MODULE1 the World of Retailing

8/6/2019 MODULE1 the World of Retailing

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Retailing Management An Introduction

Prof. Shilpa Chadichal


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Evolution of Retail Industry


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Evolution of Retail


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Weekly Markets


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Kiranas Stores


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Kadi stores and cooperatives


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Evolution of Retail


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Hyper/super Markets

video


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What is Retailing?

Retailing

Consists of the final activity and steps needed to place aproduct in the hands of the consumer or to provide services tothe consumer.

It is the set of business activities that adds value to theproducts and services sold to consumers for their personal orfamily use.

Aretaileris a business that sells products and/orservices to consumers for personal or family use.


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Examples of Retailers

Retailers:

-Sears, McDonalds, Amazon.com, , PVR Theaters,PANTALOON RETAILINDIALTD, LANDMARK LTD ,

RAYMOND LTD,etc.

Firms that are retailers and wholesalers that sell toother business as well as consumers:

- Metro, Wal-mart, Office Depot, The Home Depot ect,Staples etc.


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E-tailing

With householdsexperiencing an increasing

poverty of time, but risingincomes, more householdsare shopping for groceriesonline and having themdelivered to their homes.


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Most PopularOn-line Categories

Australia Canada Germany UnitedStates

1 Books Computers Books Books

2 Computers Books Computers Computers

3 CDs CDs CDs CDs

4 Tickets Tickets Tickets Apparel

5 Apparel Apparel Videos Tickets


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A Retailers Role in a Distribution Ch

annel

A retailer is a business that sells products/or services toconsumers for their personal or family use.

Retailer are the final Business in a distribution channel thatlinks manufactures to consumers.

A distribution channel is a set of firms that facilitate themovement of products from the point of production to thepoint of sale to ultimate consumer.


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Distribution Channel

Distribution ChannelPPT 1-4


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Manufacturers Perspective

The Four Ps of Marketing

Distribution

Retailers are part of the

distribution channel

Retailers are part of the

distribution channel

Product

Price

Promotion


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annel

In some distribution channels, the manufacturing,wholesaling, and retailing activities are performed by

independent firms, but most distribution channels havesome vertical integration.

Vertical integration means that a firm perform more

than one set of activities in the channel, such asinvestments by retailers in wholesaling or manufacturing.


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Raw Material

Intermediate

Manufacturing

Assembly

Distribution

End

Customer

Raw Material

Intermediate

Manufacturing

Assembly

Distribution

End Customer

Raw Material

Intermediate

Manufacturing

Assembly

Distribution

End

Customer

NO INTEGRATION

BACKWARD

INTEGRATION

FORWARD

INTEGRATION


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annel

Backward integration arises when a retailers performssome distribution and manufacturing activities.

Forward integration is when a manufacture undertakeretailing activities.


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Functions performed by Retailers

Breaking bulk.

Providing Assortment

Holding Inventory.

Providing services.


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How Retailers Add Value

Breaking Bulk

-Buy it in quantities customers want

Holding Inventory-Buy it at a convenient place when you want it

Providing Assortment

-Buy other products at the same time

Offering Services

-See it before you buy, get credit, layaway


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Doll can be bought

on credit or put onlayaway

Doll is featured on

floor display

Doll is offered inconvenient locations

in quantities of oneDoll is developed in

several styles

How Retailers Add Value

Doll is developed at

manufacturer

The value of the product and service increases

as the retailer performs functions.


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Social and Economic

Significance of Retailing

Support for community

Retail Sale

Employment Global Retailers

Opportunities.

Management training opportunities

Entrepreneurial opportunities


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Support for community and

Employment

Retailers are also responsible for developing manyinnovative products and services.

Example: Big Bazaar, Reliance etc. http://www.yourstory.in/entrepreneurs/entrepreneur-of-

the-week/1528-anand-kumar-super-30-patna

India retail industry is the largest in India, with anemployment of around 8%


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% Contribution in GDP &

Employment

Percentage Contribution to GDP by Various Sectors Percentage Contribution of Labor Force by Various Sectors


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% Contribution of sectors

to GDP

28.5%

14.6%

56.9%

IndustryAgriculture

Services


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Retail Sales

The Indian retail industry Comprised of organized andunorganized sectors. The organized sector will be 20% ofthe total market share.

