Retailing

INTRODUCTION 2 RETAILING

• A set of business activities involved in selling goods and services to consumers for their personal, family, or household use.

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

Examples of Retailers . . .

Retail Shops . . .

The 10 Largest Retailers in the United States

Rank Company Main Emphasis

1 Wal-Mart Full-line discount stores, supercenters, membership clubs

2 Home Depot Home centers, design centers

3 Kroger Supermarkets, convenience stores, jewelry stores

4 Target Full-line discount stores, supercenters

5 Costco Membership clubs

6 Albertson’s Supermarkets, drugstores

7 Walgreens Drugstores

8 Lowe’s Home centers

9 Sears Department stores, specialty stores

10 Safeway Supermarkets

Retail Process

POS ERP

Reports & Transactions

Retail formats in INDIA

• India is fifth most attractive emerging retail market: a potential goldmine.

• Indian retail is largest among all industries(200 billion $).

• 10% - India’s GDP.

• Growth rate – 20-25%

• 8% - employment

• Potentiality to grow 427 billion $ by 2010 and 637 billion $ by 2015.

Retail formats in INDIA

• Malls

• Specialty stores

• Discount stores

• Department stores

• Hyper marts / Super marts

• Convenience stores

• Multi brand outlets

INDUSTRY REVOLUTION

• Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

• 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

Growth of Retail in INDIA

• For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

• Post 1995 onwards saw an emergence of shopping centers.

• Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume.

Manufacturer’s Perspective

Retailers are part of the

distribution channel

A Typical Channel of Distribution

Manufacturer

WholesalerFinal

Consumer

Retailer

The Retailer’s Role in the Sorting Process

Distribution Types

• Exclusive: suppliers make agreements with one or few retailers that designate the latter as the only ones in a specified geographic area to carry certain brands or products

• Intensive: suppliers sell through as many retailers as possible

• Selective: suppliers sell through a moderate number of retailers

Multi-Channel Retailing

A retailer sells to consumers through multiple retail formats Web sites Physical stores

Retail Strategy

An overall plan for guiding a retail firm

Influences the firm’s business activities

Influences the firm’s response to market forces

Retail Strategy

Location

Store Design & Display

Pricing mixing

Customer service

MerchandiseAssortments

Six Steps in Strategic Planning

1. Define the type of business

2. Set long-run and short-run objectives

3. Determine the customer market

4. Devise an overall, long-run plan

5. Implement an integrated strategy

6. Evaluate and correct

“Pay Less + Expect More” at Target

Aspects of Target’s Strategy

Growth objectives

Appeal to a prime market

Distinctive image

Focus

Customer service

Multiple points of contact

Employee relations

Innovation

Commitment to technology

Community involvement

Monitoring performance

Applying the Retailing Concept

Customer Orientation

Coordinated Effort

Value Driven

Goal Orientation

RetailingConcept

RetailStrategy

Eliminating Shopper’s Boredom

Customer Service

• Activities undertaken by a retailer with the basic goods and services

Store hours

Parking

Shopper-friendliness

Credit acceptance

Salespeople

How Retailers Add Value . . .

The value of the product and service increases

as the retailer performs functions.

Doll is developed at manufacturer

Doll is developed in several styles

Doll is offered in convenient locations in quantities of one

Doll is featured on floor display

Doll can be bought on

credit or put on lay away

Retail Mix

•The combination of merchandise, assortment, price, promotion, customer service, and store layout that best serves the segments targeted by the retailer.

Types of Competition

1. Intratype Competition

2. Intertype Competition

3. Divertive Competition

Intratype Competition

It occurs when two or more retailers of the same type, compete directly with each other for the same households.

It occurs when two or more retailers of a different type, compete directly by attempting to sell the same merchandise lines to the same households.

Intertype Competition

It occurs when retailers intercept or divert customers from competing retailers.

Divertive Competition

The Retail Life CycleM

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Accelerateddevelopment

Maturity Decline

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Future Changes in Retail

NonstoreRetailing

New RetailFormats

Integration ofTechnology

HeightenedGlobal

Competition

Increased useof Private Labels

E-tailingCatalogSales

Direct Selling

Non store Retailing

LiquidatorsRecycled

MerchandiseRetailers

Super centers

New Retail Formats

Creation ofNew Retail

Formats

GreaterDiversity

Increased Rate of Change

Heightened Global Competition

CustomerSatisfaction

CustomerManagement

Supply ChainManagement

Integration of Technology

M.RAVISHANKARMBA(AB) 2008-2010 Batch

NIFTTEA KNITWEAR FASHION INSTITUTETIRUPUR

[email protected]

FIN