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- 2. What is Retail? ☐The word retail is derived from a French word retaillier meaning to cut off a piece or to break bulk. ☐ Retailing can hence be considered as the last stage in the movement of goods/ & services to the consumer
- 3. Retail Philosophy —“By The People, For The People and Of The People” ❑ Retailing involves selling products and services to consumers for their individual or family use. ❑ As the final link between consumers and manufacturers, retailers are a vital part of the business world. ❑ Retailers add value to products by making it easier for manufactures to sell and consumers to buy.
- 4. WHY STUDY RETAIL?? •Impact of Retailing on economy • Retail Boom in India • Career Opportunities
- 5. India – RetailPerspective Overview ☐ Population of 1.21 billion people ☐ India will rank no 1 in population by 2030 ☐ Domestic Private Consumption- 60% of GDP growing at 7.7% ☐ Real per capita income rises from Rs.5089 in 2001-02 to Rs.10810 in 2011-12
- 6. India – RetailPerspective Overview… ☐ Household Annual Income CAGR ■ 1-5lakhs-9% ■ 5-10 lakh- 12% ■ Above 10 lakh- 15% ☐ 50% of population is below 24 years ☐ 62% population in working age group ☐ Household size reduced from 5.57-5.08 ☐ Urban household size reduced – from 4.79 – 4.77
- 7. India – RetailPerspective Overview… ☐ Plastic money spend growing at CAGR 26% ☐ Rate of urbanization in last 10 years – 2.7% total 27.7% ☐ Rural consumption(3750 billion) outpaced urban(2994 billion) in 2011- 12
- 8. India – RetailPerspective Overview… ☐ Affordability growth ■ Falling interest rates ■ Easier consumer credit ☐ Non food expenditure – 59%
- 9. Indian Retail-An Overview ☐Second largest industry after agriculture- Rs.2,23,572 crore ☐ GDP contribution-10% ☐ Contribution to employment- 8% ☐ Overall retail growth-16% ☐ Organized retail growth- 26.8% ☐ Organized retail penetration -8%
- 10. Indian Retail-An Overview… ☐GRDI index rates India 14th in 2013 ☐ 2n d largest growing economy ☐ 3r d largest economy in terms of GDP ☐ 4t h largest economy in PPP ☐ Rated among top 10 FDI destinations
- 11. The Changing IndianConsumer ☐ The urban consumer ■ ■ Getting exposed to international lifestyles Inclined to acquiring asset ■More discerning and demanding than ever Internet Explosion ☐ ☐ No longer need-based shopping ■ Shopping is a family experience ☐ Changing Mindset ■ ■ Increasing tendency to spend Post Liberalization children coming of age ☐ 100 mn 17-21 year olds*. Tend to spend ☐ freely. Greater levels of education
- 12. Retail Realities: BeyondUrban Boundaries ☐ 638,691 villages ☐ 128 million households ☐ 3 times the urban population ☐ 41% of Indian middle class and 58% of the total disposable income ☐ ITC’s e-choupal, HUL’s project Shakti
- 13. The Indian RetailSector Can Be Broadly Classified Into—
- 14. Unorganized Retail inIndia ☐ Currently captures 92% of total retail market ☐ Mainly a family owned business ☐ Mostly mom-pop stores ☐ Consumer familiarity-USP ☐ Low cost structure ☐ Very low real estate and labor cost ☐ Low taxes to pay
- 15. Weekly Markets Village Fairs Melas ConvenienceStores Mom and Pop/Kiranas PDS Outlets Khadi Stores Cooperatives Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Traditional/Pervasive Reach Government Supported Historic/Rural Reach Modern Formats/ International Evolution of Indian retail Source of Entertainment Neighborhood Stores/Convenience Availability/Low Costs /Distribution Shopping Experience/Efficiency
- 16. Industry Evolution ☐ Traditionallyretailing in India can be traced to ■ ■ The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers Era of government support for rural retail: Indigenous franchise model of store chains run by ☐ ☐ ☐ ☐ Khadi & Village Industries Commission 1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers
- 17. Industry Evolution…cont… ■ Fore.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; ☐ Crossword and Fountainhead in books. Post 1995 onwards saw an emergence of shopping centers, ■ ■ mainly in urban areas, with facilities like car parking targeted to provide a complete destination experience for all segments of society ☐ ☐ ☐ Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid. At year end of 2000 the size of the Indian organized retail industry was estimated at Rs. 13,000 crore
- 18. Stages of Lifecycleof Industry ☐ Introduction: ■ ■ ■ ■ ■ Country that has just entered GRDI Retailers plan their entry strategies India in 1990s Kazakhastan in 2007 Lasts for around 10 years depending on the market attractiveness ■ Example: African markets ☐ Strategy suggested: ■ A rapid penetration strategy: low price, high promotion, limited distribution, advertises for awareness
