This document provides an overview of retail management and the evolution of retailing in India. It discusses what retail is, the services retailers provide, and different types of retailers like itinerant, fixed shop, small scale, and large scale retailers. It also outlines the functions of retailers like assembling goods, creating place utility, keeping product varieties, and more. Additionally, it examines the key drivers that are changing retail in India like socio-economic factors, changing income and age demographics, evolving family structures, expanding consumption, and increased access to credit.
2. UNIT - I
WHAT IS RETAIL?
According to Philip Kotler, Retailing includes involved in selling goods
or service to the final consumers for, non business use. A retailer or retail
stores is any business enterprise whose sale volume comes primarily from
retailing.
Retailing consists of the activities involved in selling directly to the
ultimate consumer for personal, non – business use. It embraces the
direct to consumer sales activities of the producer, whether through his
own stores by house to house canvassing or by mail order business.
SERVICE OF RETAILERS:-
The following are the services of retailers:-
1. Assemble Goods:-
The primary job of a retailer is to assemble different varieties of goods
from various wholesalers. He assembles at convenient points a wide
assortment of goods from various sources.
3. 2. Create Place utility:-
A retailer helps in the physical flow of the goods from the producer to the
consumer. He aims at giving maximum local convenience to consumers.
He transports goods from the point of production to the point of
consumption. As such the retailer satisfy the daily wants of the people by
creating place utility.
3. Keep varieties of goods of goods:-
He provides the availability of many varieties of goods from many
manufacturers. Retailers provide varieties of choice enabling the
consumers to select the commodities easily.
4. Provide storage facilities:-
The retailers store the required commodities for the consumer. Hence
consumers need not purchase the commodities in a lot. The consumers
can buy any articles in any qualities at any time.
5. Creative Demand:-
A retailer attracts consumer attention to new goods and their arrival by
personal salesmanship. He brings new products and new varieties to the
4. Knowledge of consumers. He create window display and demonstrative demand
for new goods.
6. Render service to customers:-
The retailer gives advice and guidance to the consumers regarding the
purchase of goods. It is essential for him to establish permanent and
continuous relationship with consumers. The customers are advised on the
merit and suitability of the products. They help the consumers in selection of
goods.
7. Provide Information:-
They provide information about the nature and use market trend of the
product to the wholesalers and manufacturers. They have close contact with
the customers.
8. Connecting Link:-
The retailer is the connecting link between the wholesaler and the ultimate
consumer. The wholesaler finds it difficult to sell the goods directly to the
consumers. It is the retailer who helps both.
9. Extend credit facilities:-
Customers purchasing power is increased by extending credit facilities by
retailers. Retailers volume of sale is increased by credit facilities.
5. 10. Marketing Functions:-
Marketing functions like sales and promotion, advertising, point of
purchase display etc, Point of purchase display etc, are interest to buy the
products.
11. Meet day to day Demand:-
Daily demands of consumers for food stuffs, vegetables, fruits, milk etc are
met by retailers at the right time.
6. TYPES OF RETAILERS
ITINERANT RET FIXED SHOP RET SMALL SCALE RET LARGE SCALE RET
a) Hawkers and a) Street stall holder a) Independent stores a) Dept stores
Peddlers
b) Cheap Jacks b) Second hand goods b) Automatic vending b) Multiple shops
c) Market traders c) Specialty goods c) Discount house c) Mail order shops
d) Street traders d) General shops d) Syndicate store d) Hire Purchase and
installment
e) Co – Operative stores
f) Super Market
g) Hyper Market
7. TYPES OF RETAILERS
1. Specialty Stores :-
Narrow product line
2. Departmental Stores:-
Several Product line
3. Super Market:-
- Large
- Low – cost
- Low – Margin
- High volume
- Self service stores designed to meet the total needs for food and house
hold products
4. Convenience Stores :-
- Standard or Specialty merchandise
- Low Price
- Low Margin
8. - High volume stores
5. Off Price retailers:-
- left over goods
- Over run
- Irregular Merchandise sold at less than retail
a) Factory Outlets :-
Owner and operated by manufacturer that normally carries the
manufacturers supplies.
b) Independent off price retailers:-
Owned and run by a entrepreneur
c) Ware house club :-
Sell goods to deep discount to its members.
6. Super store:-
- Huge selling space
- Routinely purchased food and house hold items
- Other services
9. 7. Catalog show room:-
- Broad selection of high mark up
- Fast moving
- Brand name goods sold by catalog at discount.
10. SERVICE OFFERED BY RETAILER
1. Self – Service:
- Many customers are willing to carry out their own locate compare select
process to save money.
2. Self Selection:-
Customers find their own goods, although they can ask for assistance.
3. Limited service:-
These retailers carry more shopping goods and services.
Customers need more information and assistance
4. Full service:-
Sales people are ready to assist in every phase of the locate compare select
process
The high staffing cost, along with higher proportion of specialty goods and
slower moving items result in high cost retailing.
11. FUNCTIONS OF RETAILER
1. Providing an assortment of product and service:-
Super markets typically carry 20,000 to 30,000 different items made by over
500 companies offering an assortment enables their customers to choose
from a wide selection of brands, designs, sizes, color, prices at one location.
Manufacturers specialize in producing specific type of products. If each of
these manufacturers had its own stores that only sold its own products,
consumers would have to go many different stores to buy the groceries
needed to prepare a single meal.
All retailers offer assortment of products, but they specialize in the
assortment they offer.
2. Breaking Bulk:-
To reduce transportation costs, manufacturers and wholesalers typically ship
cases or cartons to retailers. Retailers then offer the products in smaller
quantities tailored to individual consumers and house holds consumption
patterns. This is called breaking bulk.
