Introduction to retialing

Retailing INTRODUCTION TO

PAPER 5.3: RETAIL MANAGEMENT Chapter 1

COURSE INSTRUCTOR

Mohammed Umair | M.Com, PDGBA, NET [email protected]

WHAT IS MARKETING? Products & services do not move naturally from producer to the consumer for this we

need a structured mechanism.

The Chartered Institute of Marketing define marketing as 'The

management process responsible for identifying , anticipating

and satisfying customer requirements profitably'

Philip Kotler says, “Marketing is a societal process by which individuals and

groups obtain what they need and want through creating, offering and freely

exchanging products and services of value with others”.

Marketing is a process of:-

Identifying the wants of the people.

Developing product or service to meet the wants of people.

Recognize target customer among the people.

Determining way of communicating the product to target customer.

Mohammed Umair Introduction to Retailing

THE TRADE APPROACH Exchange of household utilities for other goods.

THE PRODUCT APPROACH Products were sold at a low cost. SALES ORIENTATION APPROACH

Enhancing sales volume with promotion.

CUSTOMER ORIENTATION APPROACH Supplying products to suit new consumer tastes.

SOCIAL ORIENTATION APPROACH Marketing activities should not harm the society.

RELATIONSHIP MARKETING APPROACH Building and keeping good customer relations.

VIRTUAL MARKETING APPROACH Links the marketing activities to online world.

BRANDING Emotional and psychological

relationship.

EVOLUTION OF MARKETING APPROACH

SALES VS. MARKETING

Meaning

Satisfying needs through an exchange process.

Effort to execute the exchange process.

MARKETING

SELLING

Inception

Starts before decision of production goods.

Starts after decision of production of goods or services.

MARKETING

SELLING

Subject Matter Satisfaction of consumers. Stresses needs of seller. MARKETING SELLING

Environment

Consideration both the internal and external factors

Selling is concerned with the internal factors .

MARKETING

SELLING

Scope

Marketing is a wider term, which, includes 4Ps

Selling is the part of marketing

MARKETING

SELLING

Subject Matter Integrated approach. Short-run-oriented. MARKETING SELLING

SALES VS. MARKETING

Meaning

Satisfying needs through an exchange process.

Effort to execute the exchange process.

MARKETING

SELLING

Inception

Starts before decision of production goods.

Starts after decision of production of goods or services.

MARKETING

SELLING

Subject Matter Satisfaction of consumers. Stresses needs of seller. MARKETING SELLING

Environment

Consideration both the internal and external factors

Selling is concerned with the internal factors .

MARKETING

SELLING

Scope

Marketing is a wider term, which, includes 4Ps

Selling is the part of marketing

MARKETING

SELLING

Subject Matter Integrated approach . Short term. MARKETING SELLING

WHAT IS RETAILING? According to Kotler: “Retailing includes all the activities involved in selling goods or

services to the final consumers for personal, non business use”

It is responsible for matching individual demands of the

consumer with supplies of all the manufacturers.

Often people think of retailing only as the sale of products

in stores, but retailing also involves the sale of services.

Not all retailing is done in stores.

Retail comes from the Old French word tailer- which means to cut off a piece or to break bulk.

Retailer is regarded as the last link in the chain of distribution.

FEATURES OF RETAILING

Sale volume is comparatively large in quantities

He deals in variety of merchandise

Direct interaction with customers

Retailer is customer focused, not Product –focused

Creates shopping environment


CONCEPTUAL CLARITY

A process of promoting greater sales and customer satisfaction by gaining a better

understanding of the consumers of goods and services produced by a company.

Retail management includes all the steps required to bring the customers into the store

and fulfill their buying needs.

Retail management makes shopping a pleasurable experience and ensures the customers

leave the store with a smile.

RETAIL MANAGEMENT

Retailer is a person, agent, agency,

company or organization reaching

the Goods or Services to ultimate

consumer with the goal of earning

a profit.

RETAILER

What is Retailing?

• Retailing involves selling products and services to consumers for their personal or family use.

Buying and Assembling

Warehousing and Storing

Grading and Packing

Assumption of Risk

Customer Profiling & Catering

Selling

Advertising

Financing Facilitate demand Functio

ns

Retail comes from the Old French word tailer- which means to cut off a piece or to break bulk.

Guidance to Consumer

Supply of Market Information

After sales service Aid in Product Launch

Providing Assortments

EVOLUTION RETAILING IN INDIA A: TRADITIONAL FORMATS Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use.

1. ITINERANT RETAILERS

Retailers who do not possess any shop of their own and who move from place to place to

sell their articles. It is a type of direct selling which stated centuries ago.

No Fixed place of business.

They carry very little stock either on their heads or on bicycles or on hand-carts.

Their capital investment is very small.

They do not stick to a particular line of business throughout the year.

They move from place to place in order to sell their articles.

They do not have fixed hours of work or even fixed days of work.

They operate at the minimum cost.

They provide door-to-door service moving about in residential localities and selling their wares.

