Module I: IntroductionModule I: IntroductionNature, scope and importance ofretailing, retail competitiontheories, Retail managementprocess, Influence of changingenvironment on retailing vizdemographic changes, lifestylechanges, technology changes (e-business), Retail Environment.
RetailRetailThe word retail is derived from theFrench word “retaillier” which means “tocut a piece off” or “ to break bulk”.In simple terms , it implies first handtransaction with the customer.
RetailRetailRetailing involves a direct interface withthe customer and the coordination ofbusiness activities.
INTRODUCTION TO RETAILINTRODUCTION TO RETAILRetailing is a distribution channel functionwhere one organization buys productsfrom supplying firms or manufactures theproduct themselves, and then sells thesedirectly to consumers. A retailer is areseller (i.e., obtains product from oneparty in order to sell to another) fromwhich a consumer purchases products.
RETAILING Business activities involve SellingGoods and Services to Consumers for theirPersonal, Family or Household use.“Every sale of Goods and Services is to finalconsumer” – Food products, apparel, movietickets; services from hair cutting to e-ticketing.Retailing is the Last stage in DistributionProcess- Wholesale is an intermediate whereGoods and services are sold to Businesscustomers.
MERCHANDISE MGTMERCHANDISE MGT12.MANAGING MERCHANDISEASSORTMENTS13.MERCHANDISE PLANNING SYSTEM14.BUYING MERCHANDISE15.PRICING16.RETAIL COMMUNICATION MIX
STORE MGTSTORE MGT17.MANAGING THE STORE18.STORE LAYOUT, DESIGN &VIRTUAL MERCHANDISING19.CUSTOMER SERVICE
Industry EvolutionIndustry EvolutionTraditionally retailing in India can be traced to◦ The emergence of the neighborhood ‘Kirana’stores catering to the convenience of theconsumers◦ Era of government support for rural retail:Indigenous franchise model of store chains runby Khadi & Village Industries Commission
Textiles sector with companies likeBombay Dyeing, Raymonds, S Kumars andGrasim first saw the emergence of retailchainsLater Titan successfully created anorganized retailing concept and establisheda series of showrooms for its premiumwatches
The latter half of the 1990s saw a fresh waveof entrants with a shift from Manufactures toPure Retailers. For e.g. Food World, Subhiksha and Nilgiris infood and FMCG; Planet M and Music World inmusic; Crossword and Fountainhead in books. Post 1995 onwards saw an emergence ofshopping centers,◦ mainly in urban areas, with facilities like carparking◦ targeted to provide a complete destinationexperience for all segments of society
Emergence of hyper and supermarkets trying to provide customerwith 3 V’s - Value, Variety andVolumeExpanding target consumersegment: The Sachet revolution -example of reaching to the bottomof the pyramid.Retailers add value by Providing the RightProduct at The Right Place at the Right Time.
Organized RetailingOrganized RetailingOrganised retailing refers to tradingactivities undertaken by licensed retailers,that is, those who are registered for salestax, income tax, etc. These include thecorporate-backed hypermarkets andretail chains, and also the privately ownedlarge retail businesses.like Wal Mart, McDonalds
Unorganized RetailingUnorganized RetailingUnorganised retailing, on the other hand,refers to the traditional formats of low-cost retailing, for example, the localkirana shops, owner manned generalstores, paan/beedi shops, conveniencestores, hand cart and pavement vendors,etc
Emerging TrendsEmerging TrendsLast decade has seen tremendous changesin Retail Business – from made to order toready to wear, emphasis on value additionand cost reduction.Family run retail business giving way tomodern professional retail.
Emerging TrendsEmerging TrendsRetail improving inventorymanagement through systems – fasterturnover, better profitability, fastchanging customer preferences forgoods and services.“BETTER CUSTOMER CARE”
Emerging TrendsEmerging TrendsWith consumers for luxury goodsgrowing in numbers , the Indian retailmarket is estimated to reach around US$3.5 billion to US$ 30 billion by 2015
Emerging TrendsEmerging TrendsThe increase in the PC and internetpenetration along with the growingpreference of Indian consumers to shoponline has given a tremendous boost toe-tailing-the online version of retailshopping. An estimated 10 per cent ofthe total e-commerce market isaccounted by e-tailing.
Emerging TrendsEmerging TrendsLed by the rising purchasing power,changing consumption patterns, increasedaccess to information and communicationtechnology and improving infrastructure,rural retail market is estimated to crossUS$ 45.32 billion mark by 2010 and US$60.43 billion by 2015
Emerging TrendsEmerging TrendsWith international brands like Tommy, Espritand Puma (that have entered the country)growing well over 100 per cent, many othersare also planning to foray into the Indian retailmarket. Indias vast middle class with itsexpanding purchasing power and its almostuntapped retail industry are key attractions forglobal retail giants wanting to enter newermarkets.
Emerging TrendsEmerging TrendsThe worlds largest retailer, Wal-Mart, hastied-up with Sunil Mittals Bharti Enterprisesto enter Indian retail market.Worlds leading coffee chain, Starbucksenters India through a tie-up with thecountrys leading multiplex operator PVRLimited.
