RETAILING The word ‘Retailer’ had been derived from the French word *Re-tailer’ which means “to-cut again’, Retailing means to cut in small portions from large lumps of goods. Retailing is a set of activities performed in selling the goods and services directly to the end users. The goods and services sold to the consumers are meant for their personal use and not for resale or business activity, Retailing is the last activity conducted in the chain of product distribution. According to W.J, Stanton, “Retailing includes all activities directly related to sales of goods or services to the ultimate cons imer for personal a non-business use”. According to Cundiff and Still, “Retailing consist of those activities involved in selling directly to ultimate consumer.” According to Philip Kotler, “Retailing includes all activities involved in selling goods or services to the final consumers for personal or non-business use.” Retail involves the sale of merchandise from a single point of purchase directly to a customer who intends to use that product, The single point of purchase could be a brick-and-mortar retail store, an Internet shopping website, a catalog, or even a mobile phone. A retailer is a person who has set up a commercial stablishment to sell goods and services in smaller quantities to the end consumers for their personal use. He sells these goods at a markup or profit margin considerably higher than that of the wholesaler. Functions performed by retaile1 (1) Buying and Assembling: A retailer deals in different variety of goods which he purchases from different wholesalers for selling to the consumers. He tries to locate best and economical source of the supply of goods. (2) Warehousing or Storing: After assembly of goods from different suppliers, the retailers preserve them in stores and supply these goods to the consumers as and when required by them, The goods are kept as reserve stocks in order to ensure uninterrupted supply to the ‘consumers. (3) Selling: The end objective of the retailer is to sell the goods to consumers. He undertakes various methods to sell goods to the ultimate consumers.(4) Credit Facilities: He caters to the needs of the customers even by supplying them goods on credit. He bears the risk of bad debts on account of non-payment of amount by the customers. (5) Risk Bearing: A retailer has to bear different type of risks in relation to goods. While in stores, goods are exposed to various risks like deterioration in quality, spoilage and perishability etc. The products are confronted to natural risks viz; fire, flood, earthquake and other natural calamities. Other type of risks like change in customer’s tastes also adversely affects the sales. (6) Grading and Packing: The retailer grades the goods which are left ungraded by the manufacturers and the wholesalers. He packs the goods in small packages and containers for the convenience of the customers. (7) Collection and Supply of Market Information: The retailers are in direct touch with the consumers. They gather invaluable information with regard to likes dislikes tastes and ‘demands of the consumers and pass on this information to the wholesalers and the producers which are very helpful to them. (8) Helps In Introducing New Products: Without the services of retailers, new products cannot be introduced properly in the market. This is so because a retailer has a direct link with the consumer. He can explain nicely about the utility and the characteristics of a new product to the customer. (9) Window Display and Advertising: The retailer displays the products in show windows in order to attract the customers. This leads to immense publicity for the product.RETAILING IN INDIA ‘The origin of retailing in India can be traced back to the emergence of Kirana stores and mom-and-pop stores. These stores used to cater to the local people, Eventually the government supported the rural retail and many indigenous franchise stores came up with the help of Khadi & Village Industries Commission, The economy began to open up in the 1980s resulting in the change of retailing. The first few companies to come up with retail chains Kumar's, Raymonds, etc. Later Titan were in textile sector, for example, Bombay Dyeing, launched retail showrooms in the organized retail sector. With the passage of time new entrants moved on from manufacturing to pure retailing. The evolution of retailing in India can be better understood as: Early Eighties ‘Retailing’ in India was synonymous with peddlers, vegetable vendors, neighborhood kirana stores (small grocery stores) or sole clothing and consumer durable stores in a nearby town. ‘These retailers operated in a highly unstructured and fragmented market. Very few retailers operated in more than one city. Before 1990 Organized retailing in India was led by few manufacturer owned retail outlets, m: ly from the textile ndustry, Ex: Bombay Dyeing, Raymonds, § Kumar's, and Grasim, Later, Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches Nineties: Liberalization of the Indian economy led to the dilution of stringent restrictions. Entry of few multi-national players like Nanz into the Indian market. Changing profile of the Indian consumers, increasing wages of the employees working in Greenfield sectors with higher purchasing power. Setting up of retail chains by domestic retailers like Cotton World (Mumbai), Nirula's (Delhi) and the Viveks and Nilgiris in the South. ‘The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountain head in books,From 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. ‘The concept of retail as entertainment came to India with the advent of Shopping malls. Shopping malls emerged in the urban areas giving a world-class experience to the customers. Eventually hypermarkets and supermarkets emerged. The evolution of the sector includes the continuous improvement in the supply chain management, distribution channels, technology, back-end operations, etc. this would finally lead to more of consolidation, mergers and acquisitions and huge investments. Retailing is considered to be the largest private sector in India and moreover, it is second to agriculture in terms of provision of employment. Indian retailing provides employment to more than 4 crore people. The retail industry is divided into two sectors namely, organised or formal and unorganised or informal. In simple terms, it could be said that organised retailing is one in which the trading or merchandising is carried out by licensed or authorized retailers who are registered for sales tax and other taxes. The companies owned super markets, hyper market retail chains and other privately owned retail stores or departmental stores come under this organised retailing. The revenue, generated by these enterprises is accounted for by the Government, It worth to mention few brands and companies that