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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
arke
t sh
are
or p
rofit
Earlygrowth
Accelerateddevelopment
Maturity Decline
Val
ue-r
etai
l sto
res
On
-lin
e re
tail
ers
Sin
gle-
pri
ce s
tore
s
War
ehou
se c
lubs
Fas
t fo
od o
utl
ets
Con
ven
ienc
e st
ores
Supe
rmar
kets
Dep
artm
ent
stor
es
Cat
alog
Ret
aile
rs
Mal
ls (
?)
Gen
eral
sto
re
Fac
tory
ou
tlet
sto
res
Profit
Market share
Sin
gle-
bra
nd s
tore
s
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
FIN