Final Ashish RDM

8/7/2019 Final Ashish RDM

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Retail consists of the sale of goods or merchandiseto small or individual lots for direct consumption bythe purchaser.

Retailing may include subordinated services, such asdelivery.

Retail establishments are often called shops orstores.

Retailers are at the end of the supply chain.



Increasing

Industry

Concentration

Growing

Diversity of

Formats

Globalization



The store-based retailers range from street vendors sellingvegetables to large corporations such as Reliance, TATA,Mahindra, Walmart, Tesco, Sears etc that have become anintegral part of global culture

The different types of retailers offer unique benefits Consumers patronize different retail types when they have

different needs like:

Type of Merchandise

Type of Merchandise

Variet y andAssortment

Variet y andAssortment

Services Offered

Services Offered

Prices and the Costof offering breadth

and de pth of Merchandise and

Services

Prices and the Costof offering breadth

and de pth of Merchandise and

Services



Merchandise

Variety (breadth)

Assortment/SKUs (depth)

Services (check-out lines)

Store size, design and visual merchandising

Location

Pricing Targeted segments



Mom and Pop Stores

Kirana Stores

Convenience Stores

Supermarkets



Departmental Stores

Specialty Stores

Category Specialists

Drug Stores

Full-lineDiscount Stores



Electronic Retailers

Catalog andD

irect Mail Retailers

Direct Selling

Television Home Shopping

Vending Machine Retailing



Fast food outlets

Health clubs and clinics

Movie halls

Auto service

Beauty care

Hotels and resorts



Independent, Single Store Establishment

Cooperatives

Corporate Retail Chains

Franchising



These are small owned family business which sellsa small collection of goods to the customers.

They are individually run and cater to a smallsections of society.

These stores are known for their high standards ofservice.



Food oriented retailers that appeal to busy consumers by reducing the time spent shopping.

Well-organised, logical store designs that speed out product selection & check-out are must.

Charge higher prices.

Shoppers must weigh costs & benefits of patronizing a convenience store.

Carry very narrow merchandise lines.

Snack foods, dairy products, gasoline accounted for 70% of sales volume.

Makes more convenient to shop.

Fast, casual restaurants.

Opening smaller stores closer to consumers (like airports).



Large,self-service, low-price & low margin food retailers

Carry an extensive variety of merchandise & rely heavily on high inventoryturnover to turn a profit

Most items sold are low margin

Use bar code scanners to identify & record purchases

Major trend is the movement towards a combination store format(cosmetics &apparels)

Based on the concept of scrambled merchandising, in which goods & servicesthat are unrelated to one another are sold together

Larger than conventional supermarkets with 20-30000 sq. feet & some to100,000sq.feet



combination store extends the concept to include complete business units, unrelatedto one another, operating within a single store( banks, dry-cleaners, parlors)

Goal : To reduce perceived scale of store from one giant entity to series ofsmall,independent shops

Superstores :

-operate in 120,000 or more sq. feet, stocks & display both broad &deep assortment

lower prices & vast array of hard & soft goods make for one stopshopping

Located in well-defined,easily accessible areas enhance shoppingconvenience



30,000 SKUConventionalsupermarkets

2000 SKU

Offer one or two brands and sizes

Designed to maximize efficiencyand reduce costs

Offer merchandise at 40-60% lower prices than conventionalsupermarkets

Save-A-Lot, ALDI (German·s Wal-Mart)

Limitedassortment

supermarkets(extreme

value foodretailers)

2-17



The fastest growing retail category

Large stores (150,000 ² 220,000 squarefeet) that combine a supermarket with

a full-line discount store

One-stop shopping experience

2-18

Supercenters

Offer a limited and irregular assortment of food and generalmerchandise with little service at

low prices

Use low-locations, inexpensivestore design, little customer

service

Low inventory holding costs by

carrying a limited assortment offast selling items

Warehouse Clubs



S pecialt y stores

Referred as limited-line/single-line retailers.

Product mix is quite narrow with unusually deep assortments within product category.

Include fashion apparel, jewelry, fabrics, sporting goods ,computers.

Operate multiple locations within a single geographic market where market segments arehighly defined.

Leader in custom tailoring its operations to serve target market.

More customer driven than supplier driven.



Strateg y : To analyze the market for latent demand in inadequately satisfied marketsegmentsStrateg y : To analyze the market for latent demand in inadequately satisfied marketsegments

Outcome : Greater reliance on private-label merchandiseOutcome : Greater reliance on private-label merchandise

It enables specialty stores to penetrate & nurture market segments that are not servedwell by conventional departmental storesIt enables specialty stores to penetrate & nurture market segments that are not servedwell by conventional departmental stores



Discount stores

general merchandisers that offer brand name products at lower prices.