are presently marching in the Indian organised retailing. They are, namely Foodworld, Spencers daily, More super markets, Big Bazaar, Hypercity, Shoppers stop, Khadims, Lifestyle, Pantaloons, Westside, Trent, Reliance super, Reliance trends, Reliance footprints, and entertainment chains like, Adlabs, Fame, PVR, Inox and Fun Republic. To spell out few Indian companies that have invested a big money in Indian organised Retailing are namely, Reliance, Future Group, Aditya Birla Group, TATA, and Bharti etc. Regarding the unorganised retailing, it stands for 95% of the Indian retailing and is occupied by the sole-owner managed general provision stores, paan shops, convenient stores, hand cart and pavement vendors etc. In relation to the provision of employment, the organised sector has employed 50 lakh people whereas, the unorganised has employed 3. India, It is found that India has highest density of shops in the world (AC Nielson and KSA crore people in Technopark, India). It is also estimated that the retail contributes about 10-11% to the GDP of.India. The value of the organised retail is Rs. 35,000 crores and of the unorganised is Rs. 9,00,000 crores approximately. The organised retailing is growing at a rate more than 30%. It implies that slowly the unorganised segment is being converted into organised. Regarding the investment, made by some of the Indian giants, it is learnt that Reliance has already invested $3.4 billion and ‘emerging as the largest contemporary Indian conglomerate; Hyper city Retail of [Link] group plans to open up 55 hypermarkets before 2015; Bharti enterprises plans to spend $5 billion by 2015 in their retail business. The present state and future plans of companies in this Indian retail industry will certainly ensure an abnormal growth rate than the present. According to AT Kearney’s Annual Global Retail Development Index for 2010, it is foun the annual study, made among 30 Countries based on their retail investment attractiveness, India has been placed at third rank which is ahead of Brazil, Saudi Arabia and others. ‘The Indian retail industry is divided into organized and unorganized sectors. The Indian retail sector is highly fragmented, with a major share of its business is being run by unorganized retailers like the traditional family run stores and corner stores. The organized retail however is at a very nascent stage, though attempts are being made to increase its proportion bringing in a huge opportunity for prospective new players.Role and Importance of Retailing and Retail Management Retailers have an important place in the distribution channel. As they sell goods to final consumers, they play useful as well as an important role in distribution channel as the last link. In the absence of retailers, the consumers cannot find necessary goods at only one place or at a single shop. They need to walk to many shops to find one after other goods. The producers and wholesalers also need to face various problems. Retailers are important in distribution channel because of its services to producers, wholesalers and consumers. Services to Manufacturers and Wholesalers: ‘The invaluable services that the retailers render to the wholesalers and producers are given as here under: 1) Help in distribution of goods: A retailer's most important service to the wholesalers and manufacturers is to provide help in the distribution of their products by making these available to the final consumers, who may be scattered over a large geographic area, 2), Personal selling: In the process of sale of most consumer goods, some amount of personal selling effort is necessary. By undertaking personal selling efforts, the retailers relieve the producers of this activity and greatly help them in the process of actualizing the sale of the products. 3) Enabling large-scale operations: On account of retailer's services, the manufacturers and Wholesalers are freed from the botheration of making individual sales to consumers in ‘small quantities, This enables them to operate at relatively large scale, and thereby fully concentrate fon their other activities. 4) Collecting market information: As retailers remain in direct and constant touch with the buyers, they serve as an important source of collecting market information about the tastes, preferences and attitudes of customers. Such information Is considered very useful in taking important marketing decisions in an organisation. '5)_Help in promotion: From time-to-time, manufacturers and distributors have to carry on various promotional activities in order to increase the sale of their products. For example, they have to advertise their products and offer short-term incentives in the form of coupons, free gifts, sales contests, and so on. Retailers participate in these activities in various ways and, thereby, help in promoting the sale of the products, ‘Serviees to Consumers: ‘Some of the important services of retailers from the point of view of consumers are as follows: 1) Regular availability of products: The most important service of a retailer to consumers is to ‘maintain regular availability of various products produced by different manufacturers. This enables the buyers to choose products according to their tastes from a wide variety and buy them when needed. 2) New products information: By arranging for effective display of products and through their personal selling efforts, retailers provide important information about the arrival, special features, etc,, of new products to the customers. This serves as an important factor in the decision making process for the purchase of those goods. 3) Convenience in buying: Retailers generally buy goods in large quantities and sell these in ‘small quantities, according to the requirements of their customers. Also, they are normally situated very near to the residential areas and remain open for long hours. This offers great convenience to the customers in buying products of their requirements. 4) Wide selection: Retailers generally keep Ostock of a variety of products of different manufacturers. This enables the consumers to make their choice out of a wide selection of goods. 5) After-sales services: Retailers provide important after-sales services in the form of home delivery, supply of spare parts and attending to customers. This becomes an important factor in the buyers’ decision for repeat purchase of the products. 