UNIT-1

What is Retail?
Retail involves the sale of goods from a single point (malls, markets, department stores etc) directly to the consumer in small quantities for his end use. In a laymans language, retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption. The word retail has its origin in French word retaillier and means to cut a piece or to break bulk. Retailing is the sale of goods and services to the ultimate consumer for personal, family or household use. According to Kotler: Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use Retailing may be understood as the final step in the distribution of merchandise for consumption by the end consumers. Retailing is responsible for matching final consumer demand with supplies of different marketers. Retailing is high intensity competition industry, the reasons for its popularity lie in its ability to provide easier access to variety of products, freedom of choice and many services to consumers.

Structure of Indian Retail

Traditional Formats Itinerant Salesman Haats Melas Mandis etc.

Established formats
Kirana shops Convenience/ department stores PDS/ fair price shops Pan/ Beedi shops

Emerging Formats
Exclusive retail outlets Hypermarket Internal retail Malls / Specialty Malls Multiplexes Fast food outlets Service galleries

The Evolution of Retail in India

Retail in India has evolved to support the unique needs of our country, given its size and complexity Haats, Mandis and Melas have always been a part of the Indian landscape. They still continue to be present in most parts of the country and form an essential part of life and trade in Various areas. The PDS (Public Distribution System) would easily as the single largest retail chain existing in the country. the evolution of the PDS of Grains in India has its origin in the rationing system introduced by the British during world war II The system was started in 1939 in Bombay and subsequently extended to other cities and towns. the system was abolished post war but however attaining independence India was forced to reintroduce it in 1950. There was rapid increase in the ration shops ( being increasingly called the Fair Price Shop or FPSs) The Canteen Stores Department and the Post Offices in India are also among the largest network of outlets in the country reaching population across the country. In the past decade, the Indian marketplace has transformed dramatically. However from the 1950,s to the 80,s, investment in various industries was limited due to low purchasing power in the hands of the consumer and the governments policies favoring the small scale sector. The first attempts at organized retailing were noticed in the textiles sector. One of the pioneers in this field was Raymonds which set up stores to retail fabric. Raymonds distribution network today comprises 20,000 retailers and over 256 exclusive showrooms in over 120 cities of the country Major Retailers in India Pantaloon With more than 450 stores across the country Launched country's first hypermarket Big Bazaar Tata Group A major player with its subsidiary Trent, which operates Westside and Star Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005.

RPG Group One of the earlier entrants in the Indian retail market, food & grocery retailing in 1996 with its retail Foodworld stores. Opened the pharmacy and beauty care outlets Health & Glow. Reliance More than 300 Reliance Fresh stores and Reliance Mart It's expecting its sales to reach Rs. 90,000 crores by 2011. Birla Group Strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England

Functions of a retailer
From the customer point of view, the retailer serves him by providing the goods that he needs in the required assortment, at the required place and time. From an economic standpoint, the role of a retailer is to provide real added value or utility to the customer. This comes four different perspectives 1. Form: First is utility regarding the form of a product that is acceptable to the customer. The retailer does not supply raw material, but rather offers finished goods and services in a form that the customers want. The retailer performs the function of sorting the goods and providing us with an assortment of product in various categories.

2. Time: He creates Time utility by keeping the store open when the consumers prefer to shop. Preferable shopping hours. Place: By being available at a convenient location, he creates place utility. Ownership: Finally, when the product is sold, ownership utility is created.

Apart from these functions retailer also performs like:

1. Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Final consumers in contrast prefer a large variety of goods and services to choose from and usually buy them in small units. Retailers are able to balance the demands of both sides, by collecting an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units 2. Breaking Bulk: to reduce transportation costs, manufacturer and wholesalers typically ship large cartons of the products, which are then tailored by the retailers into smaller quantities to meet individual consumption needs 3. Holding stock: Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacture to regulate production. 4. Promotional support: small manufacturers can use retailers to provide assistance with transport, storage, advertising, and pre- payment of merchandise.

