UNIT 1 AN INTRODUCTION TO RETAILING.pptx

Matrix

1. AN INTRODUCTION TO RETAILING Factors influencing retailing, Basic retail models, Modern retail format & Retailing in Rural India

2. Retailing “Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use”

3. AV1: Corporate Thrones: Evolution of Indian Retail Over the Years https://www.youtube.com/watch?v=qtf5fHpLVWc

4. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers’ products

5. Retail Management 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.

6. Retailing encompasses the business activities involved in selling goods & services to consumers for their personal, family, or household use. It includes every sale to the final consumer – ranging from cars to apparel to meals at restaurants to movie tickets. What is Retail Management? Key issues that retailer must resolve : How can we best serve our customer while earning a fair profit? How can we stand out in a highly competitive environment where customers have so many choices? How can we grow our business while retailing a core of loyal customers?

7. Need of RM Retail management saves time and ensures the customers easily locate their desired merchandise An effective management avoids unnecessary chaos at the store [E.g.- Big Bazar, Metro, Hyper City] Offers multiple choices of brands, products & services [E.g. – Shampoo – P&G’s Head & Shoulder, HUL’s Sunsilk , Medimix , etc.]

8. FACTORS INFLUENCING RETAILING Growth of middle class c onsumers: In India, the number of middle class consumer is growing rapidly. With rising consumer demand and greater disposable income has given opportunity for retail industry to grow and prosper. Increase in the number of working women: Today, the urban women are literate and qualified. They have to maintain a balance between home and work. The purchasing habit of the working woman is different from the homemaker. Value for money: Organized retail deals in high value and are able to enjoy economies of large scale production and distribution. Organized retailers offers quality products at reasonable prices. E.g. Big bazaar

9. Emerging rural market: The rural market in India is fast emerging as the rural consumers are becoming quality conscious. Thus due to huge potential in rural retailing organized retailers are developing new products and strategies to satisfy and serve rural customers. In India, retail is providing largest source of employment after agriculture, which has the deepest penetration into rural India. Entry of corporate sector: As the corporate- the Piramals , the Tatas , the Raheja’s , shoppers stop, pantaloons race to revolutionize the retailing sector. Entry of foreign retailers: Due to liberalization multinationals have entered our country through joint ventures and franchising. This further is responsible for boosting organized retailing.

10. Technological impact: Introduction of computerization, electronic media and marketing information system have changed the face of retailing. One of the major technological innovations in organized 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. Rise in income: Increase in income has led to increase in demand for better quality consumer goods. Rising income level 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. Media explosion: Indian consumers are exposed to the lifestyles of countries. Their expectation for quality products have risen and they are demanding more choice and money value services and conveniences.

11. Rise of consumerism: 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 organization to change their format of retail trade. Consumer demand, convenience, comfort, time, location etc are the important factors for the growth of organized retailing in India.

12. BASIC RETAIL MODELS What is a business model? It is the way by which an organisation makes money (revenue and profit) by selling their products and/or services. It is a simple yet complex model depending on the scale an organisation operates & play and the expertise they possess. Currently, their are 3 business models adopted by retailers to run their businesses. In the 21st century, retailers irrespective of the categories they operate in; will constantly need to reinvent themselves in this dynamic environment to tap the customer with all the 6 Ps.

13. 1)ONLINE MODEL: In this, a retailer operates its shop completely online i.e. website and apps without physically going to a store. No matter what time or day it is, one can order 24x7x365.

14. Customers can view, compare and place an order products and/or services just at a touch of a button or click of a mouse through their mobiles, tablets, laptops or PCs. Retailers can get plethora of data as anything can be tracked online helping them to understand customers better and faster compared to offline shopping. Further, this helps them in displaying the right product(s), making right 'promotional strategies', re-targeting customer(s), showcasing relevant advertisement(s) and much more. The biggest plus point is that online retailers don't need to worry and take pain of leasing, buying, opening and maintaining a store thus locking their capital.

15. 2)OFFLINE MODEL: As the name suggests, customers physically go to a shop to experience and purchase products and/or services in small quantities for their personal and family use to fulfil their needs and satisfy themselves. Unlike, in online shopping, the customer doesn't need to wait for a couple of days to get the product(s). A number of formats such as hypermarket, supermarket, convenience, cash & carry and many more are available for customers depending on their catchment, needs and wallet. This traditional format is witnessing immense change in the form of experiential shopping to match the new demands from the new generation customers and compete with online retailers, at the same time in terms of convenience and discount pricing. Also, the perception of online retailers (and model) being more successful (and profitable) is quite dubious and false.