KEY FEATURES


EVOLUTION RETAILING IN INDIA A: TRADITIONAL FORMATS 1. ITINERANT RETAILERS

A: Hawkers They are itinerant traders who move about in residential localities

with their articles usually on bicycles or hand-carts.

They usually deal in consumer goods of a cheap nature.

Their range of merchandise varies from:

Vegetables,

Fruits

Toys,

Bangles,

Plastic utensils etc.



B: Peddlers

They also deal in cheap goods and usually cater to the needs of

the low- income gentry.

They carry their articles on their heads or on

their back and move from one house to the

other in the residential localities of a city.

C: Cheap Jack A peddler, especially of inferior articles.



D: Street Traders They are “pavement retailers” who display and sell their products from

pavements/ footpaths. They are usually seen in crowded cities and handle light

goods.

E: Market traders They are a type of small-scale sole-proprietors who hold stalls at different

places in different localities on fixed days known as “market days” which may

be once a week.


Haats refers to locations which witness a public gathering of buyers and sellers at fixed

time and fixed locations.

Haats are the unique examples of traditional malls in India.

There was tendency in rural as well as semi-urban area in India for visiting these haats

with family members as a part of picnic cum purchasing programmes.

According to one estimate about 42,000 haats are organised in our country

2. HAATS

HAATS

Vegetables Fruits Chats Sweets Entertainment

On account of organization of these haats these are called with the name of a particular day also such as Mangal Bazar, Budh Bazar etc.



Mela is a Sanskrit word meaning 'gathering' or 'to meet' or a 'fair'.

It sizes of gatherings and can be religious, commercial, cultural or sport-related.

Generally in "melas" people can find eateries, entertainment activities, shops and games.

It is estimated that more then 2500 melas are held annually in the country.

The average sale per mela would be Rs. 143 lac.

3. MELAS


Mandis are markets set up & regulated by State Government for the sale of

Agricultural produce directly from farmers.

At present the number of such markets stand at 7521. These mandis are playing

significant role in providing better prices to farmers.

4. MANDIS



The term cooperation is derived from the Latin word ‘co-operari’, where the word ‘Co’means

‘with’ and ‘operari’ mean ‘to work’. Thus, the term cooperation means working together.

The Section 4 of the Indian Cooperative Societies Act 1912 defines Cooperative Society as “a

society, which has its objectives for the promotion of economic interests of its members in

accordance with cooperative principles.”

5. CO-OPERATIVE SHOPS

Consumers’ Cooperative Societies: These societies are formed to protect the interest

of consumers by making available consumer goods of high quality at reasonable

price.



PDS is a govt-sponsored chain of shops entrusted with the work of distributing basic food

and non-food commodities to the needy sections of the society at very cheap prices.

Public Distribution system was introduced in India in the year 1950. (the evolution of the

public distribution of grains in India)

Kendriya bandars (1963)

Mother dairy ( foods and provisions)

Co-operative stores( In Mumbai, Bombay bazar)

From the 1950’s to the 1980’s, investments in various industries was limited due to low

purchasing power and the govt’s policies favouring the small – scale sctor.

5. 'PUBLIC DISTRIBUTION SYSTEM'


The first time organised retailing was noticed in the textile sector.

Vivek’s, Nalli’s, Raymond’s, Vimal, Garden etc. This was the beginning of new era in retail in

India.

EVOLUTION RETAILING IN INDIA B: MODERN FORMATS


TIMELINE OF RETAILING IN INDIA

Pre 1947

• Haats, Melas and typical Indian markets were formed

1947

• India becomes independent nation

1970s

• First emergence of organized retail through textile sector

1980s

• Emergence of brands and braded retail outlets

1991

• India opens doors through economic reforms

1991-95

• Multiple formats and product categories introduced

1996-99

• Modern malls are introduced

2000-05

• Rapid expansion of multiple format Indian co; begins

2006

• Government allows upto 51% FDI in single brand retail firms

2008

• E-commerce blossoms

2008-2016

• Rapid modern malls and single branded store expansion


STRUCTURE OF INDIAN RETAIL INDUSTRY ORGANIZED RETAILING

It refers to trading activities undertaken by the licensed retailers i.e. those who are registered for sales tax and

income tax. In India organized retailing constitutes a very little share of 8 percent of total retail market.

UNORGANISED RETAILING

It refers to the traditional format of retail industry. These sectors is mainly characterized by small retailers and

are subject to tax evasion and lack of labor law system.

Retail sector in India

Organized KIOSKS

SUPER MARKETS

DEPARTMENTAL STORES

SPECIALTY CHAINS

CONVENIENCE STORE

MALLS

Unorganized ITINERANT SALESMAN

HAATS

MELAS

MANDIS

KIRANA SHOPS

Organized retail in nascent stage

STRUCTURE OF INDIAN RETAIL INDUSTRY

92%

8%

Retail Sector in India

Unorganized Retail

Organized Retail

33%

11%

11%

8%

7%

6%

4%

20%

Organized Sector

Apparel Food & Grocery Mobile & Telecom Consumer Electronics

Food Service Jewellery Footwear Other

In India the retail sector is categorized into two sectors, organized and unorganized.

