Retail Management 1

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Preapred By Dr.Pooja Sharma
1
RETAIL MANAGEMENT PART-1
Prepared by :
Dr. Pooja Sharma
Presented by :
Education & Information Network
http://www.InfoFanz.com
Info@InfoFanz.com
Presented by www.InfoFanz.com :
2
Introduction to RetuiI
Unit I
Infroducfion fo PefoiI: whof is PefoiI, The
funcfions of refoiI, refoiIing in Indio. The
evoIufion of refoiI in Indio, refoiI Chonge in
Indio
3
Introduction:
1he word retail has its origin in lrench word retaittier
and means to cvt a iece`` or to brea/ bvt/`.
Retaitivg i. tbe .ate of gooa. ava .errice. to tbe vttivate
cov.vver for er.ovat, favit, or bov.ebota v.e.
.ccoraivg to Kotter: Retaitivg ivctvae. att tbe actiritie.
ivrotrea iv .ettivg gooa. or .errice. to tbe fivat cov.vver.
for er.ovat, vov bv.ive.. v.e
4
#etailing may be understood as the inal step in the distribution
o merchandise or consumption by the end consumers.
#etailing is responsible or matching inal consumer demand
with supplies o dierent marketers.
#etailing is high intensity competition industry, 1he reasons or
its popularity lie in its ability to proide easier access to ariety
o products, reedom o choice and many serices to
consumers.
1he Indian retail is dotted by traditionally market place called
baaar. or baat. comprises o numerous small and large shops,
selling dierent or similar merchandise
5
eeI of RetuiIing"
better known theory o retailing beet of retaitivg proposed by
Maclcomb McNair says,
1. New retailers oten enter the market place with low prices,
margins, and status. 1he low prices are usually the result o
some innoatie cost-cutting procedures and soon attract
competitors.
2. \ith the passage o time, these businesses strie to broaden
their customer base and increase sales. 1heir operations and
acilities increase and become more expensie.
6
. 1hey may moe to better up market locations, start carrying
higher quality products or add serices and ultimately emerge
as a high cost price serice retailer.
4. By this time newer competitors as low price, low margin, low
status emerge and these competitors too ollow the same
eolutionary process.
5. 1he wheel keeps on turning and department stories,
supermarkets, and mass merchandise went through this
cycles.
7
8
unctions of u retuiIIier
lrom the customer point o iew, the retailer seres him by
proiding the goods that he needs in the required assortment,
at the required place and time.
lrom an economic standpoint, the role o a retailer is to
proide real added alue or utility to the customer. 1his
comes our dierent perspecties
9
orm: lirst is utility regarding the forv o a product that is
acceptable to the customer.
1he retailer does not supply raw material, but rather oers
inished goods and serices in a orm that the customers
want.
1he retailer perorms the unction o sorting the goods and
proiding us with an assortment o product in arious
categories.
%ime: e cerates %ive utility by keeping the store open
when the consumers preer to shop.
preerable shopping hours.
10
b. PIoce: By being aailable at a conenient location, he creates
tace utility.
o. Ownership linally, when the product is sold, over.bi
utility is created.
part rom these unctions retailer also perorms like
b. Arronging Assorfmenf: manuacturers usually make one
or a ariety o products and would like to sell their entire
inentory to ew buyers to reduce costs. linal consumers, in
contrast preer a large ariety o goods and serices to choose
rom and usually buy them in small units.
#etailers are able to balance the demands o both sides, by
collecting an assortment o goods rom dierent sources,
buying them in suiciently large quantities and selling them to
consumers in small units
11
b. 8reoking 8uIk: to reduce transportation costs, manuacturer
and wholesalers typically ship large cartons o the products,
which are then tailored by the retailers into smaller quantities to
meet indiidual consumption needs
o. HoIding sfock: #etailers maintain an inentory that allows
or instant aailability o the product to the consumers. It helps
to keep prices stable and enables the manuacture to regulate
production.
7. PromofionoI supporf: small manuacturers can use retailers
to proide assistance with transport, storage, adertising, and
pre- payment o merchandise.
12
ugor type of retuiI stores
1here is no uniersally accepted method o classiying retailer.
Various schemes hae been proposed to categories retailers
based on
Number o outlets
Margin s. turnoer
Location
Size.
