Retail

Management
Module-4
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Module-4 Retail Management
Introduction and Perspectives on
Retailing, World of Retailing, Retail management, introduction,
meaning, characteristics, emergence of organizations of
retailing - Types of Retailers (Retail Formats) - Multichannel
Retailing -Customer Buying Behaviour, role of retailing, trends
in retailing, FDI in Retail - Problems of Indian Retailing -
Ethics in retailing, Current Scenario.
Assignment: History and current trends including Indian
retail FDI Policy.
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 RETAIL MANAGEMENT
DEFINITION AND INTRODUCTION

Retailing,derived from French word Retaillier

cut a piece off or break the bulk
Retailing consists of activities involved in selling
goods and services to ultimate consumers for
personal consumption. coughan, Aderson,
Louis
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 Meaning
● Retailing is a set of business activities that add value to the
products and services sold for their family consumption
● Sale of services
● Set of activities by a retailer and the channels used to
approach costumers
● Retailing is major part of world economy and the fastest
changing industry in the world like departmental stores,
Specialty stores, discount or mass merchandising,
warehouse or wholesale clubs, Factory outlets small and
mid size retailers

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 Perspectives
● Boom is confined to urban, emerging along the
lines of the economic evolution of society.
● Is the process of understanding the environment
especially consumer and competition developing
and implementing effective strategies, Retail
Management mainly involves merchandise
management and stores management.

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Characteristics of Retailing
1.Average sale is much less than
the manufacturer,
need to control costs,
maximizing number of customers,
emphasizing more on special promotions
2.Value of in store buying due to customers
impulse buying and is difficult to make
forecasting.
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Characteristics of Retailing
3.Retailer offer specialized assortment of
products
4.Bulk item shipped are customized and are
offered at smaller quantities
5.Holding Inventory.
6.Direct end user interaction, retailing increases
the value of products andServices.
7.Location is critical factor in retailing.

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Retail industry in India

●Generate sales and earn revenue

●Providing Profitability
●Improving Market Share
●Improving Corporate Image

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 Trends in Retailing
1. Spatial convenience: Number of working women have
fueled an intense demand for convenience. The quest for
convenience on the part of consumers is shown by
o
Frantic growth of convenience store fueled by the entry
of Petroleum marketers AM/PM store
o
Exploding Popularity of online shopping operators
o
Diversification of vending machine into food /clothing
and videotapes

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 Trends in Retailing
2. Increased power of retailer : At one time, colgate dominated
retailers. Now the retailers tend to dominate them.
The reasons for this reversal are many.
Retailers have many new products from which to choose when
deciding what to stock on their sheleves.
Further the IT has diffused throughout retailing to such an extent
that virtually all major retailer can capture item-by-item data via
scanning devices at that electronic point of sale terminal.

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 Trends in Retailing
2. Increased power of retailer : This knowledge of
information has permitted retailers to calculate the (DPP)
Direct Portfolio of Individual Items, track what moves and
what does not move well in their stores. So the
Manufacturers struggled to get space in the shelves of
retailers. They offer Pricing concession, slotting allowance
etc., to promote products.

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 Trends in Retailing
3. Growing Diversity of Retail formats:
●Consumers can now purchase same merchandise from wide variety
of retailers. they are Dept. store, specialty store, convenience store,
category killer, Mass merchandiser, Hypermarket.
●Mom and Pop Stores and Traditional Kirana stores: small
independent stores across product categories is very common retail
format in India. Particularly in small townships

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 Trends in Retailing
3. Growing Diversity of Retail formats:

●E- commerce: The amount of retail business conducted

on the Internet is growing every year. Companies like
Amazon. com and First and second.com which helped
pioneer the retail e-commerce. Fabmart.com

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Trends in Retailing
o
Department store with varied merchandising operations.
o
Franchise : Territory rights are also sold to franchisees.
Various distribution and other services are provided by
contract to franchisees for fee. Ex. McDonalds, Blockbuster
Video
o
Warehouse club- wholesale club: Appeal is to price conscious
shopper. size is 60000 sq. ft. or more. Product selection is
limited and products are usually sold in bulk size.

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Trends in Retailing
o
Mail order catalog: Non-store selling through the use
of literature sent to potential customer. Usually has a
central distribution centre for receving and shipping
direct to the customer.
o
Specality Discounter –Category killer:

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 Trends in Retailing
●Emergence of region specific formats: In departmental store
format, while most A class cites and metros have larger stores of
50000 sq ft sizes, stores in B Class towns have stabilized in the
25000- 35,000 sq. feet range. Most players have started operating
these 2 formats across various cities, which has helped them to
standardize the merchandise offering across the chain.
●Entry of International Players: A large no. of international players
have evinced interest in India despite the absence of favorable
government policies.