275.86

482.76 534.48

741.38

948.28

0

200

400

600

800

1000

2008-09 2012-13 2013-14 2014-15 2018-19

Sales in Billion $

CAGR 15%

STRUCTURE OF INDIAN RETAIL INDUSTRY Retail Industry, one of the fastest changing and vibrant industries that, has contributed to the economic growth of our

country. Within a very sport span of time, Indian retail industry has become the most attractive, emerging retail market in

the world.

8% 20%

30% 40%

81% 85% 92%

80% 70%

60%

19% 15%

0%

20%

40%

60%

80%

100%

India China Indonasia Thailand Taiwan USA

Organized Retail Penetration

Organized Unorganized


RETAIL GROWTH DRIVERS

CONSUMER OR DEMAND-SIDE DRIVERS

A: Growing Working Women Population Working women can spend 1.3 times more than housewives

Working women in 1991: 22%



B: Growing youth segment The power of youth today is evident in its large numbers, tendency to consume and in its

ability to influence larger household decisions.

10.7 12.5 12.1 9.7 8.7

27.6

13.5

4 0.8

41.1 47.9

0

10

20

30

40

50

60

0 - 4 5 to 9 10 to 14 15- 19 20 - 24 25 - 44 45 - 64 65 - 79 80+ Less Than

18

Less than

21

POPULATION IN DIFFERENT AGE GROUPS


RETAIL GROWTH DRIVERS CONSUMER OR DEMAND-SIDE DRIVERS

C: Adoption of Nuclear Family Culture

Average Household Size in 1991 : 5.57



D: Changing consumer preferences and growing urbanization

Urbanization is a population shift from rural to urban area.

The renewed urbanization represents a significant turn from suburbanization patterns of the past

decades.

About 377 million people from India’s total population of 1.21 billion are urban dwellers.

With more than 10 million people migrating to cities and towns every year, the total urban population is

expected to reach about 600 million by 2031.

Today, 54% of the world’s population lives in cities, according to the United Nations.

By 2050, 67% of the world’s population will be living in a city. Mohammed Umair Introduction to Retailing


E: Media explosion

There has been an explosion in media due to satellite television and internet.

Indian consumers are exposed to the lifestyle of countries.

Their expectations for quality products have risen and they are demanding more choice and

money value services and conveniences.

99 130 165 177 216

38 60 92 101 138

2012 2013 2014 2015 2016

Internet Users Growth in India

Urban Rural Figures in Million

64 55

35

15 7 5

30 45

65

78 85 90

35 39 44 50 56 64

2013 2014 2015 2016 2017 2018

TV growth

Digital Analogue

Figures in Million

DTH


F: Increasing number of HNI’s

High-income population has notched up an impressive growth.

India has the fastest growing HNI population in the world.

The number of ultra HNHs grew to 137,100 in FY15, a 22% compounded growth over 5 years.

The number of ultra HNHs is expected to increase to 348,000 by FY20(P) with a combined net

worth of Rs. 415 trillion,

16% 15% 14% 13% 12%

9%

6% 5% 5% 4%

1%

Jewellery Apparel &

Accessories

Holidays Electronic

Gadgets

Home Décor Events Philanthropy Luxury

Watches

Vintage

Spirits

Art &

Painting

Others

AREAS OF SPEND


RETAIL GROWTH DRIVERS BUSINESS OR SUPPLY-SIDE DRIVERS

A: Availability of Real Estate The real estate sector comprises four sub sectors -

housing, retail, hospitality, and commercial.

In India, real estate is the second largest employer

after agriculture and is slated to grow at 30 per

cent over the next decade.

The Indian real estate market has become one of

the most preferred destinations in the Asia Pacific1

as overseas funds accounted for more than 50 per

cent of all investment activity in India.

B: Easier access to credit

Plastic money an acronym for credit cards is an important driver of retail

businesses.

India is the second fastest growing Financial Cards market in the Asia - Pacific region.

Tier- II & III cities to fuel future growth of Modern Retail.


RETAIL GROWTH DRIVERS BUSINESS OR SUPPLY-SIDE DRIVERS

C: Increased efficiency due to development in the supply chain

D: Conducive regulatory environment due to expected reforms

E: R&D, innovation and new product development

F: Growing interest of investors


DEMAND SIDE Growing Working Women Population

Growing youth segment

Adoption of Nuclear Family Culture

Changing consumer preferences

Growing urbanization

Media explosion

Increasing number of HNI’s

SUPPLY SIDE

Availability of Real Estate

Easier access to credit

Increased efficiency of supply chain

Conducive regulatory environment

R&D, innovation and new product development

Growing interest of investors

RETAIL GROWTH DRIVERS


TYPES OF RETAILERS CLASSIFICATION OF RETAIL FORMATS

Retail is a term which covers a vast range of business types and

models. Some of the different types of retail store include:

Brand

Single Band

Multi Brand

Store Area

Hyper Market

Supermarket

Department Stores

Marketing Strategy

Discount Stores

Warehouse Stores

Mom and Pop Store

Speciality Stores

Malls

E-Tailers

Pure-play e-tailers

Bricks & clicks e-tailer

Services retailing

People-based vs. equipment-based

Customer presence

Personal vs. business

Service provider’s motives

Degree of customer contact.



