Top Banner
RETAIL ORGANIZATION AND CLASSIFICATION OF RETAIL UNITS
26

Retail organization and classification of retail units

Jun 23, 2015

Download

Business

SANAL C.WILSON

Retail organization and classification of retail units
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Retail organization and classification of retail units

RETAIL ORGANIZATION AND CLASSIFICATION OF RETAIL UNITS

Page 2: Retail organization and classification of retail units

RETAIL ORGANIZATION

The term retail organization refers to the basic format or

structure of a retail business designed to cater to the

needs of the end customer. Recently, some scholars have

started referring to India as a nation of shopkeepers. This

epithet has its roots in the huge number of retail

enterprises in India, which were over 12 million in 2003.

About 78% of these are small family businesses utilizing

only household labour.

Page 3: Retail organization and classification of retail units

A RETAIL UNIT COULD BE OWNED BY:

Manufacturer (e.g., company owned retail outlets)

Wholesaler (e.g., Vastra outlet in Rajouri in New Delhi)

Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow)

Consumer (consumer owned grocery stores in man y residential societies)

Co-operative society (e.g., Mother Dairy milk booths in Delhi)

Government (e.g., Cottage Emporia)

Ownership shared among franchiser and franchisee (e.g., Archies Gallery)

Page 4: Retail organization and classification of retail units

CLASSIFICATION OF RETAIL UNITS

Conceptual classification of a business unit provides

the marketers with strategic guidelines, useful in the

design of retailing strategy. Besides, retail businesses

are extremely diverse and there are quite a few types

of retail units. Therefore, retail units are classified on

multiple of ownership, geographical locations, kind of

customer interaction level of services provided etc.

Page 5: Retail organization and classification of retail units

1. RETAILERS CLASSIFIED ON THE

BASIS OF OWNERSHIP

Page 6: Retail organization and classification of retail units

INDEPENDENT RETAILER

An independent retailer owns only

one retail unit. The management has

direct contact with the customers and

can quickly respond to their needs.

Page 7: Retail organization and classification of retail units

CHAIN STORES

A chain retailer operates multiple

outlets under common ownership. It

usually engages in some level of

centralized purchasing and decision

making.

Page 8: Retail organization and classification of retail units

FRANCHISING

It involves a contractual arrangement between a franchisor and a retail franchisee,

which allows the franchisee to conduct a given business under established name and

according to a given pattern of business.

The franchisee pays an initial fee and a monthly share of gross sales in exchange

for the exclusive rights to sell goods and services in a specified area.

Franchising is a retail organizational form in which small businesses can benefit

being a part of a large retail institution.

Page 9: Retail organization and classification of retail units

STORE BASED RETAIL STRATEGY MIXES

Page 10: Retail organization and classification of retail units

F O O D O R I E N T E D R E TA I L E R S

Page 11: Retail organization and classification of retail units

F O O D O R I E N T E D R E TA I L E R SType of Retailer

Size (000 sq. ft.)

Location Merchandise

Prices Services

Promotion

Convenience Store

2 - 3

Neighbourhood

Medium width and low depth of assortment; average quality

Average

Average

Moderate

Supermarket

20 - 50

Neighbourhood

Extensive width and depth of assortment; average quality; manufacturer, and generic brands

Average

Average

Heavy use of newspaper, flyers and coupons, self-service

Page 12: Retail organization and classification of retail units

CONTD..

Type of Retailer

Size (000 sq.

ft.)Location Merchandise Prices Services Promotion

Hypermarket

100 - 300

Community shopping centre or isolated site

Wide variety of food (60 – 70 %) and general merchandise (30-40%)

Low Average Low

Warehouse store

100 - 150

Secondary site, often in industrial area

Moderate width and low depth; emphasis on manufacturer brands bought at discounts

Very low

Low Little or none

Page 13: Retail organization and classification of retail units

GENERAL MERCHANDISE RETAILERS

Type of Retailer

Size

(000 sq. ft.)

Location Merchandise Prices ServicesPromotio

n

Specialty Stores

4 - 12

Business district or shopping centers

Very narrow width of assortment; extensive depth of assortment; average to good quality

Competitive to above average

Average to excellent

Heavy use of displays, may have extensive sales force.

