Retail Management

Dr. Anupamaa S. Chavan

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BOOKS ON RETAILING/RETAIL MGT BY ……
• MICHAEL LEVY & BARTON WEITZ 10th Edition (Reference Book)
• BARRY BERMAN & OTHERS
• SWAPNA PRADHAN
• DR. RAM KISHEN
• KVS MADAAN
• V V GOPAL
• ARIF SHEIKH
• GIBSON, VEDAMANI
• K S MENON
• KEITH LINCOLN, LARS THOMASSEN, ANTHONY ACONIS.
Pedagogy
• Lectures
• PowerPoint Presentations
• Pre reading notes
• Case Study & Discussions
• Quiz
• Store visit and field work
Learning Objectives
1. Understanding the theoretical foundations of retailing such as Retail Strategy,
Merchandising Management, Category Management, Store Management, and
Retail Pricing.
2. To acquire conceptual clarity of the various functional areas of retailing such as
SCM, EDI, RFID, VMI, CPFR, HR issues in retailing, CRM, financial
implications of retail decisions, retail promotions, etc.
3. To understand the various evolving formats of retailing: online and offline
4. To make sense of the evolving external environment and competitive factors to
make better strategic decisions.
5. Analysis and interpretation of the various kinds of data used to make effective
decisions in retailing at an operational level.
Learning Outcomes:
• Gain a conceptual understanding of the various retail concepts.
• Build student appreciation of current trends–
• like role of internet in retailing,
• newer ways to sell and communicate with customer,
• greater emphasis on environment and social responsibility of retail sector,
• use of technology and analytical methods in retailing.
 Evaluation Scheme
• Term End Exam (TEE): 50 marks

• Internal Continuous Assessment (ICA): 50 marks

• Mid Term Test – 20 marks
• Retail Venture – 10 marks
• Project Work – 10 marks
• Assignments – 10 marks [Class work 5m + Presentation (Research paper) 5m]

Course Structure: Will be mailed to the students:Course struc-Retail [Link]

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 Dr. Anupamaa S. Chavan
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 1. INTRODUCTION TO WORLD OF
5. NEW TRENDS IN RETAILING
RETAILING

2. RETAILING STRATEGY AND

4. STORE MANAGEMENT Retail Management PLANNING

3. MERCHANDISE MANAGEMENT

Course struc-Retail [Link]

Presentations: 5 marks (Admin Groups)
Topics:
Presentations will be done on Module V chapters
• E-commerce and Recent trends in Retail: (Groups: 1, 6, 11)
• Innovations in Retailing: (Groups 2, 7, 12)
• International Retailing: (Groups 3, 8, 13)
• Ethical aspects in retailing and Green retailing: (Groups 4, 9, 14)
• Use of social media and mobile marketing for customer communication:
(Groups 5, 10)

Note- Module V is Self Study. Every chapter will be presented by various groups
twice/thrice. Students are required to pay attention to when these presentations are
on.
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Introduction to the World of Retailing
videoplayback (1).mp4

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Retailing

The term ‘retailing’ is derived from the old French

word ‘retaillier’ meaning ‘to cut piece off’ or ‘to
break the bulk’.

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 What is Retailing?
•Retailing – a set of business
activities that adds value to the
products and services sold to
consumers for their personal
or family use

•A Retailer is a
businessman/business unit
that sells products
and/services to consumers for
personal or family use.

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RETAILING
• Retailing includes all the activities in selling goods or services directly
to final consumers for personal / non business use.

• A retailer or retail store is any business enterprise whose sales volume

comes primarily from retailing.

• Any organisation selling to final consumers – whether it is a

manufacturer, wholesaler or retailer – is doing retailing.

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 Examples of Retailers
• Retailers:
Walmart,
Amazon
[Link],
Carrefour,
Dmart,
Big Basket,

• Firms that are retailers and wholesalers - sell to other

business as well as consumers:
Office Depot, The Home Depot, United Airlines,
Bank of America, Costco, Metro
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Source: Delliote
 The Retailer’s Role in a Supply Chain

• A Supply Chain is a set of firms that make and deliver a given

set of goods and services to the ultimate consumer.

• Retailers are the final business units within a supply chain which
links manufacturers to consumers.

