Changing retailing in pakistan


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  • Retail is experiencing immense revolution all over the world but in Pakistan, they are the most underserved sector. They need a digital shift but they are Naive to be exploit technology for their business purposes. I've read interviews of specifically mobile phone retailers of Hafeez Center and they have no idea how to advertise their business. Here is one of the interviews that I read:

    In which retailer clearly said that they don't advertise because of a lot of manual efforts involved. I've also read hubspot blog in which they formulated that 59% of SMBs think doing business in today's age is more complex than before because of evolution of technologies.

    in this context, towntawks, a retailing & consumerism startup emerging from Pakistan seems to be a promising venture because their secret sauce is to seamlessly syndicate retailers' products to their state of the art online portal with no manual intervention. seems cool
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Changing retailing in pakistan

  1. 1. Retail Management CHANGE IN OPERATION IN RETAILING OVER IN PAKISTANINTRODUCTION:Retailing is a specialized marketing activity. It comprises all business activities involvedin the sale of goods and services, directly to the ultimate (final) consumer for personal,family, household or non-business use. Retailing is the last stage in a channel ofdistribution. "The ultimate objective of al1 marketing endeavors is to reach the ultimateconsumer with the product he needs at the time he wants, at the price which suits him.Retailing augments in the achievement of this ultimate objective."THE ROLE OF RETAILERS.a. They collect an assortment of products and services from a vide variety of suppliersand offer them for sale.b. They provide information to consumers, as well as to other channel members.c. They frequently store merchandise, mark prices on it and pay for items prior to,selling them to final consumers.d. They conclude transactions with the final consumers.DYNAMIC NATURE OF RETAILINGThe dynamic nature of retailing has never been demonstrated, experienced and seenbetter than now. Changes in environments — Economic, Political/Legal, Socio-cultural,Technological, Ethical and Competitive — within which retailers of all kinds mustoperate, force adjustments in policies, methods and managerial strategies.The retailer has to be very familiar with the environmental factors. Also, he has toremain watchful of the continuous change taking place in the environments since thechange in these factors has and will always have vital impact on survival, growth, profitmaking and ultimate success of the business. Therefore, as far as possible, all plans,objectives, strategies, policies have to be formulated and implemented, catering for andconsidering the changing environments.
  2. 2. Retail Management CHANGING OPERATION OF RETAILINGEconomic, Political, Legal, Social, Cultural, Technological, Ethical and CompetitiveENVIRONMENTS substantially influence the conduct of retail enterprises and for eachfactor, as already emphasized, the retailer not only has to be familiar with them but alsohas to keep a close watch on the likely changes which may occur. The following forcesunder each factor need consideration at all times.a. ECONOMIC:1) Basic Economic System2) Economic Stability3) Market Size4) Social Overhead Capital5) Personal Disposable Income6) Distribution of Income7) Inflationb. POLITICAL/ LEGAL:1) Political Stability2) Political Organization3) Relevant Legal Rules: Quality, efficiency and effectiveness of the legal structure interms of general business law, labour law, tax law, laws relevant to business andGeneral Law & Order.4) Degree of Law enforcement and reliability.5) Flexibility of Law and Legal Changes.c. SOCIOLOGICAL- CULTURAL:1) Over all population growth2) Population growth in certain age groups3) Class structure
  3. 3. Retail Management4) Mobility of people and individual mobility5) Suburban living6) Culture7) Diferent Groups (Ethnic, Linguistic, Political, Religion,Sect and Caste etc.)8) Preferences, Biases, Prejudices and social valuesd. TECHNOLOGICAL/ EDUCATIONAL/ MANAGERIAL1) Industrialisation2) Literacy level3) Attitude of people4) Enhanced means of transport and communication5) Scientific Discoveriese. COMPETITIVE:1) Number and Type of competitors2) Strength of competitors3) Size of Competitorsf. ETHICAL:1) Integrity/Honesty of the Competitors2) Integrity/Honesty of the people3) Ethical conduct and values of people and workers
  4. 4. Retail ManagementRETAILING IN PAKISTANRetailing in Pakistan, and for that matter in most of the Third World Countries, hastraditionally been a small scale business, meant mainly for small and less or noteducated entrepreneurs. Till late sixties, large scale retailing institutions like SuperMarkets, Departmental Stores, Discount Houses were unheard of in Pakistan.However, utility Store and canteen stores Department, a type of mini super markets, arefunctioning since the time of independence: but these stores were mutual benefit storesfor service of government servants and Defense Services personnel respectively. In latesixties, in Lahore, a super market chain with the name of COOP stores was introduced.The CSD still remains a mutual benefit store but utility stores have been opened togeneral public. The chain of COOP store of Lahore was later taken over by UtilityStores Corporation of Pakistan.In the rural areas of Pakistan, the retailing still follows the same traditional "HUTTIsystem — small shops which provide very necessary daily use items to the villagersfrom available stores. These days almost all grocery items, cosmetics, vegetable ghee,and other essential items including shelf medicines are available on HUTTIES, but backin fifties rather till late in sixties very few items could be procured from theseHUTTIES.In the urban areas of Pakistan, almost all types of related outlets exist. The introductionof sector wise planned markets in the newly planned modern city of Islamabad thecapital, gave new dimensions to modern retailing in Pakistan. Thereafter almost in allother cities and new towns of Pakistan, where a new residential locality had to bedeveloped, special emphasis was given to plan retail markets in a proper way. The mainretail urban outlets are:a. Small retailersb. Large retailers/ wholesale retail storesc. Department storesd. Super marketse. Street vendorsf. Vending machinesg. Mail order sellingh. Utility stores
