RETAIL MANAGEMENT

RETAILING: ROLE,
RELEVANCE AND TRENDS

WHAT IS RETAILING ????

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 crossed Rs. 25,000

billion in 2008
- growth of organized retailing in both food and non-food
segments
- proportion of sales through organized retailing increased
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

CONTD

40 per cent of the total mall space

to be concentrated in the National
Capital Region

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

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

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
Super 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 customercentred, 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