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Distribution Channel

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• [Link]

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 Manufacturing, Wholesaling
and Retailing
• Vertical Integration – firm performs more than one set of activities in
the channel
• Ex: retailer invests in wholesaling or manufacturing

• Types:
• Backward Integration
• Forward Integration

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 Manufacturing, Wholesaling
and Retailing

• Backward Integration –
Retailer performs some
distribution and
manufacturing activities

• Ex: JCPenney sells Arizona

jeans (Private Label)

• Big Bazaar coming up with

FBB brand (Apparel)
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Manufacturing, Wholesaling,
and Retailing
• Forward Integration – manufacturers undertake retailing activities
• Ex: Ralph Lauren (New York )

• Pantaloons, Titan (India)

• Large retailers engage in both wholesaling and retailing

• Ex: Wal-Mart, Lowe’s, Safeway, Brown Shoe Company

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Dr. Anupamaa S. Chavan
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 How Retailers Add Value - Functions
• Provide Assortment
Buy other products at the same time

• Break Bulk
Sell it in quantities customers want

• Hold Inventory
Buy it at a convenient place

• Offer Services
See it before you buy; get credit; layaway

• Increasing the Value of Products and Services

By providing assortments, breaking bulk, holding inventory, and providing services, retailers
increase the value that consumers receive from their products and services.

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Retail Progression-

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Reliance Retail in the list of Top 250 Global Retailers
• Factors contributing to achieve this Position:
• a strong focus on boosting e-commerce growth through its website [Link];
• a push for sales of smartphones and other consumer electronics online;
• an aggressive pricing strategy across its offline stores;
• the acquisition of Hamleys in 2019, UK-based toy retailer;
• and new store openings.
• Acquisition of retail and wholesale business and the logistics and warehousing
business from the Future Group for Rs. 24,713 crore
• Mukesh Ambani-led Reliance Industries Ltd. has acquired Stoke Park Ltd, a luxury
hotel, spa, and country club in the UK for $79 million
• Campa Cola….; Alia Bhatt’s brand Ed-a-Mama …….
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Growth Drivers for Retail

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INDIAN SCENARIO
INDIAN RETAIL SCENARIO
Indian Retail Scenario : urce- Indian Brand Equity Foundation Report
videoplayback (1).mp4

By 2021
Orgainised Retail share
will reach 18%

E-Commerce Retail
share will reach 7%

Unorganised/Traditional
Retail will be 75%

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Key Players in Organised Market in India

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 MAJOR RETAIL PLAYERS IN INDIAN MARKET:
• Future Group: Big Bazaar, Food Bazaar, Ezone, Future Bazaar, Central;
Hypercity (Now taken over by Reliance Retail but still facing court case and
heading towards dissolution)
• K Raheja Group: Shopper’s Stop, In orbit, Crossword
• Tata Group: Star Bazaar,Tanishq, Titan, West Side, Titan Eye, West Land..
• Landmark Group: Lifestyle (Headquaters in Dubai, tapping tier2 cities)
• Reliance: Reliance fresh, Reliance Digital, Reliance Jewels, Reliance Retail
etc…
• AV Birla Group: Pantaloon, R Mall Thane, More Store
• Subhiksha – Shut down
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CHALLENGES TO RETAIL DEVELOPMENT IN INDIA

• Retail not being recognized

• The high costs of real estate
• Faces very high stamp duties on transfer of property
• Lack of adequate infrastructure
• Multiple and complex regulations/licenses/certifications/taxation
system

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Dr. Anupamaa S. Chavan
INDIAN RETAIL SET TO BENEFIT FROM FDI POLICY

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The top 10 richest people in India in 2023 by Forbes India PUBLISHED: Jul 26, 2023
08:59:23 AM IST
 Retail Mix/Strategy

◈ The performance of the retailer depends upon the

planning and implementation of retail mix or strategy

◈ The elements of retail mix /strategy depict the

characteristics of the retailer.

