Retailing – Nature and Scope
Meaning of Retail, Retailer and Retailing
What is Retail?
In today’s competitive
environment, retaining customer is a difficult task. Customer should get
the product at their doorstep, due to which many intermediaries went on adding
to the distribution channel. Distribution becomes narrower with
the innovation of the word “Retail”. Retail is defined as any business
that directs its marketing efforts towards satisfying the final consumers,
based up on the organization of selling goods and services as a means of
distribution. The word ‘retail’ is dried from the French word retailer,
meaning ‘to cu a piece off’ or ‘to break bulk’.
Who is a Retailer?
A retailer is a merchant or occasionally an agent or a business enterprise, whose main business is selling directly to ultimate consumers for non-business use. He performs many marketing activities such as buying, selling, grading, risk-trading, and developing information about customer's wants. A retailer may sell infrequently to industrial users, but these are wholesale transactions, not retail sales. If over one half of the amount of volume of business comes from sales to ultimate consumers, i.e. sales at retail, he is classified as a retailer. Retailing occurs in all marketing channels for consumer products.
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Table of Contents |
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1. Meaning of Retail, Retailing and Retailer 2. Concept of Retail Management 3. Nature and Characteristics of Retailing 4. Functions of Retailers / Retailing 5. Role and Importance of Retailing and
Retail management a)
Services to Manufacturers b)
Services to Wholesalers c)
Services to Consumers d)
6. Scope of Retailing 7. Reasons behind
the growth of the retail sector in India 8. Overview /
Recent Trends in the Indian Retail Sector 9. Factors Underlying Trends of Modern Retail in India 10. Failure of Retail Business 11. Why Retailing is superior to other forms? 12. Types of Retailing (Retailers) in India |
Concept of Retailing
Delivering the products is not an
end job which a retailer does, today to be the best he needs to deliver
services associated with the product. The word Retailing is defined as
“The set of business activities that adds value to the products
and services sold to consumers for their personal or family use”.
Retailing can be referred to all activities involved in marketing and
distribution of goods and services. Retailing is defined as a conclusive
set of activities or steps used to sell a product or service to consumers
for their personal or family use. It is responsible for matching
individual demands of the consumer with supplies of all manufacturers.
A common assumption is that retailing involves only the sale of products
in stores.
However, it also includes the sale
of services like those offered at a restaurant, or by car rental agencies.
Retailing involves a direct interface with the customer and co-ordination
of business activities from end to end right from the concept or design
stage of a product or offering, to its delivery, and post delivery
services to the customer.
Definitions of Retailing
According to Kotler, “Retailing
includes all the activities involved in selling goods or services to the final
consumers for personal, non business use.”
According to David Gilbert, “Any
business that directs its marketing effort towards satisfying the final
consumer based upon the organization of selling goods and services as a
means of distribution.”
According to Chetan Bajaj,
“Retailing is defined as a conclusive set of activities or steps used to
sell a product or a service to consumers for their personal or family use.
It is responsible for matching individual demands of the consumers with
supplies of all the manufacturers.
Retailing can thus be defined as
consisting of all such activities involved in the marketing of goods and
services directly to the consumers for their personal, family or household use.
Retailing involves a direct interface with the customer and the coordination of
business activities from end to end, right from the concept or design stage of
a product or offering, to its delivery and post delivery service to the
customer.
Also Read:
👉👉Retail Management Notes
Concept of Retail Management
Management refers to the process
of bringing people together on a common platform and makes them work as a
single unit to achieve the goals and objectives of an organization. Management
is required in all aspects of life and forms an integral part of all
businesses.
The various processes which help
the customers to procure the desired merchandise from the retail stores for
their end use refer to retail management. Retail management includes all the
steps required to bring the customers into the store and fulfill their buying
needs. Retail management makes shopping a pleasurable experience and ensures
the customers leave the store with a smile. In simpler words, retail management
helps customers shop without any difficulty.