  5. 5. Retail Managementi. Cooperative storesj. Medical & general storesk. Specialty storesl. Juma, Mangal or Itwar BazarsSMALL RETAILERS:These are very similar to HUTTIES found in the rural areas of the country. Normallythese types of stores are located in suburbs of the cities and towns and take care of thedemands and requirements of the people living in that area.LARGE RETAILERS/ WHOLESALE RETAIL STORESThese are few in numbers as compared to small retail stores. These are the types ofstores which, in Karachi, were originally found in the areas of Jodia Bazaar and JoonaMarket only. Almost all the retailers in the city use to collect supplies from them tillmid seventies. However, with the development of the city, such like stores were openedin the areas of Liaqatabad (Lalukhet), Nazimabad, Landhi, Malir Colony, Shah FaisalColony, New Karachi, North Karachi, Korangi, Orangi, Federal B area (Water Pump)and North Nazimabad.DEPARTMENT STORES:A department store is a large retailer employing about 25 or more people and usuallyselling a general line of apparel for the family, household linens and dry goods andfurniture, home furnishings appliances, radios, and televisions. It is organized intoseparate departments for purpose of buying, promotion, service and control.In Pakistan, we do have department stores, but these stores do not qualify for discussionunder large scale retailing. The people who manage these stores are generally theowners or family members of the owners who are guided solely by their gut-feeling.Most of them did not have the exposure to any professional training or any kind ofhigher education. With the passage of time, however, more and more educated personsare now entering into the retailing business.SUPER MARKETS:A supermarket is a departmentalized food store. Pakistan entered the super market eraat a time when some western European countries were moving from super market toHypermarche. The first supermarket in Pakistan was opened at Karachi in 1968.During last 27 years quite a few of them have sprung up, but most of these are more like"superettes" or mini super markets rather than full fledged supermarkets with intensiveand extensive product mix. Even food items like meat, fresh fruits, are not availablewith most of them.
  6. 6. Retail ManagementSTREET VENDORS/VENDING MACHINESDoor to door selling is a very common sight in Pakistan. The provision of products andservices through street vendors range from milk, bakery items, fish, vegetables, fruits,textiles, garments, crockery, linen, CHATNIS & ACHARS and other special home madeeatables to barber, gardening, house-making & cleaning and tailoring services.The seller has to carry the merchandise. At times, vendors book orders by showingsamples but that is very rare. Normally credit facilities are not extended by door to doorsellers; yet at times depending on relations, credit is provided by the sellers for a periodextending upto one week or so. The milkman and the newspaper suppliers and at timeseven the vegetable vendors submit bills at the end of the month; so in some cases amonths credit is extended to customers.VENDING MACHINES were seen at airports and Railway stations sometimes back in80s. Even now, in cities like Islamabad, Karachi and Lahore vending machines areoperative. These machines are usually attended by a salesperson, thus the element of selfservice is not there. However, now telephone booths which can be operated throughcoded cards are operative in almost all the major cities of Pakistan.MAIL ORDER SELLING:This mode is popular in books and periodicals but seldom used for sale/ purchase of anyother merchandise. Lack of knowledge interest and integrity on the part of sellers andlack of efficient postal system appears to be the two main causes for poor mail orderbusiness. Lack of information of consumers and high cost of producing illustratedcatalogs could be another factor for restricted use of this method of retailing.UTILITY STORESInitially, utility stores were opened to provide goods on subsidized prices togovernment servants only. However, later to ensure regular provision of essentialcommodities to general public at reasonable prices, the doors of utilities stores wereopened for commoners too. Utilities stores stock and sell daily use items at lower pricescompared to general market. The utility stores corporation of Pakistan, a governmentcontrolled autonomous body is a limited company and has several hundred branches allover the country. As per reported figures, the corporation by now has a chain of about1000 stores, which are located in all major cities and towns.COOPERATIVE STORESPIA coop store and a few other established in the country are the example. The COOPestablished in 60s in Lahore has been taken over by utility stores corporation. Due tovested interest of the members and lack of training, knowledge and education of thestore operators these kinds of stores have not been successful in Pakistan.