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 Retailer Characteristics

◈ PRICE OF THE MERCHANDISE: Discount Pricing, Competitive

Pricing, Premium Pricing
◈ TYPES OF MERCHANDISE/SERVICES : Food items, Non
Food/General items, Consumer durables, Services
◈ VARIETY & ASSORTMENT: General Merchandising, Specialty
Merchandising
◈ CUSTOMER SERVICES: Self Service, Assorted Service, Full
Service
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Dr. Anupamaa Chavan [Link]@[Link]

 Merchandise Offering
Variety (breadth of merchandise): wide vs. narrow
– The number of merchandise categories

Assortment (depth of merchandise): deep vs. shallow

– The number of items in a category (SKUs)

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 Retail Mixes
◈ Retailers Use Different Retail Mixes
◈ – Merchandise: variety (breadth) / assortment (depth)
◈ – Location
◈ – Pricing
◈ - Communication Mix
◈ - Services
◈ – Store design, visual merchandising

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Types of Ownerships:

Independent/Single Store Establishments

Chain Stores
Franchising
Consumer Co-operative Stores
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 Exercise

Early in the morning when you get up and require a cup of coffee; what do
you do? Also mention the alternatives available for the same.

- Make the coffee at home

- Go to Starbucks

- Get an Automatic Coffee Maker with a timer so that the coffee is ready when you wake up

For all the above options you have to approach a retailer

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 Types of
Retailers

Store Non Store

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 Store Retailers

• Food Retailers

• Non Food/General Merchandise Retailers

• Service Retailers
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 Store Retailers

• 1. Convenience stores
Food Retailers •
•
2. Supermarkets
3. Supercentres
• 4. Warehouse Club

• 5. Departmental stores
• 6. Discount stores
Non Food/General • 7. Speciality stores
Merchandise • 8. Off-Price Retailers
• 9. Membership Club stores
Retailers • [Link] Outlets, Drug store
• 11. Cash and Carry

• [Link] care- Dry Cleaning, Beauty Salon, Health Centres

• 13. Entertainment/Recreation- Movie theatres, Golf Course, Clubs
Service Retailers
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Discotheques
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• 14. Repair- Automobiles, Electronic goods/Appliances Repair
• Rented Goods services
 Non Store Retail Formats:
Direct Marketing

Direct Selling

E-Tailing

Catalogue/Mail order

Vending Machines

Kiosks

Tele-shopping

Direct Response retailing

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Airport retailing 48
 Services Retailing

• Intangibility

• Simultaneous Production and Delivery

• Perishability

• Inconsistency of the Offering

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 Services Offered
◈ Retailers differ in the services
they offer customers
� EMS offers assistance in
selecting the appropriate kayak
and repairing them
� Vs
� Wal-Mart: doesn’t provide any
services

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 Prices and the cost of offering breadth and depth of
merchandise and services
• Stocking a deep and broad assortment (like EMS) is costly for
retailers.
Many SKUs

Because the retailer must have backup stock for each SKU in addition to
holding the inventory

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 Characteristics of Food Retailers

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 ALDI: German’s Wal-Mart

ALDI provides quality

◈ ALDI provides quality merchandise at low prices by reducing its 53

assortment in order to control store operating expenses
Dr. Anupamaa Chavan
 Conventional Supermarket
• Conventional supermarkets
• 30,000 SKU
• Emphasize Fresh Perishables
– Wegmans
• Target health conscious and ethnic
consumers
• Offer more private label brands
• Provide a better in-store experience

◈ Chef-crafted meals on the go at 54

EatZi’s
Dr. Anupamaa Chavan
 Supermarkets
• Limited Assortment
Supermarkets (extreme
value food retailers)
– 2000 SKU
– Offer one or two brands and sizes
– Designed to maximize efficiency
and reduce costs
– Offer merchandise at 40-60%
lower prices than conventional
supermarkets
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 Supercenters and Warehouse Clubs

Supercenters Warehouse Clubs

• Also known as Hypermarkets • Offer a limited and irregular assortment of
food and general merchandise with little
• The fastest growing retail service at low prices
category • Use low-locations, inexpensive store design,
• Large stores (185,000 square little customer service
feet) that combine a • Low inventory holding costs by carrying a
supermarket with a full-line limited assortment of fast selling items
discount store
• One-stop shopping experience

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 Convenience Store

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 Characteristics of
General Merchandise Retailers

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 Types of Competition
◈ Competition between same type of retailer is called Intratype Competition
� Eg: One departmental store competes with another departmental store

◈ Competition between retailers having different formats is Intertype

Competition
� Eg: Food items are now provided grocery store, discount store, supercenters and also a
drug store

When retailers offer merchandise not typically associated with their type of store such as
Apparel and Jewelry section added by Walgreens which is a drug store, this result in
Scrambled Merchandising.

