Retail Workshop KJC

7/28/2019 Retail Workshop KJC

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Dr.S.Yogananthan


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To learn

What is retailing?

Types & Functions

Retail mix Retail consumer behaviour

Design & location

Merchandising

Pricing


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Interface between producer & end

consumer.

Firsthand information towards producer

& end consumer.High sensitivity towards profit (win win).

Order lead time.

Identify Retail Brand Identity .Shift trend in Merchandise mix.

Facilitator / Coordinator for VAS.


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Manufacturer

Retailer

Consumer

Manufacturer

Consumer

Manufacturer

Wholesaler

Retailer

Consumer

Feedba

ck


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The word retail has its origin in French word retaillier and

means to cut a piece or to break bulk.

Retailing is the sale of goods and services to theultimate consumer for personal, family or household

use.

According to Kotler:Retailing includes all theactivities involved in selling goods or services to

the final consumers for personal, non businessuse

Retailers must be customer-focused, not product-focused, Carl Steidtmann, director & chiefeconomist of Pricewaterhousecoopers.


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Retailing may be understood as the final step in thedistribution of merchandise for consumption by the endconsumers.

Retailing is responsible for matching final consumerdemand with supplies of different marketers.

Retailing is high intensity competition industry, The reasonsfor its popularity lie in its ability to provide easier access to

variety of products, freedom of choice and many servicesto consumers.

The Indian retail is dotted by traditionally market placecalled bazaars or haatscomprises of numerous small andlarge shops, selling different or similar merchandise


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Types and Classification of

Retailing.


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Superstores

Department Stores

SupermarketsHyper Markets

Specialty Stores

Category killers


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Amount of service

Product lines

Relative prices

Organizational

approach

Retailers Are

Classified By:


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Functions of a Retailer.


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From the customer point of view, the retailer serves

him by providing the goods that he needs in the

required assortment, at the required place and time.

From an economic standpoint, the role of a retailer

is to provide real added value or utility to the

customer. This comes four different perspectives


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1. Form: First is utility regarding the formof a productthat is acceptable to the customer.

The retailer does not supply raw material, but rather

offers finished goods and services in a form that the

customers want.

The retailer performs the function of sorting the goodsand providing us with an assortment of product in

various categories.

2. Time: He cerates Timeutility by keeping the storeopen when the consumers prefer to shop.

preferable shopping hours.


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5. Place: By being available at a convenient location, hecreatesplaceutility.

6. Ownership: Finally, when the product is sold,ownershiputility is created.

Apart from these functions retailer also performs like:

5. Arranging Assortment:manufacturers usually make

one or a variety of products and would like to sell theirentire inventory to few buyers to reduce costs. Finalconsumers, in contrast prefer a large variety of goodsand services to choose from and usually buy them insmall units.

Retailers are able to balance the demands of both sides,by collecting an assortment of goods from differentsources, buying them in sufficiently large quantities andselling them to consumers in small units


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5. Breaking Bulk: to reducetransportation costs,manufacturer and wholesalers typically ship large cartonsof the products, which are then tailored by the retailers

into smaller quantities to meet individual consumptionneeds

6. Holding stock: Retailers maintain an inventory thatallows for instant availability of the product to theconsumers. It helps to keep prices stable and enables themanufacture to regulate production.

7. Promotional support: small manufacturers can useretailers to provide assistance with transport, storage,advertising, and pre- payment of merchandise.


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Retailers on creating value

for Consumers.


