RetailRetail

Introduction

Retail means to

Sell Put on the

market for sale

Definition

Retailing include the business activities involved in selling goods and services

to consumers for their personal,

family

household use.

It includes every sale to the final consumer.

(Cars to Apparels – offering a restaurant – theater ticket booking and all that you can imagine of).

Retailers Sorting / Cataloging Process

What Do Malls do

Special Characteristic of Retail

Small Average Sale

Impulse (urge) Purchase

Popularity of Store

People donot make shopping list ( its unplanned)

Candy, cosmetic Snacks are sold as impulse goods

When placed at high visibility traffic areas

Issues in Retailing

How can we best serve our customers while earning a fair profit?

How can we stand out in a highly competitive environment where consumers have too many choices?

How can we grow our business, while retaining a core of loyal customers?

Consumers have too many choices?

Suppose you are a consumer & want to buy apparels

Department Store Department Store

La Samaritaine , France, Paris

An apparel store

Full-service retailers

A Chennai based retail having partnership and associate network in Singapore, Australia, Western Europe and North America.

Discount stores

Online catalog shopping

To stand in contemporary world

What a retailer needs to decide.

What type of store? What kind of retailer? Where will it be located? What will you sell? How big a store do you need?

What type of store?

Types of Retail

The Malls:

These are the largest form of retail formats.

They provide an ideal shopping experience by providing a mix of all kinds of products and services,

Along with Food and Entertainment under one roof.

Examples Sahara Mall, TDI(Taneja Developers & Infrastructure

Ltd) Mall in Delhi, Iscon Mall

Department stores

Is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line

Sell apparel, furniture, appliances, home furnishings, cosmetics, jewellery, paint, hardware, electronics, and sporting goods.

They may also sell food and services such as optical, photography, pharmacy

They are the ultimate one-stop shop.

Example: Reliance Mart, D-Mart, Shoppers Stop

Specialty Stores:

The retail chains, which deal in

specific categories and

provide deep assortment (Collection)

Example RPG's Music World, Crossword, Karnavati Pagrakha

Discount stores:

These are the stores or factory outlets that provide discount on the MRP items.

They focus on

Mass selling and reaching economies of scale

Or selling the stock left after the season is over.

Example:

Future Group's Brand Factory , Factory outlet, Arvind Brands' Megamart, Provogue's Promart, Subhiksha, MARSHALLS

Hypermarkets/ Supermarkets:

These are generally large self-service outlets,

offering a variety of categories with deep assortments. (all those consumed frequently)

The supermarket typically comprises meat, fresh produce, dairy, and baked goods departments along with shelf space reserved for canned packaged goods

As well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies.

Most supermarkets also sell a variety of other household products that are consumed regularly, such as alcohol (where permitted), household cleaning products, medicine, clothes,

Example: Big Bazaar, Spencer’s retail, Reliance Mart

Lifestyle stores:

All that adds one lifestyle & Living

Example:

Wills Lifestyle stores, which initially offered only sportswear, has expanded its basket to include the premium consumer with formal wear, evening wear and a designer accessories.

Pantaloons, Lifestyle International (P) Ltd is part of the Landmark Group,Circle P, D-Mart (dolphin-mart) Exclusif

Convenience stores: They are comparatively smaller stores located near residential areas.

They are open for an extended period of the day and have a limited variety of stock.

Prices are slightly higher due to the convenience given to the customers.

Example: Kirana Stores, 6/10

E-tailers:

These are retailers that provide online facility of buying and selling products and services via Internet.

They provide a picture and description of the product. A lot of such retailers are booming in the industry, as this method provides convenience and a wide variety for customer.

But it does not provide a feel of the product and is sometimes not authentic.

Examples are Amazon.com, Ebay.com, sifymall, virtual pune.com

Vending:

This kind of retailing is making spreads into the industry.

Smaller products such as beverages, snacks are some the items that can be bought through vending machines.

At present, it is not very common in India.

Distance Retailing

Rather than visiting a store to make a purchase, a customer may order products from a remote location.

This may be done by mail, telephone, internet/email or other digital device such as interactive television

UC Santa Cruz Online Grocery

grocery.ucsc.edu

Fill online form and retailer calls you back to confirm the order

Chains

Having more than 3 of any one type of store

If a Store is successful, this will often encourage the owner or owners to attempt to repeat the success and open a similar store elsewhere.

 Example: Honest, CCD, Chavda, Mochi, subway, Mc-D

Party and Event Retailing

This is usually a form of franchising where the retailer invites people from the locality to a common location.

The event or the party will be a mix of socializing and retailing

Most commonly, the retailer will be a franchisee to a wider organization.

Often the franchisor will supply samples and a small selection of goods to the franchisee so that their potential Customers at the event can try the products out.

Example: Sphinx Adonis “Eventwala Retail Store’

Street Market

The tradition of selling from market stalls

goes back to the haats where people got together to sell their wares

Street markets, or open-air markets, are common around the world and are particularly popular in temperate or warm climates.

Example: Tibetian Warm Cloth, Law garden Traditional, Paladi Chappal bazaars, Chaupatis.

Van Retailing

Warehouse Club

These stores often require that customers purchase a membership to the store that entitles them to shop there. They offer minimum service and usually require the customer to take home their purchases.

Example: Costco, Sam’s Club by Wal-mart, Bj's Wholesale Club( US & Ohio)

What type of retail theory? Low gain with high volume and huge selection.

Example: Wal-Mart

Higher gain with lower volume but with full selection. Example: a department store.

High gain with low volume and smaller selection. Example: a Lifestyle store.