6) Provide credit facilities: The retailers sometimes provide credit facilities to their regular buyers. This enables the latter to increase their level of consumption and, thereby, their standard of living.Scope of retail management Retail management has become one of the fastest growing career in the industry with the tremendous growth in the economy. Retail Market of India is the most attractive and emerging market in the world and has demanded more number of trained professionals in this field. It strives to create a new generation of smart retail professional of international caliber and aims to equip them with the best practices being followed across the globe. The scope of the Indian retail market is immense for this sector is poised for the highest growth in the next 5 years. The India retail industry contributes 10% of the countries GDP and its current growth rate is 8.5%. In the Indian retail market the scope for growth can be seen from the fact that it is expected to rise to US$ 608.9 billion in 2009 from US$ 394 billion in 2005. ‘The scope of the Indian retail market have been seen by many retail giants and thats the reason that many new players are entering the India retail industry. The major Indian retailers are: Pantaloons Retail India Ltd Shoppers Stop Bata India Ltd Music World Entertainment Ltd Judging the scope for growth in the India retail industry many global retail giants are also entering the Indian retail market. They are : Tesco Metro AG Wal- Mart ‘The scope of the Indian retail market is very vast. And for it to reach its full potential the government and the Indian retailers will have to make a determined effort. Reasons for the growth of retail in India The major factors responsible for the growth of organised retailing in India are as follows Organised retailing is a recent development. It is the outcome of socio-economic factors. India is standing on the threshold of retail revolution. Retail Industry, one of the fastes changing and vibrant industries that, has contributed to the economic growth of our country.Within a very sport span of time, Indian retail industry has become the most attractive, emerging retail market in the world. Healthy economic growth, changing demographic profile, increasing disposable incomes, changing consumer tastes and preferences are some of the key factors that are driving growth in the organised retail market in India. Some of the factors responsible for the growth of organised retailing are as under: 1. Growth of middle class consumer In India the number of middle class consumer is growing rapidly. With rising consumer demand and greater disposable income has given opportunity of retail indu: -y to grow and prosper. They expect quality products at decent prices. Modern retailers offer a wide range of produc ind value added services to the customers. Hence this has resulted into growth of organised retailing in India. Growing consumerism would be a key driver for organized retail in India. Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence (meeting) of consumer tastes. 2. Increase in the number of working women: in a balance between ‘Today the urban women are literate and qualified. They have to maint home and work. The purchas ing habit of the working women is different from the home maker. They do not have sufficient time for leisure and they expect everything under one roof. They prefer one-stop shopping. Modern retail outlets therefore offer one store retailing. 3. Value for mon Organised retail deals in high volume and are able to enjoy economies of large scale production and distribution, They eliminate intermediaries in distribution channel. Organised retailers offer quality products at reasonable prices. Example: Big Bazaar and Subhiksha Opportunity for profit attracts more and more new business groups for entering in to this sector. 4, Emerging rural market:Today the rural market in India is facing stiff competition in retail sector also. The rural market in India is fast emerging as the rural consumers are becoming quality conscious. Thus due to huge potential in rural retailing organised retailers are developing new products and strategies to satisfy and serve rural customers. In India, Retail industry is proving the country’s largest source of employment after agriculture, which has the deepest penetration into rural India. 5. Entry of corporate sector: Large business tycoons such as Tata’s, Birla’s, and Reliance etc. have entered the retail sector. They are in a position to provide quality products and entertainment. As the corporate ~ the Piramals, the Tatas, the Rahejas, ITC, [Link]’s, RPG Enterprises, and mega retailers- Crosswords, Shopper's Stop, and Pantaloons race to revolutionize the retailing sector. 6, Entry of foreign retailers: Indian retail sector is catching the interest of foreign retailers. Due to liberalisation multinationals have entered out country through joint ventures and franchising. This further is responsible for boosting organised retailing. 7. Technological impact: Technology is one of the dynamic factors responsible for the growth of organised retailing. Introduction of computerization, electronic media and marketing information system have changed the face of retailing. Organized retailing in India has a huge scope because of the vast market and the growing consciousness of the consumer about product quality and services. One of the major technological innovations in organised retailing has been the introduction of Bar Codes. With the increasing use of technology and innovation retailers are selling their products online with the help of Internet. 8, Rise in income: Increase in the literacy level has resulted into growth of income among the population. Such growth has taken place not only in the cities but also in towns and remote areas. ‘Asa result the increase in income has led to increase in demand for better quality consumer goods. Rising income levels and education have contributed to the evolution of new retailstructure, Today, people are willing to try new things and look different, which has increased spending habits among consumer. 9. Media explosion: There has been an explosion in media due to satellite television and internet. Indian consumers are exposed to the lifestyle of countries. Their expectations for quality products have risen and they are demanding more choice and money value services and conveniences. 10. Rise of consumerisi With the emergence of consumerism, the retailer faces a more knowledgeable and demanding consumer. As the business exist to satisfy consumer needs, the growing consumer expectation has forced the retail organizations to change their format of retail trade, Consumer demand, convenience, comfort, time, loc: are the important factors for the growth of organised retailing in India, The retail industry is divided into organised and un-organised sectors. Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, ‘These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Un-organised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors It is important to understand how retailing works in our economy, and what role it plays in the lives of its izens, from a social as well as an economic perspective. India still predominantly houses the traditional formats of retailing, that is, the local kirana shop, paan/beedi shop, hardware stores, weekly haats, convenience stores, and bazaars, which together form the bulk. Organized Vs. Unorganized Retailing The Indian retail industry is divided into organize d and unorganized sectors. The unorganized retail comprises of the local baniya or kirana shop, paan and beedi shops and the other owner manned general stores. These retailers normally do not pay taxes and most of them are not even registered for sales tax, VAT, or income tax.On the other hand, the organized retail comprises of the licensed retailers who are registered for sales tax, income tax ete. and it comprises of the malls, supermarkets, hypermarkets etc. UNORGANIZED RETAIL “Unorganized retailing” is defined as an outlet which is run locally by the owner or the caretaker of a shop who lacks the technical and the accounting standardization. The supply chain and the sourcing are also usually done locally to meet the local needs. Unorganized merchandising, refers to the normal formats of cheap retail, the native kirana retailers, the owner manned general stores, paan / beedi retailers, the convenience stores, hardware stores at the corner of one’s street, small medical shops ete, Small-store (kirana) retailing has been one of the easiest ways to generate what is called self-employment as it requires a very limited investment in land, capital and labour. It is generally a family run business; there is lack of standardization and the retailers who run this store la k education, experience and exposure, Unorganised formats in Indian Ret: India encompasses a wealthy ancient history of retail trade. An outsized range of the business models (Unorganised formats) are living since long, and they still have their presence across the country. That may be the rationale why they are taken into thought at this stage of analysis. However, most of those models concentrate on food grains, cereals and alternative connected food stuff. 1. Mandis: Ruling the market hierarchy are mandis, which owe their development partly to government policies on agricultural marketing. Mandis are agricultural markets set up by the state governments to procure the agricultural produce directly from farmers. These markets can be categorised as grain mandis, cotton mandis, soya mandis, vegetable mandis, etc. 2. Hats: Unlike the regulated markets, there are also unregulated markets known as haats, peta, angadi, hatwari, shandies, chindies or painths. A haat is a periodic market which exists typically at a village level. A haat can be said to be a public gathering of buyers and sellers of commodities, fruits, vegetables, household goods, clothes, accessories like bangles, etc. ‘These haats are the heart of every village’s economic, social and cultural life as the producers as well as the farmers are very much dependent on them in their day to day life.3. Melas: The rural life has another distinct feature with it and that is the melas which are quite popular in our country and around 25,000 of them are held each year. The classification of the melas can be done according to their nature as the commodity fairs and religious fai on the basis of the time period as one day, less than a week or weekly fairs. Normally, the melas have around 800 outlets. 4, The Local Baniya/ Kirana: “The local Baniya or the Kirana store as it is popularly referred to in India, is the nearby shop to one’s home that stores goods of basic daily needs like staples, FMCG products and many a times certain snacks which are ready to eat. A typical store stocks close to 1000 ui ranging from FMCG products like soaps, shampoos, toothpaste, hair oils, etc. to staples like dal, rice, pulses, etc. Most stores also stock daily provisions and grocery products like cooking oils, juices, dairy products, chocolates, masalas, dry fruits, etc. Some of the retailers also stock unbranded goods like idli mix, etc. Classifications of Retailing Formats [ l inane Non-Store, Service Based Based Besed Ownership Merchandise pe Based | | ars Independent Retalers ‘Supermartets Ente Ondes cia Chain Stores Hypermarkets Postal Orders Banks Franchises SpecanyStores | |facmanctng —_|Cer Rental Co-operative Stores Departmental Stores automated Vending Service Contracts Factory Outlets Catalogue Showrooms India is growing at a great pace and the retail sector is also developing with it, Big Indian business houses are entering into retail sector and are adopting various retail formats for their business which are best suited to them. We can divide Indian retail market in three forms which are mentioned below: © Store Retailers © Non-store retailers © Service retailersI Store based Retailing Ownership Based Retailing + Independent Retailers: They own and run a single shop, and determine their policies independently. Their family members can help in business and the ownership of the unit can be passed from one generation to next. The biggest advantage is they can build a personal rapport with consumers very easily. For example, stand-alone grocery shops, florists, stationery shops, book shops, etc. * Chain Stores: When multiple outlets are under common ownership it is called a chain of stores. Chain stores offer and keep the similar merchandise. They are spread over cities and regions. The advantage is, the stores can keep selected merchandise according to the consumers” preferences in a particular area. For example, Westside Stores, Shopper's Stop, ete + Franchises: These are stores that run a business under an established brand name or a particular format by an agreement between the franchiser and a franchisee. They can be of two types ° Business format. For example, Pizza Hut © Product format. For example, Tee cream — parlours. of Amul. * Consumers Co-Operative Stores: These are businesses owned and run by consumers with the aim of providing essentials at a reasonable cost as compared to market rates. They have to be contemporary with the current business and political policies to keep the business healthy. For example, Sahakar Bhandar from India, Puget Consumers Food Co-Operative from the north US, Dublin Food Co-Operative from Ireland. Merchandise Based Retailing + Convenience Stores: They are small stores generally located near residential premises, and are kept open until late night or 24x7. These stores offer basic essentials such as food, eggs, milk, toiletries, and groceries. They target consumers who want to make quick and easy purchases, Convenience is offered in a lot of ways to the customers through easily accessible store locations and small store size that allows the customers to do quick shopping and fast checkout. The product selection offered by these retailers is very limited and the price of the products can be high. For example, mom-and-pop stores, stores located near petrol pumps, 7- Eleven from the US, etc + Supermarkets: These