Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use”.

1. An Introduction to
Retailing
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Dr. Amitabh Mishra

2. Retailing
• “Retailing encompasses the business
activities involved in selling goods and
services to consumers for their
personal, family, or household use”.
• It includes every sale to the final
consumer
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Dr. Amitabh Mishra

3. • Retailing comes at the end of the marketing
distributive channel.
• The word ‘retail has been derived from the French
word “retaillier” and means ‘to cut a piece’ or ‘to break
bulk’.
• From a traditional marketing viewpoint,
– The retailer is one of a number possible organization
through which goods produced by manufacture flow on
their way to their consumer destiny.
– These organizastions perform various roles by being a
member of a distribution channel.
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4. • Retail establishments are often called shops
or stores.
• The largest retail store in the world is Wal-
Mart of USA.
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5. Issues in Retailing
• How can we best serve our customers while
earning a fair profit?
• How can we stand out in a highly competitive
environment where consumers have too many
choices?
• How can we grow our business, while retaining a
core of loyal customers?
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Dr. Amitabh Mishra

6. SCOPE OF RETAILING
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7. • It covers all the activities involved in the sale of
product and services.
• Retailing is a high-intensity competition industry
and second largest globally
• Retailing is the world’s largest private sector
contributing to 8% of the GDP (estimated).
• As far as India is concerned, it contributes to 14%
of our GDP and it is the second largest sector next
to agriculture which provides employment to more
number of persons
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8. • It employs one sixth of the labor force
– An Ideal Candidate for Retailing Career
• Be a people person
• Be flexible
• Be decisive
• Have analytical skills
• Have stamina
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Dr. Amitabh Mishra

9. • Retailing is one of the key elements of a marketing
strategy facilitating:
– The targeting process (ensuring that a product reaches
particular groups of consumers)
– Being located in convenient places,
– Editing product ranges according to shopping tasks,
– Selling goods in quantities that match personal
consumption levels
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10. • Retailing consists of the sale of goods or
merchandise in small/individual lots for
direct consumption, from a fixed location
such as:
– A department store
– A kiosk
– By post
• The term “retailer” is also applied where a
service provider services the needs of a
large number of individuals, such as:
– A public utility like electric power
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11. The 10 Largest Retailers in the
U.S., 2001
Rank Company $ Sales (million) # of stores # of employees
1 Wal-Mart 219,812 4,414 1,383,000
2 Home Depot 53,553 1,348 256,300
3 Kroger 50,098 3,534 288,000
4 Sears 41,078 2,960 310,000
5 Target 39,362 1,381 223,500
6 Albertson’s 37,931 2,400 220,000
7 Kmart 37,028 2,150 240,525
8 Costco 34,797 369 64,500
9 Safeway 34,301 1,773 193,000
10 J.C. Penney 32,004 3,770 270,000
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Dr. Amitabh Mishra

12. The High Costs and Low Profits
of Retailing
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Dr. Amitabh Mishra

13. Typical Channel of Distribution
Manufacturer
Wholesaler
Final
Consumer
Retailer
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Dr. Amitabh Mishra

14. Examples of Retailers
• From a traditional marketing viewpoint, the retailer
is one of a number possible organization through
which goods produced by manufacture flow on their
way to their consumer destiny.
• Companies who provide
– Meals out,
– Haircuts and
– Aromatherapy sessions
– Subordinated services, such as delivery.
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15. FUNCTIONS OF RETAILING
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16. Functions of Retailing
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Providing assortments
Sorting
Serve as a channel of communication
Serve as a channel transportation
Breaking the bulk
Rendering services
Bearing risk
Advertising and holding the consumers