Scrambled Merchandising increases intertype competition

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 Theories of Retailing

Environmental Theory

Cyclical Theory – Wheel of Retailing

Retail Life Cycle

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 Environmental Theory
Darwin's Theory of Evolution states that groups of organisms will undergo genetic changes over
time due to the process of natural selection, changing the genetics of a species until that species
is well adapted for its environment. He further says that organisms which are most fit for their
environment survive while unfit organisms die
‘survival of the fittest’
Retail environment :
Economic, Social, Political, Regulatory, Cultural and Demographic

Environmental Theory has taken a “Darwinian” approach and suggest that only retailers with the
most appropriate organizational structure/formats & those who adopt and adapt to change will
survive (Gist, 1968; Davidson et al. 1983; Brown 1987)

The major Environmental Factors:

1. Consumers
2. Competition
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3. Changing Technology
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 Wheel of Retailing
by Professor Malcolm P. McNair in 1958

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 Retail Life Cycle

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 Multi Channel Retailing

A multi-channel retailer is a retailer that sells

merchandise and/or services through more than one
channel. By using a combination of channels, retailers
can exploit the unique benefits provided by each
channel to attract and satisfy more customers.

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 Multi-Channel
Format

Store Non Store

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 Multichannel Retailing

Store: Brick & Mortar

Non Store: Internet, Catalogs and Direct Mail, Direct Selling,

Television Home Shopping & Automated Retailing

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 Why are Retailers Using Multiple Channels
to Interact with Customers?
Consumers buy
What they want,
When they want,
Wherever they want

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Why are Retailers Using Multiple Channels
to Interact with Customers?
Consumers buy what they want,
Custom
When they want,
er Wherever they want

store kiosk catalog Call center Web/E-mail mobile

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Why are store-based retailers evolving into multi-channel
retailers?
◈ Sales through an electronic channel are growing rapidly
◈ Adding an electronic channel creates immediate possession utility
◈ Multi-channel retailers can attract more customers and satisfy
existing customers better
◈ The growth of sales in stores is declining

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 Today’s empowered consumers live in a multi-channel world –
research products online, buy offline, and demand service everywhere
Web & Email
Consumers buy • 24x7
• Visual
what they want,
when they want,
Call Center
wherever they want
• Convenient
• Immediate
Brick & Mortar
• Touch/Feel
• Experience driven

Kiosks
• Visual
• Convenient
Customer
Handheld
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• Immediate
• 24x7
 Benefits Provided by Different Channels

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 Unique Benefits
Provided by Store Channel
◈ Browse in the Store
◈ Touch & Feel the products
◈ Personal service
◈ Cash and credit payment
◈ Entertainment and social (c) Brand X Pictures/PunchStock

interaction
◈ Immediate gratification
◈ Risk Reduction
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 Benefits Provided by Catalog Channel

Convenience

Information

Safety

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Hoby Finn/Getty Images
 Internet Channel
▪ Broader Selection
▪ More and Better Information to Evaluate Merchandise
- Browse as Much as You Want
- Full motion Video
• Personalization
– Information is tailored to Individual consumers to help them make quicker and better
purchase decisions
– Customized Information -- Side By Side Comparisons, Full Motion Video
– Try It On Virtually

• Information for Solving Problems, Not Just Merchandise Characteristics

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– Virtual Communities
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 Benefits of Multichannel Retailing
◈ Traditional
store-based and catalog retailers are placing more
emphasis on their electronic channels and evolving into multichannel
retailers.
� E-channel gives a way to overcome limitations of existing format
� With electronic channel, retailers can reach out to new markets
� Builds share of wallet
� E-channel enables retailers to give insights into customers’ shopping behaviors

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 Benefits of Multichannel Retailing

◈ Gaining Insights into Consumer Shopping Behavior

◈ Expanding Market Presence

◈ Building a Strategic Advantage

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 Benefits of Multichannel Retailing

Overcoming the
Limitations of an Existing
Format

Low-Cost, Consistent
Increased Assortments Current Information
Execution
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 Shopping in the Future

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 Decision Variables for Retailers
Customer
Service

Store Merchandis
Design e Type,
and Variety &
Display Assortment

Retail Mix

Pricing Location

Communication
Mix
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 Exercise

As a retailer critically evaluate each channel in

Multichannel retailing.

