Retail organization and classification of retail units
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Transcript of Retail organization and classification of retail units
RETAIL ORGANIZATION AND CLASSIFICATION OF RETAIL UNITS
RETAIL ORGANIZATION
The term retail organization refers to the basic format or
structure of a retail business designed to cater to the
needs of the end customer. Recently, some scholars have
started referring to India as a nation of shopkeepers. This
epithet has its roots in the huge number of retail
enterprises in India, which were over 12 million in 2003.
About 78% of these are small family businesses utilizing
only household labour.
A RETAIL UNIT COULD BE OWNED BY:
Manufacturer (e.g., company owned retail outlets)
Wholesaler (e.g., Vastra outlet in Rajouri in New Delhi)
Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow)
Consumer (consumer owned grocery stores in man y residential societies)
Co-operative society (e.g., Mother Dairy milk booths in Delhi)
Government (e.g., Cottage Emporia)
Ownership shared among franchiser and franchisee (e.g., Archies Gallery)
CLASSIFICATION OF RETAIL UNITS
Conceptual classification of a business unit provides
the marketers with strategic guidelines, useful in the
design of retailing strategy. Besides, retail businesses
are extremely diverse and there are quite a few types
of retail units. Therefore, retail units are classified on
multiple of ownership, geographical locations, kind of
customer interaction level of services provided etc.
1. RETAILERS CLASSIFIED ON THE
BASIS OF OWNERSHIP
INDEPENDENT RETAILER
An independent retailer owns only
one retail unit. The management has
direct contact with the customers and
can quickly respond to their needs.
CHAIN STORES
A chain retailer operates multiple
outlets under common ownership. It
usually engages in some level of
centralized purchasing and decision
making.
FRANCHISING
It involves a contractual arrangement between a franchisor and a retail franchisee,
which allows the franchisee to conduct a given business under established name and
according to a given pattern of business.
The franchisee pays an initial fee and a monthly share of gross sales in exchange
for the exclusive rights to sell goods and services in a specified area.
Franchising is a retail organizational form in which small businesses can benefit
being a part of a large retail institution.
STORE BASED RETAIL STRATEGY MIXES
F O O D O R I E N T E D R E TA I L E R S
F O O D O R I E N T E D R E TA I L E R SType of Retailer
Size (000 sq. ft.)
Location Merchandise
Prices Services
Promotion
Convenience Store
2 - 3
Neighbourhood
Medium width and low depth of assortment; average quality
Average
Average
Moderate
Supermarket
20 - 50
Neighbourhood
Extensive width and depth of assortment; average quality; manufacturer, and generic brands
Average
Average
Heavy use of newspaper, flyers and coupons, self-service
CONTD..
Type of Retailer
Size (000 sq.
ft.)Location Merchandise Prices Services Promotion
Hypermarket
100 - 300
Community shopping centre or isolated site
Wide variety of food (60 – 70 %) and general merchandise (30-40%)
Low Average Low
Warehouse store
100 - 150
Secondary site, often in industrial area
Moderate width and low depth; emphasis on manufacturer brands bought at discounts
Very low
Low Little or none
GENERAL MERCHANDISE RETAILERS
Type of Retailer
Size
(000 sq. ft.)
Location Merchandise Prices ServicesPromotio
n
Specialty Stores
4 - 12
Business district or shopping centers
Very narrow width of assortment; extensive depth of assortment; average to good quality
Competitive to above average
Average to excellent
Heavy use of displays, may have extensive sales force.
Category Specialists
50 - 120
Stand alone, power strip centers
Narrow variety but very deep assortment
Low Low to high
Low to Moderate
Department Store
100 - 200
Regional Malls, Stand alone
Broad variety, average to deep assortment
Average to high
Average to high
Average to high, direct mail, catalog use
CONTD..Type of Retailer
Size (000 sq.
ft.)Location Merchandise Prices Services Promotion
Discount Store
60 - 80
Stand alone, power strip centers
Broad variety, Low to average assortment
Low Low Heavy use of newspaper ads, price oriented messages
Factory outlets
20 - 30
Outlet malls
Average variety, deep but varying assortment
Low Low Use of newspapers, brands not advertise, limited workforce
Flea Market
Street (market area)
Average variety, average and varying assortment
Low Low low
Drug Stores
3 - 15 Stand alone, strip centers
Narrow variety, average to deep assortment
Average to high
Average Low to average
N O N S T O R E - B A S E D R E TA I L S T R AT E G Y M I X
DIRECT MARKETINGIt is a form of retailing in which a customer is first exposed to a good or service
through a non-personnel medium (such as direct mail, broadcast or cable TV, radio,
magazine, newspaper etc.) and then orders by mail, phone (usually a toll free
number), fax or by computer.