India retail industry is one of the fastest growing industriesin India, especially over the last few years.

With growing market demand, the industry is expected togrow at a pace of 25-30% annually.

The India retail industry is expected to grow from Rs.35,000 crore in 2004-05 to Rs. 109,000 crore by the year2010.


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Organized Retailing in India (2010)

Organized retail INR 109,000 crore

Clothing, Textiles &Fashion accessories 39%

Footwear 9%

Jewellery & Watches 7%

Mobile handsets & accessories 3%

H

ealth

& Beauty (including serv

ices) 2%

Food & Grocery 18%

Durables 13%

Books, Music & Gifts 3%

Home 3%


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% Contribution of Retail

sectors to GDP

The contribution of retail industry to Indias GDP is more than13%.

Indian retail industry (organized as well as unorganized)spreads over more than 6 million outlets (2.4 million urbanand 3.6 million in rural).

8 per cent ofIndias population is engaged in retail

(compared to 20 per cent in the United States)..

Given the size, and the geographical, cultural and socio-economic diversity ofIndia, there is no role model forIndiansuppliers and retails to adapt or expand in the Indian

context. HenceIndian retailers ha

ve to find a suitable modeland adopt it to the Indian context.

Economic Significance ofRetailing


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Comparison of GDP

Contribution

Contribution of Services Industries to Indias GDP


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Nature of Retail Industry is Changing

Mom and Pop Store

To Todays Retailer


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Indian Retail Scenario At A Glance

Indias first true shopping mall complete with food courts,recreation facilities and large car parking space wasinaugurated as lately as in 1999 in Mumbai. (This mall iscalled Crossroads).

An FDI Confidence Index survey done by AT Kearney,showed that the retail industry is one of the most attractivesectors forFDI (foreign direct investment) in India and ifallowed, foreign retail chains would make a great impact on

Indian retailing.

In India still, more than 60% sales in retail comes from fooditems only.


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A Few Indian Retailers:

Pantaloon is one of the biggest retailers in India withmore than 450 stores across the country.Headquartered in Mumbai.

Pantaloons The different formats of Pantaloons are

1. Big Bazaar The Discount Hypermarket

2. Pantaloons - The Family Store

3. Central Mall One point shopping4. Food Bazaar Food & Grocery Super Market


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A Few Indian Retailers

RPGGroup is one of the earlier entrants in theIndian retail market, when it came into food &

grocery retailing in 1996 with its retailF

oodworldstores RPG The different retail formats of RPG group are:

1. Spencers (earlier known as Food World) Super Market

2. Spencers Hypermarket

3. Health and Glow4. Music World


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Forces Governing Indian

Retailing

1. Consumer Pull: Rising income and greater purchasingpower of the Indian customer and the tremendous growthof the middle class in the post-liberalization era.

2.G

rowing urbanization leading to avariety of customerneeds.

3. Significant increase in the number of brands in the Indianmarket leading to a larger option set for the Indiancustomer.

4. Media boom leading to an increased level of awarenesslevels and exposure to the international trends andconcepts.


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Forces Governing Indian

Retailing

5. Changing demographics propelling the growth ofretail industry.

6. Psychographics changes in the Indian consumerbehavior

7. Shopping is becoming an outing or a way of familyentertainment that means that families nowspend greater time in shops


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Retailing : Th

e Road Ah

ead

India is a nation of shopkeepers and it has more outletsthan any other country in the world.

But retail outlets still exist in all shapes and sizes Panwalla to Shoppers Stop. However most of these retailoutlets are kirana shops that are smaller than 500 sq.ft. in

area, provide

very basic offerings and hardly use anytechnology.


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Retailing : Th

e Road Ah

ead

According to Mr. Nedungadi, President, Madura Coats,Retailing is becoming all about great ambience, more

choice and convenient location.

An emerging trend is also that of the value consciousnessof the consumer. So Indian retail industry has a long wayto go.

With corporate investments coming to organized retailing,the scope and growth of organized retailing is looking brightforIndian retail Industry.


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Opening the door partly 51% FDI permitted to Single

Brand Retail

The most significant development in regulatoryaspects influencing the Indian retail industry is the

governments decision to allow foreign directinvestment (FDI) up to 51% in retail outlets meant

exclusively for single brands.

