retailingMBA IV Semester [MBA MK 03]

Dr. Rahul Pratap Singh Kaurav

All activities involved in selling goods or services directly to final consumers for their personal, non-business use.

Retailing

Retail Industry

Evolution of Retail in India - I

Barter system was known as the first form of RetailFollowed by Kirana Stores and Mom & Pop StoresFinally Manufacturing era necessitated the small stores and specialty stores

It was a seller’s market till this point of time with limited number of brands available

1980s experienced slow change as India began to open economy.

Evolution of Retail in India II

The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

Post 1995 onwards saw an emergence of shopping centers.

In beginning of 21st century, emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume

Expanding target consumer segment

Retail: Environmental Overview

Retail MIX

4 PsProductPricePlacePromotion

4 CsCustomized SolutionCost / Customer ValueConvenienceCommunication

How Retailing is different from other channels of distribution?

S. No.

Basis of Comparison Retailing Other channels

1. Interaction with end customers Direct and Regular

Indirect and Irregular

2. Sales turnover Low High

3. Number of sales transaction High Low

4. Unit price of product High Low

5. Variety of merchandise High Low

6. Profit margins High Low

7. Importance of business location and sites Very Highly important

Important

Functions performed by Retailers - I

TransactionalBuying, Selling and Risk Taking

LogisticalAssorting, Storing and Sorting

FacilitatingFinancing, Grading and Marketing Information

Functions performed by Retailers - II

Breaking BulkHolding stock and risk takingCreating place and time utilityAssortment of product and servicesExtending other servicesCreating demand and sales of merchandise

Main features of modern Retail

Adoption of modern management practices Growth of multi-store retail chains Large format retailing Integrated and dedicated distribution systems Growth of private labels Growth of private labels CRM and loyalty programs

Comparison between organised and unorganised Retailers in India

S. No.

Basis of Comparison Organised Unorganised

1. Average size (sq. fet) 4,000 3,00

2. Average number of SKUs 5,000 1,200

3. Service format Self service Over the counter

4. Customer expectations (ambience etc.)

Predominantly experience based

Predominantly need based

5. Stock turn High Low

6. Profit margin High Low

Ramesh Kiarana Store !

Value chain in Retail - I

Farm to Fork

Value chain in Retail - II

Shopping Experience

Important issues before Retailer

Maximise customer valueMerchandisingTraffic buildingStore design and layoutStore location and siteKeeping pace with technologyPeople management

Characteristics of Retailer: Elements of Retail mix - I

Satisfies the need of specific segment Mass market Exclusive market Specialty market

Offer merchandise assortment and variety General merchandisers Specialty merchandisers

Adopt a specific pricing strategy Discount pricing Competitive pricing Premium pricing

Characteristics of Retailer: Elements of Retail mix - II

Develop its own promotional mix Advertising Direct mail Sales promotion

Select distribution method and location Store based retailer

Stand-alone locationStrip-shopping centerMallCentral business district

Non-store retailer

Level of customer services Self-service Assorted services Full service

Retailer relationship

Customer relationship The customer base Customer service Customer satisfaction Loyalty programs

Channel relationship

Technology and relationship in retailing

Electronic bankingCustomer and supplier interactions

Retail formats

Food oriented retailer Predominance of food items to

generate revenue. High frequency of purchase. Low/ average unit value of

merchandise. Less variety of formats

Non-food oriented retailer Predominance of non-food

items to generate revenue. Low frequency of purchase. High/ value of merchandise. More variety of formats

Retail formats: Food-oriented retailers

Convenience stores Spencer’s Daily

Express Bharti Retail Easy Day Om daily needs Pratidin

Supermarkets Spencer’s Spencer’s

Super Future group Food Bazar Aditya Birla Group ‘more’

Hypermarket Spencer’s Spencer’s

Hyper Future group Big Bazar TATA group (trent) Star India

Bazar

Super-centre (Big-Box) Wal-mart Meijer Fred Meyer

Retail formats: Non-Food oriented retailers - I

Departmental Store Raheja Group Shopper’s Stop Trent Westside Future group Pantaloon

Specialty Store Multiple line specialty retailer O Croma O Vivek’s Single line specialty retailer ITC Wills Lifestyle O Manyavar

Category Killer Walmart in toys Amazon.com for books eBay for e-auction

Value Retailing Pantaloons retail – Brand Factory

Retail formats: Non-Food oriented retailers - II

Off-price retailer

Warehouse clubs Cash-n-Carry Big Bazar Whole-sale Club

Flea Market Janpath in Delhi Zaveri bazar in Mumbai

Airport Retailing Shopper’s Stop – Nuance,

Switzerland Tata - Woolworth, Australia to start

Croma ZIP

Railway Retailing IRCTC Sanchi

Strategic planning in retailing: Elements

Situation analysis

Organizational mission, Ownership

Objectives Sales, Profit etc.

Identification of

consumers

Mass, Concentrated

and Differentiate marketing,

Overall strategy

Controllable, Uncontrollable

Specific activities

ControlFeedback

RETAILRetailRETAIL

Need for studying consumer behaviour

Understanding how the need for a product/ service was determined

Understanding how information was sought by the customer The process of evaluation of various products and stores The payment process The post purchase behavior

Factors influencing the retail shoppers

Range of merchandiseConvenience of shopping at a particular outletTime to travelSocio economic factorsStage of family life cycle

Customers Decision Making Process

Store

Internet

Media

Family and Friends

PersonalityLifestyleCulture

Social Class

Income

Market Research: A tool for understating retail market and consumers

Research prior to setting up a retail store Demographic data Consumer dataThe PopulationGDP & PPP Income Class (Per Capita Income)

Research after setting up a retail store Customer satisfaction Traffic building and many

Key features of new technology retail formats

Rich sensual impactMore synchronised responseSpeed and pace of information InteractivityMode of transfer of information

O2O O2M M2M M2O