chapter 6. retail mgt
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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.
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