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INTRODUCTION TO RETAILINGMODULE 1BBA

Module I: IntroductionModule I: Introduction

Nature, scope and importance of retailing, retail competition theories, Retail management process, Influence of changing environment on retailing viz demographic changes, lifestyle changes, technology changes (e-business), Retail Environment.

RetailRetailThe word retail is derived from

the French word “retaillier” which means “to cut a piece off” or “ to break bulk”.

In simple terms , it implies first hand transaction with the customer.

RetailRetailRetailing involves a direct

interface with the customer and the coordination of business activities.

INTRODUCTION TO RETAILINTRODUCTION TO RETAIL

Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products.

RETAILING Business activities involve Selling Goods and Services to Consumers for their Personal, Family or Household use.

“Every sale of Goods and Services is to final consumer” – Food products, apparel, movie tickets; services from hair cutting to e-ticketing.

Retailing is the Last stage in Distribution Process- Wholesale is an intermediate where Goods and services are sold to Business customers.

MANUFACTURER

DISTRIBUTOR

WHOLESALER

RETAILER

END-CONSUMER

Who is a Retailer?Who is a Retailer?

Retailer links Producers to Customers

Retailer is a person, agent, agency, company or organization who delivers the Goods or Services to ultimate consumer

Functions Of RetailerFunctions Of Retailer

1) Breaking bulk

2) Providing assortment

3) Holding inventory

4) Providing services

importance of retailingimportance of retailingSUPPORT FOR COMMUNITYRETAIL SALESEMPLOYMENT

Retail management Retail management processprocess

RETAILING WORLDRETAILING WORLD

1.INTRODUCTION TO THE WORLD OF RETAILING

2.TYPES OF RETAILERS3.MULTICHANNEL RETAILING4.CUSTOMER BUYING

BEHAVIOUR

RETAILING STRATEGYRETAILING STRATEGY

5.RETAIL MARKETING STRATEGY6.FINANCIAL STRATEGY7.RETAIL LOCATIONS8.SITE LOCATIONS9.ORGANISATION STRUCTURE & HRM10.INFORMATION SYSTEM & SUPPLY

CHAIN MGT.11.CRM

MERCHANDISE MGT MERCHANDISE MGT

12.MANAGING MERCHANDISE ASSORTMENTS

13.MERCHANDISE PLANNING SYSTEM

14.BUYING MERCHANDISE15.PRICING16.RETAIL COMMUNICATION MIX

STORE MGTSTORE MGT17.MANAGING THE STORE18.STORE LAYOUT, DESIGN &

VIRTUAL MERCHANDISING19.CUSTOMER SERVICE

Industry EvolutionIndustry Evolution

Traditionally retailing in India can be traced to ◦The emergence of the neighborhood

‘Kirana’ stores catering to the convenience of the consumers

◦Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission

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

Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches

The latter half of the 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, ◦ mainly in urban areas, with facilities like car

parking ◦ targeted to provide a complete destination

experience for all segments of society

Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume

Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid.

Retailers add value by Providing the Right Product at The Right Place at the Right Time.

Organized RetailingOrganized Retailing

Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.

like Wal Mart, McDonalds

Unorganized RetailingUnorganized RetailingUnorganised retailing, on the

other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc

EMERGING TRENDS IN EMERGING TRENDS IN RETAILINGRETAILING

Emerging Trends Emerging Trends

Last decade has seen tremendous changes in Retail Business – from made to order to ready to wear, emphasis on value addition and cost reduction.

Family run retail business giving way to modern professional retail.


Retail improving inventory management through systems – faster turnover, better profitability, fast changing customer preferences for goods and services.

“BETTER CUSTOMER CARE”


With consumers for luxury goods growing in numbers , the Indian retail market is estimated to reach around US$ 3.5 billion to US$ 30 billion by 2015


The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping. An estimated 10 per cent of the total e-commerce market is accounted by e-tailing.


Led by the rising purchasing power, changing consumption patterns, increased access to information and communication technology and improving infrastructure, rural retail market is estimated to cross US$ 45.32 billion mark by 2010 and US$ 60.43 billion by 2015


With international brands like Tommy, Esprit and Puma (that have entered the country) growing well over 100 per cent, many others are also planning to foray into the Indian retail market. India's vast middle class with its expanding purchasing power and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.


The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market.

World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited.

Global Retail scenarioGlobal Retail scenarioIn the other parts of the world,

retailing is better organized than what it is in India.

The US retail Industry is the world largest retail industry and its still growing.

In USA most part of retailing is accounted by organized sectors.

Global Retail scenarioGlobal Retail scenarioThe USA dominates the world

retail market and accounts for 32.3% of the global retailing group.