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MoneyShopping time

Travel timePhysical effort

Stress

Risk to personal safetyRisk of wrong purchase

BENEFITS COSTS

High quality productsFavourite brands

Wide range of productsGood shopping

environment

Ease of usePleasant service

BALANCING BENEFITS AND COSTS TO CREATE

VALUE


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Retail Strategy

Customer Service Location

Merchandise

Assortment

PricingCommunication

Mix

Store Design

And Display


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Extended Problem Solving

High financial or Social Risk

Limited Problem Solving

Some Prior Buying ExperienceHabitual Decision Making (Routine /Impulse)

Store Brand, Loyalty


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Hard Coreloyalists

Soft Core loyalists

Shifting loyalistsSwitchers

Platinum (Angels)

Gold

Iron

Aluminium(Demons)

Word of Mouth (Viral Marketing)Customer Partnering

Benchmarking


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Are based on the distances customersare from a store and the willingness to

overcome these distances Divided into:

a) Primary Trading Zone 50-70% ofbusiness

b) Secondary Trading Zone 20-30% ofbusiness

c) Fringe Trading Zone 5-10% ofbusiness


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a) Convenience Goods Zone

b) Shopping Goods Zone

c) Specialty Goods Zone


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Central Business Districtversus

Secondary Business DistrictversusNeighborhood Business District

versusPlanned Shopping Center

VersusSolo Location


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Free Flow Layout - Fixtures andMerchandise are grouped in Free-flowing

patterns on the sales floor


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Grid Layout - Counters and Fixtures areplaced in long rows or runs usually at

right angles, throughout the store


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Loop Layout - The major customer aislebegins at the entrance, loops through the

store and returns customer to the front ofthe store


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Spine Layout - Themajor customer aisle

runs from the front to

the back of the store,

with merchandise

departments branching

off to the the back sidewalls


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Process by which a retailer offers theright quantity of the rightmerchandise in the right place at theright time and meets the companys

financial goals.

Merchandise management:

The analysis, planning, acquisition,handling, and control of the

merchandise investments of retailoperation.

Merchandise Management


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Six Basic methods

Shelving

Hanging

Pegging

Folding

Stacking

Dumping


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Visual Merchandising


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Examples of Visual MerchandisingHeres sampling of the techniques stores use to generate those

sales:

Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company

All rights reserved.

Getm coming and going.

Escalators are a focal point of

many stores. That makes

them ideal locations for

promotional signs and for

impulse items like perfume.


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Examples of Visual Merchandising

Lead them to temptation.

Department-store design

incorporates a gauntlet of

goodies to stimulate impulsebuys. Cosmetics, a stores

most profitable department,

should always be at the main

entrance to the store.




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Color is king. Retailers

believe consumers are more

apt to buy clothes that appear

in full size and colorassortments.




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Suggestion positioning. Once the customer

has already purchased one item, its easier to

sell an additional item. Thus apparel retailers

strategically place impulse buys like hair

bows and costume jewelry by the cashier the

same way supermarket checkouts display

candy and magazines.


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Traditional Purchase Order System(often adversarial relationship)

Quick Response System - usescomputer technology (partnership ofvendor and retailer)

Electronic Data Interchange -technology connecting retailer andvendor in a quick response system

Just-in-Time Delivery Systems -Reduces inventory requirements

Direct Store Delivery (DSD) - nowarehouse; vendor delivers directlyto store

AR &RS


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EDLP

High / low pricing Pricing & Internet

Coupons

Leader pricing

Price bundling

Multiple unit pricing

Price lining

Odd pricing

Cost orientedmethod

Competitionoriented method

Demand orientedmethod


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Future of Retailing.


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The Future of Retailing

Rise of mega retailers

Growing importance of retail technology

Global expansion of major retailers

Retail stores as Communities or Hangouts

Goal 2: Know the major types of retailers


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Retailing management, Levy & Weitz, Tata McGraw Hill company,

Page 5-24.

Retailing management, David Moore, Prentice hall company, 5th

edition.

Retailing and wholesaling, Philip Kotler, web based article.

Introduction to retail product management-

www.routledge.com/textbooks/0415327156/ppt/slides1.ppt

Retail management by Dr. Pooja Sharma,

www.infofanz.com/Download/MBA_MPA.../Retail-Management-

1.ppt

RETAILING MANAGEMENT I, Dr . Padmaja Rachapudi, web basedarticle.

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Retail Workshop KJC

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