
 Types of Specialty Retail
• Apparels
• Electronics (CDIT)
• Jewellery
• Footwear
• Watches
• Eye wear
• Pharmacy
• Accessories
• Sports goods
• Furnishings What is NOT Retail?
• Automobiles
• F&B
• QSR
• Health care
• Hospitality
• Retail Banking
• Agri Inputs
• Education ?
• Etc...........
 Types of Specialty Retail
• Apparels
•
•
Electronics (CDIT)
Jewellery What is NOT Retail?
• Footwear
• Watches
• Eye wear • B2B
• Pharmacy
• Accessories
•
•
Sports goods
Furnishings
• Personal Selling (Eureka
•
•
Automobiles
F&B
Forbes) + Urban Ladder
• QSR
• Health care
• Hospitality • Multi level Mktg ( Amway,
• Retail Banking
• Agri Inputs Tupperware)
• Education ?
• Etc...........
 As a Shopper what are the differences you would
spot between F&G and Specialty Retail ?
( eg Jio Mart/ More vs Titan stores)
Food & Grocery Retail Specialty Retail
 Business Size

F &G Vs Specialty Retail

3

2.5

Investment
1.5

0.5

0
0 0.5 1 1.5 2 2.5 3

Profitability
Sociological Evolution of Retail
 Sociological History of Retail
• Where did Retail start?
 Sociological History of Retail
Family Trade Routes Monetisation

Tribe Locomotion Credit

Specialisation Market Place Communication

Surplus Barter Online

 Old Market places ( Haats / Melas) vs
Modern Day Malls
• What do Shoppers/ consumers/ customers
look for in a Mall?

• What did/ do they look for in a Haat/Mela ?

 Old Market places ( Haats / Melas) vs
Modern Day Malls
• Customers look for the same things:
– Shopping
– Food
– Entertainment
 Sociological Impact of Modern Retailing:

• The Virtuous cycles

• The flip side effects:

 The Virtuous Cycle -1
Growth of
Modern Retail

Better
Adoption of
Modern Retail Value For
Money

Increased
Satisfaction
AND / OR
Increased Savings
 The Virtuous Cycle -2
Growth of
Modern Retail

Adoption of More
Modern Retail Employment

Increased Wages
AND
Increased Savings
The Flip side effects:
 The Flip side effects:
• Mom & Pop stores / Traditional Retailers
• Small producers
• Artisan Products
• Farm sector: Beet sugar vs Cane sugar
• Change consumer preferences: Mexican Rice
 Retailing

India Backgrounder
 India: the land of dispersion…….
Population Range No of Towns % Population
Urban

> 10 million 3

1 -10 million 50
22%
100K – 1million 415

< 100 K 5698 10%

Total Urban 6166 32 %

Rural ~ 630,000 68%

Census Of India : 2011

 India … the land of shopkeepers
Country No. of Retail outlets No. of Retail
(millions) outlets / million
Popn.
UK 0.30 4900

USA 0.95 3150

Japan 1.00 7300

Brazil 1.20 6200
Indonesia 2.70 11500

China 4.50 3500

India Estd.15.0 12000

Source: Euromonitor, 2007 with extrapolation

 Upgrading of the Consuming Class will
be the next inflection point
• Middle class to swell from 5% of population in 2005 to 41% of population
by 2025
• The heart of the Diamond will look for Quality versus just Price driven by needs
of Fashion, Convenience, Durability & Experience

High
Income

583 Million
50 Million 318 Million
Middle Middle Income (41%)
(5%) (27%)
Income

Low Income

2005 2015 2025

Source : McKinsey Global
Institute

Market Place & BHPC’s Vision

2016
• Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in
online retail of goods and services through the automatic route, thereby providing
clarity on the existing businesses of e-commerce companies operating in India.
 FDI in Retail
• Why is FDI Good?
• Retail Industry is investment heavy due to store fit outs and
purchase/ lease.
• Retail Industry has long gestation periods.
• Firms have to sustain losses in the interim

• How does FDI solve the above?

• FDI brings with it a lot of Capital
• FDI capital generally is long term
• FDI coupon rates are low and can sustain long gestation
periods
 Policy Guidelines
• FDI has to be Approved by both Centre and
State.

• Reservation for towns in Populations of 1 lac

and below for Traditional Trade

• Single Brand FDI comes with a 30% local

sourcing rule