12. 3. Holding Inventory:-
A major function of retailers is to keep inventory that is already broken into user
friendly size so that products will be available when consumer want them.
4. Providing Service:-
Retailers provide services that make it easier for customers to buy and use
products.
They display products so consumers can see and test them before buying.
5. Other function of Retailers:-
a) Provide Personal service to all
b) Provide two – way information
c) Facilitate standardization and grading
d) Assemble goods for ready supply to buyers
e) Stock goods for ready supply to buyers
f) Undertake physical movement and storage of goods
g) Extend credit facilities
h) create demand by window display etc.
i) Undertake sales promotion activities
j) Assume risk.
13. RETAIL TRENDS IN INDIA
THE EVOLUTION OF RETAIL IN INDIA:-
While barter is considered to be the oldest from of retail trade, since
independence.
Haats, mandis and melas have always been a part of the Indian landscape.
They still continue to be present in most parts of the country and from an
essential part of life and trade in various areas.
The PDS or PUBLIC DISTRIBUTION SYSTEM would easily emerge as the single
largest retail chain existing in the country.
The evolution of the public distribution of grains in India has its origin in the
rationing system introduced by the British during the world war II.
This system was started in 1939 in Bombay and subsequently extended to
other cities and towns.
Tracing the evolution of Indian retail would be incomplete without mention of
the canteen stores department and the post offices in India.
The Khadi & village Industries (KVIC) was also set up post independence. Today
there are more than 7,050 KVIC stores across the country
14. The co – operative movement was again championed by the Government,
which set up Kendriya Bhandars in 1963
From 1950 to 80’s investment in various industries was limited due to the low
purchasing power in the hands of the consumer and the Government’s policies
favoring the small scale sector.
From 1985 – 90 initial steps towards liberalization were taken.
1990’s – Indian economy slowly progressed.
Independent retail stores like Akbaraliy’s, vivek’s and nalli have in India for a
long time.
First attempts at organized retailing were noticed in the textile sector. One of
the pioneering in the field was Raymond’s.
With the growth of textile retail, readymade branded appeal could be far
behind and the next wave of organized retail I India saw the links of Madura
garments, Aravind mills etc. set up showrooms for branded men's wear.
With the success of the branded men's wear stores, the new age departmental
stores arrived in India in the early nineties.
This was in a sense, the beginning of a new era for retail in India.
15. THE EVOLUTION OF RETAIL IN INDIA
TRADITIONAL
FORMATS
Itinerant
salesman
Haats
Melas
Mandis
ESTABLISHED
FORMATS
Kirana shop
Convenience /
Department
Stores
PDS / Fair price
Shops
Co – Operative
Stores
Pan / Beedi
shops
EMERGING
FORMATS
Exclusive retail
outlets
Hyper Markets
Internal retail
Malls /
Speciality Malls
Rural oriented
formats
Service
Galleries etc.
16. DRIVES OF RETAIL CHANGE IN INDIA
We are all witness to the change in retail in the country. The local bania has
gradually transformed himself into a small supermarket. This change is not
restricted to the metro cities but has rapidly spread to small cities and towns
as well. The person driving this change is the Indian consumer.
1. Socio – Economic Factors:-
Socio – economic factors are seen as fundamental to development. India is
today a nation which has a large middle class, a youth population which is
happy spending and a steady rate of growth of GDP.
Basic amenities like drinking water and electricity are also likely to be
commonly available. Thus we can say that there is a definite improvement in
the basic quality of life of an Indian Citizen. With the basic necessities being
taken care of there is a good chance that the demand for other products and
service may increase.
2. Changing income profile:-
The middle class forms the backbone of the India market story and it is the
rising income in the young middle – class population that is fuelling its
growth.
Not only does the population determine the volume of the market, but the
relative size of the different income segments as well. The building up of
17. The Indian middle class and the higher income will provide a demand for niche
and branded product.
3) The Age Factor:-
Compared with several advanced countries, where the overall population is
aging. India is a very young nation, with more than 70% of its population below
the age of 40 and more than 47% below the age of 20. This age distribution is
of significance to marketers of goods and services.
The projected increase in the economically active population of young Indians
hold the key to Indians property and its economic potential over the next
twenty years and is expected to unlock a new wave of consumer demand
provided the current trend of economic liberalization continues and generates
continued investment and trade opportunities in the economy.
4) The changing Role of woman and the Evolving Family structures:-
The increased economic independence of woman has led to a change in the
kind of products and services which are demanded. The purchasing habit of a
working woman is different from that of a housewife, since the former has
lesser time to devote to the household tasks. Working woman would prefer a
one-stop shop for purchasing their regular products. Also a working woman
propensity for spending is higher than that of a housewife. The increase in the
number of working woman will hence drive the need for convenience and will
18. Play a major role in the success of many modern retail formats in the country.
5. The changing consumption Basket:-
occupational changes and the expansion of media have a significance change
to the way the consumer lives and spends his money. The increase in the
contribution made by services is also a reflection of the new opportunity that
are available to the youth in terms of job opportunities. The Indian Population
is today characterized by youth, who also have the spending power. There is
also an easier acceptance of luxury and an increased willingness to experiment
with the mainstream fashion, resulting in an increased willingness towards
disposability and casting out from apparels to car to mobile phones to
consumer durables. Occupational changes and the expansion of media have
made a significant change to the way the consumer lives and spends his
money.
6. Increased Credit Friendliness:-
There is a radical change in the Indian consumer’s mindset regarding credit.
There has been a dramatic shift in terms of how a consumer defines capital
expenditure and revenue expenditure. Many capital expenditures (i,e) money
spend on buying a house, vehicle, jewellery or consumer durables has
transformed into consumer durables has transformed into consumer revenue.