Nature and Characteristics of Retailing
Retailers are
very important part of channel of distribution. Some of the key features of retailing
are listed below:
a) Middlemen: Retailers acts as a middlemen
between wholesalers and consumers. They helps in movement of goods from
wholesalers to retailers.
b) Sale in small quantities: Retailers buys goods
in bulk quantities from wholesalers and sale them in small quantities to the
ultimate consumers. If retailers are eliminated from the channel of
distribution, it is very difficult for consumers to buy goods in small
quantity.
c) Personal contact: Retailers maintains a
personal contact with consumers. They know the needs of the consumers and
transferred these information to the wholesalers.
d) Variety of goods: Retailers deals in variety
of goods. In a retail shop, a consumer will get maximum variety of goods at one
place.
e) Various Types of Retailing: Regardless of the particular type of
retailer (such as a supermarket or a department store), retailers can be
categorized by (a) Ownership – Independent, retail chain and franchising (b)
Store strategy mix such as departmental store and super markets and (c) Non
store operations such as home retailing and telephone retailing.
Functions of Retailers / Retailing:
Retailers as the last link in the
chain of distribution, performs good many functions of marketing. Of all these
following are the most significant ones.
1.
Buying and assembling: Retailer
has to assemble products from different manufacturers and wholesalers as he has
to keep wide variety of stock of products market the varied and small
requirements of large number of customers. This assembling possible through the
prices of buying. Buying is a continuous process involving selection and the
most economical and dependable sources of supply.
2.
Warehousing: Retailer is a safety
value releasing the goods in quantities different varieties and price ranges
according to the consumer needs. Warehousing has possible holding the stocks to
match between the consumer demand and the wholesalers or manufacturer supply
conditions. It is possible to have adequate and interrupted supply of goods.
3.
Selling: The final aim is to sell
products so bought and held by him. Retailer is rightly called as the buying
agent of consumers. He is the means to dispose the goods to the consumers for
producers and wholesalers and collect the sales revenue for them. Successful
retailing needs good deal of salesmanship tactics.
4.
Risk-Shouldering: Risk
shouldering is the basic responsibility of a retailer arising out of physical
deteriorations and changes in prices. These are unavoidable as he holds
sufficient and variety of inventories from the time they are bought till they
are sold to the consumers. The risk of loss is seen in the number of forms such
as natural calamities – fire, food, cyclone, earthquake, spoilage and
deterioration due to changes in the weather and fashion and so on.
5.
Grading and Packing: Retailers undertake
secondary or second round grading and packing activities left by the
manufacturers and wholesalers. Classification of goods into different graders
and lots is common. As he sells in loose packs and very odd lots, packing
assumes a particular importance. Such packing can be highly standardised or can
be as per the individual requirements.
6.
Financing: In the whole scheme of
marketing, the contribution of retailers is really worth emphasizing in so far
as consumer financing is concerned. His financing consists of credit granted on
liberal terms to the consumers, investment made in large variety of stocks, the
expenses of holding stock, salaries and wages of watch and ward staff and other
trade expenses.
7.
Advertising: Retailers are
the best agents to advertise the products, services and ideas. In collaboration
with wholesalers and manufacturers retailers do undertake shop display,
distribution of sales literature, introduction of new products in a convincing
way as he recommends what is ‗right‘ or ‗wrong‘ to a particular customer.
8.
Supply of market information: Retailers
really enjoy enviable position so far collecting information from the horse‘s
mouth. As being in closed and constant touch with consumers, he clearly keenly
observes, studies the consumer’s behaviour, changes in the tastes and fashions
and therefore, demands. This collected information was passed on to the
wholesalers and the manufacturers for their perusal and necessary prediction
for future adjustment and success.
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 on 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.
Services 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
0stock 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 Retailing
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 organized retailing
sector in India is only 3% and is expected to rise to 25- 30% by the year
2010. There are under construction at present around 325 departmental stores,
300 new malls, and 1500 supermarkets. This proves that there is a tremendous
scope for growth in the Indian retail market.
The growth of scope in the Indian
retail market is mainly due to the change in the consumer’s behavior. For the
new generation have preference towards luxury commodities which have been due
to the strong increase in income, changing lifestyle, and demographic patterns
which are favorable.
The scope of the Indian retail
market has been seen by many retail giants and that’s the reason that many new
players are entering the India retail industry. The major Indian
retailers are:
b) Pantaloons Retail India Ltd
c) Shoppers Stop
d) Bata India Ltd
e) 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:
a) Tesco
b) Metro AG
c) Wall Mart
The scope for growth in
the Indian retail market is seen mainly in the following cities:
a) Mumbai
b) Delhi
c) Pune
d) Ahmedabad
e) Bangalore
f) Hyderabad
g) Kolkata
h) Chennai
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 behind the growth of the retail sector in India
India is not only one of the
fastest growing economies in the world but also ranks first in the Global
Retail Development Index (GRDI). The GRDI ranks the top 30 developing countries
for retail investment worldwide by analysing 25 macroeconomic and retail-
specific variables. Moreover, it not only identifies the most attractive
markets today but also identifies those that offer potential in the future.
