Retail

Management
Mkt 531
• Retail encompasses business activities involved in selling
goods and services to the end user, the final customer, for
relatively for use or consumption rather than resale .
• When we say consumption we are talking about personal
consumption not for the purpose of selling it forward
• When buying for selling purposes , rather than visit a
retailer one would visit a wholesaler or manufacturer to
get bulk items at a reduced cost to sell forward but when
you buy say a can of soda from a quick mart, you are
buying it to drink

Retail
 Department Stores

Specialty Store

Supermarkets

Drugstores

Convenience Stores

Discount Store

Types of Retail Restaurants

 Department Stores

Specialty Store

Supermarkets

Drugstores

Convenience Stores

Discount Store

Restaurants

Mobile Retailer

Internet E -tailer

Types of Retail 2018

• A department store is a retail establishment offering a
wide range of consumer goods in different product
categories known as "departments".

Department Stores
• Specialty stores are retail businesses that focus on
specific product categories, such as office supplies, men's
or women's clothing, or carpet.
• It isn't the product they sell that determines if a company
is a specialty store, but rather the breadth of their product
offering.
• JF Carpets, Wall master, S.Adullah, Bombay
Sweets,WOV, Amir Adnan
• A subcategory would be Multibrand Specialized Retail
Stores like Labels, Ensemble, and Brand Just Pret

Specialty Store
• A supermarket is a self-service shop offering a wide variety
of food and household products, organized into aisles. (Imtiaz
Bahandurabad)
• A Grocery Store is a retail store that primarily sells food.
( This would primarily fall under specialty stores, eg Whole
Foods)
• a hypermarket is a superstore combining a supermarket and
a department store. The result is an expansive retail facility
carrying a wide range of products under one roof, including
full groceries lines and general merchandise ( Hyperstar,
Metro)

Supermarkets
• A pharmacy (also called "drugstore" ) is a retail shop
which provides prescription drugs, among other products.
• Walgreens, Farids, Health mart, Kausur medico, Meher
Impex, etc

Drug Store
• A convenience store is a small retail business that stocks
a range of everyday items such as groceries, snack foods,
confectionery, soft drinks, tobacco products, over-the-
counter drugs, toiletries, newspapers, and magazines
• Select Store, PSO Shop Stop, Kirana, small neighborhood
retail store)*

Convenience Store
• ( Export Left Overs)
• A discount store is a retail store which sells products at
prices that are lower than the typical market price.

Discount Stores
• Ethnic ( BBQ Tonite, Bundookhan)
• Fast food ( OPTP, Broadway)
• Fast casual (OMG)
• Casual dining (Espresso, BellaVita, Delfrio, NewYork
Café)
• Family style ( Kolachi, Nandos)
• Fine dining ( Flo, Aylanto, Pompei, Sakura)

Restaurants
• Mobile Retailer - Uses a smartphone platform to process
retail transactions and then ships the products that were
purchased directly to the customer.
• Internet E-tailer –Sell from an Internet shopping website
and ship the purchases directly to customers at their
homes or workplaces and without all the expenses of a
traditional brick-and-mortar retailer, usually sell
merchandise for a lower-than-retail price

New Retailer types

 • Drop shipping is a retail fulfillment method where a store
doesn’t keep the products it sells in stock.
• Instead, when a store sells a product using the drop
shipping model, it purchases the item from a third party
and has it shipped directly to the customer. As a result,
the seller doesn’t have to handle the product directly.

Now you even have a format referred to as

Drop shipping
• The biggest difference between drop shipping and the
standard retail model is that the selling merchant doesn’t
stock or own inventory. Instead, the seller purchases
inventory as needed from a third party—usually a
wholesaler or manufacturer—to fulfill orders.
• We can extensively cover the differences later in supply
chain, however even this form of retail as the
merchandise isn't essentially with the retailer is now in
form
• And how is it so easy, with social media and specifically
Facebook and instagram leading to monetization and
growth of their business pages, it is easier than ever to
start a online business and cheaper relatively too.
• Providing an assortment of products and services
• Breaking Bulk ( To reduce costs manufacturers ship cases of
fabric or raw material to the retailer, who then offer them in
small quantities tailored to consumption patterns
• Holding Inventory ( also Holding your cash) A major function
is to hold on to inventory and make them available when
consumers want them.
• Providing Service, Retailers provide a service that make it
easier to buy and use products ( reduce trips to tailor) , they
offer credit so you can buy now, pay later, they display products
so customers can touch and appraise them before buying them.