Accept lower prices in exchange for high sales volume.

Meet customer demands for hard goods (appliances, equipment, hardware),soft goods (fashion items, food products), services (automotive repairs,restaurants, personal care).

New store ² specialty discounter referred as category killers focus on singleproduct line as toys, electronics, books/ home improvements.



Variet y stores

carry gifts, toileteries, toys, linens & fashion accessories in limitedassortment & at low prices.

Offer limited customer service, employ few sales people.

Because of its lowest growth it have been moving towards specialtystores format.



Off- price retailers

Appeal to price conscious consumers.

Strateg y ² to secure mfrs returns & off merchandise below whole sale cost & offer themto consumers at deep discount.

Carry limited national brands & designer merchandise at 20 to 60 percent belowtraditional departmental store prices.

But, price cutting by department stores has been squeezing the profitability of off-priceretailing.

Go for re-organising the operations to meet out the competitive pressure.



Catalog showrooms

These are discount operations that offer merchandise through either a showroom orcatalog.

As they compete on price operating cost must be held at minimum.

So they occupy low cost facilities &display a limited assortment of samples.

Customers write up their own orders, present then to clerks at centralized check outs &pick up the merchandise at in-store delivery stations.

Competitive strategy ² planning of merchandise mix, systematic monitoring & control

of inventory& long range pricing decisions.



Factory outlets

manufacturer owned outlets to sell off goods that cannot

be sold through traditional retailers.

Offer medium-high quality goods at deep discounts.

Based on the concept of value positioning ² givingshoppers better value for their money.

Occupy large,low-overhead locations(suburban,rural)known as factory outlet malls.



Warehouse stores

wholesale retail, cash &carry setups with limited sales personnel & display areas Referredas wholesale clubs sell groceries, office supplies, appliances at wholesale prices

Membership cards are required to gain entry.

Success is based on ability to attract small business customers & increase inventoryturnover.

60 ² 70 percent of sales in these stores are wholesale purchases by hotels, restaurants,small retailers & service firms.

Goal: zero ownership of inventory or sale of merchandise to customers before it is paid for.

Allows warehouse store to reduce spoilage, low operating expenses & make a profit atwholesale prices.



Success of e-retailing depend on :

Quality of information to consumers

Types of merchandise & services itdelivers

Customer acceptance

Competitive response from storeretailers



Direct res ponse retailers

Advertise products on radio/TV & take mail or telephone orders(toll free)

Take credit cards & operate 24 hrs

Television shopping programs ² home shopping n/w

Video logs ² shop at home video catalogs designed for use on VCRs

Infomercials ² paid TV ads,30 ² 60 min long,designed solely to promote &demonstrate merchandise or services

- product demo, testimonials from past users,& benefits are woven in the

entertainment.then consumers are asked to purchase by phone or mail



Catalog retailers :

Offer goods through mail order catalogs

Save consumer time

Electronic retailers :

Allows consumer to evaluate & purchase goods & services in comfort of their homes.

Provide complete & up to date information on price, quality, assortment & styles through directinteraction with the retailers.

Computer ² h/w & s/w is required to link retailer & customer through phone lines/TV cables.

Home banking, hotels, airlines, book retailers, ready to wear fashion items.

Use is for general merchandise sales.



Automatic vendors

Automatic vending m/c enhance customer service inside traditionalretail stores & provide convenient service where stores do not exist.

ATMs & Airline ticket m/c reduce long lines at service counters.



Four unique characteristics :

Intangibility : Lack physical properties that consumers normally use inevaluation ² color, texture, design, materials, workmanship

- Cannot be possessed or consumed, but it can only be experienced

- Retailers can build tangibility into their services in 3 ways

Price can be used as a distinguishing feature(competitors)

Celebrity endorsement can lend tangibility to services.Idea is to identifyservice with celebrity who provide tangibility

A well chosen Logo can provide tangibility for a service offering



Perishability - Services cannot be stored for later use.

Inseparability ² normally produced at the same time they are

consumed. customers active participation in the process is required ² weight loss clinics.

Heterogeneity ² degree of variation in the quality of service, as humanperformance varies day by day or from customer ² customer.

- it imposes special challenge on service retailers to provide an efficient,standard service at an acceptable level of quality.



Restaurants

Health care services

Travel & lodging

Freight

Home improvements

Business services

Repair services

Education

Information services

Entertainment

Broadcasting

Financial services

Legal services

Insurance

Tangible

Actions

Intangible

Actions

People Things



Four important differences in the nature of the offeringprovided by services and merchandise retailers are:

Final Ashish RDM

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