Professional Documents
Culture Documents
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Introduction to Retail
Unit I
Introduction to Retail: what is Retail, The
functions of retail, retailing in India. The
evolution of retail in India, retail Change in
India
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Introduction:
The word retail has its origin in French word retaillier
and means “to cut a piece’’ or “to break bulk’.
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“’Wheel of Retailing”
1. New retailers often enter the market place with low prices,
margins, and status. The low prices are usually the result of
some innovative cost-cutting procedures and soon attract
competitors.
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Functions of a retaillier
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1. Form: First is utility regarding the form of a product that is
acceptable to the customer.
The retailer does not supply raw material, but rather offers
finished goods and services in a form that the customers
want.
The retailer performs the function of sorting the goods and
providing us with an assortment of product in various
categories.
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5. Place: By being available at a convenient location, he creates
place utility.
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Major type of retail stores
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1. General merchandise retailer: general merchandise
retailer carry a variety of product lines, with considerable
depth. Some major types of these stores include
supermarkets and hypermarkets , discount stores and
department stores.
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2. Specialty Stores: specialty stores carry a narrow product
mix with depth of assortment within the line.
The emphasis is on a limited number of complimentary
products and high level of customer service
Specialty store often sell shopping goods such as Jewelry,
apparel, computers, music systems, sporting goods.
Like; Tanishq, Titan watches, Van Heusen, Raymond's.
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The Marketing – Retail Equation
Wholesaler
Retailer
Feedback
Retailer
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Retailing in India.
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The Evolution of Retail in India
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The system was started in 1939 in Bombay and subsequently
extended to other cities and towns. the system was abolished
post war but however attaining independence India was
forced to reintroduce it in 1950.
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The Khadi & Village industries (KVIC) was also set up post
independence. The cooperative movement was again championed by the
government.
1. PDS: 463,000
3. KVIC: 7,000
4. CSD Stores:3,400
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In the past decade, the Indian marketplace has transformed
dramatically. However from the 1950,s to the 80,s, investment
in various industries was limited due to low purchasing
power in the hands of the consumer and the government’s
policies favoring the small scale sector.
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Raymond’s distribution network today comprises 20,000
retailers and over 256 exclusive showrooms in over 120 cities
of the country
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The Evolution of retail in India
Established Emerging
Traditional formats Formats
Formats Kirana shops Exclusive retail outlets
Itinerant Salesman Convenience/ Hypermarket
Haats department stores Internal retail
Melas PDS/ Malls / Specialty Malls
Mandis etc. fair price shops Multiplexes
Pan/ Beedi shops Fast food outlets
Service galleries
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Drivers of Retail change in India
major drivers :
1. Changing Income Profiles: Steady economic growth fuelled
the increase in disposable income in India. The average
middle class family's disposable income rose by more than
20% between 1999-2003.
2. Diminishing difference between Rural and urban India: Rural
India accounts for over 75% of India population and this in
itself offers a tremendous opportunity for generating volume
driven growth. Tax benefit. In year 2002-03 LIC sold 50% of
its policies in rural India. Same BSNL also sold its 50%
connection in small towns .
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3. Changes in Consumption patterns: Occupational changes and
expansion of media have caused a significant change in the
way the consumer lives and spends his money.
o The changes in income brought about changes in the
aspirations and the spending patterns of the consumers. the
buying basket of the consumer changed
4. The emergence of a young Earning India : Nearly 70% of the
Indian population is below the age of 34. taking advantages
of employment opportunity in the booming service sector
these young Indians are redefining service and consumption
patterns
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Prominent sector in Indian retail
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Challenges to retail Development in India
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Size of the organized retail market (Rs Cr)
PAKISTAN 1 99
INDIA 3 97
CHINA 20 80
INDONESIA 30 70
BRAZIL 36 64 ORGANISED
40 60 UNORGANISED
THAILAND
MALASIA 55 45
TAIWAN 81 19
USA 85 15
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