Functions Performed By
Retailers
• Retailing is a major part of World Commerce.
• Estimates for Pakistan’s retail market today vary widely,
the industry mostly reported to the tune of USD 42 billion
with annual sales in excess of USD 105 billion (The
Economist Intelligence Unit).
• The Industry is the third largest after Agriculture and
Manufacturing and still shows a healthy appetite for growth
• Retail Trade and wholesale comprises more than a third of
Pakistan’s service sector which itself constitutes more than
53% of Pakistan’s GDP

Retailing and the

economy
• Retailing is a major source of Jobs*

Economic Benefit of
Retailing
 Global
• "Our mission: to inspire and nurture the
human spirit – one person, one cup and one
neighborhood at a time.“ ( Starbucks)
• "We ignite opportunity by setting the world in
motion.“ Uber
• Girl's Best Friend
Claire’s is the world’s leading brand for fun, affordable
and fashionable jewelry, accessories and beauty
products. (Claire's Mission)

Mission Statement
• "Our vision is to be earth's most customer-centric company; to
build a place where people can come to find and discover anything
they might want to buy online.“
• Amazon.com has had a clear focus and a solitary mission since it
began.
• Founder Jeff Bezos has publicly referred to
the Amazon.com mission statement as the guiding force behind his
leadership decisions many times in the company's 18-year history.
• It can be concluded that the success of Amazon.com as the top
Internet retailing company in the world is due at least in part to
their unwavering commitment to this mission and the daily
execution of it.

Goals and Belief form

your mission statement
• What you offer
• Who you offer it to
• Your service Proposition
• The outcome for your customer

Components of a
Mission Statement
Lets play a game
• Our Mission
• To be a result oriented and profitable Company by consistently improving
market share, quality, diversity, availability, presentation, reliability and
customer acceptance.
• To emerge as a growth oriented ensuring optimum return and value addition to
its shareholders.
• To ensure cost consciousness in decision making and operations without
compromising the commitment to quality.
• To create an efficient resource management and conductive business
environment. Evolving an effective leadership by creating a highly professional
and motivated management team fully equipped to meet any challenge.
• To keep abreast with modern technology and designs to optimize production
and enhance brand image to attain international recognition for the Company’s
product.
• To set up highly ethical business standards and be a good corporate citizen,
contributing towards the development of the national economy and assisting
charitable causes.

Who am I?
• MISSION
• “We will make our unmatched services available to all
major cities of Pakistan and beyond. We will strive for
continuous improvement in our processes, services and
offerings by using the most advanced tools and
technology wherever possible to retain customers for
life.”

WHO AM I?
• To provide our customers with healthy, nutritious, and
high quality products prepared in a homemade fashion,
which help them in leading healthier and more active
lifestyles, in tune with todays taste and consumer trends.

WHO AM I?
 "To bring inspiration and innovation to every athlete in the world.“ (NIKE )

• Does Nike follow through on their Mission statement?

2015 2017 2018 2018

Flyease Pro Hijab is Nike signs Lacry Baker, female

Sneakers for Introduced first athlete skate boarder featured
the disabled. with cerebral in ad
“Easy Entry palsy
Footwear

Connecting Mission Statements to

Product Offerings
The Origin Story Of Sweet Green
• In 1976, Anita Roddick opened the first The Body Shop in Brighton, selling 25
naturally-based skin and hair care products. The Body Shop International now
has over 1,500 stores in 47 countries selling over 400 different products.
• The Body Shop story, however, is not just of a highly successful market-oriented
manufacturer and retailer of toiletries and cosmetics. Like its founder, the whole
organization is committed to issues such as respect for human rights, animal and
environmental protection.
• The organization has arranged and supported national and international
campaigns on animal testing in the cosmetic industry, women’s rights, anti-
nuclear testing and coordinated an international protest at the sentencing and
execution of environmental activist Ken Saro-Wiwa and other Ogoni leaders in
Nigeria who were fighting to protect their community from multi-national oil
companies. All business organizations need to make a profit to survive but the
emphasis at The Body Shop is on profit with a wider social responsibility i.e.
‘profit with principles.’

The Body Shop

One Retail Outlet
Example:
Retailer Operates
Multiple Outlets
Indep Example: Bareeza
enden
t
Chain

Retail Institutions
• Contractual arrangement between a franchisor (a
manufacturer, a wholesaler, or a service sponsor) and a
retail franchisee, which allows the franchisee to conduct a
given form of business under an established name and
according to a given pattern of business.

Franchising
• Product/Trademark Franchising – Arrangement in
which the franchisee acquires the identity of the
franchisor by agreeing to sell the latter's products and/or
operate under the latter's name.
• Business Format Franchising – Arrangement in which
the franchisee receives assistance in site location, quality
control, accounting, startup practices, management
training, and responding to problems – besides the right
to sell goods and services.

