The term retail organisation refers to the basic format orstructure of a retail business designed to cater to the needs ofthe end customerA Retail unit could be owned by Manufacturer Wholesaler Independent Retailer Consumer Cooperative Society Government Franchiser & Franchisee
a) Nature of Ownership:Sole ProprietorshipPartnershipJoint VentureLimited Liability Company (Private &Public L.L.C).b) Operational Structure:Independent trader(one retail outlet operation)Multiple or Chain storeFranchisingConsumer co-operative.
c) Length & Depth of Merchandise: Offer a wide range of goods Dealing in specific product categoryd) Nature of Service:For eg: Self-service, and providing following services sucha delivery, credit, gift wrapping, repairs, etc.e) Pricing Policy:Some retail businesses choose, Low price emphasis, while some offer Attractive attribute such as convenient location, premiummerchandise mix or distinctive image.
f) Retail Location:Classified according to their store’s geographic location.Out-of-town locations, whilst othersLocate in ‘cluster’ locations in downtown centersg) Customer Interaction:Retail stores facilitating face-to-face contacts.Non-store retailing operations(mail order catalogues,telephone selling, vending machines, door-to-door selling ormobile vendors.)
1. Sole Proprietorship:The characteristics of this retail format are:It’s easy to form, less expensive to organize and theproprietors have full controlThe income generated reaches the proprietor and he canmake the ultimate decision to keep it or reinvest in businessThe business is easy to dissolve, if desiredTheir business and personal assets are at risk; due tounlimited liability, they are also legally responsible for allthe debts.Often limited to using funds from personal savings orconsumer loans, andMay have a hard time attracting high-caliber employees
The characteristics of this retail format arePartnerships are relatively easy to establish and withmore than one owner, the ability to raise funds may beincreased.Prospective employees may be attracted to thebusiness if given the incentive to become a partner andthe business usually will benefit from partners whohave complementary skills.Partners are jointly and individually liable for theactions of the other partners.Since decisions and profits are shared, disagreementscan occur.
A joint venture is not well defined in the law.Unless incorporated or established as a firm as evidenced bya deed, joint ventures may be taxed like association of persons,sometimes at maximum marginal rates.It acts like a general partnership, but is clearly for a limitedperiod of time or a single project.
LLC’s must not have more than two of the four characteristicsthat define corporations i.e.Limited liability to the extent of assets; continuity oflife; centralization of management; and freetransferability of ownership interests.It is designed to provide the limited liability features of acorporation, tax efficiencies and operational flexibility of apartnership. Yet formation is more complex and formal thanthat of a general partnership.
1. Independent Trader: Generally operates one outlet and offers personalizedservice, a convenient location and close customer contact. Roughly 98% of all the retail businesses in India, aremanaged and run by independents, including barber shops,dry cleaners, furniture stores,bookshops,LPG Gas Agenciesand neighborhood stores. This is due to the fact that into retailing is easy and itrequires low investment and little technical knowledge.This obviously results in a high degree of competition.. Most independent retailers fail because of the ease ofentry, poor management skills and inadequate resources.
It involves common ownership of multiple units. In suchunits, the purchasing and decision making are centralized. Itincludes specialization, standardization and elaborate control-systems. Chain stores have been successful, mainly because they havethe opportunity to take advantage of “economies of scale” inbuying and selling goods. Examples : Shoppers stop; West side and IOC, conveniencestores at select petrol filling stations.2. Multiple Or Chain Store
Is a contractual arrangement between a “franchiser”and a “franchisee”. It is a certain form of business under an establishedname and according to a specific set of rules. In exchange for fees, royalties and a share of theprofits, the franchiser offers assistance and very oftensupplies as well. Examples; McDonalds, Pizza Hut and Nirulas.