A: Based on Brand

Unique design, sign, symbol, words, or a combination of

these, employed in creating an image that identifies a

product and differentiates it from its competitors.

Where a business sells goods to individual

customers under the same brand.

More Attention

Greater Shelf Space

Greater Sales and Profits

Minimized Competitive Influence

SINGLE BRAND

TYPES OF RETAILERS

TYPES OF RETAILERS A: Based on Brand

Retailing of two or more similar and competing products

by the same firm under different and unrelated brands.

While these brands eat into each others' sales.

Where a business sells goods to individual customers

and such goods can carry several different brands.

MULTI BRAND


Catering to brand-switchers users who like to experiment with

different brands.

TYPES OF RETAILERS B: Based on STORE AREA

SUPERMARKET


A retail store which generally sells food products and household items, properly

placed and arranged in specific compartments is called a supermarket.

A supermarket is an advanced form of the small grocery stores and caters to the

household needs of the consumer.

The main features of supermarket are as follows:

1. Variety of products

2. Deals in necessaries of life

3. Self-service

4. Reasonable prices

5. Separate compartments

6. Deals in pre-packed goods

Bakery products

Cereals

Meat products

Breads

Medicines

Vegetables

Fruits

Soft drinks

Frozen Food

Canned Juice

Product Portfolio


DEPARTMENTAL STORE

A departmental store may be described as a large retail organization having number

of departments in the same building under centralized control.

Each department deals in particular type of trade and is a complete unit in it.

The main features of Departmental are as follows:

1. Large size

2. Central location

3. Wide range of goods

4. Specialization

5. Attractive appearance

6. Unified management

7. Amenities and services

Apparels Jewellery Toiletries

Cosmetics

Footwear

Sportswear Toys Electronics Appliances

Personal care



HYPERMARKET A hypermarket is a superstore combining a supermarket and a department store.

It was in 1931 that the word hypermarket was first coined to

refer to a gigantic retail facility that was earlier called as

departmental store or a super store.

Fred Myer chain in US was labeled as hypermarket, but the

word was later reserved for all such retail stores that

combined the features of super market and departmental

stores.

The result is an expansive retail facility carrying a wide range of products under one roof,

including full groceries lines and general merchandise.


TYPES OF RETAILERS SUPER VS HYPERMARKET


Retail outlet that focuses on selling a particular product range & associated items.

Supermarkets

• Supermarkets are large self-service

grocery stores.

• Offer customers a variety of foods

and household supplies.

• Similar goods placed together.

Hypermarkets

• Large retail establishments.

• Combination of supermarket and

department stores

• One-stop shop for all of the

customer’s needs.

A discount store is a retail store which sells products at prices lower

than the typical market value.

The discount stores generally offer a limited range and the quality

in certain cases might be a little inferior as compared to the

department stores.

The products generally include formal and semi formal as well as

casual clothing, footwear and accessories.

DISCOUNT STORE

TYPES OF RETAILERS

Consumer Discounts Prompt More Spending ∣ Consumers Discounts Make Your Business Money∣ Stay competitive ∣Improve Goodwill


B: Based Marketing Strategy Marketing strategy is making sure your offering addresses your

consumer's needs. Consumers do not buy what you sell. They buy

what has value to them.

Brand discount retailers typically offer 25-80% discount on products

through the year and insist they do not sell counterfeits or factory

seconds, or products typically rejected by stores.

They claim they are able to buy at reduced prices as they purchase odd

sizes, end-of-season surplus items and, often, make payments in cash to

the manufacturer or distributor.

TYPES OF RETAILERS Why discount stores are struggling?

Inability to maintain a strict cost structure

Limited supplies from large brands

A faulty understanding of the business

High rentals

Pantaloon Retail (India) Ltd’s Brand Factory, Arvind Mills Ltd’s Megamart, Vishal

Megamart, the discount store chain of Vishal Retail Ltd, and Provogue (India) Ltd’s

Promart have been the most prominent players in the field.

2008 The Rise of Discount Stores

The Loot (India) Pvt. Ltd, which operates The LOOT outlets, Krishna

Group’s The Grab Store and Prateek Apparels Pvt. Ltd’s Coupon started

in 2008.