Or…

Multi-channel retailing- sells through multiple retail formats

Where it will be located

Strip mallsStrip malls

Strip mall (also called a shopping plaza or mini-mall) is an open area shopping center where the stores are arranged in a row, with a sidewalk in front.

Strip malls are typically developed as a unit and have large parking lots in front.

They face major traffic arterials

And tend to be self-contained with few pedestrian connections to surrounding neighborhoods

Conti…

Freestanding (separate)

A room in your home (Brand factory)

Internet web site

Flea Market (s) A flea market or swap meet is a type of bazaar where inexpensive or secondhand goods are sold or bartered

Home shopping parties

Catalogs

Buying Basics

Questions to ask the vendor What is the cancel date?

What is your FOB point?

Who pays for freight?

What are your terms?

Who is your factor?

What is your opening order?

What is your size run & how do they come packed?

Buying ground rules You are the buyer, don’t let anyone sell you.

Don’t buy price.

Use your own order sheets. That seems you are working on your terms and not the vendors.

Ask for a discount.

Set reminders for your placed orders

Plan your orders and try not to cancel them.

Retailer – Supplier Relationship Exclusive Distribution (one or few)

Tata Motors distributor of Fiat

Intensive Distribution (as many as possible) P&G Rely on intensive one

Selective Distribution (moderate retailers) Luxury goods Like Brut Perfumes found only in

Lifestyle shops

Merchandising & Displays

Work on 4 of the 5 senses

Retail is all about the visual.

The over-all store presentation The Displays & Fixtures The Lighting The Signage The Music The Store’s smell

The 10 second test

Eliminating Shopper Boredom

Foremost Merchandising TipsMust hire a visual merchandiser or a store planner

to lay out your store. to assess your traffic flow determine the most effective use of your floor space.

Merchandiser Will help retailer to decide:

What to move where How much time each individual should spend at one place Rack Placement Tagging Ceiling Heights decision etc.

Case: TARGET Stores Retail Strategy

Introduction

In 1961 Store realized the need of less expensive, quick and convenient format

1962 First Target store in US

With a Tag of “Pay Less + Expect more at Target”

Ranked 10th among the largest US Retailer

Its Strategy – Key to success

Growth-oriented objectivesIn 2002 alone it opened about 110

new stores

Appeal to a prime marketFirm is strong seller to middle income having 20 % higher income that of typical

Wal-Mart shopper.

Distinctive company image

It positions with Less + Expect more it’s a true discount department store with everyday low price

But is perceived as an “Upscale Discounter”

Focused

Target never lost its sight of discount store niche “Value always wins”

Replaced People from buying $18 GAP t-shirts by it $8 cool T-shirts

Strong customer service

If an item is out stock Target will offer

a substitute item of the sameor greater value at the same discount or give a rain check for the original

item (A promise that an unaccepted offer will be renewed in the future. )

Multiple points of contactExtensive adds + stores in 47 states + toll free

telephone service( 7 * 17 hrs)

Employee relations

Celebrates success

Brings out best in teams and individuals

Internal Career Growth plans and training by each team

leader

Regular performance feed back

Community involvement

Target believes in giving back

Targets popular program is school fundraising

“You can support your school just by shopping with target guest card”

(1 % to any of the eligible school of your choice)

The Great Mall Of China

A France based retail organization since 1995

Second largest retailer in the world

One of the first foreign company to get in to Chinese retail industry

Brought a Retail Revolution in the country

They are doing Mass retailing much more successful than iconic Wal-mart (revenue twice.

What Carrefour is doing right

Instead of only grabbing and building They are selling in a Chinese way to

Chinese people.

( Pull your own sea food from tanks, take from the bins of fresh produce)

Company is more like a Shanghai outdoor market than a Paris indoor market

What all it did Leveraged on its international experience

And thereby brought few of its best practices in the Chinese market

Adopted decentralized management

It sold private label products

Designed the store according to the Chinese customers convinience

Procured majority of the product locally (for freshness)

Other players took china to be a single market

Whereas Carrefour took it to be a country with several small markets

Not an easy market as high variety of cultures and traditions within the country

For Chinese customer the price was main concern

Thus Carre4 concentrated on keeping price low- lower than any other store in that city

This made it highly popular

Consumer type

Pragmatists: Check Value + Action (They prefer small sachet to first test then repurchase)

Purchased in Small basket size

Store Selection

Regional offices were established and each of it took care of expansion in that area

Based on Availability of space

Based on purchasing power of the people in that area

Detailed Research by a team about the culture, custom & Purchasing behavior

No fix store format encouraged employees to come forward

Stores Management

Every stores manager was empowered to take decisions according to the local tradition

Products to be sold was decided by him on the basis of customer preferences

A product stacked on the shelf if couldn’t generate sale in 45-60 days was then removed

Checked the performance of Stores Manager based on his ability to forecast and study products

SCM

85 % of inventory was local

Supplier had to negotiate separately with each individual store.

Carre4 trained the suppliers, to manage and recall or track.

Provided them with Computers and software to manage and standardize their orders

Localization Strategy

Carre4’s stores spread 7 floors with escalators for moving shopping cart

Surprisingly sides of the escalators stacked with snacks & eatables.

Some place stores were designed in a look of local outdoor market

(“shouting come here this is fresh and good”)

In Muslim countries Carre4 did not sell Pork- all products certified by Halal products.

Once Carre4 Displayed 20 varieties of French wines of $10

It failed as too expensive according to the Chinese standards

Replaced it with local wines $1.

Carrefour Values Freedom: Customer & Employee

Responsibility: Right to take initiative and be responsible for the actions

Sharing: Distribute wealth

Respect: Individual culture

Integrity: be transparent & Committed

Solidarity (unity): Men & Women

Progress: Encouraged innovations and wished for a continual improvement