1. RETAILING
Prepared By,
Sagar Gadekar

2. Definations
 According to William J Stantons,
“ A Retailer or Retail store is a business enterprise which
sells primarily to the ultimate consumers for non business
use.”
 According to Cundiff and Still,
“Retailing consist of those activities involved in the selling
directly to ultimate consumers. ”
 According to Mc. Carthy.
“ Retailing is selling to final consumer products to
households.”

3.  Retailing may be understood as the final step in the
distribution of merchandise for consumption by the end
consumers.
 Retailing is responsible for matching final consumer demand
with supplies of different marketers.
 Retailing is high intensity competition industry, The reasons
for its popularity lie in its ability to provide easier access to
variety of products, freedom of choice and many services to
consumers.
 The Indian retail is dotted by traditionally market place called
bazaars or haats comprises of numerous small and large shops,
selling different or similar merchandise

4. Characteristics of Retailing
 Direct Interaction with Customers.
 Lower Average Amount of Sale
Transaction.
 Point of Purchase and Display and
Promotion.

5. Importance of Retailing
 Services to Wholesalers and Producers.
b) Advertisement of new products.
c) Arrangement to sell the goods.
d) Information about consumer habits, tastes and needs.
e) Sharing of Risks.
 Services to consumers.
g) Selection.
h) Variety of goods.
i) Demand creation.
j) Distribution.
k) Credit Facility.

6. Functions of Retailing.
 Sorting.
 Breaking Bulk.
 Holding Stock.
 Additional Services.
 Channel of Communication.
 Transport and Advertising Functions

7. Main Activities involved in retailing
 Choosing the Store Location.
 Sourcing/buying or partnership/supply chain management.
 Merchandising and category Management.
 Visual Merchandising (Display)
 Sales Promotion.
 Store Positioning and Building the store as a Brand.
 Store Operations.
 IT Task.
 Inventory Management.
 Shrinkage Loss Prevention.
 Real estate development.
 Achieving efficiencies in Retail Operations.

8. Retailing in India.
 Retail is the new buzzword in India.
 The global Retail development Index has ranked India first,
among the top 30 emerging markets in the world.
 It is believed that India has the potential to deliver the fastest
growth over the next 50 years.
 While barter would be considered to be oldest form of retail
trade, since independence , retail in India has evolved to
support the unique needs of country, given its size and
complexity

9.  Second largest sector after Agriculture. Contributes about 10 –
11 % of the GDP
 The estimated size of the organized retail industry in India is
Rs. 16,000 crores. This is 2 % of the total estimated retail
trade.
 Indian Retail trade increased from Rs. 2200 billion in 2000 to
Rs 3300 billion by the year 2005
 India's first true shopping mall – complete with food courts,
recreation facilities and large car parking space – was
inaugurated as lately as in 1999 in Mumbai. (this mall is called
"Crossroads").

10. The Evolution of Retail in India
 Retail in India has evolved to support the unique needs of our
country, given its size and complexity Haats, Mandis and Melas have
always been a part of the Indian landscape. They still continue to be
present in most parts of the country and form an essential part of
life and trade in Various areas.
 The PDS (Public Distribution System) would easily as the
single largest retail chain existing in the country. the evolution of the
PDS of Grains in India has its origin in the “rationing system”
introduced by the British during world war II

11.  The system was started in 1939 in Bombay and subsequently
extended to other cities and towns. the system was abolished
post war but however attaining independence India was forced
to reintroduce it in 1950.
 There was rapid increase in the ration shops ( being increasingly
called the Fair Price Shop or FPSs)
 The Canteen Stores Department and the Post Offices
in India are also among the largest network of outlets in the
country reaching population across the country.

12.  The Khadi & Village industries (KVIC) was also set up post
independence. The cooperative movement was again championed by the
government.
India's Largest retail Chains:
 PDS: 463,000
 Post offices: 160,000
 KVIC: 7,000
 CSD Stores:3,400
(source business world marketing White book 2005)

13.  In the past decade, the Indian marketplace has transformed
dramatically. However from the 1950,s to the 80,s, investment
in various industries was limited due to low purchasing power
in the hands of the consumer and the government’s policies
favoring the small scale sector.
 The first attempts at organized retailing were noticed in the
textiles sector. One of the pioneers in this field was Raymond’s
which set up stores to retail fabric.

14.  Raymond’s distribution network today comprises 20,000
retailers and over 256 exclusive showrooms in over 120 cities
of the country
 Other textile manufacturing who set up their own retail chains
wee Reliance- which set up Vimal showrooms and Garden Silk
Mills, which set up Garden Vareli showrooms.