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Trends in Retailing
Mall Devlopment: Modern malls made their entry
into India in the late 1990s with the establishment of
cross roads in Mumbai and Ansal Plaza in Delhi.
According to a market estimates,close to 10mn sq.
feet of mall space is being developed across several
cities in the country.

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Trends in Retailing
■ Digital in-store experience
• Self-service kiosks improve customer
experience and increase sales for retailers
by 20%.
• Beacon-triggered offers increase the
likelihood of a purchase by 73%.
• 85% of customers have used self-checkout
kiosks, often citing convenience and
Simplicity.
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Emergence of organized retailing:
■ Organized retailing in India represents fraction of total retail
market.
■ In 2011, organized retail trade in India was worth Rs. 11,228.7
billion.
■ 64 million sq ft is expected to grow by 84 million sq feet in
2023
■ Existing Retail Stock: Currently stands at 89 million square
feet, expected to grow by 50% to reach 134 million square feet
by end-2028
■ The modern retail formats are showing robust growth as
several retail chains have established a base in metropolitan
cities, especially in south India, and are spreading all over
India at a rapid pace.
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 Emergence of organized retailing:
●In urban India, families are experiencing growth in
income but dearth of time. More and more women are
taking up corporate jobs, which is adding to the familiy’s
income and leading to better lifestyles.
●Rising incomes has led to an increased demand for better
quality products while lack of time has led to a demand for
convenience and services.

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 Emergence of organized retailing:
●The demand for frozen, instant, ready to cook , ready-to-eat food has
been on the rise, especially in the metropolitan and large cities in India.
●There is also a strong trend in favour of one stop shops like supermarkets
and department stores.
●Rural India continues to be serviced by small retail outlets. Only 3. 6
million outlets cater to more than 700 million inhabitants of rural India.
Here, provision stores, paan shops and ration shops are the most popular
vehicles of retailing.
●Apart from this, there are periodic or temporary markets, such as that
come up at the same location at regular time intervals.

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 Types of Retailers (Retail Formats)
Store Retailing by Store based Strategy Food Retailers
1. Departmental stores: Pantaloons
2. Convenience Store.
3. Full Line Discount: Big Bazaar
4. Conventional Supermarket: More
5. Specialty Stores: IKEA
6. Food Based Superstore: Big Bazaar
7. Off Price Retailer: D Mart/ Mega mart
8. Combination Store: HyperCity + HyperMarket
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 Types of Retailers
Store Retailing by Store based Strategy
Food Retailers
9. Variety Store: Miniso.
10. Super Centers: Walmart Supercenter.
11. Flea Market: Mumbai and BANGALORE.
12. Hypermarket.
13. Factory Outlet.
14. Limited Line Stores: Croma.
15. Membership Club: Metro Cash & Carry.

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 Types of Retailers
Non Store Retailing.
1. Direct Marketing.
2. Electronic/Internet/E- Direct Selling.
3. Vending Machines
4. Catalog Marketing: Cosmetics
5. Franchising: KFC

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 Types of Retailers
Multichannel Retailing
a)Store channel:
b)Catalog channel:
c)Internet channel:

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 Customer buying behaviour:
1. Need recognition / Problem recognition:
2. Information search
3. Alternative evaluation
4. Purchase decision
5. Post-purchase behaviour

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 Types of buying decisions:
1. Extended problem solving:
2. Limited problem solving:
3. Habitual decision making:

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 Factors influencing the buying process
1. Cultural factors:
-Culture and societal environment

2. Social factors:
-Reference groups and membership groups

3. Family:

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 Historical perspective
● The retail industry emerged in the US in the eighteenth century,
restricted to general stores.
● Specialty stores were developed only in those areas that had a
population of above 5,000.
● Supermarkets flourished in the US and Canada with the growth of
suburbs after World War II.
● The modern retail industry is booming across the world.
● Revenues from retail sales in the US alone stood at $4.48 trillion in
2007, according to a report by the US Census Bureau

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 Role of Retailing:
1. Destination
2. Routine
3. Preferred routine
4. Seasonal/occasional
5. Convenience

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 FDI in Retail:
● FDI IN SINGLE-BRAND RETAIL
● FDI IN ―MULTI-BRAND‖ RETAIL

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 Problems of Indian retailing:
1. Global economic slowdown impacting consumer demand
2. Consumption declines in the advanced economies
3. Competition from the unorganized sector
4. Retail sector yet to be recognized as an industry
5. High real-estate costs
6. Lack of basic infrastructure
7. Supply-chain inefficiencies
8. Challenges with respect to human resources
9. Shrinkage

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 Indian retailing:
●CurrentScenario.
●Assignment: History and current trends including Indian retail
FDI Policy.

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