Because o oerlap o classiication criteria, some stores may
qualiy as under two dierent categories.
13
I. 0eneroI merchondise refoiIer general merchandise
retailer carry a ariety o product lines, with considerable
depth. Some major types o these stores include
supermarkets and hypermarkets , discount stores and
department stores.
o Super morkef supermarket is a large sel serice retail
store that carries a wide ariety o consumer products under
one roo , such as complete line o ood products , laundry
requirement, household maintenance items. In India
cooperatie hae managed some supermarkets or quite
sometime like super bazaar in Delhi, apna bazaar shakari
bhandar etc.
14
o Discounf sfore: these stores are sel serice, standard
general merchandise retailers regularly oering brand name
and priate brand items at low price, earn lower margins and
push or high sales turnoer. 1he characteristics o true
discount stores include
Selling products at discounted price
Carry standard international , national, or store brand toi
build image
Sel serice stores to minimize operational costs
Preerred store location are low rent areas.
Like best known discount store is \al-Mart. In India almost all
retail stores oer discounts, subhiksha
15
o Deporfmenf sfore a department store is larger retail store
organized into seeral departments, oering a broad erity
and depth o product lines. 1he product mix may include
ood products, appliances, clothing, urnishing and other
household goods.
Like Pantaloons, shoppers` stop,
department store only or kids is Kids Kemp.
lashion related department stores in India are Lbony,
Globus, pantaloons, liestyles.
16
Z. SpecioIfy Sfores: specialty stores carry a narrow product
mix with depth o assortment within the line.
1he emphasis is on a limited number o complimentary
products and high leel o customer serice
Specialty store oten sell shopping goods such as Jewelry,
apparel, computers, music systems, sporting goods.
Like, 1anishq, 1itan watches, Van eusen, #aymond's.
3. Shopping MoIIs: shopping malls typically deal with seeral
bases and product categories and proide a large ariety o
merchandise abs serice. 1here are 96 operational malls in
India and expected to grow 158 by this current year.
nsal plaza ,Delhi,, Garuda mall ,Bangalore, Sahara plaza
Gurgaon Spenser Plaza Chennai
17
4. PefoiI choins: a retail chain operates multiple retail outlets
under common ownership in dierent cities and towns.
1o some extent the purchasing unction and decision making
are coordinated or centralized.
Like \estside, Globus, lood world, McDonald's retail petrol
outlets. Ltc.
18
The Morkefing - PefoiI Equofion
Manufacturer
Retailer
Consumer
Manufacturer
Consumer
Manufacturer
Wholesaler
Retailer
Consumer
F
e
e
d
b
a
c
k
19
RetuiIing in Indiu
#etail is the new buzzword in India.
1he global #etail deelopment Index has ranked India irst,
among the top emerging markets in the world.
It is belieed that India has the potential to delier the astest
growth oer the next 5 years.
\hile barter would be considered to be oldest orm o retail
trade, since independence , retail in India has eoled to
support the unique needs o country, gien its size and
complexity
20
Second largest sector ater griculture. Contributes about 1
- 11 o the GDP
1he estimated size o the organized retail industry in India is
#s. 16, crores. 1his is 2 o the total estimated retail
trade.
Indian #etail trade increased rom #s. 22 billion in 2 to
#s billion by the year 25
India's irst true shopping mall - complete with ood courts,
recreation acilities and large car parking space - was
inaugurated as lately as in 1999 in Mumbai. ,this mall is called
"Crossroads",.
21
The EvoIufion of PefoiI in Indio
#etail in India has eoled to support the unique needs o our
country, gien its size and complexity aat., Mavai. and Meta.
hae always been a part o the Indian landscape. 1hey still
continue to be present in most parts o the country and orm an
essential part o lie and trade in Various areas.
1he PDS (PubIic Disfribufion Sysfem) would easily as the
single largest retail chain existing in the country. the eolution o
the PDS o Grains in India has its origin in the ratiovivg .,.tev
introduced by the British during world war II
22
1he system was started in 199 in Bombay and subsequently
extended to other cities and towns. the system was abolished
post war but howeer attaining independence India was
orced to reintroduce it in 195.