Profit margins of a discount retail format are much less than a full priced

retail store, the higher sales volumes in a discounted format compensate

the cash flow. The profit margin in a discount retail chain is 6-10%


Point MEGAMART COUPON

Started 1995 2007

No. of outlets at peak 220 14

What went wrong? Dependence on other bands to supply unsold

stock

Could not raise funds for expansion and was

acquired by brand factory in 2013

Current status Positioned on value fashion platform Merged with brand factory

No. of outlets today 83 value fashion and 55 discount stores being

scaled down

Nil

Point THE LOOT VISHAL RETIAL PROMART

Started 2004 2004 2007

No. of outlets at peak 150 175 Two

What went wrong? Cash flows issues, unreliable

supply, frenetic expansion

Accumulated debt of Rs. 730

crore

Supply from large brands was

difficult due to the 08 crisis

Current status Banks auctioned properties

owned by THE LOOT

Was acquired by TPG and

Shriram Group in 2001

Sold out to Vemb lifestyle in

FY10

TYPES OF RETAILERS B: Based Marketing Strategy


Why kirana stores are still popular in India? kirana stores are still the best preference for some set of people/ families:

Micro-credit Flexible quantity Low rental Ancillary services Social connect

MOM & POP STORE The term "mom and pop shop" refers to a small, independent business

selling merchandise of day to day use.

The main features of mom & pop store are as follows:

1. Small amount of business volume

2. Business only in a single location

3. Operated by the same family for generations

4. Handful of employees (family members)

Convenience Stores

TYPES OF RETAILERS B: Based Marketing Strategy SPECIALTY STORE


Most specialty store business operators will maintain considerable depth in the type of

product that they specialize in selling

Usually premium prices & provide higher service quality and expert guidance to

shoppers.


TYPES OF RETAILERS B: Based Marketing Strategy

SPECIALTY STORE


Specialization and Expertise Lack of Variety Staffing Reliance on Market


TYPES OF RETAILERS B: Based Marketing Strategy WAREHOUSE STORES

A warehouse is a retailer that offers a limited assortment of food and general

merchandise, with limited services, at low prices to ultimate consumers and small

businesses. 1. A membership or membership fees is required

2. Offer a no-frills experience

3. It appeals to price–conscious consumers

4. Products are not properly displayed

5. Brands may be temporarily or permanently out of stock


Where should a Mall focus in order to drive satisfaction and loyalty? THE FOUR ATTRIBUTES OF MALL SATISFACTION AND LOYALTY

Discovery

Attractive

Diversity of stores

Restaurants

Unique products

Special event

Environmentally conscious

Comfort

Cleanliness

Maintenance

Safe

Sanitary

Navigation

Location

Layout

Clear signage

Accessibility

Parking

Vicinity

A successful shopping mall must have an appropriate blend of all attributes. But

when it comes to creating loyal mall patrons “Discovery” is the most important

attribute, far outweighing all other experience factors.

TYPES OF RETAILERS B: Based Marketing Strategy SHOPPING MALL A shopping mall in which one or more buildings form a complex of

shops representing merchandisers with interconnecting walkways that

enable customers to walk from unit to unit.


TYPES OF RETAILERS B: Based Marketing Strategy SHOPPING MALL A shopping mall in which one or more buildings form a complex of shops representing merchandisers with

interconnecting walkways that enable customers to walk from unit to unit.


• Advantages of Shopping Malls

• Many types of stores within one

location

• Merchandise assortments available

within those stores

• Opportunity to combine shopping with

entertainment

• Attract many shoppers

• Large trade area

• Generate significant pedestrian traffic

• Inexpensive form of entertainment

• Customers don’t have to worry about

weather

• Disadvantages of Shopping Malls

• Occupancy cost are higher than those

of strip centers, freestanding sites,

most central business districts

• Retailers may not like mall

managements control of their

operations

• Strict rules governing store displays

and signage

• Competition within shopping centers

can be intense

• Similar merchandise sold in a close

proximity

TYPES OF RETAILERS


C: e-tailers

A business that uses an electronic network such as the internet to sell its

goods or services to the customer for personal, non business use”

India’s e-tailing growth drives 1. Annual disposable income per household to grow by two-and-a-half times by 2015

2. Proliferation expected in the sales of PCs, tablets and smartphones

3. More Indians increasing time spent online

4. Probability of growth in internet user base, mirroring that of the voice user base

5. Increase in the number of payment options.

6. Considerable rise in the number of internet users

7. Proliferation of internet-enabled devices

8. Favorable demographics

India’s e-tailing challenges 1. Low average broadband speed and flat average internet speed cause for concern

2. Online payment landscape marred by low penetration of credit and debit cards

3. Absence of e-Commerce laws

4. Low entry barriers leading to reduced competitive advantages

5. Shortage of manpower

6. Customer loyalty

• Marketing and promotion agencies

• Entrepreneurs – Application

developers, bloggers, third-party

website owners

• Search engines TECHNOLOGY

- Web designers & developers

- IT professionals

- Freelance developers

- SMEs in technology solutions

space

- Hardware/software providers

PAYMENT GATEWAYS

- Banks

- Credit card companies

- Telecom operators

PHOTOGRAPHERS, CONTENT

WRITERS, STYLISTS & MODEL

Warehouse Owners

Packaging Material Suppliers

Technology Device Suppliers

Merchandise Supplier

Vendors

Freelance Designers

Boutiques

Airlines (Domestic cargo)

