retailing - an overview

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Retailing - An Overview

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Retailing – An Overview

Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use.

A retailer is a business that sells products and/or services to consumers for personal or family use

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Retailing in Supply Chain

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Vertical Integration Backward Forward

Manufacturing, Wholesaling & Retailing

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Retail Terminology

Break Bulk Hold Inventory

Buy it at a convenient place when you want it.

Provide Assortment Offer Services

Layaway, Credit, See it before you buy

The word ‘retail’ is derived

from the French word

‘retaillier’, meaning

to cut a piece off

or to break bulk

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How Retailers add Value

Bicycle is developed at manufacturer

Bicycle is developed in several styles

Bicycle is offered in convenient locations in quantities of one

Bicycle is featured on floor display

Bicycle can be bought on credit or

put on layaway

The value of the product and serviceincreases as the retailer performs functions

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Retailing in U.S.A.

Over $ 3.5 trillion sales annually (2005) Employs 27 million people

Wal-Mart buys merchandisefrom over 5000 different

factories located in 60 countries

Wal-Mart data warehouse contains over 425 terabytes

of data, almost twice as muchdata as contained in the World

Wide Web

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Retailing is a big part of economy

Services (45.8%)

Manufacturing (11.2%) Retail (21.8%)

Government (16.6%)

Other 5.6%

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Nature of Retail Industry is Changing

Mom and Pop Store

To Today’s Retailer

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Retailing in India One of the largest industries in India Second largest employer after agriculture in the country $70 billion by 2010 (organized sector) To touch US$ 590 billion in the next two years (Both) Estimated to grow at 13 per cent per annum from US$ 322

billion in 2006-07 to US$ 590 billion in 2011-12. Accounts for 12 percent of its GDP and 8 percent of the

employment

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Major Retail Players in India Pantaloon

Pantaloons, Lifestyle, Big Bazzar, i-collection, Home Town Raheja

Globs, Shopper’s Stop Relinace

Reliance Mart, Reliance Fresh RPG

Food World, Giant, Music World, Health n Glow Tata

Westside Landmark Piramal

Cross Roads A V Birla

More ITC

Wills Lifestyle

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Retail – Global View

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Indian Retail Scenario

Technology IncentivesSuper Market StocksRising Disposable IncomeIncrease in Number of People in Earner Category

Large Consumer MarketGrowth of Organized SectorRural RetailingPotential for Investment

High Unorganized MarketShopping CulturePoor Inventory Turnover and Poor Stock Availability MeasuresInflation

Low Conversion LevelCustomer LoyaltyUnderdeveloped Supply ChainLack of adequate Utilities

Strength

Opportunity

Weakness

Threat

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Organized / Unorganized Retailing

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Organized RetailingShare of Organized Retailing across the Globe

1999 2002 2005

Total Retail 150 180 225

Organized Retail 1.1 3.3 7

% share of Organized Retail

0.7 1.8 3.2

1999 2002 2005

Total Retail 7000 8250 10000

Organized Retail 50 150 350

% share of Organized Retail

0.7 1.8 3.5

Share of Organized Retailing in India

US $ B

INR M

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Shopping Trends in IndiaType of Store Percentage of People

Hypermarkets 1

Supermarkets 17

Convenience Stores 10

Personal Care / Drug Stores 52

Others 20

% of Indians

Love to try new things 48

Don’t waste time on new things 13

Keep up with things but don’t go out of their way to try new things

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Indian Shopper’s Attitude for Trying New Things

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Fact Sheet about India India is the 4th largest economy in terms of PPP after USA, China & Japan India is touted to be the 3rd largest economy in terms of GDP in next 5 years It is the 2nd fastest growing economy India in 2010 grew at…% Among top 10 FDI destination Stable government with 2nd stage reforms in place Growing corporate ethics Major tax reforms US$200 b plans in IR in next 5 years 2nd most attractive developing market ahead of …… Has the largest young population in the world More English speaking people in India more than whole of Europe 600 million middle class (by 2010) - The real consumers, the largest

consumer market of the world.

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Reasons for retail boom in India

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Marketer’s Choice of Top 20 Small Towns

Town

1 Chandigarh

2 Jalandhar

3 Thane

4 Coimbatore

5 Madurai

6 Jodhpur

7 Cochin

8 Trivandrum

9 Agra

10 Vijayawada

Town

11 Patna

12 Nashik

13 Vizag

14 Rajkot

15 Guwahati

16 Mysore

17 Meerut

18 Gwalior

19 Kota

20 Amritsar

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Organized Retailing in India Entry of large business houses

Started in Chennai and Hyderabad

Apparel Retailing Food Retailing Health & Beauty Footwear Retailing Music and

Entertainment

Books Watches and Jewelry Petrol and Diesel Home Furniture Luggage

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Retail Segments in India

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A Profile of Major Indian Retailers

Pantaloon Retail India Limited Headed by………. Pantaloons, Big Bazaar, Food Bazaar, Gold Bazaar, Music Bazaar,

Central, Lifestyle, Home Town, i-collection, Brand Factory Incorporated in 1987 as Menz Wear Pvt Ltd., became a public ltd.