Previously single brands had to enterIndia only

through joint ventures or the franchisee route. Nowbrands can enter with a majority stake of 51% alongwith a local partner. This definitely gives theinternational brands more space to play ground.


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Challenges facing Indian

retail Industry

The tax structure in Indian favors small retail business.

Lack of adequate infrastructure facilities.

High cost of real estate.

Dissimilarity in consumer groups.

Restrictions in Foreign Direct Investment.

Shortage of Retail study options.

Shortage of trained manpower

Low retail management skill


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Th

e Future

The retail industry in India is currently growing at a greatpace and is expected to go up to US$ 833 billion by theyear 2013. It is further expected to reach US$ 1.3 trillionby the year 2018 at a CAGR of 10%.

As the country has got a high growth rates, the consumerspending has also gone up and is also expected to go upfurther in the future. In the last four year, the consumer

spending in India climbed up to 75%.

As a result, the India retail industry is expected to growfurther in the future days. By the year 2013, the organizedsector is also expected to grow at a CAGR of 40%.


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Opportunities in Retailing

Management Opportunities.

Entrepreneurial Opportunities.


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Kishore Biyani (Ceo, Future

Group)

kishore Biyani, born in a middle class marwari trading family,was not satisfied with family business.

While in college, he noticed one of his fashion consciousfriend wearing trouser made out of new material calledstonewash farbic, which looked fashionable, simplybecause it was so different.

This ga

ve him a idea and he started selling stonewash fabricto small shops in mumbai.


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Kishore Biyani (Ceo, Future

Group

It was a big success and he made his first profit. Thereafter,nothing could stop his entrepreneurial instinct and heventured to redefine the retailing business in

India with thelaunch of Pantaloons, Big Bazaar, and may more retail

formats.

Today, Kishore biyanis Future Group, with Rs.3,550 croreturnover, is one of the countrys leading business group.


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CEO of Future Group

The CEO ofFutureGroup is Mr. Kishore

Biyani.


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PRODUCTS

1) Apparels

2) Food & grocery

3) Accessories4) Cosmetics

5) Footwear

6) Electronics7) Home dcor


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PRICE :

APPARELS

KIDS WEAR

From Rs.90 to Rs.300

WOMENS WEAR


& above

MENS WEAR


And above


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PROMOTION

Saal ke sabse saste 3 din- 26th January,15th

August, Diwali.

Future Card(3%).

Shakti Card.

Advertisements (Print ads, TV ads, Radio ads).

Hafte ka sabse sasta din-low prices onWednesday.

Monthly bachat bazaar.

Buy one get one free and complementary gifts.


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PROMOTION :


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CELEBRITY PROMOTIONS


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PLACE :

Big Bazaar,Bengaluru

Big Bazaar,Hyderabad


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FUTURE GROUPVS SHOPPERS STOP


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SAWARIYA VS OM SHANTI

OM

Sawariya and Om Shanti Om,the two big releases inthe year 2009 were fighting to out do each other inorder to race in the box office.

Sawariya tied up with the Future Group for a specialrange of merchandise which included beauty productsand bed linen.

In reaction to this SRK led the whole OSO team topromote the branding of the film with another retailgiant-Shoppers Stop.


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Dave Thomas (wendys)

Dave Thomas appeared in over300 television commercialsand became the most well-know restaurateur in united

states. His unassuming persona conveyed an image that the chain

was owned by a caring grandfather rather than a facelesscorporation, a lesson he learned from colonel sanders,founder of KFC.

Thomas became millionaire when he sold his KFCfranchises. He soon decided to open some fast foodrestaurant to pay for his children's college educations.

Wendys successes begins by targeting young adults byofferin sandwiches.


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The Retail Management

Decision Process

Understanding the World of retailing.

Developing a Retail Strategy

Implementing the Retail Strategy


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Questions -2mks

What is retailing?

What is Hyper Market?

Define E-Tailing.


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Questions -8mks

What are the functions performed by a retailer?

What would be the social and economic impact of

retail development in India? Discuss the retailing management decision process.

Discuss the economic significance of retailing.


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MODULE1 the World of Retailing

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