are large stores with high volume and low-profit margin, They target mass consumer and their selling area ranges from 8000 [Link]. to 10,000 [Link]. They offer fresh as well as preserved food items, toiletries, groceries and basic household items. Here, at least 70% selling space is reserved for food and grocery products. They offer a fairly huge range of products and self-service. People usually go to the supermarkets to buy goods in large {quantities so that they can stock those goods for later consumption, They provide products for reasonable prices and of medium to high quality.For example, Food Bazar and Tesco. + Hypermarkets: These are one-stop shopping retail stores with at least 3000 sq. selling space, out of which 35% space is dedicated towards non-grocery products. They target consumers over the large area and often share space with restaurants and coffee shops. Hypermarkets in India are a combination of supermarket and department store. These are large retailers that provide all kinds of groceries and general goods. Big Bazaar and Reliance Fresh are hypermarkets that attract enormous crowds. The hypermarket can spread over the space of 80,000 [Link]. to 250,000 [Link]. They offer exercise equipment, cycles, CD/DVDs, Books, Electronics equipment, etc. For example, Big Bazar from India, Walmart from the US. + Speciality Stores/ Category Killers; These retail stores offer a particular kind of merchandise such as home furnishing, domestic electronic appliances, computers and related products, etc. They also offer high-level service and product information to consumers. The specialty stores are called Category Killers. These stores are specialized in their fields and they offer only one category of products. They occupy at least 8000 [Link]. selling space. Examples in India include Music World of RPG, Crossword (Bookstore), Chroma of Tatas ete, * Departmental Stores: Department stores are classified as general merchandisers. Some carry a more selective product line. It is a multi-level, multi-product retail store spread across average size of 20,000 [Link]. to 50,000 [Link]. It offers to sell space in the range of 10% to 70% for food, clothing, and household items. For example, The Bombay Store, Ebony, Meena Bazar from India, Marks & Spencer from the UK + Factory Outlets: These are retail stores which sell items that are produced in excess quantity at discounted price. These outlets are located in the close proximity of manufacturing units or in association with other factory outlets. For example, e, Bombay Dyeing factory outlets. + Catalogue Showrooms: These retail outlets keep catalogues of the products for the consumers to refer. The consumer needs to select the product, write its product code and handover it to the clerk who then manages to provide the selected product from the company’s warehouse. * Discount Stores: Discount stores offer price reduction. Discount stores offer product at lower price than market price. The main reason behind this low price is the additional stock left over towards the end of any season. Discount stores sell their goods at a reduced rate with an aim of drawing bargain shoppers. II Non-Store Based (Direct) Retailing It is the form of retailing where the retailer is in direct contact with the consumer at the workplace or at home. The consumer becomes aware of the product via email or phone call from the retailer, or through an ad on the television, or Internet. The seller hosts a party for interacting with people. Then introduces and demonstrates the products, their utility, and benefits. Buying and selling happen at the same place. The consumer itself is a distributor.For example, © Amway — and_—Herbalife —miulti-level__-—_marketing. Non-Store based retailing includes non-personal contact based retailing such as: * Mail Orders/Postal Orders/E-Shopping: The consumer can refer a product catalogue on internet and place order for purchasing the _— product via__email’post. + Telemarketing: The products are advertised on the television. The price, warranty, return policies, buying schemes, contact number etc. are described at the end of the Ad. The consumers can place the order by calling the retailer’s number. ‘The retailer then delivers the product to the consumer's doorstep. For example, Asian Skyshop. + Automated Vending/Kiosks: It is most convenient to the consumers and offers frequently purchased items round the clock, such as drinks, candies, chips, newspapers, etc. ‘The success of non-store based retailing hugely lies in the timely delivery of the appropriate product. III Service Based Retailing ‘These retailers provide various services to the end consumer. The services include banking, carrentals, electricity, and -—cooking gas container_— delivery. ‘The success of service based retailer lies in service quality, customization, differentiation and timeliness of service, technological up gradation, and consumer-oriented pricing, Changes in Retail Environment A retail marketing environment consists of the external actors and forces that affect the retailers’ ability to develop and maintain successful transactions and relationships with its, target customers. ‘The micro environment consists of the actors in the retailer's immediate achievements that affect its ability to serve its markets: Suppliers, intermediaries, customers, competitors and publics. Micro Enviornment Factors Every retailers’ primary goal is to profitably serve and satisfy specific needs of chosen target markets, To carry out this task, the retailer links himself with a set of suppliers and a set of intermediaries comprise the core marketing system of the retailer. to reach its target customers. The suppliers / intermediaries / customers chain 1. Suppliers: Suppliers are business firms and individuals who provide resources needed by the retailer. For example a retail store must obtain various products from different suppliers so that as and when customers come and ask the products, he will be in a position to sellthem on time. Developments in the ‘suppliers’ environment can have a substantial impact on the retailer’s marketing operations. Retail managers need to watch price trends of their key inputs. They are equally concerned with supply availability. Supply shortages and other events can prevent fulfilling delivery promises and lose sales in the short run and damage customer goodwill in the long run. Many shops prefer to buy from multiple sources to avoid depending on any one supplier who might raise prices arbitrarily or limit supply. Retail purchasing agents try to build long-term trusting relationships with key suppliers. In times of shortage, these agents find that they have to ‘market’ their shop to suppliers in order to get preferential supplies. 