Different formats
Department Stores A department store is a set-up which offers wide range of products to the end-users under one roof. In a department store, the consumers can get almost all the products they aspire to shop at one place only. Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs. Merchandise: Electronic Appliances Apparels Jewellery Toiletries Cosmetics Footwear Sportswear Toys Books CDs, DVDs Examples - Shoppers Stop, Pantaloon Discount Stores Discount stores also offer a huge range of products to the end-users but at a discounted rate. The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores. Wal-Mart currently operates more than 1300 discount stores in United States. In India Vishal Mega Mart comes under discount store. Merchandise: Almost same as department store but at a cheaper price. Supermarket A retail store which generally sells food products and household items, properly placed and arranged in specific departments is called a supermarket. A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer. The various food

products (meat, vegetables, dairy products, juices etc) are all properly displayed at their respective departments to catch the attention of the customers and for them to pick any merchandise depending on their choice and need. Merchandise: Bakery products Cereals Meat Products, Fish products Breads Medicines Vegetables Fruits Soft drinks Frozen Food Canned Juices Warehouse Stores A retail format which sells limited stock in bulk at a discounted rate is called as warehouse store. Warehouse stores do not bother much about the interiors of the store and the products are not properly displayed. Mom and Pop Store (also called Kirana Store in India) Mom and Pop stores are the small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity. They offer selected items and are not at all organized. The size of the store would not be very big and depends on the land available to the owner. They wouldnt offer high-end products. Merchandise: Eggs Bread Stationery Toys Cigarettes Cereals Pulses Medicines Specialty Stores As the name suggests, Specialty store would specialize in a particular product and would not sell anything else apart from the specific range. Specialty stores sell only selective items of one particular brand to the consumers and primarily focus on high customer satisfaction. Example -You will find only Reebok merchandise at Reebok store and nothing else, thus making it a specialty store. You can never find Adidas shoes at a Reebok outlet.

Malls Many retail stores operating at one place form a mall. A mall would consist of several retail outlets each selling their own merchandise but at a common platform. E- Tailers Now a days the customers have the option of shopping while sitting at their homes. They can place their order through internet, pay with the help of debit or credit cards and the products are delivered at their homes only. However, there are chances that the products ordered might not reach in the same condition as they were ordered. This kind of shopping is convenient for those who have a hectic schedule and are reluctant to go to retail outlets. In this kind of shopping; the transportation charges are borne by the consumer itself. Example - EBAY, Rediff Shopping, Amazon Dollar Stores Dollar stores offer selected products at extremely low rates but here the prices are fixed.

Example - 99 Store would offer all its merchandise at Rs 99 only. No further bargaining is entertained. However the quality of the product is always in doubt at the discount stores.

Retailing mix
Retail strategies are combination of one or more of the 6 Ps of Retail referred as "Retailing Mix". Every retailer seeks to find a unique combination of these factors that put them in the target market.

Product: Identifying, anticipating and satisfying customer needs & desires. Retailers need to ensure that their products and services are focused to meet the customers expectations. Product in the retail mix considers classification and brands - price points, labels, quality, branding. Price: Price is important element of the retail mix, it brings profits. Approaches to pricing model are based on market, competition, margins and brands. Some common strategies are EDLP (everyday low pricing), EDFP (everyday fair pricing) or Hi-Lo pricing and these strategies are influenced by what competition charges, what customers are ready to pay, what is required to present the product to the customer etc Place: Correct channels for reaching the customers e.g. locations, sites, space and opening hours to achieve the objective.

Promotion: Publicity, advertising, public relations, personal selling, direct marketing, communication are few elements that encapsulate promotion aspect. Presentation: It is the physical evidence that portrays the image of the business and key drivers. Presentation of the stores, websites, premises, offices, delivery vans, warehouses, uniforms etc plays crucial role in associating customer with your brand. It very important to ensure that the image portrayed is consistent with the product and services being offered. Personnel: It is the people working for you determine the level of service or value you provide to customer. Be is selling function, service, support or communication. These are people that are differentiators as compared with the competition whether it is pre-sales, sales or post-sales activities.