RetailRetail
Introduction
Retail means to
Sell Put on the
market for sale
Definition
Retailing include the business activities involved in selling goods and services
to consumers for their personal,
family
household use.
It includes every sale to the final consumer.
(Cars to Apparels – offering a restaurant – theater ticket booking and all that you can imagine of).
Retailers Sorting / Cataloging Process
What Do Malls do
Special Characteristic of Retail
Small Average Sale
Impulse (urge) Purchase
Popularity of Store
People donot make shopping list ( its unplanned)
Candy, cosmetic Snacks are sold as impulse goods
When placed at high visibility traffic areas
Issues in Retailing
How can we best serve our customers while earning a fair profit?
How can we stand out in a highly competitive environment where consumers have too many choices?
How can we grow our business, while retaining a core of loyal customers?
Consumers have too many choices?
Suppose you are a consumer & want to buy apparels
Department Store Department Store
La Samaritaine , France, Paris
An apparel store
Full-service retailers
A Chennai based retail having partnership and associate network in Singapore, Australia, Western Europe and North America.
Discount stores
Online catalog shopping
To stand in contemporary world
What a retailer needs to decide.
What type of store? What kind of retailer? Where will it be located? What will you sell? How big a store do you need?
What type of store?
Types of Retail
The Malls:
These are the largest form of retail formats.
They provide an ideal shopping experience by providing a mix of all kinds of products and services,
Along with Food and Entertainment under one roof.
Examples Sahara Mall, TDI(Taneja Developers & Infrastructure
Ltd) Mall in Delhi, Iscon Mall
Department stores
Is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line
Sell apparel, furniture, appliances, home furnishings, cosmetics, jewellery, paint, hardware, electronics, and sporting goods.
They may also sell food and services such as optical, photography, pharmacy
They are the ultimate one-stop shop.
Example: Reliance Mart, D-Mart, Shoppers Stop
Specialty Stores:
The retail chains, which deal in
specific categories and
provide deep assortment (Collection)
Example RPG's Music World, Crossword, Karnavati Pagrakha
Discount stores:
These are the stores or factory outlets that provide discount on the MRP items.
They focus on
Mass selling and reaching economies of scale
Or selling the stock left after the season is over.
Example:
Future Group's Brand Factory , Factory outlet, Arvind Brands' Megamart, Provogue's Promart, Subhiksha, MARSHALLS
Hypermarkets/ Supermarkets:
These are generally large self-service outlets,
offering a variety of categories with deep assortments. (all those consumed frequently)
The supermarket typically comprises meat, fresh produce, dairy, and baked goods departments along with shelf space reserved for canned packaged goods
As well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies.
Most supermarkets also sell a variety of other household products that are consumed regularly, such as alcohol (where permitted), household cleaning products, medicine, clothes,
Example: Big Bazaar, Spencer’s retail, Reliance Mart
Lifestyle stores:
All that adds one lifestyle & Living
Example:
Wills Lifestyle stores, which initially offered only sportswear, has expanded its basket to include the premium consumer with formal wear, evening wear and a designer accessories.
Pantaloons, Lifestyle International (P) Ltd is part of the Landmark Group,Circle P, D-Mart (dolphin-mart) Exclusif
Convenience stores: They are comparatively smaller stores located near residential areas.
They are open for an extended period of the day and have a limited variety of stock.
Prices are slightly higher due to the convenience given to the customers.
Example: Kirana Stores, 6/10
E-tailers:
These are retailers that provide online facility of buying and selling products and services via Internet.
They provide a picture and description of the product. A lot of such retailers are booming in the industry, as this method provides convenience and a wide variety for customer.
But it does not provide a feel of the product and is sometimes not authentic.
Examples are Amazon.com, Ebay.com, sifymall, virtual pune.com
Vending:
This kind of retailing is making spreads into the industry.
Smaller products such as beverages, snacks are some the items that can be bought through vending machines.
At present, it is not very common in India.
Distance Retailing
Rather than visiting a store to make a purchase, a customer may order products from a remote location.
This may be done by mail, telephone, internet/email or other digital device such as interactive television
UC Santa Cruz Online Grocery
grocery.ucsc.edu
Fill online form and retailer calls you back to confirm the order
Chains
Having more than 3 of any one type of store
If a Store is successful, this will often encourage the owner or owners to attempt to repeat the success and open a similar store elsewhere.
Example: Honest, CCD, Chavda, Mochi, subway, Mc-D
Party and Event Retailing
This is usually a form of franchising where the retailer invites people from the locality to a common location.
The event or the party will be a mix of socializing and retailing
Most commonly, the retailer will be a franchisee to a wider organization.
Often the franchisor will supply samples and a small selection of goods to the franchisee so that their potential Customers at the event can try the products out.
Example: Sphinx Adonis “Eventwala Retail Store’
Street Market
The tradition of selling from market stalls
goes back to the haats where people got together to sell their wares
Street markets, or open-air markets, are common around the world and are particularly popular in temperate or warm climates.
Example: Tibetian Warm Cloth, Law garden Traditional, Paladi Chappal bazaars, Chaupatis.
Van Retailing
Warehouse Club
These stores often require that customers purchase a membership to the store that entitles them to shop there. They offer minimum service and usually require the customer to take home their purchases.
Example: Costco, Sam’s Club by Wal-mart, Bj's Wholesale Club( US & Ohio)
What type of retail theory? Low gain with high volume and huge selection.
Example: Wal-Mart
Higher gain with lower volume but with full selection. Example: a department store.
High gain with low volume and smaller selection. Example: a Lifestyle store.