2. Intermediaries: Intermediaries are firms that aid the retail shop in promoting selling and 4. Competitor distributing its goods to final buyers. Large business organizations might hire agents to find retailers in various South Indian cities and pay commission to these agents based on their success. The agents do not buy the merchandise ~ they direct retailers to buy and sell ultimately to the consumers. Physical distribution firms assist the retailer in stocking and moving goods from their original locations to their destinations. Warehousing firms store and protect goods before them more to the next destination, Every retailer has to decide how much storage space to build for it and how much storage space allotted for different . Marketing service agencies-marketing research firms, advertising agencies, s and marketing consulting firms — assist the retailer in targeting and promoting media firt its products to the right markets. The retailer has to review the products sold periodically and must consider replacing those that no longer have demand in the market as expected. Financial intermediaries include banks, credit companies, insurance companies and other companies that help finance firm and / or insure risk associated with the buying and selling goods. Most retailers and customers depend on financial intermediaries to finance their transactior Customers: A retailer links himself with suppliers and middlemen, so that he can efficiently supply appropriate products and services to its target market. Its target market may be individuals and households that buy goods and services for personal consumption, A retailer rarely stands alone in its effort to serve a given customer market. His efforts to build an efficient marketing system to serve the market are matched by similar efforts on the part of others. The retailer’s marketing system is surrounded and affected by a host of competitors. These competitors have to be identified, monitored and outmaneuvered to capture and maintain customer loyalty. A basic observation about the task of competing effectively can now be summarised. A retailer must keep four basic dimensions in mind, which can be called Four C’s of market positioning. He must consider the nature of the customers, channels, competition and his own characteristics as an organisation. Successful retailing is a matter of achieving an effective alignment of the organisation with customers, channels, and competitors. Macro Environment Factors in Retailing All retail companies operate within a “macro environment,” or the sphere of influence outside the company that shapes how companies do business. Unlike the micro environment of aretail store, companies in the retail industry usually cannot influence or change the macro environment and must adapt to changes as they arise. The macro environment includes economic, technological, societal and governmental influences. A retailer must understand the role of each to compete within the retail industry The Role of Technology in the Macro Environment Technology not only creates new products for retail companies to sell, but also plays a major role in changing the way retail companies do business. Technological advancements such as the internet offer retail customers additional shopping options. Technology also opens new retail markets, with auction platforms like eBay and web-based retailers such as [Link]. Barcoding and computerized billing systems have improved the retail industry by allowing retailers to develop new processes that increase efficiency. Point-of-sale systems increase sales by allowing retailers to process cash, cheque, and credit- and debit-card payments, The Role of Government Laws, regulations and other government policies can have a number of positive or negative effects on the retail industry. Government assistance, such as government-backed loans and subsidies, can help fledgling retailers grow or allow an established company to keep costs low for consumers. However, government policies can also hinder businesses by imposing regulations that increase costs, such as requiring the development and integration of new systems or procedures or establishing a minimum wage that small retailers may not be able to afford. The retail industry also relies heavily on government-supported road and transportation infrastructure to move goods and bring customers to retail locations. The Role of Economic Factors Retail sales are driven by the economic environment. A robust economy correlates to an increase in consumers’ disposable income, increasing sales and allowing retailers to sell more valuable goods, such as high-end electronics. On the other hand, a sluggish economy decreases consumer confidence and can cause people to spend less, leading to declining sales and forcing retailers to lower prices. Economic and governmental factors often overlap in areas such as corporate taxation, import and export laws, and inflation, which can decrease ‘consumer purchasing power. The Role of Social Factors Changes in social values and trends impact the goods retailers sell and how retailers relate to consumers. The retail industry is often under pressure to develop and implement socially responsible business practices, such as selling environmentally-friendly products, placing warnings or restrictions on potentially harmful goods, and removing recalled or controversial products from the shelves. Again, government and social factors overlap in many areas including employment discrimination and, in some states, the recognition of same-sex partners as legally entitled to employer-provided benefits. Retailers that fail to conform tonew social norms often lose business to companies that are willing to adapt to changing societal values.Ss aaa Challenges Faced by R retail lerstood by many ; ‘i 1 ig often not Casy as the globe. Asia, especially China and India are the emerging markey Asia, €8 oe ive of China and India did not necessarily lead to thei, places, In the past, the ae "The technological, transportation and industrial revolutions having an impact asa mT panged much of that. Increasing urbanisation in both the markets has fas etailers worldwide ail expansion needs to happen, the ~ ers that ret © happen, t Listed below are some of the key challenges While itis ur towards global expansion 4 by retailers acros being Laces The emergence of new markets emerging markets The empowered consumer Retaining the consumer is far more difficult today than it was q decade ago. Consumer lifestyles and demographics are changing rapidly. Spending power is increasing and technology is aiding consumers to make sound shopping decisions, Given the increased amount of choice in terms of products and formats, consumers now demand more for less from the shopping experience: more quality, choice, consistency, convenience, and service, for less money, time, effort, and risk. Competition is not just on price, but on multiple fronts. Technology-enabled