What is Retailing???....•All activities involved in selling, renting, and providinggoods and services to ultimate customers forpersonal, family or household use.•In the channel of distribution, retailing is where thecustomer meets the product.
Retail is usually classified by type of products as follows:• Food products• Hard goods or durable goods (Goods that do not quickly wear out and provide utility over time)- Appliances, Electronics, Furniture, Sporting goods, etc..• Soft goods or consumables - clothing, apparel, and other fabrics. Goods that have a limited period of utility (typically under three years) in which you may use them.
Types of retailers by marketing strategy RetailingNon- Store Retailing In Store Retailing
Automatic Vending• Non-store retailing that makes it possible to serve customers where stores cannot.Direct Mail & Catalogs• Marketing efficiency is improved through segmentation and targeting.• Customer value is enhance by providing a fast and convenient means of making a purchase.Television Home Shopping• TV home shopping is possible when consumers watch a shopping channel on which products are displayed; orders are placed over the telephone.• TV home shopping programs traditionally attract 40-50 year old females.
Online Retailing• Online retailing allows consumers to search for, evaluate, and order products through the Internet.• The advantages of online retailing are: – ability to compare different shops – privacy – VarietyTelemarketingTelemarketing involves using the telephone to interact with and sell directly to consumers.
Direct Selling• Direct selling involves direct sales of goods and services to consumers through personal interactions and demonstrations in their home or office.• Many direct selling retailers are expanding into international markets to offset the decline in domestic sales.
Major Formats of In- Store Retailing Format Description The Value Proposition Exclusive showrooms either owned or Complete range available for a given brand,Branded Stores franchised out by a manufacturer. certified product quality Focus on a specific consumer need, carry most Greater choice to the consumer, comparisonSpecialty Stores of the brands available between brands is possible Large stores having a wide variety of products, organized into different departments such as One stop shop catering to varied/ consumerDepartment Stores clothing, house wares, furniture, appliances, needs. toys, etc. Supermarkets One stop shop catering to varied consumer Extremely large self-service retail outlets needs Stores offering discounts on the retail priceDiscount Stores through selling high volumes and reaping Low Prices economies of scale Larger than a supermarket, sometimes with a Low prices, vast choice available includingHyper- mart warehouse appearance, generally located in services such as cafeterias. quieter parts of the city Small self-service formats located in crowded Convenient location and extended operatingConvenience stores urban areas. hours. An enclosure having different formats of in-Shopping Malls Variety of shops available to each other.
Retail Positioning• For a store to be successfully positioned, it must have an identity which has some advantages over competitors, and at the same time are recognized and valued by consumers.The Retailing Mix• Goods and services• Physical distribution• Communications tactics chosen by a store.
Global Retailing• Retail business grew between 25% - 30% percent in India and 13 percent in fast growing economies China and Russia.• World’s largest private industry• US$ 6.6 trillion sales annually US Retail UK Retail Indian Retail China Retail WORLD’s TOP Companies Companies Companies Companies Retail Companies Wal-Mart Stores, Tesco plc Lifestyle Shanghai Bailian Wal-Mart Stores, Inc. lnc Group Co., Ltd (USA) The Kroger Co Marks & Spencer plc Reliance Fresh Dalian Dashang Carrefour Group Group Co., Ltd (France) The Home Depot, Safeway plc Pantaloon Group Eguo China Retail Metro AG lnc Group (ECRG (Germany) Sears, Roebuck Somerfield plc Spencers Retail Trading Co Ltd. ITM Enterprises SA and Co (UK) Target The Boots Company Reliance World Suning Appliance The Home Depot, Inc Corporation plc Chain Store Group (USA) Co., Ltd
Retailing in INDIA – Largest employer after agriculture - 8%* of population. – Highest outlet density in world, Around 12 mn outlets. – Retailing in India is one of the pillars of its economy and accounts for 14 – 15% of its GDP – 96% of the 12 Million stores are less than 500 Sq. ft.Different Types of Retail Sectors– Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of labor laws– Formal Retailing Sector Typically large retailers Greater enforcement of taxation mechanisms High level of labor usage monitoring
Indian Retail Scene Post 2011• Before 2011, India had prevented innovation and organized competition in its consumer retail industry• Over 30% of food staples and perishable goods produced in India spoiled because poor infrastructure and small retail outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.• One report estimates the 2011 Indian retail market as generating sales of about $470 billion a year of which a miniscule $27 billion comes from organized retail such as supermarkets, chain stores with centralized operations and shops in malls
Challenges in the Industry Geographically dispersed population Real Estate Costs Supply Chain Inconsistency Poor Infrastructure and little use of IT systems Existence of counterfeit goods Lack of Skilled Manpower