Third Party Logistics (3PL) providers

Customer Care •Call Centers

•Telecom Operators

CUSTOMER WEBSITE WAREHOUSING MERCHANDISE

MARKETING THE E-TAILING ECOSYSTEM AND KEY STAKEHOLDERS

Merchandise

SellerTechnology

Marketing &

Promotions

Payment

GatewayWarehousing Logistics Packaging Others Margin

Share 65% 6% 8% 2% 4% 7% 2% 3% 3%

0%

10%

20%

30%

40%

50%

60%

70%

REVENUE SPLIT OF E-TAILERS

TYPES OF RETAILERS


C: e-tailers

Key Skillset Requirements in E-tailing

CREATIVE - WEB DESIGN AND DEVELOPMENT

Role Skillset Requirements

• Proficiency in visual arts, flash, animation, etc.

• Knowledge of web design software

TECHNOLOGY - WEB DESIGN AND DEVELOPMENT

Role Skillset Requirements

• Understanding of different technology platforms

• Programming language skills

• Software and tools – Web analytics, statistical, BI, etc.

ONLINE MERCHANDISING Skillset Requirements

• Understanding of merchandising and category management

• Knowledge of online trends and how consumers shop online

• Creative flair, with ability to design web content

Role

CONTENT AND PHOTOGRAPHY

Skillset Requirements

• Creative/copy writing, editing and proof

reading skills

• Visual art skills with proficiency in

photoshop, corel, flash, etc Role

Search Engine Optimization (SEO)

Skillset Requirements

• Understanding of SEO tools and techniques, on and

off page activities, social media optimization, etc.

• Sound technical knowledge

Role

TYPES OF RETAILERS C: e-tailers

SPECIFIC E-COMMERCE PLAYERS IN INDIA

Travel

• MakemyTrip

• Goibibo

• Yatra

• IRCTC

• Cleartrip

Real Estate

• MagicBricks

• CommonFloor

• 99acres

• Housing

Fashion

• Jabong

• Myntra

• YepMe

• Zovi

• FashionandYou

Furniture

• FabFurninsh

• Pepperfry

• Urban Ladder

• Zansaar

Health

• Healthkart

• LensKart

• Portea

• Medical

Education

• EduKart

• Meritnation

• Edureka

• Toppr

• embibe


43% 37%

14%

24% 19%

14%

0%

10%

20%

30%

40%

50%

Jan-15 Jan-16

Mar

ket S

hare

%

Churn in the Marketplace

Flipkart Amazon Snapdeal

Though Flipkart has lost market share, it

remains the leader by margin primarily

due to strong presence in fashion.

Amazon India has gained market share

among horizontal etailers, dislodging

Snapdeal from the second slot.

Snapdeal is focusing on monetizing its

existing customer base through

payments online, travel, food and grocery

delivery.

1. According department of industrial policy and promotion (DIPP), a

marketplace model is an information technology platform run by an e-

commerce entity on a digital and electronic network to act as a

facilitator between buyer and seller.

2. MPM companies cannot own inventories of goods and services and

sell directly to consumers using online platforms.

3. MPM companies will be allowed to provide support services to sellers

on their platform such as warehousing, logistics, order fulfilment, call

center and payment collection.

TYPES OF RETAILERS C: e-tailers – MARKET PLACE MODEL

1. Audience is Massive

2. Trust is provided by rating

3. Transparency

4. Marketplaces for all tastes

5. Marketplaces have SEO experts

6. 24/7 and 365 days

7. Promotion & Customer service

1. Shipping costs are higher

2. Fragmented vendors

3. Requires excellence in Logistics

ADVANTAGES

DIADVANTAGES

An aggregator is a business that doesn't produce product, but gathers products or information

from different sources and presents them on a platform like website or mobile app.

Aggregators could be market creators providing a digital environment where buyers and sellers

can meet and transact or transaction brokers.

Their revenue model is generally based on transaction fees for enabling or executing the

transaction and value proposition is convenience, on-demand and cost effectiveness for the

consumer.

TYPES OF RETAILERS C: e-tailers - AGGREGATOR MODEL

An American travel website

company providing reviews

of travel-related content.

Zomato is a restaurant

search and discovery

service. Founded in India.

India's biggest online movie and

events ticketing brand.

Indian online travel company

Ola, is an Indian online

transportation network

company.

The success of these ventures depends on the simplified experience they can provide to buyers, sellers, and

even the employees.

American MNC e-commerce

Co; providing c2c &b2b sales

services.

Global mobile food

delivery marketplace HQ

in Berlin.

India's number 1 bus ticketing

reservation platform.

In an inventory model, buyers purchase goods directly from the

website belonging to a business.

Control of the product enables a superior post purchase consumer

experience. If you have the product in your control, then

1. Have visibility into your stock level,

2. know where the product is physically located, and control the pick,

pack and ship process.

3. It also means that you can optimize dispatch time.

TYPES OF RETAILERS C: e-tailers – INVENTORY MODEL

The bottom line is that being in control of the product enables you to deliver

faster and with higher accuracy, and respond effectively to customer inquiries

about shipping status.