  7. 7. Retail ManagementJUMMA/MANGAL/ITWAR BAZAARS:The institution of these Bazaars can be described as a step towards "consumerism" inPakistan. In these Bazaars all daily use items are available. These can be termed; asdiscount houses since as per claims, the commodities are available at much cheaperrates. The middleman and his share has been eliminated and the producers directly sellgoods to the end- users. The normal complaint about these Bazaars is that sub-standardgoods are sold at comparatively cheap rates. However, this fact can not be denied thatexcept for nominal official rent and license fee to be paid to Government, no otheroverheads are to be borne by the sellers and hence sellers at these Bazaars remaincheaper as compared to stores housed in big buildings and malls.HISTORY OF RETAILING "FROM PEDDLERS TO CHAIN STORES"For thousands of years most goods were sold in market places or by peddling. InPakistan, India, tropical Africa and most of the developing countries including southand Latin America, hawkers still walk the streets of cities and towns carrying theirwares, or cycle/ motor cycle from street to street or village to village. Even, in mostdeveloped countries peddlers are still seen selling goods.It is a normal sight in Pakistani cities, towns and villages that either on bicycles,tricycles, or on animal driven carts, vendors sell all kinds of daily consumer goods andservices, The commodities range from cloth to cosmetics and milk to meat.Hairdressers, knife & scissors repairers and sharpeners are normally seen on bicycles. InKarachi, Milkmen have switched to bicycle from walking & from bicycle to motorcycle.Even some are using motor carriers these days. Yet, still the market places remain thechief form of retail selling.THE RETAIL STORES:Chain of retail stores is known to have been operative in China several centuries beforeChrist. The chain store, as it is known in much of the world today, however, is generallybelieved to stem from the founding of Great Atlantic and Pacific Tea Company (A&P) inNew York City in 1859.The prototype of present day departmental stores existed in Japan as early as the 17thcentury. The horse-drawn buses encouraged the growth of central business districts andallowed department store to take hold in the western world. "Au Bon March" in Parisdeveloped from a large specialty-store to a department store in about 1860.SMALL INDEPENDENT MERCHANTS, however still form the majority of retailersin all the countries of the world. Till disintegration of the USSR, most retail stores in allthe communist countries were nationalized and still in most countries they remain so.However in some states (Central Asian States) the trend is gradually changing and self-owned retail stores are being encouraged and they are coming up.
  8. 8. Retail ManagementThe pattern of SUPER MARKET development was set in the United States in 1930,when Michael Cullin opened the first unit of what was to become the King Kullen Chainof Super Markets. CONSUMER COOPERATIVES are retail stores owned andoperated by consumers for their mutual benefit. Most COOPERATIVES adopt theprinciples of the first cooperative store established in Rochelle, England in 1954.The three principal types of NON-STORE RETAILERS are catalog houses, itinerant(roving) retailers and vending machines operators. The largest catalog houses in theworld, Sears, Roebuck & company and Montgomery Ward & company were founded inthe United States during the latter part of the 19th century. Following World War II,mail order specialists grew rapidly in highly industrialized countries.TYPES OF RETAIL OUTLETS IN PAKISTAN.Many types of retail outlets each fulfilling a particular purpose in the distributiveprocess can be identified. The retailer reaches the customer in one or more of followingfour ways:a. Through storesb. House to house sellingc. Through maild. Automatic Vending machinesIt is the type and range of merchandise, which determine the form of organization ofretail stores. The distinctions are as under:a. Small retailer and small chainsb. The large chain or multiplec. The department stored. The cooperative storee. The mail orderf. Automatic vending machinesTo do a good job, i.e. entire satisfaction of customers and running a profitable business,the retailer must perform many important functions. Some of the functions are:
  9. 9. Retail Managementa. Appropriate choice of locating and layoutb. intelligent selection of merchandisec. Selection of the sources of supplyd. Timing the availability of goods and servicese. Recruitment, training and motivation of sale personnelf. Making most efficient use of capital and other resourcesg. Planning and control of promotional campaignsh. Maintaining proper recordsi. Management of credit businessj. Handling complaintsk. Handling purchases and sales returnsl. Improving customer relationsm. Developing inventory control techniques