RETAIL MANAGEMENT

Chapter - 1
RETAILING: ROLE, RELEVANCE AND TRENDS
What is retailing?
Retailing: a conclusive set of activities or steps used
to sell a product or a service to consumers for their
personal or family use
Retailer: a person, agent, agency, company or
organization instrumental in reaching the goods,
merchandise, or services to the ultimate consumer
Countries that have enjoyed the greatest economic
and social progress have been those with a strong
retail sector
Over the last decade there have been sweeping
changes in the general retailing business
Retail industry and economy
Retail business is the largest private industry
 Retail is ahead of finance and engineering and
contributes over 8 per cent of GDP in the western
countries
 Over 50 of the Fortune 500 and about 25 of the Asian
Top 200 companies are retailers
Today, in some developed countries, retail businesses
have shares as large as 40 per cent of the market
The significance of the retail business has increased
with the fast growth in the service sector
Retail industry in India
Retail forecasts in India:
- the business in India is expected to reach Rs. 25,000
billion in 2008
- growth of organized retailing in both food and non-food
segments
- proportion of sales through organized retailing
estimated,
increase by 8% in 2010
Emergence of organized retailing:
-India to have over 700 shopping malls by 2015
(400 operational malls in 2010)
- land developers rushing to cash in on the booming retail
business
Characteristics of retailing
Direct end-user interaction
Sole point in the value chain to provide platform for
promotions
Sales at the retail level is generally in smaller unit sizes
Location is a critical factor for retail business
Retail services are as important as core products
A larger number of retail units as compared to other
members present in the value chain
 Functions of retailing

Sorting
Breaking bulk
Holding stock
Additional services
Channel of communication
Transport and advertising functions
Activities performed by retailers

Arrange for assortment of offerings

Breaking quantity
Holding stock
Extending services
Categorizing retailers
Number of outlets
Margin vs Turnover
Location
Size
Trends in retail formats
Mom and Pop Stores and traditional kirana stores
E-commerce
Department Stores
Discount Stores
Category Killers
Specialty Stores
E-tailers
Relationships between retailers and
suppliers
The retail sector is critically dependent on its suppliers for
effective operation and the profitability of its business
Several socio-economic and demographic factors are
considered by manufacturers for identifying the ideal retail
format mix for its products
This is illustrated by the washing soap category in India and
the resultant retail format preferences
Retail format mix adopted by
manufacturers for soaps
Soap is targeted towards women as they are the chief
decision-makers in soap purchase. Medicated
positioning like germ killing and anti-bacterial are
marketed to families.
About 75% of the soaps are bought through these
following types of outlets.
Kirana stores
Pan-beedi shops
Department stores
 Retail strategy
Define the business of the firm in terms of orientation
towards a particular sector
Set short-term and long-term objectives with regard to
image and profitability
Identify the target market and direct efforts on the basis of
the customers characteristics and needs
Decide the broad direction the company must take in
future
Implement an integrated plan that encompasses all
aspects of retailing like pricing, location, and channel
decisions
Evaluate and revise the plan depending on the nature of
the internal and external environment
Retail concepts
An essential part of the retailing strategy, the retailing
concept is essentially a customer-centred, company-
wide approach to developing and implementing a
marketing strategy. The retailing concept covers four
broad areas:
Customer orientation
Goal orientation
Value driven approach
Coordinated effort
The changing face of retailing
Role of the Internet
- Does the size of the retail organization play a big part in
adapting easily to the Internet?
- Is the product/service offering also a prime determinant of
cyber retailing?
Branding through retailers
- How do retailers choose which brands to display?
- Why do many new products fail in the marketplace
- How can manufacturers maximize the brand opportunity in
a given retail outlet?
- What is future of Lifestyle Clustering?
- Vertical retail concepts are increasing in popularity
Consumption related mega trends
Drivers of success in the retail sector
Customers are the driving force in change
Re-evaluating the marketing plan
Advanced education for retailers is critical for growth
Strong visual recognition
The workplace challenge
Planning for success