- 19. Stages of Lifecycleof Industry.. ☐ Growth: Market is developing quickly and is also ready for modern retailing Retailers have a good chance of long term success Retailers should enter through local representation, sourcing offices and new stores Lasts for approx. 15-25 years ■ ■ ■ ■ ■ Example: Indian market ☐ Strategy suggested: strength against competitor, stronger distribution channel, shift of advertising from product awareness to product preference
- 20. Stages of Lifecycleof Industry.. ☐ Maturity: ■ Market is still big and growing but the space for new entrant will become tighter ■ Margins for error is thin ■ Competition from international retailers ■ Generally lasts for 5-10 years ■ Example: South Asian markets ☐ Strategy suggested: enter new market segments and innovative products and offers
- 21. Stages of Lifecycleof Industry.. ☐ Decline: ■ ■ ■ Window of opportunity is closing fast and organised retail is at 40 to 60 percent Existing retailers can enter through discount formats or non food formats such as consumer goods and apparels Lasts for around 5 to 10 years before reaching saturation ■ Example: Developed country markets ☐ Strategy suggested: identify weak segments, maintaining investment levels selectively, controlled advertising
- 24. Challenges In TheIndustry ☐ Low domestic competition ■ Because of fragmented nature of industry ☐ Lack of exposure to global best practices ■ Low entry barriers for unorganized retailing ■ Moderate entry barriers for organized retailing ☐ Wholesale system under-invested leading to 20-40% wastage ☐ Non level playing field issues ■ Wide differences in treatment of small and large retailers
- 25. Challenges In TheIndustry… ☐ Real Estate low Availability and high cost ☐ Supply Chain Inconsistency ☐ Poor Infrastructure ☐ Lack of Skilled Manpower ☐ Complex tax Structure ☐ Heavy Stamp Duties
- 26. FDI in Indianretailing ☐ Current Indian FDI Regime ■ FDI is now permitted in retail trade sector: ☐ Private labels – 100% ☐ Single Brand Retailers – 100% ☐ Multibrand Retailers – 51%
- 27. Why FDI? ☐ Improvecompetition ☐ Develop the market ☐ Greater level of exports due to increased sourcing by major players ■ ■ ■ Sourcing by Wal-Mart from China improved multifold after FDI permitted in China Similar increase in sourcing observed for Metro in India Provides access to global markets for Indian producers
- 28. Why FDI?... ☐ Investmentin technology ■ ■ ■ Cold storage chains solve the perennial problem of wastage Greater investment in the food processing sector technology Better operations in production cycle and distribution ☐ Better lifestyle ■ ■ ■ ■ ■ Greater level of wages paid by international players usually More product variety Newer product categories Economies of scale to help lower consumer price Increased purchasing capacity of consumers
- 29. Careers In Retailing…. ☐Operations: ■ ■ ■ ■ ■ ■ Zonal managers Area managers Store managers Asst. Store managers Floor managers Department managers ☐ Category management ■ ■ ■ ■ Category managers Buyers Asst category managers Asst. Buyers ☐ Information Technology ■ ■ Software development managers Hardware maintenance managers
- 30. Careers In Retailing…. ☐ ☐ ☐ ☐ ☐ ☐ Businessdevelopment: Online retail managers Project managers Asst. Manager- projects Corporate sales manager Asst. Manager- corporate sales ☐ ☐ ☐ ☐ ☐ Supply chain management: Manager- supply chain Asst. Manager- supply chain Warehouse managers Asst manager- warehouse ☐ ☐ ☐ Customer service: Customer relationship managers Customer facilitators
- 31. Careers In Retailing…. ☐ ☐ ☐ ☐ ☐ Marketingand advertising: Retail marketing managers Pr manager Asst manager- pr Pr executives ☐ ☐ ☐ ☐ Human resource development: Manager training Manager recruitment Hr manager ☐ ☐ ☐ ☐ ☐ Commerce: Manager- finance Manager- audit Manager- collections CAs, CSs
- 32. Requiments for careerin retail 1. Communication skills 2. Ability to speak in Local Language, Hindi, and English speaking skills 3. Friendly personality 4. Well groomed 5. Ability to tackle tricky situations 6. A good team member 7. Respect for the seniors 8. Knowledge of the product 9. Family background 10. Educational background
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- 34. Buying behavior refersto the decision-making process that consumers go through when purchasing a product or service. It involves the actions and attitudes of individuals or organizations when they buy and use products or services
- 35. Understanding buying behavioris important for businesses and marketers, as it helps them to: 1. Identify target markets and customer needs 2. Develop effective marketing strategies and tactics 3. Create products and services that meet customer needs and preferences 4. Build strong relationships with customers and improve customer satisfaction.
