RETAIL

What is retailing?

Retailing: a conclusive set of activities or steps

used to sell a product or a service to consumers for

their personal or family use

Retailer: a person, agent, agency, company or

organization instrumental in reaching the goods,

merchandise, or services to the ultimate consumer

Countries that have enjoyed the greatest economic

and social progress have been those with a strong

retail sector

Over the last decade there have been sweeping

changes in the general retailing business

World Brands

• Reach mass amounts of people

Interests and desires

• Understand Culture

Language, Images, Color Choice

• 5 C’s Global Branding

Communication- to build familiarity and relate to consumer

Continuity- long term marketing programs

Consistency- packaging and advertising

Cooperation- partners & employees

Control- management

Important Brands by Region

Global

Asia-

Pacific

Europe &

Africa USA

1.Apple 1.Sony 1.Ikea 1.Apple

2.Google 2.Samsung 2.Virgin 2.Google

3. Ikea 3.LG 3.GM 3.Target

RETAIL FORMATS

1) Mom and Pop Stores (traditional kirana stores)

Mom and pop stores are very small stores in the city where they buy in few numbers from whole sellers and sell it to the consumers. These stores offer few products that are necessarily required for daily life. These are so small stores, where you cannot go inside and select what ever you want. Customer orders by standing out side the counter.

2) E-commerce

E-retailing or e-commerce means retail

business being conducted on the internet.

e-commerce is growing every year. Many

major retail organizations and

manufacturers have online retail stores.

eg. Amazon.com, First and second.com

3) Department stores

Large stores ranging from 20,000-50,000 sq. ft, catering to a variety of consumer needs having a wide variety of products, organized into different departments, such as clothing, house wares, furniture, appliances, toys, etc. One stop shop catering to varied consumer needs.

eg. Ebony, Globus, Lifestyle, Pantaloon, Shoppers Stop, and Westside

4) Discount Stores

As the name suggests, discount stores or factory outlets, Stores offering discounts on the retail price through selling high volumes and reaping the economies of scale. Low prices. The product category can range from a variety of perishable/ non perishable goods.

e.g.: S Kumar’s S-MART Discount Chain, Margin Free Market, and Subhiksha

5) Specialty Stores

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, Body Shop are focusing on specific market segments and have established themselves strongly in their sectors.

These stores concentrate on one type of merchandise and offer it in some manner that makes it special.

Retail Management Activities

• Selecting the best location

• Sourcing and buying

• Merchandising

• Promotion

• Store Management

• Operational efficiency

FACTORS DETERMINING LOCATION DECISION

1. SELECTION OF CITY

• Size of the city’s trading area

• Population and growth trend

• Purchasing power and its distribution

• Trade potential

• Number, size, quality of competition

2. SELECTION OF AN AREA OR TYPE OF

LOCATION WITHIN A CITY

• Customer attraction of shopping district

• Quantitative and qualitative nature of

competition

• Availability of access route

• Nature of zoning regulation

• Direction of the area expansion

3. Site Decision

• Adequacy and potential traffic

• Complementary nature of adjacent store

• Adequacy of parking

Relationship Management

• Customer base

• Customer service

• Customer satisfaction

• Loyalty programmes

American Retailers

Selected Retailers $ Billion Dollar Brands

Wal-Mart (US) ………….. 50 billion Sam’s Choice, Great Value,

Old Roy, George, ASDA,

Faded Glory, Equate.

Sears (US) ………………30 billion+ Kenmore, Craftsman,

DieHard, Lands’ End.

Tesco (UK) ……………...18 billion+ Tesco.

Gap (US)………………....13.8 billion Gap, Old Navy, Banana Republic.

Kroger (US) ……………..13.7 billion Kroger, Private Selection.

Carrefour (France)…......13 billion Carrefour

Target (US) ……………...13 billion $2 billion Cherokee

(Licensed clothing brand).

Kmart (US) ………………13 billion $1.5 billion Martha Stewart

Everyday, Route 66.

GLOBAL RETAILERS

IKEA (Sweden) ………….11 billion IKEA

Marks & Spencer (UK)…..10 billion+ St Michaels

Safeway (US) ……………8.6 billion Safeway Select.

Albertson’s (US) ………...6.6 billion Albertson’s.

Costco (US) ………………4 billion Kirkland Signature

Casino (France) …………..3 billion+ ** Leader Price.

Loblaws (Canada) ……….2.3 billion $1.5 billion President’s Choice

IGA (US) ………………...1 billion+ IGA Brand

The Body Shop (UK) …….1 billion+ The Body Shop

American Retail Industry

• Retail is America’s 2nd largest industry

• The U.S. retail industry generates $3.8 trillion in retail

sales annually

• Wal-Mart is the world's largest retailer and the largest

US corporation with more than $256 billion (USD) in

sales annually

• The retail industry accounts for about 11.7 percent of

U.S. employment

Retail Market

India: A major retail market

250

285

290

300

370

550

1050

3100

0 500 1000 1500 2000 2500 3000 3500

India

France

Italy

U.K.

Germany

China

Japan

United states

$ (billion)

What is the key to success?

"The secret of successful retailing is to give your

customers what they want,"

-Wal-Mart founder Sam Walton

• Good service is very essential- customers remember extra attention

• Have innovative ideas

• The application of advanced technology to improve existing system

• Automated inventory management

• Precision in demand and sales forecasting

• Effective marketing and communication

Retail Management Process

Opportunity

Identification and Sizing

Retailer Resources and

Competencies

Markets to Enter

Shopper Expectations Shopper Profile Competition

Value Proposition/

Positioning

Merchandise Supply

Chain

Location Layout Pricing Promotion HRM/OD

•Suppliers

•Logistics

•Turnarounds

•Trading Area

•Store Choice

•Traffic

•Customer Flow

•Ease of

Purchase

•Prime

Categories

•Competition

•Traffic Building

•Margin

Protector

•Increase bill size

•Increase bill

value

•In-store/Out

Store

•Serviced/Self

•Motivation

•Recruitment

and Development

•Category

•Items

•Brands

Drivers of Growth

•Shoppers

•Suppliers

Profitability

Format

•Physical

Stores

•Online

Retail Management Process

• Retailing is a complex business as it involves the detailing and precision involved in implementing each of the decisions

• The core of the framework is the Retail Value Proposition.

• The proposition is derived keeping in mind the market profile and expectations, opportunities present in the market, competitive stances and activities and the retailer’s objectives and resources

• Based on the proposition, retailers decide the formats, merchandise, location, supply chain, pricing, promotion and other aspects of retailing mix.