15. The Evolution of retail in India
Established Emerging
Traditional formats Formats
Formats Kirana shops Exclusive retail outlets
Itinerant Salesman Convenience/ Hypermarket
Haats department stores Internal retail
Melas PDS/ Malls / Specialty Malls
Mandis etc. fair price shops Multiplexes
Pan/ Beedi shops Fast food outlets
Service galleries

16. Drivers of Retail change in India
major drivers :
 Changing Income Profiles: Steady economic growth fuelled
the increase in disposable income in India. The average
middle class family's disposable income rose by more than
20% between 1999-2003.
 Diminishing difference between Rural and urban India: Rural
India accounts for over 75% of India population and this in
itself offers a tremendous opportunity for generating volume
driven growth. Tax benefit. In year 2002-03 LIC sold 50% of
its policies in rural India. Same BSNL also sold its 50%
connection in small towns .

17.  Changes in Consumption patterns: Occupational changes
and expansion of media have caused a significant change in
the way the consumer lives and spends his money.
o The changes in income brought about changes in the
aspirations and the spending patterns of the consumers.
the buying basket of the consumer changed
t The emergence of a young Earning India : Nearly 70% of
the Indian population is below the age of 34. taking
advantages of employment opportunity in the booming
service sector these young Indians are redefining service
and consumption patterns

18. Prominent sector in Indian retail
1. Clothing, textiles and fashion Accessories:
2. Food & food Services:
3. Consumer Durables:
4. Books & Music:
Other emerging sectors
 Jewellery retail
 Footwear retail
 Time Wear Retail
 Fuel Retail/ petro retail

19. Challenges to retail Development in India
 Retail not being recognized as an industry in India.
 The high costs of real estate.
 Lack of Adequate infrastructure.
 Multiple and complex taxation system.

20. Size of the organized retail market (Rs Cr)
2001-02 2007 CAGR (%)
(compound Annual growth
rate)
TOTAL 16,000 37,216 18
Food 1,800 7,473 33
Clothing 4,950 10,423 16
Cons.Durables 1,650 3,787 18
Books & Music 450 1,426 26

21. Share of organized & unorganized retail with comparison
source: Ernst &Young, The Great Indian Retail Story, 2006
PAKISTAN 1 99
INDIA 3 97
CHINA 20 80
INDONESIA 30 70
BRAZIL 36 64 ORGANISED
40 60 UNORGANISED
THAILAND
MALASIA 55 45
TAIWAN 81 19
USA 85 15
0% 20% 40% 60% 80% 100%
21

22. Indian versus Global Retailing
Scenario.

23. Basis Indian Retailing Global Retailing
Nature of Retailing India is mostly Unorganized. At Retail World globally is well
Operation present only 2% to 4% accounts for organized organized and in most developed
sectors. countries is control by major.
Scope of Package good manufacturer control all retail In organized retail industry retailer
Influence business to a large extent. But the scenario is have an upper hand in negotiating
changing, even with the limited growth of deals with manufacturers.
organized retail in India.
Technology Indians retailers lag behind global retailers in Global retailers resorts employ
use of technology. Though, retailers like technology in larger scope than
shopper stop, Pantaloons are employing Indian retailers.
technology in their operations.
Formats Indian retail industry is concentrated around A large no. of retail formats are
few formats. Only 2% of retail industry has available.
adopted modern retail formats of department
stores and supermarkets.
Retail Space Real estate space available for organized retail In west large store formats are
is getting saturated in Metros and in tier 1 located in outskirts of cities or the
cities in India & is now looking at tier 2 cities. suburbs. The enables them to have
large space.

24. Basis Indian Retailing Global Retailing
Infrastructure Maximum infrastructure problems faced Minimum infrastructure problems faced
by retailers in International market. by retailers in International market.
Manpower A lack of trained manpower hampers Trained manpower available aiding retail
development in industry. boom.
Products/Bran Indian retail industry usually has brands of Global retailers resort to keep their own
ds Assortment well known Indian and foreign brands. This leads to increase
companies. Private label brands are competition with better known
negligent or absent. company brands.

25. Difference between Wholesaler and Retailer.
Criteria Wholesaler Retailer
Buyers Business customers, i.e. Retailers Final Customers, i.e. End users
Buying Motive of For reselling/trading. Wholesaler or producer in case large
Buyers retailers.
Business Volume High. Low.
Risk Involved High. Less.
Investment High. Moderate.
requirement
Promotional Less Important. Very important.
Activities
Store Atmosphere, Less attention. Very Important Hence maximum
Layout & Location attention.
Area covered Large area covered many areas Relatively small- mostly retailers operate in
territories can be handle by single small area.
wholesaler.
Upper link Producer Wholesaler or producer in case of large
retailers.

26. Thank You

27. Drivers of Success in Retail Sector
 Customers are driving force in
change.
 Re-evaluating the Marketing Plan.
 Advanced Education for Retailers
is critical for growth.
 Strong visual recognition.
 Work place challenge.