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INTRODUCTION 2 RETAILING

• A set of business activities involved in selling goods and services to consumers for their personal, family, or household use.

• A retailer is a business that sells products and/or services to consumers for personal or family use.

Examples of Retailers . . .

Retail Shops . . .

The 10 Largest Retailers in the United States Rank

Company

Main Emphasis

1

Wal-Mart

Full-line discount stores, supercenters, hip clubs

2

Home Depot

Home centers, design centers

3

Kroger

Supermarkets, convenience stores, jewelry stores

4

Target

Full-line discount stores, supercenters

5

Costco

hip clubs

6

Albertson’s

Supermarkets, drugstores

7

Walgreens

Drugstores

8

Lowe’s

Home centers

9

Sears

Department stores, specialty stores

10

Safeway

Supermarkets

Retail Process

POS

ERP

Reports & Transactions

Retail formats in INDIA •

India is fifth most attractive emerging retail market: a potential goldmine.

•

Indian retail is largest among all industries(200 billion $).

•

10% - India’s GDP.

•

Growth rate – 20-25%

•

8% - employment

•

Potentiality to grow 427 billion $ by 2010 and 637 billion $ by 2015.

Retail formats in INDIA • Malls • Hyper marts / Super marts • Specialty stores • Convenience stores • Discount stores • Multi brand outlets

• Department stores

Growth of Retail in INDIA INDUSTRY REVOLUTION

• Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

• 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

• For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

• Post 1995 onwards saw an emergence of shopping centers. • Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume.

Manufacturer’s Perspective

Retailers are part of the distribution channel

A Typical Channel of Distribution

Manufacturer Retailer

Wholesaler

Final Consumer

The Retailer’s Role in the Sorting Process

Distribution Types • Exclusive: suppliers make agreements with one or few retailers that designate the latter as the only ones in a specified geographic area to carry certain brands or products

• Intensive: suppliers sell through as many retailers as possible • Selective: suppliers sell through a moderate number of retailers

Multi-Channel Retailing A retailer sells to consumers through multiple retail formats Web sites Physical stores

Retail Strategy An overall plan for guiding a retail firm

Influences the firm’s business activities Influences the firm’s response to market forces

Retail Strategy Merchandise Assortments

Location

Store Design & Display

Customer service

mixing

Pricing

Six Steps in Strategic Planning 1.

Define the type of business

2.

Set long-run and short-run objectives

3.

Determine the customer market

4.

Devise an overall, long-run plan

5.

Implement an integrated strategy

6.

Evaluate and correct

“Pay Less + Expect More” at Target

Aspects of Target’s Strategy  Growth objectives

 Employee relations

 Appeal to a prime market

 Innovation

 Distinctive image

 Commitment to technology

 Focus

 Community involvement

 Customer service

 Monitoring performance

 Multiple points of

Applying the Retailing Concept

Customer Orientation

Coordinated Effort Retailing Concept

Value Driven Goal Orientation

Retail Strategy

Eliminating Shopper’s Boredom

Customer Service

• Activities undertaken by a retailer with the basic goods and services  Store hours

 Parking  Shopper-friendliness  Credit acceptance  Salespeople

How Retailers Add Value . . .

Doll is developed at manufacturer

Doll is developed in several styles

Doll is offered in convenient locations in quantities of one

Doll is featured on floor display

Doll can be bought on credit or put on lay away

Retail Mix •The combination of merchandise, assortment, price, promotion, customer service, and store layout that best serves the segments targeted by the retailer.

Types of Competition 1.

Intratype Competition

2.

Intertype Competition

3.

Divertive Competition

Intratype Competition

It occurs when two or more retailers of the same type, compete directly with each other for the same households.

Intertype Competition

It occurs when two or more retailers of a different type, compete directly by attempting to sell the same merchandise lines to the same households.

Divertive Competition

It occurs when retailers intercept or divert customers from competing retailers.

Early growth Accelerated development Maturity

Market share

Profit

Decline

General store

Catalog Retailers

Malls (?)

Department stores

Supermarkets

Fast food outlets Convenience stores

Warehouse clubs

Factory outlet stores

Single-price stores

Single-brand stores

On-line retailers

Value-retail stores

Market share or profit

The Retail Life Cycle

Future Changes in Retail

Nonstore Retailing

New Retail Formats

Heightened Global Competition

Integration of Technology Increased use of Private Labels

Non store Retailing

Direct Selling

Catalog Sales

E-tailing

New Retail Formats

Super centers

Recycled Merchandise Liquidators Retailers

Heightened Global Competition

Increased Rate of Change Greater Diversity

Creation of New Retail Formats

Integration of Technology

Supply Chain Management

Customer Customer Management Satisfaction

M.RAVISHANKAR MBA(AB) 2008-2010 Batch NIFTTEA KNITWEAR FASHION INSTITUTE TIRUPUR [email protected]

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