Although the sheer market size of China still makes it a strong competitor for
foreign investment, the waning of its working population in comparison to the
working population of India gives India an edge over China. The main factors
responsible for the growth of the retail industry are:
1. Increase in per capita
income: Per capita Income means how much an individual earns, of the
yearly income that is generated in the country through productive activities.
India has marked growth in per capita income by 10.5% which shows tremendous
increase in GNP (Gross National Product) of the country. Increase in per capita
income reflects hike in income of Households which in turn will consume more,
thus leading to growth of retail sector. Household prefer to shop from big
giants as compare to their Kirana store.
2. Demographical changes: India
is having huge young age working population which is generating huge income and
high savings. For any developing country young age group, income, savings are
key factors for its growth. Presence of these key factors has helped in
attracting big retail giants to India
3. High standard of
living: Standard of living in India has improved. Earlier Shopping in
India always had an emotional tag attached to it, along with that people use to
have myth that shopping from shopping complexes or Malls is costlier and it
suits only to rich class. But now things have .changed, people have changed
their misconception and have adopted Mall culture. This shows that standard of
living has increased.
4. Change in consumption
pattern: Consumption patterns among various classes have changed over the
years. Earlier customers were brand loyal due to which they were allowing new
brands to enter the market. But now customers are showing good response to new
product entering the market because they have realised that they are paying for
quality. This drastic change in customers’ perception has opened ways for many
new entrants.
5. Availability of low-cost consumer
credit: It is rightly said that sales generated on credit are more as
compare to cash sales. With the change in credit policies, many new customers
have entered the market. Purchasing on credit basis with good credit worthiness
gives both seller and buyer flexibility to transact. Earlier due to lack of
cash many buyers use to postpone their purchases, but now with modernisation
they are carrying it on credit basis as it is cheaper to repay.
6. Improvements in
infrastructure: With many infrastructural changes taking place right from
metro rails to Bandra-worli sea link in the country, retail is also expanding
its wings. With huge infrastructure spending which has entered the country in
form of FDI (Foreign Direct investment), more retail giants have proposed to
enter Indian market.
7. Entry of foreign retailers: The
main factors responsible for the growth of the retail industry are the foreign
retailers and the income structure of the working population. Foreign retailers
enter the market and provide good quality products and services which not only
expand the market but give local retailers incentives to improve the quality of
their own products. Meanwhile, the income structure of the working population
determines the demand for products. Other factors include the size of the
working population, entry of the retail industry into rural markets or the
involvement of a corporate sector to provide quality products at reasonable
prices.
8. Make in India reaping dividends:
The Make in India campaign, started with the aim to make India a global
manufacturing hub, encouraged multinational and domestic companies to
manufacture their products in India. To achieve that aim, the government has
been working towards creating a conducive environment for investment,
development of modern and efficient infrastructure and opening up new sectors
for foreign investments. Under this campaign, the government also took steps to
improve India’s rank in the Ease of Doing Business Index, an index that
measures how easy it is to do business in a country. Developments of the
manufacturing sector and an increase in the number of businesses have
facilitated job creation leading to higher incomes for an increasing
middle-class population. Due to the higher incomes, the population is moving
away from the trend of buying only essential commodities, thus leading to a
consumption boom in India
9. Impact of FDI
and e-commerce: Recognising the
importance of foreign investment in the growth of any industry, the government
has initiated lucrative methods to attract foreign investors. These methods
include relaxing FDI regulations in certain areas of the retail sectors and are
expected to result in a boost to the organised retail sector.
