retailling

FARHAN.S.INAMDAR

PRSENTATION.

RETAIL

“Includes all the activities of selling products or services to the end consumers with added value”.

What is Retailing?{ Derived form a French word “Retailer”

Meaning : to cut a piece off or to break bulk }

Sale of goods/Services to the ultimate consumers- Personal, Family or Household use.

Thus involves more than just selling products-(Services)

Final leg in the distribution channel

Is labor intensive

Retailing is..

Retailing involves..

Identifying the target markets (customers)

Interpreting the needs of the targeted customers

Developing good assortment of merchandise

Presenting them in an effective manner so that customers find it easy and attractive to buy

Retailing has multiple functions-

Creates Market & Generates Employment

Functions of Retailers

Understanding customers needs

and wants

Providing assortment of

Products/Services

Breaking bulk

Providing services to the

customers

Holding inventory &

Providing information to the

suppliers

Why are retailers needed?

Understanding Customer’s Needs & Wants

Difference between need and want

Understand what products and services are required by the customers

Breaking the Bulk` Manufacturers normally send in cartons/cases/bags

Retailers breaks these bulk suitable to the customer’s need

Breaking Bulk: Breaking large shipments into smaller

Providing Services

Provision of credit limit & hire-purchase facilities

Home delivery of goods/services

Provision of warranty, after sale service, customer complaint resolution

Helping customers choose a product/service

Displaying products for customers ease of selection

Holding Inventory

Help the customers in keeping the inventory already broken into user-friendly sizes/prices

Help the customers in making the products available at all the time at relatively stable prices.

Helps the customers in reducing the storage costs/losses

Providing Information to Suppliers Retailers are in direct contact with the

end consumers

Feed back from the customers, comments, suggestions etc..

Market/Source of competitor information

TYPICAL CHANNEL OF DISTRIBUTION

Manufacture

Wholesaler

Retailer

FinalConsumer

Dealer

Specialty Store: (Narrow product line ) E.g. Athlete’s Foot. Reebok, Nike,

Department Store: (Several Product lines) E.g. Pantaloons, Shoppers'

stop

Convenience Store: (Limited line of high turnover convenience products,

Small store in residential area, ) E.g. Local retail shops open 24/7

Discount store: Standard or specialty merchandise low price, low

margin, high volume stores (Big Bazaar, Wal-Mart)

Types of Retailers

CONT…

Super markets: (Huge Selling space, routinely purchased food and

household items. Plus services (Food World, More Retailing)

Off-price retailer: Leftover goods, overruns, irregular merchandise

sold at less than retail price E.g. Factory outlets

Catalog Showroom: Broad selection of high markup, fast moving, brand-

name good sold by catalog at discount. E.g. Oriflame, Amway

Types of Retailers Based on merchandise and pricing

Departmental Stores

Specialty Stores

Discount Stores

Supermarkets & Hypermarkets

Department StoresA large store selling:

Broad Variety & Deep Assortment

Offer considerable customer services

Organized into physically separate departments Ex: Shoppers' Stop, J C

Penny, Regional Malls

The Characteristics :

Located in the market area or a major shopping center

Availability of parking space

Freedom for the customers to move around

Relatively high prices with margins large enough

Continued..

Specialty Stores Have narrow product line with deep

assortment

Provides higher degree of customer service

Better selection with the assistance of

sales people.

Discount Stores General merchandise retailer

Offers broad variety & assortment

Limited services and low prices

Located in the lower priced areas away from the market

Dependence on the shoppers

Low cost fittings

No free services such as delivery to door etc..

Relies on heavy advertisement in the nearby areas

No free services such as delivery to door etc..

The characteristics :

Super Market , Superstores & Hypermarkets

Super Market Self-service (Majorly) food store offering groceries along with other household maintenance products Size of the store- <25000 Sq Ft.

Low cost, low margin, high volume stores

Continued..

Superstores Larger supermarkets Size of the store- 25000 Sq Ft +.

Also offers products and services like pharmacy, bakery, chats, salad bar etc under one roofEx: Nilgiris

Hypermarkets Very large in size Size of the store- 50000 Sq Ft +.

offers mainly grocery, general merchandise goods, flower shop, photo shop etc..

Selling huge volumes at less margins

Similar to that of the discount stores.

Continued..

Types of Retailers Based on Operational Structure

Independent Traders

Multiple or Retail Chain Stores

Cooperative Societies

Concessionaire

Franchising

Independent Traders`

Individual trader owns majority of

the shop.

Other than Cooperatives

Have less than 10 branches or no

branches

Branches usually controlled by the family

members

Examples: Kirana Shops, drug stores, Photo

copier shops etc..

Continued..

Advantages: Management (owner) has direct contact with his customers

Can be very flexible owing to their small size

Can freely locate/ change their store, merchandise wherever required

Multiple Retail or Retail Chains Large multiple retail store

(either public/private) belong to a common ownerwith ten or more branches

Strongest in the departmental Stores, Specialty stores, Drug Stores, Food stores etc...

Size allows to buy in bulk and sell at lower prices

Presence of specialists for every retail function

Have well defined management philosophies

Strategies with reference with the store hours, product assortment, prices, sales personnel, promotion etc..

