The document discusses three main theories of retail: environmental theory, cyclical theory, and conflict theory. Environmental theory attributes changes in retail to changes in the retailers' operating environment. Cyclical theory views changes as following patterns and phases. Conflict theory proposes that competition between opposing retailer types leads to new formats developing. The document then provides more details on attributes, characteristics, and implications of each theory.

1. THEORIES OF RETAIL
Lecture 4

2. Classification of the Theories
 Environmental Theory
 Where a change in retail is attributed to the change in the
environment in which the retailers operate
 Cyclical Theory
 Where change follows a pattern and phases can have definite
identifiable attributes associated with them
 Conflictual Theory
 The competition or conflict between two opposite types of
retailers leads to a new format being developed

3. Attributes of Environmental Theory
 Ability to adapt to change successfully is the core of the theory
 Works on Darwin’s theory of ‘Survival of the Fittest’
 Retailers are Economic Entities
 Confront Environment made up of customers, competitors and
changing technology
 Alters Profitability
 High Susceptibility to environmental change can spell death in the
competition
 Identification of the Point of Precipice

4. Attributes of Cyclical Theory
 Also known as the Wheel of Retailing
 From Innovators to Traditional Retailers to Mature Retailer
 Creates Cyclical Trends in due course of time
 Constant evolution of the retailers as they start adding products
unto confused state thus entailing a negative cycle
 i.e. from Niche retailing to general retailing to moving away from
the tenets of its own niche business (e.g. IBM)

5. Attributes of Cyclical Theory

6. Attributes of Conflict Theory
 Thesis: Individual Retailers as corner shops all across the
country
 Antithesis: A position opposed to the thesis which challeges
thesis i.e. department stores
 Synthesis: Blending of Thesis and Antithesis resulting into
supermarkets, hypermarkets etc.
 Synthesis is the basis for the next evolution.

7. Life Cycle in Retail

8. Life Cycle in Retail

9. Business Models in Retail
 Format adopted by retailers to reach the customer
 Challenges to Business Models
 New Information
 Communication Technologies
 Shorter PLCs
 Global markets
 Tougher Competition
 What Business Model in retail means:
 Product & Services offered by the retailer
 Pricing policy
 Reaching to the customer using various means of communication
 Size, look and location of the store

10. Critical Success Factors
 Trends in market positioning
 Competition
 The Organizational capabilities

11. Classification of Retail Formats

12. Classification Based on Ownership
 Independent Retailer (Standalone Kirana Stores)
 Operated by single person
 Passed on generation to generation
 Ease of Entry and Exit
 Good CRM
 No Economies of scale
 Limited Bargaining Power
 A Chain Retailer or a Corporate Retail Chain (Westside)
 Two or more outlets under a common ownership
 Similarity in merchandise, ambience, advertising and promotions
 Good bargaining power
 Cost effective advertising and promotions
 No accommodation of local preferences
 Loss of control on greater scale of operations

13. Classification Based on Ownership
 Franchising
 Product or trademark franchise (Archie’s)
 A business format Franchise (McDonald’s, Domino’s)
 Franchising can be for one store or multiple stores within the region
 Leased Departments (Stores for Perfumes, jewellery, watches)
 Shop-in-shops
 Good method of expanding product offerings
 Presence in the form of small express outlets in malls, multiplexes, airports,
railway stations
 Consumer Co-operatives (Apna Bazar, Khadi Gramodyog)
 Essential commodities at reasonable prices
 Encouraged in the interest of the common man
 A significant employment provider

14. Questions???