Retail Management

Dr.Sumesh Raizada
Associate Professor

Unit I


It consists of business activities involved in selling goods and services to consumers for their personal, family or household use The offerings may include automobiles, fast food, movie in a multiplex, bank account, etc. It adds value to the products & services sold to the consumers It is the last stage of distribution process   

Supply Chain
Raw material suppliers / Vendors Manufacturers Distributors Wholesalers Retailers Transporters

Support Agencies


Traditional distribution Chain
Supplier / vendor manufacturer


distributor retailer wholesaler


Modern Supply Chain


Supplier vendor


Wholesaler / retailer



Retailing is done by organizing availability of products / services on a relatively large scale and supplying them to consumers on a relatively small scale ¶Retail· is derived from a French world ¶Retaillier· meaning ¶to break bulk· or ¶to cut a piece off· Retailing involves selling through store, internet, mail, television or door to door visit  


A retailer is a person, agent, agency, company or organization, which facilitates the supply of goods / services to the ultimate consumer 

Retailer attempt to satisfy consumer needs by having the right merchandize, at right price and at right place, when the consumer wants it 

Retailer sells to final (non business) consumers, when final product do not undergo any further change


A business or non-final consumer buy nonintermediate product for industrial use to produce other goods or services Wholesaler buy products in bulk, and sell in bulk to the intermediate / business buyers such as retailers, industries, etc.  

Retailers usually do not make any change in the product except for some value addition in the form of packaging, etc. 

However, in some cases such as restaurant, florist, computer assembly, etc.goods are prepared at their premises


Retailers often buy from a wide variety of distant or global sources. They resell through stores or organize the delivery and payment collection services Retailers cover a diverse range of activities, such as garages, restaurants, financial service and banks. These usually require additional manual and technical skills or knowledge as well as financial investment on facilities  

Importance of Retailing 

Retail contributes nearly 8-10% of national GDP 8and employs roughly 10% of population 

They are the last stage of distribution chain and have direct interaction with the customer 

Hence the opinion, motivation and efforts of retailer is extremely important for the success of a product or service

Drivers of Change in Retailing 

Changing demographics and industry structure Expanding IT, telecom and media network Emphasis on lower costs and prices Emphasis on convenience, shopping experience and service Focus on productivity Continuing growth of non-store retailing nonChanging aspirations and demands      

Characteristics of Retailing 

There is a direct end user interaction It is a only point in value chain for sales promotion Sales are generally in smaller unit sizes Location is a critical factor Services are equally important as the product Large number of units compared to other units of supply chain, due to high population density and geographical coverage     

Activities performed by Retailers

Arranging Assortment Providing Services

Activities of Retailers

Breaking Bulk

Holding Stock

Functions of Retailing 

Sorting: Assortment and arrangement of goods from large number of suppliers Breaking Bulk: Receiving in large consignments and Bulk: repacking them in smaller lots 

Holding Stock: To avoid stock outs, Stock: inventories are maintained for immediate supply to the customer 

Functions of Retailing 

Additional Service: warranty Service: /guarantee, credit, pre & after sales services, exchange, home delivery, product trials, answer queries

Channel of Communication: Source of information about competitors Communication: and new products, market, sales & product feedback to the wholesaler and manufacturer 

Transport & Advertising: Point of sales promotion and personal selling, Advertising: transport, storage and pre payment assistance to small manufacturers 

Services provided by the Retailers 

Accessibility of Location: Making products and services available close to the customer Convenience of Timing: Flexible store working hours  

Convenience of Size: Making products available in smaller lots / packing to suit individual requirement Information: It is provided to the consumers on regular basis regarding government practices, company policies, competitors 

Lifestyle support: Retailers builds up a regular customer base and constantly renews the customer relationship through service, price, accessibility and latest fashion products 

Retail Strategy 

It indicates that how the firm plans to focus its resources to accomplish its objectives 

It influences the firm·s business activities and its response to the market forces such as competition and economy

Retail Strategy Steps in developing retail strategy 


Defining the business of the firm Setting short & long term objectives Identifying the target market Deciding the broad direction company must take Implementing an integrated plan including aspects of retailing such as pricing, location, channel decisions Evaluating and revising the plan depending on environment 

Retail Concept 

It provides broad guidelines that must be followed by retailers irrespective of their size, channel design, medium of selling. It covers four broad areas;  


Customer Orientation Goal Orientation Value driven approach Coordinated efforts

Retail Concept 

Customer Orientation

The retailer makes a detailed study of the needs of the customer and attempt to satisfy those needs 

Goal Orientation

The retailer has clear cut goals and devises strategies to achieve those goals 

Value driven approach

The retailer offers good value to the consumer with merchandise having the price and quality appropriate for the target market 

Coordinated efforts

Every activity of the firm is aligned to the goal and is designed to maximize its efficiency and deliver goods to the consumer

Retail Industry Structure 

Food Stores: food, drink, tobacco comprise more than half of total sales

Non specialized food stores: supermarkets, cooperatives, convenience : food and non food items Specialized food stores: bakers, butchers, dairies, fishmongers, vegetable grocer, etc. 

Predominantly non-food stores:more than half of nonstores:more total sales through non-food items non-

Non specialized non food stores: department stores stores: Textile, clothing and leather footwear Household goods stores: consumer durables, hardware, etc.

Retail Industry Structure

Other stores: Comprise wide collection of stores stores: including antique stores, bookshop, carpet, chemist, photographer, sport or toys shop, CDs, music, etc.

Non store Retailing: General mail order firms Non store retailers, including door to door retailers Vending machines and mobile shops Repair of personal and household goods


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