retailling
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RetaillingTRANSCRIPT
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.
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