Europe has 30.8 %, Asia Pacific has 25.6 %, and rest of the world has 11.20 %.

Global Retail scenarioGlobal Retail scenarioThe organized retailing has gained

a great deal of momentum in China in the past few years.

The developing countries are also making an effort in the industry but organized retailing is mainly dominated by the developed countries like USA.

Global Retail scenarioGlobal Retail scenarioRetail is the significant

contributor to the overall economic activity around the world.

The employment opportunities offered by the retail industry is huge.

Global Retail scenarioGlobal Retail scenarioAccording to the US department of

labor, about 22 million Americans are employed in the retailing industry in more than 2 million stores.

Globally, retailing is customer centric with an emphasis on innovation in product, process and services.

Global Retail scenarioGlobal Retail scenarioGlobally, Retail is a very fast

changing field and the customer not only has to keep up with ever changing expectations and demand of the consumers but also has to keep a track on the competition and changes in technology.

Indian Retail ScenarioIndian Retail ScenarioMost of the retailing in India is

unorganized. Most of the organized retailing in the country has just started recently, and has been concentrated mainly in the metro cities.

Today convenience has become a priority for the Indian consumers and they want everything under one roof so that they have an easy accessibility.

Indian Retail ScenarioIndian Retail ScenarioSo the organized retailing has a

very big opportunity to set itself in the Indian markets.

The two main factors which drives organized retailing in India are low prices and the benefits that are offered by them.

Indian Retail ScenarioIndian Retail ScenarioIndia is seen as a competitive

marketplace with the potential target consumers in the niche and middle class segments.

Over the past few years. International companies like Marks & spencer, Mc Donald’s, Dominos etc have entered the Indian markets.

Indian Retail ScenarioIndian Retail ScenarioThe entry of companies like Big Bazaar

have created the concept of value for money for the Indian consumers.

A McKinsey report on India says organized retailing would increase the efficiency and productivity of economic activities, and would help in achieving higher GDP growth.

Large Indian companies like Reliance group, Future group, Essar telecom Retail, Shopper stop are investing huge amount of money in this sector.

THE RETAIL THE RETAIL ENVIRONMENTENVIRONMENT

The Legal EnvironmentThe Legal Environment

The legal scenario of a country plays an important role. For eg.

- Restricting the days and hours during which the retailers may operate.

- Limit the manner of business to ensure consumer privacy.

The Legal EnvironmentThe Legal EnvironmentLaws on non discriminatory hiring

and promotion of people.Trademarks agreement which

provides retailers with exclusive rights to brand names.

Licensing agreements which allows the retailers to sell goods created by others in return for a royalty.

The Legal EnvironmentThe Legal EnvironmentPrice marking laws which specify

the discounted items must be marked properly.

Product safety laws that prohibits retailers to sell goods that have not been tested properly.

The Technological The Technological EnvironmentEnvironment

These changes can bring about a lot of other changes as they affect the range of choices available to both the consumer and the retailer. New technology can lead to better products and services for the consumer and at the same time it can help the retailer as well like keeping control over the inventory level.

The Importance of The Importance of Technology in RetailTechnology in Retail

The Importance of The Importance of Technology in RetailTechnology in Retail

1) Collection of data

The use of technology aids data collection. The data can be collected regarding the consumers, their purchases and the frequency of buying. This information helps the retailer to distinguish the customer who shops frequently.

The Importance of The Importance of Technology in RetailTechnology in Retail2) Efficiency in Operations

The use of technology serves the basis of integrating the functioning of various departments. As the process gets automated , the time involved in the task is reduced

The Importance of The Importance of Technology in RetailTechnology in Retail3) Helps communication

Communication can be faster with the help of technology and it can be a 24 x 7 process. EDI can be used for communication with the suppliers and vendors

(EDI:-

The Importance of The Importance of Technology in RetailTechnology in RetailThe use of systems to organize,

search and manage the data is termed as DATABASE MANAGEMENT. A simple purchase at any retail store enable the stores to gather a vast amount of information about the customer and products.

The Economic The Economic EnvironmentEnvironment

The economy is a term which is used to denote the patterns of economic activity in a country which includes the production and environment, income, consumption and the living standards.

The Competitive The Competitive EnvironmentEnvironmentCompetitors are offering choices to

customers and “value added” products Competitors come in different sizes (small

organizations to international companies) and serve different market segments (specialized industry segments to mass markets)

In the process of serving customers, many are making profits; thus they have an incentive to increase their market share and are promoters of retail competition

FDI in RetailFDI in Retail

FDIFDIMeaningAdvantagesDisadvantagesImpact on IndiaFDI LATEST NEWSExamples

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