Global Retail scenarioGlobal Retail scenarioIn the other parts of the world, retailingis better organized than what it is in India.The US retail Industry is the worldlargest retail industry and its still growing.In USA most part of retailing isaccounted by organized sectors.
Global Retail scenarioGlobal Retail scenarioThe USA dominates the world retailmarket and accounts for 32.3% of theglobal retailing group.Europe has 30.8 %, Asia Pacific has 25.6%, and rest of the world has 11.20 %.
Global Retail scenarioGlobal Retail scenarioThe organized retailing has gained a greatdeal of momentum in China in the pastfew years.The developing countries are also makingan effort in the industry but organizedretailing is mainly dominated by thedeveloped countries like USA.
Global Retail scenarioGlobal Retail scenarioRetail is the significant contributor to theoverall economic activity around theworld.The employment opportunities offeredby the retail industry is huge.
Global Retail scenarioGlobal Retail scenarioAccording to the US department oflabor, about 22 million Americans areemployed in the retailing industry inmore than 2 million stores.Globally, retailing is customer centricwith an emphasis on innovation inproduct, process and services.
Global Retail scenarioGlobal Retail scenarioGlobally, Retail is a very fast changingfield and the customer not only has tokeep up with ever changing expectationsand demand of the consumers but alsohas to keep a track on the competitionand changes in technology.
Indian Retail ScenarioIndian Retail ScenarioMost of the retailing in India is unorganized.Most of the organized retailing in the countryhas just started recently, and has beenconcentrated mainly in the metro cities.Today convenience has become a priority forthe Indian consumers and they want everythingunder one roof so that they have an easyaccessibility.
Indian Retail ScenarioIndian Retail ScenarioSo the organized retailing has a very bigopportunity to set itself in the Indianmarkets.The two main factors which drivesorganized retailing in India are low pricesand the benefits that are offered by them.
Indian Retail ScenarioIndian Retail ScenarioIndia is seen as a competitivemarketplace with the potential targetconsumers in the niche and middle classsegments.Over the past few years. Internationalcompanies like Marks & spencer, McDonald’s, Dominos etc have entered theIndian markets.
Indian Retail ScenarioIndian Retail ScenarioThe entry of companies like Big Bazaar havecreated the concept of value for money for theIndian consumers.A McKinsey report on India says organizedretailing would increase the efficiency andproductivity of economic activities, and wouldhelp in achieving higher GDP growth.Large Indian companies like Reliance group,Future group, Essar telecom Retail, Shopperstop are investing huge amount of money in thissector.
The Legal EnvironmentThe Legal EnvironmentThe legal scenario of a country plays animportant role.For eg.- Restricting the days and hours duringwhich the retailers may operate.- Limit the manner of business to ensureconsumer privacy.
The Legal EnvironmentThe Legal EnvironmentLaws on non discriminatory hiring andpromotion of people.Trademarks agreement which providesretailers with exclusive rights to brandnames.Licensing agreements which allows theretailers to sell goods created by othersin return for a royalty.
The Legal EnvironmentThe Legal EnvironmentPrice marking laws which specify thediscounted items must be markedproperly.Product safety laws that prohibitsretailers to sell goods that have not beentested properly.
The Technological EnvironmentThe Technological EnvironmentThese changes can bring about a lot of otherchanges as they affect the range of choicesavailable to both the consumer and the retailer.New technology can lead to better productsand services for the consumer and at the sametime it can help the retailer as well like keepingcontrol over the inventory level.
The Importance ofThe Importance ofTechnology in RetailTechnology in Retail
The Importance of Technology inThe Importance of Technology inRetailRetail1) Collection of dataThe use of technology aids data collection. The datacan be collected regarding the consumers, theirpurchases and the frequency of buying. Thisinformation helps the retailer to distinguish thecustomer who shops frequently.
The Importance of Technology inThe Importance of Technology inRetailRetail2) Efficiency in OperationsThe use of technology serves the basis ofintegrating the functioning of variousdepartments. As the process gets automated ,the time involved in the task is reduced
The Importance of Technology inThe Importance of Technology inRetailRetail3) Helps communicationCommunication can be faster with thehelp of technology and it can be a 24 x 7process. EDI can be used forcommunication with the suppliers andvendors(EDI:-
The Importance of Technology inThe Importance of Technology inRetailRetailThe use of systems to organize, searchand manage the data is termed asDATABASE MANAGEMENT. A simplepurchase at any retail store enable thestores to gather a vast amount ofinformation about the customer andproducts.
The Economic EnvironmentThe Economic EnvironmentThe economy is a term which is used todenote the patterns of economic activityin a country which includes theproduction and environment, income,consumption and the living standards.
The Competitive EnvironmentThe Competitive Environment Competitors are offering choices to customers and“value added” products Competitors come in different sizes (smallorganizations to international companies) and servedifferent market segments (specialized industrysegments to mass markets) In the process of serving customers, many are makingprofits; thus they have an incentive to increase theirmarket share and are promoters of retail competition