efficiencies Technology has enabled businesses and consumers to build efficiencies on the basis of the ability to receive and transmit data at a fast speed. This information has today become critical for achieving efficiencies in all aspects of retailing In the near future retailer-supplier partnerships will depend on technology, substituting information for inventory in the pipeline to reduce costs while improving productivity Retailers will rely on technology to establish links with consumers through electronic retailing and customer relationship marketing. ee ool the e-age The emergence of internet retailing or e-tailing as is popularly : a ‘as been a key driver of change in retail. The increase in the number of internet *s not only in the developed markets, but also globally has placed new demands on retailers. Onli eoeent nat al a : a ine shopping facilitated by auction sites are the new realities of retail. Internet coupe ese shop and buy on their own terms. Internet both enhances and competes wi i pari ith the store, ice. ic i i Reape rain re the brick and mortar experience. Comparison”RETAIL AS A CAREER Retail is a people-centric industry, and is one industry which simultaneously can expos¢ you to many skills and disciplines, I ‘ offers many choices in terms of a career, chief among them are: * Buying and Merchandising: then. Wir ggg COMPLE Sra forthe 10605, Roger D Blackwel, [Link] Talarzyk, Joumal of Retaling, Volume1 AN Ovurvitw ov Rear [aay remembered is that very often it may require extensive travell avelling to aspect to be exclusive merchandise for the retail stores, locate vendors and + Marketing: In retail, marketing fimetions may be centralised and may include different departments like advertising, sales promotion, and public/ pres clations. Marketing would also look at ways of understanding, the customet and his behaviour by way of focus groups and analysing of customer buying patterns to develop strategies and plans that guide marketing components like ads, websites Atore signage, etc. The size of the retail organisation would determine eee various functions would be in one department or would be divided into various combinations. «+ Store Operations: Retail professionals in the store operations career area oversee pverall store operations and profits. Positions inchide Head of Store Operations, nd District Manager, and responsibilities in this area may ff functions like loss prevention and/or human resources. vary from being responsible for a department, stores. Successful store managers have the ability as well as an eye for detail. Store management Regional Manager, inchide managing Responsibilities in operations may floor, the entire store ora group o} to lead and motivate employee: involves all the disciplines necessary to run a successful business, © Sales: Very often sales considered as a part of store operations. Areas in sales include positions like sales associate, cashier, store stock associate, and stock receiver. The primary duty of a sales staff is to serve customers on the selling floor, actually selling goods. Front-end sales staff may also be involved in receiving merchandise into the store, counting it and then displaying it on the store shelf. Responsibilities would also include receiving merchandise returned by customers. These frontend positions need the ability to deal with people, flexibility and importantly the ability to work in teams. Very often a sales position may be the entry position in retail. On the other hand a cashier would work behind the cash register desk and would be responsible for billing of the merchandise purchased by the customer and the collection of the required amount of money. Many organisations would seek to train persons across functions in sales. * Finance: The finance retail career area includes all accounting and treasury functions like accounting for income, paying expenses, compiling and maintaining financial records, money management and cash flow control, banking, investment and credit lines, Auditing of stores for merchandise and money may also be @ part ohthe responsibilities of this department. With the rapid development of retail in 5 aes ene and implementing project finance may also emerBe as pm cm eames in the next few years. os 4 hirin uurces: Human resource in retail may range from recruiting an iring employees to larger areas like identifying training needs at various levels within the organisation and then designi , oe, the programmes. Rerponnca ee anon and then designing and implementing 1 Ee aid Planning for and e oy. Iso include overseeing compensation an 7 maces Tis necessary tor suring legal compliance in hiring and employmen! PM emember that retail is a peoplefocused business, Putre RwrarinG MANaGkMENT : vorki s at both the front and ba >, calls for long Wer king hours al back end. Huma, ds tO understand these performance app! merce: Retail is one of the most mature users of information 1D implementation to e-commerce websites, technolo; complex inventory s s — from technology-driven mmes delivered over sé tellites or the Internet to state-of-the-art cash stems. Careers in this department may range from overall responsibility for the data processing efforts within the chain, including systems design, programming, computer operations and information systems (IS). Systems development may be another area, which would be responsible for programming one segment of the business such as merchandising, finance, or logistics. A retailer who has a presence in the e-commerce segment may also look for individuals who may be responsible for strategy development, procurement of merchandise and the fulfilment of orders and payments as specific areas. * Visual Merchandising: Visual merchandising is largely associated with creating the look of the store. Visual merchandisers are responsible for the total merchandise or service presentation, the overall business image, and even the building and placement of design elements. The increase in competition has necessitated retailers to differentiate them from the competition. While products and services are the primary methods of differentiation, visual merchandising, is fast becoming an area of differential advantage, as it is believed that attractive displays attract and stimulate which, in turn, is believed to create increased sales. bd Supply Chain Management and Logistics: Supply chain managementand logisticsa’ aa te peysoces areas in retail. Supply chain management is the integrate! eee “ owe of materials and products, services, and information fen sueeorh ise rs, through operations, to the final customer, and back ag amanapenemt a eee paaecareal isan integral factor affecting cost. Effect the organisation, a ane ly c hain enhances profitability. Depending on the Cai negotiating ee ae supply chain management may involve analysing 7 and