A retail cooperative is a group of independentretailers, that have combined their financial resourcesand their expertise in order to effectively control theirwholesaling needs. They share purchases, storage, shopping facilities,advertising planning and other functions. . Example : Amul
It refers to department in a retail store that are rentedto an outside party.Usually this is done in case of department andspeciality stores and also at times, in discount stores.The proprietor of a leased department is usuallyresponsible for all aspects of its business and normallypays the store a percentage of sales as rent.Example : store beauty salon,banks,watch repair
Differentiate themselves on the basis of the range and varietyof Merchandise they maintain in their store.Wide range of goodsProduct category with a minimum range of Merchandisewithin that product category
Variety of merchandise mix can be classified as follows:Departmental storesDiscount StoresSpecialty StoresSupermarket and Hypermarkets
Departmental stores:A large retail store organized into number of departmentsoffering a broad variety and depth of merchandise;commonly part of a retail chain Ebony, Globus, Lifestyle,Pantaloon, Shoppers Stop andWestsideDiscount Stores:Retailers offering a broad variety of merchandise mix,limited or no service, and low prices. Subhiksha, MarginFree market and outside India, Wal-Mart is a classicexample of the most successful retailer operating as adiscount centre.
Specialty Stores:Complementary product categories and extend a high levelof service to their customers.For e.g.: Vivek’s retailing consumer durables in Chennai,shopper’s store housing planet m.Supermarket and Hypermarkets:Hypermarkets are characterized by large store size, lowoperating costs and margins, low prices and comprehensiverange of merchandise.For e.g. : Big Bazaar ,RPG owned Giant Hypermarket.Successful international hypermarket chains includeCarrefour of France and Continent of South Africa.
Retailers are classified on the basis of level and kind ofservices extended by them to their customerThese retail outlets have been converted to or built as self-services units, and are providing services such as delivery,credit, gift-wrapping, repairs, etc
Low price rather than the service element of their retailingmixThey will generate business on the basis of some otherattribute such as convenient location, premium merchandisemix or distinctive image
1. Retailers at Freestanding location:Retailers located at site, which is not connectedto other retailers and therefore they depends onits own drawing power and promotion to attractcustomers, classified as neighborhood orhighway stores.For e.g. : McDonalds outlet in Delhi- Ludhiana highway.
Retailers in Business Associated location: who located theirstore where a group of retail outlets offering a variety ofmerchandise, work together to attract customers to their retailarea, but also compete against each other for the samecustomers, classified as unplanned business districts andplanned shopping centres.For e.g. :Trichur Round Market Place in Kerala covering garments,grocery, jewelry, shoes, home products, confectioneries etc candescribe a planned business district .
Traditional independent retailers or chain stores particularlyprefer specialized markets .For e.g.:The Chowk area in Lucknow famous for its food and cottonembroidery cloth materials.
Retailers at airports are mostly comprising of duty-free shops,newsstands and book stores but now also seen opening foodretail chains like cafe coffee day etc.
Retail units can be classified into two groups on the basis ofthe nature of interaction between retailer and customersnamely store retailers and nonstore retailers.
They operate from fixed point-of-sale location to attract ahigh volume of walk-in customersMass media ads to attract consumersIt serve business and institutional clientsIt provide after sales services, such as repair , alterationsand installation
Electronic Retailing- It is also called e-tailing and internetretailing is a retail format in which the retailers communicatewith customers and offer products and services for sale on theinternet.Catalog Retailing-It is a non-store retail format in which theretail offering is communicated to a customer through a catalogDirect-Mail Retailing-It is a non store retail in which theoffering is communicated through letters and brochures.
Direct selling : It is a retail format in which a salesperson,frequently an independent businessperson, contacts acustomer directly in a convenient location either at thecustomers house or at work and demonstrates merchandisebenefits, takes an order and delivers the merchandise to thecustomer.TV Shopping: It is a retail format in which customers watcha TV program demonstrating merchandise and then placeorders for the merchandise by telephoneVending machine retailing: It is a non-store format in whichmerchandise or services are stored in a machine anddispensed to customers when they deposit cash or use acredit card.