Types of Franchising
• Name recognition. Already well-known to customers and provide
a competitive edge.
• Minimal risk & Higher Success Rate – A proven business
method, Franchisors have developed a Plan & system that works,
created the concept, researched the market, developed the product
and service offerings
• Support – Pre & Post launch Support in relation to operations,
Technical, marketing, designing and location.
• Training Assistance at your location & their location & Online,
also via phone support
• Hiring / Managerial Assistance provided, fewer mistakes happen
at start up with exploration of general knowledge

Franchise Advantages
• Greater purchasing power / Economies of scale – Cost
savings on inventory items from bulk purchase
• Professional advertising
• Willing to share their trade secrets
• Don’t Require an Extensive Business Background or
Education
• Franchisee makes you a partner in a larger business structure
• The whole aim of franchising is to duplicate the original
• If you ask those who work up close and personal with
franchisees, they’ll tell you it’s about relationships
• Fees – Franchise Fee – one-time, nonrefundable
• Royalty Fees – a percentage of weekly or monthly gross income and continued
payments for the term of franchise Agreement
• Advertising Fees required to contribute to an advertising pool
• Renewal Fees – Franchise contracts are for a limited time only
• Loss of Control – Franchisors exercise significant control over store appearance,
Purchase, production & sale of services, operations & location for the sake of
uniformity among all outlets.
• Fewer opportunities for initiatives – New Product development / Marketing /
Management Strategy
• The preselection process – a former restaurant manager would likely be more
successful if he or she acquired a fast-food restaurant rather than, perhaps, a muffler
shop.
• Required purchases. Purchase certain materials from franchisor / authorized agents.
• Termination clause. The franchisor retain the right to terminate the franchise
agreement on certain conditions

Disadvantages
• Constrained Decision Making – Limits
franchisee involvement in the strategic
planning process.
• Channel Control – Occurs when one member
of a distribution channel can dominate the
decisions made in that channel by the power it
possesses.

Some Limitations of the Franchisee

• A licensed dealership is a mix of franchise and
independent retailer. The licensee has the right
(sometimes this is exclusive) to sell a brand of products.
Unlike a franchise, the dealer can sell a variety of brands
and there are generally no fees to the licensor.
Dealerships may or may not be identified as an
authorized seller or by the company's trademark. Think of
cars and trucks as the most common example of a
dealership.

A licensed dealership
• The concept of the retail life cycle refers to the succession of
identifiable stages a retail format goes through over time
• In the development stage, the new format is introduced to the market.
• There is departure from the strategy mix of existing retail institutions,
as at least one element of the marketing mix is altered in the new
format.
• In the introduction phase, sales and profits are low, but growing.
Costs and risks are high because long run success is not assured at
this stage.
• The growth phase is characterized by rapid growth of both sale and
profits. Existing companies expand their markets and new
competitors with the same retail format enter the market. Towards
the end of this stage, growth acceleration begins to decline and cost
pressure may emerge.

The Retail Life Cycle

• The next stage is characterized by maturity of the retail
format which is brought on by market saturation, in
turn caused by a high number of firms in this retail
format and competition from new formats. Sales
growth declines and profit margins may have to be
reduced in order to stimulate purchases. Once maturity is
reached, the main goal is to prevent the business from
declining and to sustain profit as long as possible.
• In the final stage (decline), sales volume declines and
price sand profitability diminish. Companies can try to
avoid decline by repositioning the retail format but many
companies abandon the format all together and start
introducing new formats to keep their customers or
attract new ones
 Industry Life Cycle

Growth Stage ShakeOut Maturity Decline

• • • Opened new
Faced Butlers • Fall of
competition outlets
enters the • Faces Sale
from Bateel
market competition on • Wide use
Developm but
• Bombay best selling
expanded item from of deals
ent Stage their product sweets foreign • Pie in the
• Lals offerings and Laduree import
Sky opens
• Lindtt is
and soon foreign widely specialized
became a availabilit available
brand •
Chocolate
y of Butlers opens
Shop
essential new outlets
Chocolate

Prolonging the Life Cycle: Just In Time, Lean Production or Finding New Uses
for the product ( Lals creates a Community space with it’s Halloween and
holiday events)
• Strategically, retail leaders should keep a close watch
on their performance in the six dimensions of retail
excellence: customer focus, merchandising,
operations, infrastructure, people, and, most
important, customer proposition.
• Material underperformance in any of these dimensions
can be deeply problematic, but if a retailer doesn’t
have a compelling customer proposition—a reason for
customers to choose that retailer over competitors—it
simply won’t survive.
Retailers should monitor their performance in the six dimensions of retail
excellence
1. Acknowledgement: There is a lot of denial associated with
the fall of sales but a hard look needs to be taken at the TRS.
• The rate of sale, or sell-through, is one of the core ways to
measure the health of a retail business. Both ends of the sell-
through equation can be equally bad for business. If your rate
of sale is very low it means that you're not selling products as
quickly as you could or should. An overly high rate, on the
other hand, means you're cutting it too close with the inventory
and may be losing sales due to lack of products. The ideal
place (bliss point)* is somewhere in the middle

5 stages of Retail
Turnaround
2. The Reason: Analysis of the entire company to figure out what is
not working and what is working well
3. Be the Lion: Act quickly and aggressively to fix a decline so it
does not result in death or well extinction ( Block Buster, Radio
Shack). Create Goals and Strategies. Find a way to lower Cost of
Goods Sold.
4. Don’t be myopic: It is not only about cost, so when constructing
an overhaul, one needs to consider all facets, like competitors or loss
of sales due to limited channels, etc
5. Make it Last : The turnaround should not be a short term fix or
fad but a sustainable model that should be implemented in the
company.