- 36. Buying behaviour isinfluenced by various factors, including: Cultural Factors: Shared values, beliefs, and behaviors of a society Social Factors: Reference groups, family, social class, and other social influences Personal Factors: Individual characteristics such as personality, lifestyle, motivation, perception, attitudes, and learning Psychological Factors: Perception, motivation, learning, and attitudes Economic Factors: Income, employment, inflation, and overall economic conditions By understanding these factors and stages, retailers can develop effective strategies to influence customer buying behavior, enhance customer satisfaction, and drive sales.
- 37. There are differenttypes of buying behavior, including: 1. Routine buying behavior: Repeat purchases of familiar products –News paper, Magazine, Milk, Eggs, Bread 2. Limited buying behavior: Purchasing a product with some degree of evaluation: Cosmetics, seeks advice and suggestions 3. Extensive buying behavior: Purchasing a product with a high degree of evaluation, Comparisions, reviews– Mobiles, Laptops, Electronic gadgets 4. Impulsive Buying Decisions :Impulsive buying decisions are made on the spur of the moment, without much thought or evaluation. Examples include buying a snack or utility Item.
- 38. 5. Habitual BuyingDecisions: Habitual buying decisions are made out of habit, without much thought or evaluation. Examples include buying a daily newspaper or a favorite snack. 6. Complex Buying Decisions: Complex buying decisions involve a high degree of evaluation and comparison among available options, and may require expert advice. Examples include buying a business software or a medical device. 7. Dissonance-Reducing Buying Decisions: Dissonance-reducing buying decisions involve a high degree of evaluation and comparison among available options, in order to reduce post-purchase dissonance. Examples include buying a high-end luxury item. 8. Variety-Seeking Buying Decisions: Variety-seeking buying decisions involve seeking new and different products or experiences. Examples include trying a new restaurant or a new type of cuisine.
- 39. These categories arenot mutually exclusive, and buying decisions can involve a combination of these factors.
- 40. Stages of theBuying Process- Need Recognition: Customers become aware of a need or problem Information Search: Customers gather information about products or services Evaluation: Customers evaluate alternatives and make a decision Purchase Decision: Customers make the final decision and select a product or service Post-Purchase Behavior: Customers assess their satisfaction and likelihood of future purchases
- 41. Different Types ofBuyers • The Researcher or Showroomer • The Deal Seeker or Bargain Hunter • The Window Shopping Wanderer • The Decisive, Take Charge Type • The Sociable Chatter • The In & Out Sure Buyer • The Angry, Demanding Pessimist • The Regular
- 42. • The Researcheror Showroome r Indecisive and willing to shop around Focus on Quality of the product or service instead of price Highlight other benefits or deals Tangential In-store offers, like great loyalty programs or warranty policies
- 43. The Deal Seekeror Bargain Hu nter Money-Focused and Frugal They are not impulse buyers. Haggle over price Openly complain about how expensive a certain product is Add perceived value to any purchase Offer flat discount
- 44. The Window ShoppingWander er Non-Committal, Leisurely Enjoy shopping for shopping purpose Don’t be pushy, offer help and suggestions
- 45. The Decisive, TakeCharge Typ e Resolute and Determined They already know what they want They look carefully at the product description, price, Sourcing and reviews Acknowledge their research and take a passive approach Ensure accurate details, stay active on social
- 46. The Sociable Chatter Sociableand Easy going Engage in conversation and actively listen Steer them gently towards making a purchase If you don’t have time or notice other customers waiting for your attention, gently find away to move on
- 47. The In &Out Sure Buyer They already made up their mind They area mission to be in and out of store in record time Hurried & Straight Forward; Time is typically of the essence Don’t bother to sell anything Facilitate a fast and easy shopping experience Quick billing solutions; faster check-out counters
- 48. The Angry, DemandingPessim ist Loud, Angry and proud of it Irrational shoppers; Looking for reasons to get upset Looking for force deals Stay Clam and protect your staff from their wrath Don’t show any emotions
- 49. The Regular Affable andGenerous Thank them You wouldn’t be doing what you do without this group Offer generous loyalty programs Incentivize frequent visits Small gifts on their special days