17. Providing Assortments
• Offering an assortment enables customers to
choose from a wide selection of brands, designs,
sizes, colors, and prices in one location.
• Manufacturers specialize in producing specific
types of products. Example: Kellogg’s- breakfast
cereals, Knorr- soups.
– Big Bazaar’ sells more than 20,000 assortments from 900
companies.
– There are specialized retailers like Patanjali or Barista,
which offers specialized assortments of a single product
line.
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18. Sorting
• Manufacturers make one single/multiple product lines
always and prefer to sell their entire output to few buyers.
• Final consumers prefer to choose from a large variety of
goods/services and then buy in smaller quantities.
• Retailers make a balance between demands of both the
sides, by collecting a combination of goods from different
producers, buying them in large quantities and selling them
to individual consumers in smaller quantities.
• The above process is called Sorting
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19. Rendering Services
• Retailers render services that make it easier for
customers to buy and use products.
– Provide credit facilities
– Display products, which attract the customers.
– keep ready information to answer queries of the
customers.
– Provide product guarantee from owner’s side,
– Provide after sales service and also
– Deal with consumer complaints.
– Fill orders
– Promptly process, deliver and install the product at
customer point.
– Help in completing a transaction and realizing the sale
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20. • Breaking Bulk: Retailers offer the products in
smaller quantities tailored to individual
consumers/household consumption patterns.
– This reduces transportation costs, warehouse costs and
inventory costs.
• Holding Inventory: Retailers keep inventory so
that products are available for consumers.
– Thus, consumers can keep a much smaller inventory of
products at home because they can easily access more
from the nearby retailers.
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21. • Risk Bearing:
– Retailers bear a different kind of risk to the manufacturers
and wholesalers.
– The customers can come back to the retail point and return
the product.
• Transportation:
– Retailers help in transport and advertising function.
– The larger assortments are transported from wholesaler’s
point to retailers point by retailer’s own arrangements and
many times, the retailer delivers the goods at final
consumer’s point.
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22. Channel of Communication
• Retailers are the bridge between the manufacturer or his
representative and the end customers
• They serve as a two-way channel of communication
– The manufacturer collects customer choice and preference
data and provides information about existing and new
products through the retailers
– The point of purchase displays, serve as advertisements
– Many times retailers inform the consumers about likely
date of availability of a product or entry of variants into the
market
– The shoppers acquire trial
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23. RETAILING SCENARIO IN
INDIA AND ITS FUTURE
PROSPECTS
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24. Retailing scenario in India
• Retailing business in India is undergoing
rapid transformation.
• The ‘Kirana store’ is a major element in the
retail business in India.
• The emergence of new retail formats in
retailing sector has attracted attention of
– Government,
– Large corporations,
– Economists and
– General public
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25. • The Indian retail industry is the fifth largest in the
world and one of the fastest growing industries in
India.
• The driving forces in Indian retail sector are:
– Rapid economic development
– Raising incomes
– Changes in consumers’ preferences
– Improvements in civic situation
– Liberalization of the Indian Economy
– Globalization & shift in consumer demand to foreign
brands
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26. – Consumer preference for shopping in new
environment
– Improvements in infrastructure
– Increase in spending per capita income
– Advent of dual income families
– Internet revolution & reach of satellite T.V
channel created awareness about global
products for local markets
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27. ORGANIZED VS.
UNORGANIZED SECTORS
Retailing scenario in India
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28. Organized vs. Unorganized
sectors
• Indian retail industry comprised of:
– Organized sectors and
– Unorganized sectors
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29. • Organized or Corporate retailing refers to
trading activities undertaken by licensed
retailers, that is, those who are registered
for sales tax, income tax, etc.
• These include the
– Corporate-backed hypermarkets and retail
chains
– Privately owned large retail businesses.
• Example:
– Pantaloon Retail, Shoppers’ Stop, Spencer’s,
Hyper CITY, Lifestyle, Subhiksha & Reliance
Retail etc.
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30. • Unorganized retailing, refers to the
traditional formats of low-cost retailing.
• Example:
– Local kirana shops,
– Owner operated general stores,
– Paan/beedi shops,
– Convenience stores,
– Hand cart and pavement vendors,
– Etc.
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