Category Specialists

50 - 120

Stand alone, power strip centers

Narrow variety but very deep assortment

Low Low to high

Low to Moderate

Department Store

100 - 200

Regional Malls, Stand alone

Broad variety, average to deep assortment

Average to high

Average to high

Average to high, direct mail, catalog use

Page 14: Retail organization and classification of retail units

CONTD..Type of Retailer

Size (000 sq.

ft.)Location Merchandise Prices Services Promotion

Discount Store

60 - 80

Stand alone, power strip centers

Broad variety, Low to average assortment

Low Low Heavy use of newspaper ads, price oriented messages

Factory outlets

20 - 30

Outlet malls

Average variety, deep but varying assortment

Low Low Use of newspapers, brands not advertise, limited workforce

Flea Market

Street (market area)

Average variety, average and varying assortment

Low Low low

Drug Stores

3 - 15 Stand alone, strip centers

Narrow variety, average to deep assortment

Average to high

Average Low to average

Page 15: Retail organization and classification of retail units

N O N S T O R E - B A S E D R E TA I L S T R AT E G Y M I X

Page 16: Retail organization and classification of retail units

DIRECT MARKETINGIt is a form of retailing in which a customer is first exposed to a good or service

through a non-personnel medium (such as direct mail, broadcast or cable TV, radio,

magazine, newspaper etc.) and then orders by mail, phone (usually a toll free

number), fax or by computer.

Direct marketing can be divided into two broad categories:

• General: General marketing firms offer a full line of products from clothing to house ware.

• Specialty: Specialty firms focus on narrow product lines.

Page 17: Retail organization and classification of retail units

DIRECT SELLING

It includes both personal contact with consumers in their homes (and other

non-store locations such as offices) and phone solicitations initiated by a

retailer.

Examples: Carpet selling, vacuum cleaner, other household products,

cosmetics, books, encyclopedia etc.

It emphasizes convenience in shopping and a personal touch.

Page 18: Retail organization and classification of retail units

VENDING MACHINE

It is a retailing format involving the coin or card operated dispensing of hot

and cold beverages and food or snacks items.

It eliminates the use of sales personnel.

It allows round the clock sales.

Location of the machines can be done according customer’s convenience.

Page 19: Retail organization and classification of retail units

WORLD WIDE WEB

WWW in the field of retailing relates to online retailing.

It enables retailer’s world wide presence.

Enhances the retailer’s brand.

Provides information to the consumers.

Promotes new products.

Furnish customer service.

Cost efficient

Can announce special offers and also employment opportunities.

Page 20: Retail organization and classification of retail units

SINGLE AND MULTI CHANNEL RETAILING

Single-Channel Retailing:• If a firm sells to consumers through one format.

Multi-Channel Retailing:• If a firm sells to consumers by combining store

and non-store retailing- as well as using multiple store formats.

Page 21: Retail organization and classification of retail units

INTEGRATED MULTI-CHANNEL STRATEGY

Integrated promotions across channels.

Ensuring product consistency across channels.

Having an effective information system that can share data across channels.

Enacting a store pickup process for items purchased on the web or through a catalog.

Searching for multi-channel opportunities with appropriate partners.

Page 22: Retail organization and classification of retail units

2 . C L A S S I F I C AT I O N O F R E TA I L E R S O N T H E B A S I S O F O P E R AT I O N A L S T R U C T U R EIndependent retail unit: – The total number of retailers

in India is estimated to be over 5 million in 2003. About 78%

of these are small family businesses utilizing only household

labour. An independent retailer owns one retail unit.

Retail Chain: – A chain retailer operates multiple outlets

(store units) under common ownership; it usually engages in

some level of centralized (or coordinated) purchasing and

decision making.

Page 23: Retail organization and classification of retail units

Franchising: – Franchising involves a contractual

arrangement between a franchiser and a retail

franchisee, which allows the franchisee to conduct a

given form of business under and establishments

name and according to a given pattern of business.

Leased Department or Shop-in-shop:- It refers to

department in a retail store that are rented to an

outside party. Usually this is done in case of

department and specialty stores and also at times, in

discount stores.

Co-operative Outlets: – Co-operative outlets are

generally owned and managed by co-operative

societies.

Page 24: Retail organization and classification of retail units

3 . CLASSIFICATION OF RETAILERS ON THE BASIS OR RETAIL LOCATION

Retailers in a free-standing location: – Retailers located at a site

which is not connected to other retailers depend entirely on their sore’s

drawing power and on the various promotional tools to attract customers.

This type of location has several advantages including no competition,

low rent, better visibility from the road, easy parking and lower property

costs.

Retailers in a Business-associated Location:- In this case, a retailer

locates his store in a place where a group o retail outlets, offering a

variety of merchandise, work together to attract customers to their retail

area, and also compete against each other for the same customers.

Page 25: Retail organization and classification of retail units

Retailers in Specialized Markets: - Besides the

above location-based classification, we also have in

India-retailers who prefer specialized markets,

particularly traditional independent retailers or chain

stores. In India, most of the cities have specialized

markets famous for a particular product category. For

example, in Chennai, Godown Street is famous for

clothes.

Airport Retailing: – For quite some time, duty-free

shops and newsstands dominated the small amount of

commercial space provided at airports. Lately, serious

efforts are being made to design new airport facilities

in order to incorporate substantial amounts of retail

space.

Page 26: Retail organization and classification of retail units

THANK YOU