production planning faut eee and/or distributors, CPi the transportation and logi i 7 r a cpaee and facility location and a gistics of product/service to its final destination. same tim resources need and implementing * Technology and econ! technology. From RF geared (0 tackle pects of the retail business while creatjn and promotions. g needs to be training progr’! register and credit 8)3. Airport Retailing Thanks to consistent double-digit growth in the airport travelers and introduction of ost ewrriets, airports today have been renovated from being dull and boring places to cheerful, vigorous and lively destinations. Thanks also go to emergence of airport retailing in India, The 21st century traveler is being attracted in every possible manner. Malls, service stations, parasite stores, duty free shops, consumer durables stores, are all set to change the traditional view of airports. low c Being recently explored, Airport retailing offers one of the most promising sectors for retail development. It offers branded luggage, cre mn Fal clothing and items of decoration. Food, toys, consumer cells, electronics, souvenirs and wristwatches are other specialized segments. Shoppers’ Stop, Future Group and Tata’s consumer durable chain, Croma are the few major players in airport retailing. Figure 2.7 Merchandise Category under Airport Retailing Personal services, Electricals 1.91% 249% Personal goods, 17.57%, 1 Catering, 91.00% 12.31% Source: Airport Retailing in UK by Bob Thompson. ([Link]-journals. om) OTHER EMERGING RETAIL FORMATS 1. Van/Mobile Van Retailing: This is a compromise between door to door selling and store selling. In this type of retail business, retailer keeps one day stock of his merchandise and goes to an area to serve its permanent customers. Sometimes retailers “Sil some areas which are totally new to them to attract new customers. The kind of Gee Sold in Van retailing can range from everyday household products to different sorithem, anny The various van, goods include soaps, detergents, kitchen appliances, Several other cleaning products. There are some vans which designed toRetail Management — 4 00a! Fer: S e 5 : ‘s will fi Bs low temperatures. In these types of van customers ind all ky, operate at extremely e. In the rural areas of in frozen food such as vegetables, meat, dairy ee oe Pamecerlion kind of selling of goods still exists though it is not quite pop! ail licensing «™ In some states van retailing may be subject to regulations and entai paieaa State regulations determine the area that van sales can cover and the products that are allowe to be sold’. Van retailing is usually found in remote/rural areas and is of two types: (a) Static retailing: Under this sort of retailing, such vans are parked in public areas where customer traffic is usually high. The items sold under static retailing are snacks and junk food. : (b) Raving retailing is where retailer takes his van to one house to another, selling merchandise to customers at their doorstep. 2. Conference/Party/Event Retailing: In this sort of retailing, retailer invite people from nearby localities and after describing positive aspects of the merchandise, sells it These types of get together/events are organized by the franchisor (retailer) belonging to a big organization. The products sold under such form of retailing vary from cosmetics from small household items that are of low cost. In order to attract customers, retailer usually distributes sample merchandise or gives some demonstration regarding effective use of his items offered on sale. Event retailing usually takes place on national or regional level events such as Valentine Day, Mother's Day, Father’s Day, Diwali, etc. Gold retailing on the day of “Akshaya Tritiya” in most of the Parts of the country is one of such example of event retailing. Some events are food related like Annual Mango festival at Pragati . ‘| organized by Delhi Tourism in collaboration with Delhi Government ne Maidan, Delhi special food offers being offered on the occasion of “Kava Chagas aa iu ceva e avratra'! in India are none other than event retailing:83 petaling Formats Distant Retailing: As the very name suggests, under distant retailing, a customer > ye order from a remote location by telephone, SMS, internet, pager ete. instead of pee eal Retailers who provide such home delivery facility may/may not have yan P a “The leading global retailers who follow such practice are Amazon, Wal- physical sto Hygiene. The main advantage of such sort of retiling is that any type of item Mart, Arkay lied by the retailer on demand. The range of items offered depends on the Oe ens demand, and retailers’ resources and the infrastructure of the concerned region. cu 4, Forecourt Retailing: A new emerging concept in retailing is the establishments of stores in front of large buildings of high traffic areas. This concept caught public attention with oil companies trying to allow private companies to set up convenience stores at their fuel station outlets. The aggressive players in this area are HPCL, IOC, BPCL and Reliance. According to a Business Standard report!?, Vishal Mega Mart has tied up with Hindustan Petroleum Corporation Ltd (HPCL) for opening forecourt retail stores chain, which has been branded as “Vishal Comer Mart” will set up convenience stores at fuel station outlets of HPCL. These marts besides offering convenience goods and services would also provide travel solutions and other facilities as a ‘one stop solution’. Previously, Apollo Pharmacy had tied up and set up ‘convenio’ stores at Indian Oil Corporation (IOC) petrol Pump outlets for supplying groceries and medicines. This experiment was well appreciated by business critics but it did not succeed, perhaps, on account of problems in revenue sharing model. Similarly Kishore Biyani-led Future group had also tied up with IOC to set up fuel pumps in Big Bazaar premises and Big Bazaar stores in IOC premises. However, nothing seems to have emerged so far. 5. Trade Parks: Retailing through trade parks is a recent retail practice and is Practiced only in metros and big cities. Under this concept, business complexes are being Sel up for promotion of retail trade especially the international trade. Some of the examples are India Exposition Mart Set up by Handicraft Export Promotion Council in Greater Noida, International Home Deco Park (IHDP) set up by a group of private investors in a and World Trade Park coming up in Jaipur. TDP plans to provide International ers ready access to approximately sixty world class Indian exporters belonging to Home Fumishings segment. This effort of IHDP would be beneficial to buyers as they Would not have to go to rei & ‘mote towns to see the designs and samples of exporters. ea aan from getting increased visibility will also get other facilities such as Sign. library, design studio,