Direct communication between buyers and sellers

Privacy of numbers and other personal details

Any concerns of site-visitors can be resolved immediately.

The buyer can know exactly what the customer is looking for.

Build of trust between the vendor and seller

e-store with delivery in 2008. Consumer electronics and durables. Men's ethnic wear.

By Vedant Fashions

Largest bookstore.

BRICKS AND CLICKS A business model by which a

company integrates both offline

(bricks) and online (clicks) presence.

According to the FDI policy, “Inventory

model of ecommerce means an

ecommerce activity where inventory of

goods and services is owned by e-

commerce entity and is sold to the

consumers directly.”

Advantages of Inventory Model

Govt. defines e-commerce marketplace rules, allows 100% FDI.

100% (FDI) in online retail of goods and services under the so-called “marketplace

model” is allowed through the automatic route, seeking to legitimize existing businesses

of e-commerce companies operating in India.

So far, India has allowed 100% foreign investment in business-to-business (B2B) e-

commerce but none in retail e-commerce—i.e., business-to-consumer, or B2C.

Mar 30 2016

Flipkart’s largest seller WS Retail Services Pvt. Ltd easily generates more than 25% of

the company’s sales while Cloudtail India Pvt. Ltd, the biggest seller on Amazon India,

contributes even more.

Cloudtail India, a joint venture between Amazon.com Inc. and N.R. Narayana Murthy’s Catamaran

Ventures, is now the key growth driver for Amazon India, generating at least 40% of the

company’s sales.

SERVICE RETAILING

“A service retailing is any act or performance

that one party can offer to another that is

essentially intangible and does not result in

the ownership of anything.”

CHARACTERISTICS OF SERVICE RETAILING

1 Intangibility—Customers can’t see, touch, or smell

Intangibility signifies inability of seeing, feeling, touching and weighing, services

are intangible and do not have a physical existence. Therefore customers can’t

see, touch, or smell service.

In case of tangible products a customer can inspect

and judge the product, however this may not be

possible in case of services.

Individuals spend more than 50 percent of all personal consumption expenditures on services.


1 Intangibility—Customers can’t see, touch, or smell SERVICE HOW IT IS DONE? (BY DEVELOPING ABSTRACT IDEAS)

Banking Anticipate consumer needs, simplify the experience, and learn from every

interaction and maintain customer’s trust and belief.

College

Education

By providing a conducive learning environment in terms of Library, Computer

Labs, Interactive Learning, Recreational Facilities, Hostel facilities, Classrooms

and Lectures.

Movie

Theatre

Offer a exceptional consumer experience through state of the art projection and

sound systems, unique ambience, e-booking, specialty food, which can be

ordered and delivered on ones seat!

Credit Card By offering services and benefits based on customer lifestyle

Insurance Developing trust, offer the best value for money, and set the standards in

dealing with customers.

In order to demonstrate the tangibility of a services firms assess

the customer's perception of an experience and derive a clear

picture of customer expectation from the service and also craft a

set of enforcements and provide physical cues to reassure the

customer experience.

CHARACTERISTICS OF SERVICE RETAILING 2 Perishability—Customers have to use it or lose it.

The perishable nature of services creates difficulty

for both customer and marketers.

Perishability refers to feature of a service that makes

it impossible store, return or resell, thus services are

highly perishable compared to physical products.

Christopher H. Lovelock well know author of

Services Marketing says,

“Lost opportunity in a service business is

rather like having a running tap in sink with

no plug. The flow is wasted unless customers

or their possession that require servicing are

present to receive it”.

TECHNIQUE DESCRIPTION CASE-IN-POINT

Flexible pricing

This involves charging a higher price

during peak season and low price

during off-peak periods.

Movie theatres like PVR, Fame, Fun cinemas and Inox

charge more for movie tickets and snacks on weekends

and public holidays and prices are slashed on

weekdays.

Capacity

management

In this technique marketers adjust their

offerings in an attempt to match

demand.

Wonder-La an amusement park in Bangalore operates

all rides on weekends and holidays where as on

weekdays some of the rides are put on hold, further

for each ride to operate a minimum number of

audience are required.

Non-peak

demand

This involves stimulating demand

during off-peak hours when power

demand is usually low.

Café coffee day has come up with concept of chat

over breakfast and a good coffee. MacDonald’s has

recently launched breakfast service (7am to 10:30am)

to stimulate demand during off-peak hours.

Complementary

services

They are designed and offered to

provide alternatives to avoid rush.

BSNL offer many channels for bill payments such as

internet, mobile, ATMs collection centres etc. Most of

the banks have an ATM attached to bank.

Reservation

system

This involves an arrangement whereby

the service is reserved for the

customer.

Airlines, and railways use reservation systems to

effectively to manage the demand levels.

Techniques to encourage demand for the service during slack times

2. Perishability—Customers have to use it or lose it


CHARACTERISTICS OF SERVICE RETAILING 3 Variability—Lack of consistency in service performance

Variability characteristic of a service explains inability of services providers to

offer same level of service consistently, this means that even the same service

performed by the same individual for the same customer can vary.