Or…
Multi-channel retailing- sells through multiple retail formats
Where it will be located
Strip mallsStrip malls
Strip mall (also called a shopping plaza or mini-mall) is an open area shopping center where the stores are arranged in a row, with a sidewalk in front.
Strip malls are typically developed as a unit and have large parking lots in front.
They face major traffic arterials
And tend to be self-contained with few pedestrian connections to surrounding neighborhoods
Conti…
Freestanding (separate)
A room in your home (Brand factory)
Internet web site
Flea Market (s) A flea market or swap meet is a type of bazaar where inexpensive or secondhand goods are sold or bartered
Home shopping parties
Catalogs
Buying Basics
Questions to ask the vendor What is the cancel date?
What is your FOB point?
Who pays for freight?
What are your terms?
Who is your factor?
What is your opening order?
What is your size run & how do they come packed?
Buying ground rules You are the buyer, don’t let anyone sell you.
Don’t buy price.
Use your own order sheets. That seems you are working on your terms and not the vendors.
Ask for a discount.
Set reminders for your placed orders
Plan your orders and try not to cancel them.
Retailer – Supplier Relationship Exclusive Distribution (one or few)
Tata Motors distributor of Fiat
Intensive Distribution (as many as possible) P&G Rely on intensive one
Selective Distribution (moderate retailers) Luxury goods Like Brut Perfumes found only in
Lifestyle shops
Merchandising & Displays
Work on 4 of the 5 senses
Retail is all about the visual.
The over-all store presentation The Displays & Fixtures The Lighting The Signage The Music The Store’s smell
The 10 second test
Eliminating Shopper Boredom
Foremost Merchandising TipsMust hire a visual merchandiser or a store planner
to lay out your store. to assess your traffic flow determine the most effective use of your floor space.
Merchandiser Will help retailer to decide:
What to move where How much time each individual should spend at one place Rack Placement Tagging Ceiling Heights decision etc.
Case: TARGET Stores Retail Strategy
Introduction
In 1961 Store realized the need of less expensive, quick and convenient format
1962 First Target store in US
With a Tag of “Pay Less + Expect more at Target”
Ranked 10th among the largest US Retailer
Its Strategy – Key to success
Growth-oriented objectivesIn 2002 alone it opened about 110
new stores
Appeal to a prime marketFirm is strong seller to middle income having 20 % higher income that of typical
Wal-Mart shopper.
Distinctive company image
It positions with Less + Expect more it’s a true discount department store with everyday low price
But is perceived as an “Upscale Discounter”
Focused
Target never lost its sight of discount store niche “Value always wins”
Replaced People from buying $18 GAP t-shirts by it $8 cool T-shirts
Strong customer service
If an item is out stock Target will offer
a substitute item of the sameor greater value at the same discount or give a rain check for the original
item (A promise that an unaccepted offer will be renewed in the future. )
Multiple points of contactExtensive adds + stores in 47 states + toll free
telephone service( 7 * 17 hrs)
Employee relations
Celebrates success
Brings out best in teams and individuals
Internal Career Growth plans and training by each team
leader
Regular performance feed back
Community involvement
Target believes in giving back
Targets popular program is school fundraising
“You can support your school just by shopping with target guest card”
(1 % to any of the eligible school of your choice)
The Great Mall Of China
A France based retail organization since 1995
Second largest retailer in the world
One of the first foreign company to get in to Chinese retail industry
Brought a Retail Revolution in the country
They are doing Mass retailing much more successful than iconic Wal-mart (revenue twice.
What Carrefour is doing right
Instead of only grabbing and building They are selling in a Chinese way to
Chinese people.
( Pull your own sea food from tanks, take from the bins of fresh produce)
Company is more like a Shanghai outdoor market than a Paris indoor market
What all it did Leveraged on its international experience
And thereby brought few of its best practices in the Chinese market
Adopted decentralized management
It sold private label products
Designed the store according to the Chinese customers convinience
Procured majority of the product locally (for freshness)
Other players took china to be a single market
Whereas Carrefour took it to be a country with several small markets
Not an easy market as high variety of cultures and traditions within the country
For Chinese customer the price was main concern
Thus Carre4 concentrated on keeping price low- lower than any other store in that city
This made it highly popular
Consumer type
Pragmatists: Check Value + Action (They prefer small sachet to first test then repurchase)
Purchased in Small basket size
Store Selection
Regional offices were established and each of it took care of expansion in that area
Based on Availability of space
Based on purchasing power of the people in that area
Detailed Research by a team about the culture, custom & Purchasing behavior
No fix store format encouraged employees to come forward
Stores Management
Every stores manager was empowered to take decisions according to the local tradition
Products to be sold was decided by him on the basis of customer preferences
A product stacked on the shelf if couldn’t generate sale in 45-60 days was then removed
Checked the performance of Stores Manager based on his ability to forecast and study products
SCM
85 % of inventory was local
Supplier had to negotiate separately with each individual store.
Carre4 trained the suppliers, to manage and recall or track.
Provided them with Computers and software to manage and standardize their orders
Localization Strategy
Carre4’s stores spread 7 floors with escalators for moving shopping cart
Surprisingly sides of the escalators stacked with snacks & eatables.
Some place stores were designed in a look of local outdoor market
(“shouting come here this is fresh and good”)
In Muslim countries Carre4 did not sell Pork- all products certified by Halal products.
Once Carre4 Displayed 20 varieties of French wines of $10
It failed as too expensive according to the Chinese standards
Replaced it with local wines $1.
Carrefour Values Freedom: Customer & Employee
Responsibility: Right to take initiative and be responsible for the actions
Sharing: Distribute wealth
Respect: Individual culture
Integrity: be transparent & Committed
Solidarity (unity): Men & Women
Progress: Encouraged innovations and wished for a continual improvement