Centralized decision making system- difficulty in adopting to the local needs of the target markets

Ex: Raymond's, Titan, Tanishq, Ginger etc..

Continued..

Cooperative Societies

Are the cooperative retail organizations trading on cooperative principles and registered under the Cooperative Societies Act

Mother D’airy in Delhi, Sahkari Bhandar, Apana Bazaar in Mumbai are the examples

Some times independent retailers set up central buying system called retailer cooperative

Franchising

Granting of sole selling rights within a given geographical area by the Franchiser

Provide all the equipments, furniture's and fixtures to carry ou the business

The Franchisee provided with the license against the royalty payments

Franchisee pays for part of the system. Initial deposit and the service charges as per the agreement with the Franchiser

Beneficial to both

Benefits to the Franchiser:

Covering new territory

Hard working entrepreneurs’ (not employees)

Franchisee’s familiarity with the locality

Non- Store Retailing

Mail Order

Direct Selling

Automatic Vending Machines

Electronic Retailing

Catalog & Direct –Mail RetailingCatalog Retailing

Retail offerings communicated through a catalog

Direct-Mail Retailing

Convenient and time saving alternative

Internet acting as a natural extension to catalogers selling strategy.

Retail offerings communicated through letters and brochures

Direct SellingIs the retail format in which the salespersons contacts the customer directly in a convenient location.

Demonstrate the merchandise and explain the benefits and the services, take an order, deliver the merchandise.

Is highly interactive, considerable information conveyed.

Is very costly.

It can be Door-to-Door, Mobile Shops

Party Plan SystemCustomer is asked to act as a host and invite friends and coworkers to a party.

Host receives a gift

Sales made here are influence by the social relationships

Multilevel Network People serve as master distributors, recruiting other people to distribute & sell (either to the members of the network/ end users)

Every member of the network either buy the merchandise from the firm and resell it/they receive commission on every product

Automatic Vending

Vending of Products or Services through machines.

Usually placed in closed relatively vandal-proof areas

Can be in operation 24 x7

Ex: ATMs, Coin Boxes etc…

Electronic Retailing

The customer and the retailer can communicate through an interactive electronic system- Internet.

Customer places an order after browsing through and satisfying himself

www.jaldi.com www.indiainfo.com www.rediff.comwww.amazon.com

Retailing through Internet:

A retailer demonstrates product/service on the television

Customer places an order over telephone.

Ex: Asian Sky Shop, TSN, TVC, Telebrands etc..

Retailing through Television:

Service Retailing Very important part of retailing

Employs more employees than in product retailing

Ex: Banks, Doctors, Legal Advisors, Consultants, Educational Institutions, Hotels, Beauty Parlors, Garages, Transporters etc..

Specialty Service Retailers also present- APTECH, VLCC, NIIT etc..

RETAILING CONCEPTS

RETAIL ORGANIZAT

ION

TARGET

MARKET

COMPETITORS AND

THEIR STRATEGIE

S

ENVIRONMENTAL TRENDS

Factors Influencing the Retailing

Business

COMPETITORS AND

THEIR STRATEGIE

S

Retail Competition form those who use/do not use the same retail format

Competition can be Intra-typeEx: Between two departmental stores

Retail Competition can be Inter-typeEx: Between a departmental store & a discount store.

Competition form the Scrambled Merchandise Retailers

Competition is greater where customer views two retailers having similar Retail Mix.

Competition from similar kind of retailer/ retailer with similar merchandise

ENVIRONMENTAL TRENDS

Environmental factors surrounding the retailer and its customers

Includes the following:

-Economic Factors- Demographic Factors- Social Factors- Psychological Factors- Brand Profusion- Psychographic Change- Demographic Change- Political Change- Technological Change

Results in change in consumer buying patterns

Economic Factors:

The growth of economy

Increased Buying Power and Disposable Incomes

India’s Large Middle-Class sector – Led to introduction of Organized Retailing.

Indian Economy getting integrated in the world- GlobalizationGlobal trends started effecting the Indian economy

Demographic Factors:

Significant increase in the population in urban due to migration

Created interest in large retailers

Changing demand and consumption- Numerous clusters with distinct needs

Types of families living, Families living in big apartments

India- Highest youth population. USA- Majority of population turning old

Social Factors:

Joint Family- Nuclear family

Increasing number of women working

Lack of time, more income

Social Factors:

Joint Family- Nuclear family

Increasing number of women working

Lack of time, more income

Psychological Factors:

Consumer Psychology changed- fuelled by Increased exposure to media, TV

Consumer’s increased emphasis on Health & Fitness, Skin Care, Personal & Family hygiene & care.

Has led to the change in concept of marketing.

Brand Profusion:

Brand Explosion in almost all goods/services

Consumers surrounded with huge number of brands.

Consumers have become brand conscious at the same time.

Has altered the consumer buying behavior

Political Factors:

Severe Political Instability since few years

Causing frequent and major changes in the policies effecting retail industry.

Technological Factors:

Advancement in IT

Provided with new ways to expand, network and increase market share.

THANK

YOU