1here was rapid increase in the ration shops , being
increasingly called the lair Price Shop or lPSs,
1he Confeen Sfores Deporfmenf and the Posf
Offices in India are also among the largest network o
outlets in the country reaching population across the country.
23
1he Ihodi & ViIIoge indusfries (IVIC) was also set up post
independence. 1he cooperatie moement was again championed by the
goernment.
Indios Lorgesf refoiI Choins:
I. PDS: 4o3,000
Z. Posf offices: Io0,000
3. IVIC: 7,000
4. CSD Sfores:3,400
(source business worId morkefing Whife book Z00b)
24
In the past decade, the Indian marketplace has transormed
dramatically. oweer rom the 195,s to the 8,s, inestment
in arious industries was limited due to low purchasing
power in the hands o the consumer and the goernment`s
policies aoring the small scale sector.
1he irst attempts at organized retailing were noticed in the
textiles sector. One o the pioneers in this ield was
#aymond`s which set up stores to retail abric.
25
#aymond`s distribution network today comprises 2,
retailers and oer 256 exclusie showrooms in oer 12 cities
o the country
Other textile manuacturing who set up their own retail
chains wee #eliance- which set up Vimal showrooms and
Garden Silk Mills, which set up Garden Vareli showrooms.
26
1raditional
Iormats
Itinerant Salesman
aats
Melas
Mandis etc.
Lstablished
formats
Kirana shops
Conenience,
department stores
PDS,
air price shops
Pan, Beedi shops
Lmerging
Iormats
Lxclusie retail outlets
ypermarket
Internal retail
Malls , Specialty Malls
Multiplexes
last ood outlets
Serice galleries
The EvoIufion of refoiI in Indio
27
Drivers of PefoiI chonge in Indio
major driers
I. Chonging Income ProfiIes Steady economic growth uelled
the increase in disposable income in India. 1he aerage
middle class amily's disposable income rose by more than
2 between 1999-2.
Z. Diminishing difference befween PuroI ond urbon Indio: #ural
India accounts or oer 5 o India population and this in
itsel oers a tremendous opportunity or generating olume
drien growth. 1ax beneit. In year 22- LIC sold 5 o
its policies in rural India. Same BSNL also sold its 5
connection in small towns .
28
3. Chonges in Consumpfion pofferns: Occupational changes and
expansion o media hae caused a signiicant change in the
way the consumer lies and spends his money.
o 1he changes in income brought about changes in the
aspirations and the spending patterns o the consumers. the
buying basket o the consumer changed
4. The emergence of o young Eorning Indio : Nearly o the
Indian population is below the age o 4. taking adantages
o employment opportunity in the booming serice sector
these young Indians are redeining serice and consumption
patterns
29
Prominenf secfor in Indion refoiI
1. Clothing, textiles and ashion ccessories
2. lood & ood Serices
. Consumer Durables
4. Books & Music
Other emerging sectors
5. Jewellery retail
6. lootwear retail
. 1ime \ear #etail
8. luel #etail, petro retail
30
ChoIIenges fo refoiI DeveIopmenf in Indio
#etail not being recognized as an industry in India.
1he high costs o real estate.
Lack o dequate inrastructure.
Multiple and complex taxation system.
31
Si;e of fhe orgoni;ed refoiI morkef (Ps Cr)
200J-02 2007 CAGR ()
,compound nnual growth
rate,
%% J6,000 37,2J6 J8
ood J,800 7,473 33
CIoting 4,9S0 J0,423 J6
ConsurubIes J,6S0 3,787 J8
ooks & usic 4S0 J,426 26
32
$ure of orgunized & unorgunized retuiI wit compurison
source: Lrnst &Young, 1he Great Indian Retail Story, 2006
85 15
81 19
55 45
40 60
36 64
30 70
20 80
3 97
1 99
0% 20% 40% 60% 80% 100%
USA
TAWAN
MALASA
THALAND
BRAZL
NDONESA
CHNA
NDA
PAKSTAN
ORGANISED
UNORGANISED
33
RetuiI %rude- Indiu U$ und Cinu
Trode
($ bn)
EmpIoymenf
(7)
Shops
(miIIion)
Orgoni;ed
Secfor
shore (7)
Indio I80-394 7 IZ Z-3
Chino 3o0 IZ Z.7 Z0
US 3800 IZ.o-Io Ib.3 80

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