retail introduction

1. The word retail has its origin in French word retaillier and means
“to cut a piece’’ or “to break bulk’.
“Retailing is the sale of goods and services to the ultimate
consumer for personal, family or household use.”
According to Kotler: “Retailing includes all the activities
involved in selling goods or services to the final consumers
for personal, non business use”

2. 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. “’Wheel of Retailing”
A better known theory of retailing “wheel of retailing” proposed
by Maclcomb McNair says,
New retailers often enter the market place with low prices,
margins, and status. The low prices are usually the result of
some innovative cost-cutting procedures and soon attract
competitors.
With the passage of time, these businesses strive to broaden
their customer base and increase sales. Their operations
and facilities increase and become more expensive.

5. They may move to better up market locations, start carrying
higher quality products or add services and ultimately
emerge as a high cost price service retailer.
By this time newer competitors as low price, low margin,
low status emerge and these competitors too follow the
same evolutionary process.
The wheel keeps on turning and department stores,
supermarkets, and mass merchandise went through this
cycles.

6. Functions of a retaillier
From the customer point of view, the retailer serves him
by providing the goods that he needs in the required
assortment, at the required place and time.
From an economic standpoint, the role of a retailer is to
provide real added value or utility to the customer. This
comes in four different perspectives

7. 1. Form: First is utility regarding the form of a
product that is acceptable to the customer.
The retailer does not supply raw material, but rather
offers finished goods and services in a form that
the customers want.
The retailer performs the function of sorting the
goods and providing us with an assortment of
product in various categories.
2.Time: He creates Time utility by keeping the store
open when the consumers prefer to shop.
preferable shopping hours.

8. 3.Place: By being available at a convenient location, he
creates place utility.
4.Ownership: Finally, when the product is sold, ownership
utility is created.
Apart from these functions retailer also performs like:
• Arranging Assortment: manufacturers usually make one
or a variety of products and would like to sell their entire
inventory to few buyers to reduce costs. Final
consumers, in contrast prefer a large variety of goods
and services to choose from and usually buy them in
small units.
• Retailers are able to balance the demands of both sides,
by collecting an assortment of goods from different
sources, buying them in sufficiently large quantities and
selling them to consumers in small units

9. • Breaking Bulk: to reduce transportation costs,
manufacturer and wholesalers typically ship large
cartons of the products, which are then tailored by the
retailers into smaller quantities to meet individual
consumption needs
• Holding stock: Retailers maintain an inventory that
allows for instant availability of the product to the
consumers. It helps to keep prices stable and enables
the manufacture to regulate production.
• Promotional support: small manufacturers can use
retailers to provide assistance with transport, storage,
advertising, and pre- payment of merchandise.

10. Major type of retail stores
There is no universally accepted method of classifying
retailer. Various schemes have been proposed to
categories retailers based on
Number of outlets
Margin vs. turnover
Location
Size.
Because of overlap of classification criteria, some stores
may qualify as under two different categories.

11. 1. General merchandise retailer: general merchandise
retailer carry a variety of product lines, with
considerable depth. Some major types of these
stores include supermarkets and hypermarkets ,
discount stores and department stores.
• Super market: A supermarket is a large self service
retail store that carries a wide variety of consumer
products under one roof , such as complete line of
food products , laundry requirement, household
maintenance items. In India cooperative have
managed some supermarkets for quite sometime
like super bazaar in Delhi, apna bazaar shakari
bhandar etc.

12. Discount store: these stores are self service, standard
general merchandise retailers regularly offering brand
name and private brand items at low price, earn lower
margins and push for high sales turnover. The
characteristics of true discount stores include
•Selling products at discounted price
•Carry standard international , national, or store brand
to build image
•Self service stores to minimize operational costs
•Preferred store location are low rent areas.
• best known discount store is Wal-Mart. In India
almost all retail stores offer discounts

13. Department store:
A department store is larger retail store organized into
several departments, offering a broad variety and depth
of product lines. The product mix may include food
products, appliances, clothing, furnishing and other
household goods.
Like Pantaloons, shoppers’ stop,
department store only for kids is Kids Kemp.
Fashion related department stores in India are Ebony,
Globus, pantaloons, lifestyles.

14. 2.Specialty Stores: specialty stores carry a narrow
product mix with depth of assortment within the line.
The emphasis is on a limited number of complimentary
products and high level of customer service
Specialty store often sell shopping goods such as
Jewellery, apparel, computers, music systems,
sporting goods like; Tanishq, Titan watches, Van
Heusen, Raymond's.
3.Shopping Malls: shopping malls typically deal with
several bases and product categories and provide a
large variety of merchandise and service. There are
96 operational malls in India and expected to grow
158 by this current year.
Ansal plaza (Delhi), Garuda mall (Bangalore) Sahara
plaza Gurgaon Spenser Plaza Chennai

15. 4.Retail chains:
A retail chain operates multiple retail outlets under
common ownership in different cities and towns.
To some extent the purchasing function and
decision making are coordinated or centralized.
Like Westside, Globus, Food world, McDonald's,
retail petrol outlets. Etc.

16. The Marketing – Retail Equation
The Marketing – Retail Equation
Manufacturer
Retailer
Consumer
Manufacturer
Consumer
Manufacturer
Wholesaler
Retailer
Consumer
Feedback

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