Overview / Recent Trends in the Indian Retail Sector
Retailing in India has
traditionally been fragmented, while in the western countries, big retailers
usually dominate the landscape. In recent times, India has seen the emergence
of several organized retailing formats, from departmental stores like Shopper's
Stop to discount stores like Big Bazaar. We also have niche (exclusive) stores
like Music World, Coffee Day and Planet M and Grocery Stores like Spencer's,
subiksha etc.,
Indian retailing is undergoing a
process of evolution and is poised to undergo dramatic transformation. The
traditional formats like hawkers, grocers and paan shops co-exit with modern
formats like Super- markets and Non-store retailing channels such as multi
level marketing and teleshopping. Modern stores trend to be large, carry more
stock keeping units, and have a self-service format and an experiential
ambience. The modernization in retail formats is likely to happen quicker in
categories like dry groceries, electronics, men’s' apparel and books. Some
reshaping and adaptation may also happen in fresh groceries, fast food and
personal care products. In recent years there has been a slow spread of
retail chains in some formats like super markets, malls and discount stores.
Factors facilitating the spread of chains are the availability of quality
products at lower prices, improved shopping standards, convenient shopping and
display and blending of shopping with entertainment and the entry of Tatas into
retailing.
Foreign direct investment in the
retail sector in India, although not yet permitted by the Government is
desirable, as it would improve productivity and increase competitiveness. New
stores will introduce efficiency. The customers would also gain as prices in the
new stores tend to be lover. The consequences of recent modernization in India
may be somewhat different due to lower purchasing power and the new stores may
cater to only branded products aimed at upper income segments.
The Indian retail environment has
been witnessing several changes on the demand side due to increased per capital
income, changing lifestyle and increased product availability. In developed
markets, there has been a power shift with power moving from manufactures
towards the retailers. The strategies used by retailers to wrest power include
the development of retailers own brands and the introduction of slotting
allowances which necessitate payments by manufactures to retailers for
providing shelf space for new products. The recent increased power of retailers
has led to the introduction of new tactics by manufactures such as everyday low
pricing, partnership with retailers and increased use of direct marketing
methods.
Factors Underlying Trends of Modern Retail in India
The earlier part of this lesson
has provided some information that enables the construction and analysis of
recent trends in the Indian Retail Industry. The driving forces towards that
trend can be broadly classified into the following categories.
a) Economic development
b) Improvements in civic situation
c) Changes in government polices
d) Changes in consumer needs, attitudes and
behavior
e) Increased investment in retailing
f) Rise in power of organized retail.
The development of the Indian
economy is a necessary condition for the development of the Indian retail
sector. The growth of the economy can provide gainful employment to those who
would otherwise enter retailing in areas like roadside vending and other
similar low cost entries into the retail sector. The growth of modern retail is
linked to consumer needs, attitudes and behavior. Marketing channels including
retailing emerge because they receive impetus from both the supply side and the
demand side. On the demand side, the marketing channel provides service outputs
that consumer's value.
In Indian retailing, convenience
and merchandise appear to be the most important factors influencing store
choice, although ambience and service are also becoming important in some
contexts. Store ambiance includes such as lighting, cleanliness, store layout
and space for movement.
The government of India has
clarified on a number of occasions that foreign dried investment will not be
permitted in India in the retailing sector. Major international retailer
organizations are waiting for signals of policy change especially in the wake
of Chinese permission for foreign investment in its retail. In opening up the
retail sector, the government may consider various approaches such as insisting
an joint ventures, limiting the foreign stake, or specifying the cities where
investment is permitted.
Although FDI is not yet permitted
in retailing, a number of global retailers are testing the waters by signing
technical agreements and franchises with Indian firms. Fast food chains like
McDonald's and Pizza Hut are already operating in the metres. A Marks and
Spencer Store is already operational in Mumbai. Recent trends show that
industrial groups such as Reliance and Raymonds have been active in encouraging
development of well appointed exclusive showrooms for their textile brands.
Industrial houses like Rahejas, Tatas have entered retailing. Several Indian
and foreign brands have used franchising to establish exclusive outlet for
their brands.
The Indian retail sector is
largely traditional but stores in modern format are emerging. Though the
contribution of organized retailing in the retail sales in India though small
in the last decade, but currently it is picking up very fast spreading their
activates not only in metros but in other cities. Modern management techniques
are used in managing the affairs of retail sector. Firms will need to
proactively review their sales structures, brand activates, logistics policy
and price structure to cope with pressures from powerful retailers.
