2. RETAIL MANAGEMENT ..1
INTRODUCTION –
CONCEPTS, ROLE & ENVIRONMENT
RETAILING Business activities involve Selling Goods
and Services to Consumers for their Personal,
Family or Household use.
“Every sale of Goods and Services to final consumer”
– Food products, apparel, movie tickets; services
from hair cutting to e-ticketing.
• Retailing is the Last stage in Distribution Process-
Wholesale is an intermediate where Goods and
services are sold to Business customers.
3. RETAIL MANAGEMENT ..1
• Retailer is customer focused, not Product –
focused.
Manufacturer may reach customers
through:
• Dealers
• Company showrooms
• Malls
4. RETAIL MANAGEMENT ..1
ORGANISED RETAILING
• In India Organised Retailing is 5%
• Retail sector highly fragmented
• Retail chains like Wal Mart, Sears, McDonalds
brought Rapid Growth and consolidation of
Organised Retail
• Rapid rise of Income levels and
accompanying changes in lifestyles greatly
contributed to growth of Organised Retail
5. RETAIL MANAGEMENT ..1
ORGANISED RETAILING
• In India, increase in Disposable income, Purchasing
Power of growing Middle Class conducive conditions
for growth of Organised Retail
• Indian Retail environment different from that of
western countries:
- Cities congested, large population rural areas
- Smaller purchases, limited household space
6. RETAIL MANAGEMENT ..1
RETAILING CONCEPT
“Retaillier” French for breaking bulk
Retailer links Producers to Customers
Retailer is a person, agent, company or organisation
reaching the Goods or Services to ultimate consumer
Retailers perform specific activities:
• Anticipate customer wants
• Stock product assortments
• Acquire market information
• Finance Retail business
8. RETAIL MANAGEMENT ..1
Last decade has seen tremendous changes in
Retail Business – from made to order to
ready to wear, from counter sales to self
service, emphasis on value addition and cost
reduction.
Family run retail business giving way to modern
professional retail.
Retail improving inventory management
through systems – faster turnover, better
profitability, fast changing customer
preferences for assortment of goods and
services. BETTER CUSTOMER CARE
10. RETAIL MANAGEMENT ..1
ORGANISED RETAIL FORMAT
1. By 2006 - 200 Shopping Malls – Up from 25
in 2003
2. 6 A Grade cities Delhi NCR, Mumbai,
Bangalore, Hyderabad, Chennai, Kolkata will
have 34 mio. and non metros Pune,
Ahemadabad Ludhiana, Chandigarh, Jaipur,
Lucknow, indore, Cochin 6 mio.
3. Delhi NCR will have 26 mio., Mumbai another
5 mio.
11. RETAIL MANAGEMENT ..1
RETAIL CHARACTERISTICS
1. Direct End-User Interaction
2. Platform for Promotions & POP displays
3. Lower unit sales
4. Retail location critical
5. Services as important as Core Products
6. Large number of Retailers to meet
geographical coverage and population
density
12. RETAIL MANAGEMENT ..2
RETAIL CONCEPT
• Customer Orientation:
Attributes & Needs satisfaction
• Coordinated Efforts:
Maximize Business Efficiency IT: POS, QR.
• Value driven:
Good Value for Money sabse sasta din Big
Bazaar, EDLP Wal Mart
• Goal Orientation
Achieve Goals
13. RETAIL MANAGEMENT ..2
RETAILING CONCEPT
• Communication with Customers
• Identify Customers Needs
• Provide Products and Services to
Satisfy Customers
• Elicit Feedback to Improve Services – Word
Of Mouth
14. RETAIL MANAGEMENT ..2
RETAILING CONCEPT
Customer Service approach:
• Create a conducive environment
• Listen to your Customers
• Direct mail
• Relationship Marketing – Long Term CRM
• Rewards for Regular Customers Inc switching cost
15.
16. RETAIL MANAGEMENT ..2
ROLE
• Consumer spend their money at Retail which drives the
economy. Retailers realize Revenue when Consumers buy
products or Services from them.
• The revenue passes up the Consumer Goods distribution
chain viz. to Wholesalers, Distributors and Manufacturers.
17. RETAIL MANAGEMENT ..2
• Retail Industry employs 17-20% Workforce that drives
the Economy.
• Retail trends often mirror trends in a nation’s overall
economy.
• Retailers add value by Providing the Right Product at
The Right Place at the Right Time.
19. RETAIL MANAGEMENT ..2
• ENVIRONMENT
• Retailing is a Dynamic field with very Competitive
Environment.
• Retailers act as Filters – Strong lobby for success or
otherwise of a Product or Services.
• Companies create Retailer Value and Consumer
Differential Advantage to improve success rate of their
Brands.
• Constraints – Multiple Brands and SKUs for each category,
Shelf Space, funds available, Turnover of Merchandise.
20. RETAIL MANAGEMENT ..2
New Concepts & Trends
1. Vertical Retail Concept: Traditional
stores and Shop-in-Shop concepts –
mixture of system and individuality,
e.g. Sale of Non-food items like
newspapers, magazines with snacks,
beverages
2. Consumption Related Trends:
Increasing Consumers with Purchasing
Power & More Migrant Consumers
Demand for Broad selection of Products
Demand for Good quality Products e.g.
Honest, Original and Green Products
21. Indian Economy – GDP Projections Through 2022 (2007 Prices)
US$ US$
Billion 2007 Billion
B raz il 1,068 2012
R us s ia 979
B raz il 1,369
India 916 R us s ia 1,304
F ranc e 2,232 India 1,409
UK 2,374 F ranc e 2,470
2,630
UK 2,648
C hina G ermany 3,198
G erma 2,897 C hina 4,197
US A 13,245 US A 15,354
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 - 5,000 10,000 15,000 20,000
US$ US$
Billion Billion 2022
2017
B raz il 2,282
B raz il 1,789 R us s ia 2,103
R us s ia 1,688
India 3,128
India 2,119
F ranc e 3,085
F ranc e 2,761
UK 3,251
UK 2,953
G ermany 3,766
G ermany 3,513
C hina 6,341 C hina 9,229
US A 17,031 US A 19,751
- 5,000 10,000 15,000 20,000 - 5,000 10,000 15,000 20,000 25,000
*GDP figures are in real terms with base year as 2007
India is expected to be comparable with UK & France in GDP by 2022
26. Radical Transformation Anticipated In
Indian Retail
Country Share of Years taken to
Organized reach the level
Retail from < 5%
China 20% 10
Poland 20% 8
Brazil 36% 15
Thailand 40% 18
US 85% 50
India 17% (estimated) 5
27% (estimated) 10
India looking at rapid GROWTH compared to other countries
27. Growth Of Indian Retail …
*Projected
Source: Technopak Analysis, CSO & Other Sources
Indian Retail expected to grow close to 12% p.a. in the next 10
years