Thus element of variability in services is quite common on account

of a large measure of the “human element”

Zinger burger offered in all the

outlets of KFC are almost

identical. However, when it

comes to services rendered by

counter staff it may vary.

A lecturer teaching a same

subject for different section

may not be able to deliver

uniformity in the content.

VARIABILITY IN SERVICES


The following are some of the measure to overcome service variability

3. Variability—Lack of consistency in service performance

By adopting good human resource management practices Strategy 1

• Recruit right candidates and also adequately provide training, commission based salaries to develop customer orientation in employees.

Standardizing service delivery: Strategy 2

• This involves use of strategies like First time right, flowcharts and standard operating procedures to guide service providers in offering a uniform level of service and guaranteed results.

Understanding customer: Strategy 3

• Understanding customer and responding to their needs is the heart of the servicing process, Marketer should be highly concerned about customer satisfaction.

Feedback and Follow up: Strategy 4

• The outcome of response collected from the respondents (Customers) can be represented in form of a graph, chart or map which will help marketer to understand satisfaction level of the customer and take appropriate actions.



4 Inseparability—Produced and Consumed simultaneously The characteristic of a service that means that it is impossible to separate the

production of a service from the consumption of that service.

On account of technological advancement the skill and expertise of

doctors, cooks, beauticians, lecturers and the other service provider

can now be detached—meaning they can made available on internet,

phone etc.


CLASSIFICATION OF SERVICE RETAILERS

Service can be classified according to whether the service

delivery is people based or equipment based, even though

most services involve both elements to some degree.

People Based Versus Equipment Based 1

Customer can have personal contact with the

service provider without being physically present.

Degree of Customer Contact 2

FORMS OF RETAILING BASED ON OWNERSHIP

Mohammed Umair INTRODUCTION TO RETAILING

Independent

Retailer Existing Retail

Business

Corporate

chains

Network

Marketing

Franchise

Model

1. In independent retailer is one who builds his/her business from

the ground up.

2. From the business planning stage to opening day, the

independent retail owner does it all.

3. He/she may hire consultants, staff and others to assist in the

business endeavor. The opportunities are endless.

Someone who inherits or buys an existing

business is taking ownership and

responsibility of someone else's hard

work. The foundation has already been laid.

Existing Retail Business

Dealership

Model

Mohammed Umair INTRODUCTION TO RETAILING

Corporate chains A retail chain is a company operating multiple retail units under common ownership and usually has

centralized decision making for defining and implementing its strategy.

1 |Reliance Retail Limited | Establishment – 2006

A part of Reliance industries. It offers complete retail solutions such as food items, lifestyle, fashion,

consumer electronics products, home decorative products etc. The company has a total of 1500 outlets

in the country.

2 | Future Group

Corporate office | Establishment – 1997

The hypermarket chain, Big Bazaar, department store chain, Central, outlet stores chain, Brand Factory, sportswear chain, Planet

Sports, home improvement and consumer durables chain, HomeTown and Ezone, supermarket chain, Food Bazaar, convenience

stores chain, KB’s.

3 |Provogue India Ltd| Establishment – 1997

It is a lifestyle and fashion company. The company’s offering include men’s wear, women’s wear, fashion

accessories, apparel and numerous other products. It has over 250 stores all across the country.

4| Shoppers Stop| Establishment – 1991 |

Shoppers Stop is a well known name in retail industry in India and ranked among the top retail

companies in India. The company is operated and managed by K Raheja Corp Group and was

incorporated in year 1991. It has total 61 stores in India and offers national and international

brands of apparel, fashion and lifestyle.

Top Retail Companies in India

CORPORATE CHAINS

5 | ITC -LRBD| Establishment – 1910 |

Lifestyle Retailing Business division is a premier clothing retail company in India branding through

Wills Lifestyle and John players. The Company has a diversified range of business activities in FMCG,

Hotels, Paper board, Packaging and Agriculture.

Top Retail Companies in India

6 | Trent Ltd. | Establishment – 1998 |

Established in 1998 and part of the Tata group, Trent operates Westside, one of India’s largest and fastest

growing retail chains; Star Bazaar, a hypermarket chain and Landmark a family entertainment format store.

7 | McDonald’s| Establishment – 1940 |

McDonald is leading global food service provider which has existence in more than 130 countries

worldwide. The company started India operation in 1996 and has more than 300 food chain restaurants in

the country.

8 | Aditya Birla Retail| Establishment – 2006 |

Aditya Birla retail limited is a subsidiary of Aditya Birla group established in year 2006 which owns over

500 supermarkets and 15 hypermarkets.

9 | Titan Industries| Establishment – 1984|

Titan is joint venture between Tata group and the Tamil Nadu Industries development corporation

established in year 1984. Titan is dominating the Indian Watch Industry since then and become global

international brand. Titan also has a great retail presence in jewellery business and its brand Tanishq is

one amongst the top retail jewelry in India.

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