Failure of Retail Business
A retail trade may fail owing to
the following reasons:
a) Limited financial resources.
b) Lack of experience in the line.
c) Faulty credit policy of retailer
d) Change of customer’s outlook.
e) Natural calamities, viz.,
earthquakes, floods, etc.
f) Personal factors, viz., death or
illness of retailer himself.
g) Poor location of shop.
h) Poor advertising and window
display.
i)
Impolite
and discourteous behaviour of retailer.
j)
Poor
service of retailer.
k) Stiff competition from rivals in
the same trade.
l)
Poor
or lack of foresight of the retailer which leads to faulty planning,
organisation and control of the business.
m) Financial crunch viz., limited
capital resource of the retailer.
n) Unplanned spending by the retailer
for personal needs.
Why Retailing is superior to other forms?
1) A retailer performs the dual
functions of buying and assembling of goods. The responsibility of a retailer
is to identify the most economical source for obtaining the goods from the
suppliers and passing on the advantages to the consumer.
2) The retailers perform the functions
of warehousing and storing. They store the goods in bulk and make them
available as per the requirement of the consumer. Warehousing and store keeping
helps in ensuring uninterrupted availability of the goods to the consumers.
3) The primary function of a retailer
is selling the products to the customers for which various techniques or
business practices are being adopted by the retailer to achieve the strategic
goals.
4) The prime focus of a retailer is
on maximizing customer satisfaction by delivering quality products and services
both on cash as well as credit basis. As a result of which, retailer always
runs the risk of accumulating bad debts on account of non-payment of the amount
from the consumer.
5) A retailer needs to have robust
risk management capabilities. Various kinds of risks can be involved in a
retail business which a retailer should be well prepared with like loss or
damage of the products due to deterioration in quality, perishability or
spoilage. A change in customer’s buying preferences or tastes can also affect
the retail business to a great extent, or even the products may be damaged due
to the natural calamities or vagaries of nature.
6) A retailer performs the crucial
function of grading for all those goods which at times are either left ungraded
by the wholesalers or manufacturers so that the customers readily accept the
goods. The retailer is responsible for the packing of goods in small packages
or small containers for the customer’s convenience.
7) The retailers are the direct point
of contact or communication with the customers; hence they gather information
regarding the changing tastes and preferences of the consumers pass on the
customer feedback to the manufacturers for continuous improvement in service
delivery.
8) Retailers act as a vital channel
for the launch of new products in the market as they are the direct interface
with the consumers and can communicate directly with the targets consumers
about the new product features and advantages.
9) The retailers are responsible for
the product promotion and advertisement by planning the product displays and
visual merchandising for attracting the customers.
Types of Retailing (Retailers) in India
Regardless of the particular type of retailer (such as a supermarket or a department store), retailers can be categorized by (a) Ownership, (b) Store strategy mix, and (c) Non store operations.
1. Form of Ownership: A retail business like any other type
of business, can be owned by a sole proprietor, partners or a
corporation. A majority of retail business in India are sole proprietorships and
partnerships.
a. Independent Retailer: Such retailers
generally operates one outlet and offers personalized service, a convenient
location and close customer contact. Roughly 98% of all the retail businesses
in India, are managed and run by independents, including barber shops,
drycleaners, furniture stores, bookshops, LPG Gas Agencies and neighborhood
stores. This is due to the fact that entry into retailing is easy and it
requires low investment and little technical knowledge. This obviously results
in a high degree of competition. Most independent retailers fail because of the
ease of entry, poor management skills and inadequate resources.
b. Retail Chain: It involves common
ownership of multiple units. In such units, the purchasing and decision making
are centralized. Chains often rely on, specialization, standardization and
elaborate control- systems. Consequently chains are able to serve a large
dispersed target market and maintain a well known company name. Chain stores
have been successful, mainly because they have the opportunity to take advantage
of "economies of scale" in buying and selling goods. They can
maintain their prices, thus increasing their margins, or they can cut prices
and attract greater sales volume. Unlike smaller, independent retailers with
lesser financial means, they can also take advantage of such tools as computers
and information technology.
c. Retail Franchising: It ss a
contractual arrangement between a "franchiser" (which may be a
manufacturer, wholesaler, or a service sponsor) and a "franchisee" or
franchisees, which allows the latter to conduct a certain form of business
under an established name and according to a specific set of rules. The
franchise agreement gives the franchiser much discretion in controlling the
operations of small retailers. In exchange for fees, royalties and a share of
the profits, the franchiser offers assistance and very often supplies as well.