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 Exercise

Enumerate the economic and social significance

of retailing.

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 Retail Shopping Behavior

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 A: Need Recognition: Types of needs
• Associated with work
• Shopping is deliberate and efficient
Utilitarian Needs • Retailers can satisfy these needs by providing information
and making shopping easy and effortless

• Associated with recreation, emotions and entertainment

• Desire for excitement,
Hedonic Needs • Retailers can satisfy these needs by including stimulation,
social experience, adventure, power and status, self-reward,
learning new trends

Conflicting Needs (Hedonic/Utilitarian)

Cross shopping (pattern of buying both premium and low priced merchandise) 84

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 B. Information Search
• the nature anFactors influencing the amount of information searched for include:
• (1) the use of the product being purchased,
1. Amount of • (2) characteristics of the individual customer, and
Information • (3) aspects of the market and buying situation in which the purchase is made.
Searched

• Internal sources are information in a customer’s memory such as the names, images, and past
experiences with different stores.
• External sources are information provided by ads and other people. When customers feel that
2. Sources their internal information is inadequate, they turn to external information sources.
of
Information • The Internet

• A good selection of merchandise

• Services provided by retailers can also limit the search.
3. Reducing • Everyday low pricing (EDLP)
the • Credit
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Information
Search
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 C. Evaluation of Alternatives:
The Multi-Attribute Attitude Model

•The multi-attribute attitude model provides a

useful way for summarizing how customers
use the information they have about alternative
products, evaluate the alternatives, and select
the one that best satisfies their needs.
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 C. Evaluation of Alternatives:
The Multi-Attribute Attitude Model

Customers see a retailer, product, or service as a

collection of attributes or characteristics

Customer’s evaluation of a retailer, product, or service is

based on
- Its performance on relevant attributes
- The importance of those attributes to the customer
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Information about Retailers Selling Groceries

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Information about Retailers Selling Groceries

10 8 6

3 5 10

9 7 5

4 4 8

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Information about Retailers Selling Groceries

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 Weightage given for every parameter by different
consumers
◈ 1. Young Single Women
◈ 2. Parents with 4 children
Characteristics Young Single Women Parents with 4 Children

4 10

10 4

5 8

9 2

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 Information Used in Evaluating Retailers

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Information Needed to Use Multi-Attribute Model

Alternative Consumer Considering

Characteristic/Benefits Sought in Making Store and

Merchandise Choices

Ratings of Alternative Performance on Criteria

Importance of Criteria to Consumer 93

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 Getting into the Consideration Set

• Consideration set: the set of alternatives the

customer evaluates when making a selection
• Retailers develop programs influencing top-of-mind
awareness
– Get exposure on search engines like Google
– Try to be the top of the page
– More stores in the same area (e.g., Starbucks)
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Methods for increasing the chance of store visit after getting
into the Consideration Set

• Increase Performance Beliefs of Your Store

• Decrease Performance Beliefs About Competitor

• Increase the Importance of Weight of Attributes on which You Have

an Advantage

• Add a New Benefit on which You Excel

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 Purchasing Merchandise or Services

Post purchase Evaluation

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 Types of Buying Decisions

Extended Problem Solving:

High financial or Social Risk

Limited Problem Solving:

Some Prior Buying Experience

Habitual Decision Making:

Store Brand, Loyalty 97

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 Social Factors
Influencing the Buying Decision Process

Family

Reference Groups

Culture

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Criteria for Evaluating Market

Segments
Actionable
• Retailer should
know what to do to
satisfy needs of the
customers in the
segment

Identifiable
• Retailer is able to determine
which customers are in the
segment
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 100

Criteria for Evaluating Market

Segments
Substantial
• Market segment must be larger
enough or its buying power
significant to generate sufficient
profits

Reachable
• Retailer can target promotions
and other elements of the retail
mix to customers in the segment

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Approaches for Segmenting

Markets

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Thank you
Dr. Anupamaa Chavan [Link]@[Link]