Direct marketing can be divided into two broad categories:
• General: General marketing firms offer a full line of products from clothing to house ware.
• Specialty: Specialty firms focus on narrow product lines.
DIRECT SELLING
It includes both personal contact with consumers in their homes (and other
non-store locations such as offices) and phone solicitations initiated by a
retailer.
Examples: Carpet selling, vacuum cleaner, other household products,
cosmetics, books, encyclopedia etc.
It emphasizes convenience in shopping and a personal touch.
VENDING MACHINE
It is a retailing format involving the coin or card operated dispensing of hot
and cold beverages and food or snacks items.
It eliminates the use of sales personnel.
It allows round the clock sales.
Location of the machines can be done according customer’s convenience.
WORLD WIDE WEB
WWW in the field of retailing relates to online retailing.
It enables retailer’s world wide presence.
Enhances the retailer’s brand.
Provides information to the consumers.
Promotes new products.
Furnish customer service.
Cost efficient
Can announce special offers and also employment opportunities.
SINGLE AND MULTI CHANNEL RETAILING
Single-Channel Retailing:• If a firm sells to consumers through one format.
Multi-Channel Retailing:• If a firm sells to consumers by combining store
and non-store retailing- as well as using multiple store formats.
INTEGRATED MULTI-CHANNEL STRATEGY
Integrated promotions across channels.
Ensuring product consistency across channels.
Having an effective information system that can share data across channels.
Enacting a store pickup process for items purchased on the web or through a catalog.
Searching for multi-channel opportunities with appropriate partners.
2 . C L A S S I F I C AT I O N O F R E TA I L E R S O N T H E B A S I S O F O P E R AT I O N A L S T R U C T U R EIndependent retail unit: – The total number of retailers
in India is estimated to be over 5 million in 2003. About 78%
of these are small family businesses utilizing only household
labour. An independent retailer owns one retail unit.
Retail Chain: – A chain retailer operates multiple outlets
(store units) under common ownership; it usually engages in
some level of centralized (or coordinated) purchasing and
decision making.
Franchising: – Franchising involves a contractual
arrangement between a franchiser and a retail
franchisee, which allows the franchisee to conduct a
given form of business under and establishments
name and according to a given pattern of business.
Leased Department or Shop-in-shop:- It refers to
department in a retail store that are rented to an
outside party. Usually this is done in case of
department and specialty stores and also at times, in
discount stores.
Co-operative Outlets: – Co-operative outlets are
generally owned and managed by co-operative
societies.
3 . CLASSIFICATION OF RETAILERS ON THE BASIS OR RETAIL LOCATION
Retailers in a free-standing location: – Retailers located at a site
which is not connected to other retailers depend entirely on their sore’s
drawing power and on the various promotional tools to attract customers.
This type of location has several advantages including no competition,
low rent, better visibility from the road, easy parking and lower property
costs.
Retailers in a Business-associated Location:- In this case, a retailer
locates his store in a place where a group o retail outlets, offering a
variety of merchandise, work together to attract customers to their retail
area, and also compete against each other for the same customers.
Retailers in Specialized Markets: - Besides the
above location-based classification, we also have in
India-retailers who prefer specialized markets,
particularly traditional independent retailers or chain
stores. In India, most of the cities have specialized
markets famous for a particular product category. For
example, in Chennai, Godown Street is famous for
clothes.
Airport Retailing: – For quite some time, duty-free
shops and newsstands dominated the small amount of
commercial space provided at airports. Lately, serious
efforts are being made to design new airport facilities
in order to incorporate substantial amounts of retail
space.
THANK YOU