Classic examples of franchising KR Bakery, Famous bakery and opus bakery.
d. Cooperatives: A retail cooperative
is a group of independent retailers, that have combined their financial
resources and their expertise in order to effectively control their wholesaling
needs. They share purchases, storage, shopping facilities, advertising planning
and other functions. The individual retailers retain their independence, but
agree on broad common policies. Amul and milma are typical example of a
cooperative in India.
2. Store Strategy Mix: Retailers can be classified by retail
store strategy mix, which is an integrated combination of hours,
location, assortment, service, advertising, and prices etc. The various
categories are:
a. Convenience Store: It is generally
a well situated, food oriented store with long operating house and
a limited number of items. Consumers use a convenience store; for fill
in items such as bread, milk, eggs, chocolates and candy etc.
b. Super markets: It is a diversified
store which sells a broad range of food and non food items. A
supermarket typically carries small house hold appliances, some apparel items, bakery,
film developing, jams, pickles, books, audio/video CD's etc.
c. Department Stores: A department
store usually sells a general line of apparel for the family,
household linens, home furnishings and appliances. Large format apparel department
stores include Pantaloon, Ebony and Pyramid. Others in this category are: Shoppers
Stop and Westside.
d. Speciality Store: Such stores
mainly concentrates on the sale of a single line of products or services,
such as Audio equipment, Jewellery, Beauty and Health Care, etc. Consumers are
not confronted with racks of unrelated merchandise. Successful speciality
stores in India include, Music World for audio needs, Tanishq for
jewellery and McDonalds, Pizza Hut and Nirula's for food services.
e. Hyper Markets: Is a special kind
of combination store which integrates an economy super market with
a discount department store. A hyper market generally has an ambience
which attracts the family as whole. LULU hypermarket is good example of hypermarket.
3. Non Store Retailing: In non store retailing, customers do
not go to a store to buy. This type of retailing is growing very
fast. Among the reasons are; the ability to buy merchandise not available in
local stores, the increasing number of women workers, and the presence of
unskilled retail sales persons who cannot provide information to
help shoppers make buying decisions. The major types of non store
retailing are:
a. In Home Retailing: Where, a sales
transaction takes place in a home setting - including door-door
selling. It gives the sales person an opportunity to demonstrate products
in a very personal manner. He/ She has the prospect's attention and there are fewer
distractions as compared to a store setting. Examples of in home retailing
include, Eureka Forbes vacuum cleaners and water filters.
b. Telesales/Telephone Retailing:
This involves contact between the prospect and the retailer over
the phone, for the purpose of making a sale or purchase. A large number of mobile
phone service providers use this method. Other examples are private insurance companies,
and credit companies etc.
c. Catalog Retailing: This is a type
of non store retailing in which the retailers offers the merchandise
in a catalogue, which includes ordering instructions and customer orders by mail.
The basic attraction for shoppers is convenience. The advantages to the
retailers include lover operating costs, lower rents, smaller sales
staff and absence of shop lifting. This trend is catching up fast
in India.
d. Direct Response Retailing: Here
the marketers advertise these products/ services in magazines,
newspapers, radio and/or television offering an address or telephone number so
that consumers can write or call to place an order. It is also sometimes
referred to as "Direct response advertising." The
availability of credit cards and toll free numbers stimulate direct
response by telephone. The goal is to induce the customer to make an immediate
and direct response to the advertisement to "order now." Telebrands
is a classic example of direct response retailing. Times shopping
India is another example.
e. Automatic Vending: Although in a
very nascent stage in India, is the ultimate in non personal, non
store retailing. Products are sold directly to customers/buyers from machines.
These machines dispense products which enable customers to buy after closing
hours. ATM's dispensing cash at odd hours represent this form of non store retailing.
Apart from all the multinational banks, a large number of Indian banks also provide
ATM services, countrywide.
f. Electronic Retailing/E-Tailing: Is
a retail format in which retailers communicate with customers and
offer products and services for sale, over the internet. The rapid diffusion of
internet access and usage, and the perceived low cost of entry has stimulated
the creation of thousands of entrepreneurial electronic retailing
ventures during the last 10 years or so. Flipkart, Amazon.com,
E-bay and Bazee.com HDFCSec.com are some of the many e-tailors
operating today.