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Wheel represents phases through which some types of Retailers pass:
Retailers attract customers – low price, low service
Expand market – More expensive merchandise, More services, open More convenient locations. Trading up process increases costs & price of their merchandise, creating opportunities for new low price retailers to enter e.g. Discount stores & category specialists
Some Retailers don’t begin as low price, low service entrants, e.g. Upscale fashion specialty stores.
TOBACCO KIOSK : Deal in tobacco products like Paan, Cigarettes, etc. are called Pan Bidi shops. Many of them also deal in packaged consumer products like toilet soaps, toothpaste, washing soaps, biscuits, confectionery, batteries etc.
COSMETIC STORE : Deal in Ladies Personal care products / Cosmetics, General toiletry products, Men’s toiletry products, Baby Care Products.
Vertical Retail Concept: Traditional stores and Shop-in-Shop concepts – mixture of system and individuality, e.g. Sale of Non-food items like newspapers, magazines with snacks, beverages
Consumption Related Trends: Increasing Consumers with Purchasing Power & More Migrant Consumers Demand for Broad selection of Products Demand for Good quality Products e.g. Honest, Original and Green Products
Indian Economy – GDP Projections Through 2022 (2007 Prices) US$ Billion US$ Billion US$ Billion US$ Billion India is expected to be comparable with UK & France in GDP by 2022 *GDP figures are in real terms with base year as 2007
Rapid Transformation Anticipated 28% share Reach a share of 28% by 2017
Projections of 8% sustainable real GDP growth rate till 2020 promise high growth potential for Indian Retail HIGH GDP GROWTH
Radical Transformation Anticipated In Indian Retail India looking at rapid GROWTH compared to other countries 5 10 17% (estimated) 27% (estimated) India 50 85% US 18 40% Thailand 15 36% Brazil 8 20% Poland 10 20% China Years taken to reach the level from < 5% Share of Organized Retail Country
Growth Of Indian Retail … Indian Retail expected to grow close to 12% p.a. in the next 10 years *Projected Source: Technopak Analysis, CSO & Other Sources
Rural India consists of 720 Million consumers across 627,000 villages
17% of these villages account for 50% of the rural population and 60% of the rural wealth implying reaching out to almost 100,000+ villages to address even 50% of this rural opportunity WITH HIGH PRIVATE CONSUMPTION
Corporation – Incorporated under law. Funds through Sale of Stocks. Ownership Transfer is easy. Private Limited Company – Limited number of Individuals with Limited Liability. Public Limited Company – Open to Public to Invest In Stocks. Profits and Dividends attract Taxes. Managed by professional managers.
Target Market – Customer Group To Be Attracted and Satisfied.
Mass – Broad Spectrum of Customers
Concentrated – Specific group
Differentiated – Two or more distinct Groups with Different Retail Approaches
RETAIL MANAGEMENT ..3 Strategies directed at Heterogeneous Groups Specific Strat. Directed at Specific Gr. Large Homogeneous Group STRATEGY High, Medium and Low High or Low Popular PRICING Different Media for Target Groups Direct mail Mass Advtg. PROMOTION Distinct Goods for Target Market Deep Assortment, High/ Low Qual. Wide Assortment, Medium Qual. RETAILMIX Near Large Population Near Small Medium Pop. Near Large Population LOCATION DIFFERENTIATED CONCENTRATED MASS MARKET STRATEGY TARGET MARKET TECHNIQUES
RETAIL MANAGEMENT ..3 Legal Restrictions Seasonality Economic Conditions Communicating Technology Merchandise @ Pricing Competition Managing a Business Consumers Store Location UNCONTROLLABLE VARIABLES RETAIL STRATEGY CONTROLLABLE VARIABLES
In Retailing computing Price Elasticity is Difficult due to other factors of Product Mix also interplay. Demand hard to predict. Price Sensitivity varies by Market Segment based on Shopping Orientation:-Economy: Shop around for Lowest Price. Segment Growing rapidly.
- Status: Perceive Retailers as different, Look for Prestige Brands and customer Service.
Market Pricing: High Competition, customers seek lowest pricing. Price increase leads to brand switching.
Administered Pricing: Strong product Differentiation, Control by retailer on Price charged. For customers Image, Assortment, Personal service more important than Price, e.g. Fashion apparel stores, upscale restaurants.
Retailer’s Objectives direct Strategic Planning – some Routine. Non-routine require careful evaluation
Strategy outlined, new data required for its operation acquired and files updated or retrieved from storage, analyzed and interpreted. All this at Information Control Centre. Decisions made and put into operation.
CHOICE OF FIXTURES, DÉCOR, SIGNAGE ENABLE CUSTOMERS PERCEPTION . PROPER PLACEMENT OF SIGNAGES INDICATING PRODUCTS OFFERED INCREASE EFFECTIVENESS. CUSTOMERS NECESSITY TO ASK QUESTIONS INCREASE STRESS LEVELS. UNIFORMS WORN BY STORE EMOLOYEES ALSO REDUCE CUSTOMER STRESS AND ANXIETY TO ASK QUESTIONS.
QUALITY OF STORE FIXTURES SIGNIFY A RETAILER CUTTING CORNERS OR MAKING LARGE PROFITS.
SIGNAGE, LAYOUT AND FURNISHINGS ADD TO AMBIENCE AND EFFECTS STORE-BROWSING COMFORT OF CUSTOMERS.
IN STORE ELEMENTS SUCH AS COLOUR, LIGHTING AND MUSIC MAY AFFECT PURCHASE DECISIONS MORE THAN POP AND DISPLAYS. TO IMPROVE IN STORE ATMOSPHERE, PERFUMES GET DESIRED EFFECT – ESPECIALLY TO GET RID OF CERTAIN ODOURS. IF THESE ARE COMPLEMETARY TO THE STORE, THE SERVICE QUALITY EXPERIENCE IMPROVES.
DOMINANCE: CUSTOMERS FEEL DOMINANT ( IN CONTROL). ENVIRONMENTAL ASPECTS - COLOUR OF INTERIORS, HEIGHT OF CEILING DETERMINE CUSTOMER DOMINANCE. FURNITURE AND FIXTURES MAY IMPACT THE DURATION OF TIME SPENT IN-STORE.
Efficiency with which a Retail Strategy is carried out. Reach Sales and Profit Goals keeping Operating Costs under control.
Criteria used to assess effectiveness and setting standards for each performance. Measures used: Total Sales Turnover, Average Sales per store, Sales by Goods/ Service Category, Gross Margin/ ROInvst., Op.Income, Inventory T/O, Financial ratios, Profitability