in1991 Brand name Pantaloons, John Miller, Color Plus CSR initiatives ‘Big Bazaar’, Wednesday, ‘Is se sasta aur accha kahi nahi’ Food Bazaar – 6 hot shops at Food Bazaar

Farm Fresh, Chill Station, Golden Harvest, Chef Zone,

Hungry Kya, Head-to-toe

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RPG Group Power, Tyre, Retail, Transmission, Entertainment,

Technology and the specialist sector Food World, Spencers Introduce reverse auction Introduce bar code scanners Health & Glow – A JV between RPG and Daily form

Internationals

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A Profile of Major Indian Retailers Tata Group

Information systems and communication, engineering, materials, services, energy, consumer products and chemicals

Tata sold its ‘Lakme’ to HLL in 1997 1998 purchased Littlewood international (UK Firm) renamed as Trend

Ltd. and the store named as Westside Introduced in-house labeling Star India Bazaar Titan Industry (A JV between Tata and Tamil Nadu Industrial

Development Corporation (TIDCO)) Titan and Sonata (25% Market Share) (Fastracj, Edge, Nebula, Raga,

Regalia. Das, Bandhan and Steel Fastrack I-Gear Sunglasses Tanishq

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Raheja GroupShopper’s Stop (1991)Introduced Retail-ERPThe first citizenCrossword Books Store

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Ajay Bijli

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Nikhil Chaturvedi

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Aditya Birla Group

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Retailing Environment

Economic environment Legal environment

Restriction on Foreign Direct Investment (FDI), 1997 NK Singh Committee

Property regulations, and Real Estate - PSFPM Labor Laws

Complex taxation system

Technological environment Competitive environment

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Retail Mix

Retail Strategy

Customer Service Location

Merchandise

Assortment

PricingCommunication Mix

Store Design

and Display

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Retail Mix

Enclosed malls

Free-standing Stores

Customer Service

Merchandise

Assortment


Store Display

And Design

Location Strategy

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Retail Mix

Location

Pricing

Communication Mix

Store Design

and Display

Customer Service

Many Items in Apparel and Soft Home

Large Number of CategoriesPrivate LabelsFew Items in Each Category

Assortment Strategy

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Retail Mix

Location

Communication Mix

Store Design

and Display

Customer Service

Merchandise Assortment

Modest with Sales

Pricing Strategy

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Retail Mix

Communication Mix

TV and Magazine Ads

Special Events

Store Design

And Display

Customer ServiceLocation


Pricing

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Retail Mix

Store Design and Display

Bright, fashionable and fun

boutique layout

Racetrack with Displays

Colorful, wide aisles displays

for products with a grid

layout

Customer Service Location

Merchandise Assortments


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Retail Mix

Customer Service

Modest

Location


Pricing

Communication Mix

Store Design and Display

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Myths about Retailing Sales clerk is the entry-level job in retailing College and university degree are not

needed to succeed in retailing Retail jobs are low paying Retailing is a low growth industry with

little opportunity for advancements Working in retailing requires long

hours and frequent relocation Monotonous Retailing doesn’t provide opportunities for women and

minorities47% Of all retail employees have college education and 27.1% have

college degrees

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Career in Retailing Entry level management positions

Department manager or assistant buyer/planner Manage and have P&L responsibility on your first job

Most entry level jobs are in store management or buying, but there’s… Accounting and finance Real estate Human resource management Supply chain management Advertising Public affairs Information systems Loss prevention Visual merchandising

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Questions I would like to ask!!! Give the name of non-traditional but organized retailers? Do consumers perform some of the functions performed by retailers,

wholesalers and manufactures? Suppose the local grocery store markups all its products by about 50%? Is

the grocery store profitable? Describe the difference in the assortments of bicycles provided by Wal-

Mart and the local bike shop. What is the difference in assortment of CDs provided by the local music store and Kmart?

What are the product categories for which holding inventory is particularly appealing (e.g., seasonal items)

What kind of services do retailers provide? How a computer retail store can increase the value of a computer for a

consumer. Compare the service of a computer store with an on-line store like Dell.

What examples of community support they have seen from local retailers?

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Questions I would like to ask!!!

What type of changes in the retail industry may take place in the 21st century. How is technology affecting the changes in this industry? Will consumers still go to stores or will they buy everything from a computer in their houses? What will stores look like? How will they adjust to the Internet? Who will be the big winners/losers?

What are the changes occurring in the environment now that will affect retailing in general and specific retailers.

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Some of the services retailers do provide: Acceptance of credit Cards, Alteration of merchandise, Assembling of merchandise, Bridal registry, Check cashing, childcare facilities, Credit, Delivery to home, Demonstrations of merchandise, displaying merchandise, dressing rooms,

gift wrapping, layaway plans, Parking, personal assistance in selecting merchandise, personal shoppers,

play areas for children, Presentations on how to use merchandise, Provisions for customers with special needs (wheelchairs, translators), Repair services, Rest rooms, special orders and warranties

retailing - an overview

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