16. 3)OMNI CHANNEL MODEL: It is also known as hybrid channel. This new age shopping format is mix of online and offline model where consumers can shop from a variety of mediums. It is seen as the new way to shop bridging the gap between online and offline shopping and combining both synergies to create an exceptional shopping experience for the customer. An omni -channel retailer is one whose customers uses both offline shopping tools + online shopping tools to purchase their products and /or services.

17. It enjoys the advantages of both formats thus helping retailers to increase their offerings and providing better services to delight the customer(s). Undoubtedly, this format is a win-win for both retailers and customers. Check out how Alibaba is transforming traditional retail with online retail creating an omni -channel model in China.

18. MODERN RETAIL FORMAT A number of modern retail formats have emerged over the time all around the globe. As the competition gets intense with customer and margins are getting squeezed, retailer have experimented and innovated to survive in the industry. 1) Convenience Stores : As the name suggests, it offers convenience to consumers and hence, the reason for success.It stocks everyday/top-up items such as grocery, newspapers, soaps, confectionery, beverages, dairy, snacks and more. It caters to a particular area/catchment. A retailer doesn't require heavy capex & opex for stores as compared to a hypermarket/cash and carry and also, marketing/branding activities aren't required.

19. 2) Supermarket : This formats offers a wide variety of goods both general and branded in prime shopping locations with good parking facilities available for the customers. They may shop for monthly family and/or individual needs/necessity. Hence, products are priced attractively (or affordable) to capture customers. Compact Hypermarket : This format is a middle ground between small stores ( kirana ) and large hypermarkets. This format is economically feasible to run than daily format store but comes with its own set of challenges. 3) Hypermarket : One of the most popular format housing various categories and thousands of products. It is spread over a large area has a lot of aisles, product varieties, salespeople and exclusive parking for the customers. The sales and footfalls of an average customer(s) are quite high (and a must for survival) compared to other formats but with low margin sales and high turnovers. This format is quite successful in India especially for the urban customer who has a big basket and wants a delightful customer shopping experience. One can find apparel to groceries to liquor and what not; under one roof.

20. 4) Departmental : This format offers broad assortment of merchandise i.e. international, domestic and local brands to the customers. It is quite popular in apparels. Additionally, footwear and accessories can be found. The stores have attractive interiors, quality merchandise and strategic locations. It enjoy the benefits of economies of scale and also cost advantages due to its large scale operation. Examples are Shoppers Stop, Pantaloons, Marks & Spencer, etc. to name a few.

21. 5) Cash & Carry – This format is only for business re-sellers and registered professional customers who settles the invoice (bill) in cash on the spot and carry the goods themselves. Buyers have to assume all the risk for transporting and insuring their goods. The purpose is remove the middleman in the distribution channel and earn savings for the business while it brings low pricing for the buyer. The products are sold in bulk quantities at wholesale rates. These stores are located outside the cities and consume the largest space compared to any format.

22. 6) Warehouse Club : These stores sell a limited assortment of goods at low or discounted prices. The discounted prices can be due to a variety of reasons. They are located in not-so posh (or lower rental) areas which helps them to decrease expenses on rent, operations and maintenance. 8) Discount Stores - They offer a huge range of products to the end-users but at a discounted rate. These discount stores are similar to departmental stores, generally offering a limited range of products at cheaper prices and of inferior quality. Their customers tend to shop more when offered discounts. 9) Specialty Stores : These stores specialize in selling specific category. Generally, they offer a wide assortment of goods at attractive ( or affordable) prices to customer. The stores are well-maintained and location plays a key role.

23. 10) Category Killers : A retailer typically offers single category of goods at such low prices which eliminates the competition as the nearby smaller stores find hard to compete. The deep merchandise selection helps them to tap different customers based on price ranges. 12) Etailers : It refers to retailers who sell via internet i.e. online and/or app. The customers can order any product simply be accessing the website/app from their mobile, tablets/laptop. The ordered products will be delivered after a couple of days at their home(s)/office(s). You must pay a surcharge for fast delivery i.e. one or two day delivery. It is suitable for customers who have a hectic work-life balance.

24. 13) Vending Machines : It is an automated machine which quickly dispenses a wide assortment of products (via unique codes) such as FMCG, Beverages, Tobacco, F&B, Grocery and more in return for a payment either by cash/special card. These machines are placed at strategic places such as crowded public spots/metro/malls/parks/airports. Also, they're convenient, accessible 24x7x365 and doesn't requires frequent human intervention(s) unlike a physical store. Few challenges faced are theft/vandalism, high rental and technical snags.

25. 14) Cashierless Stores : Retailers are often criticised for paying low-wages/salaries to the store staff. To counter this, a new concept of cashierless stores is quietly gaining momentum. These stores hardly employ staff to run the stores. However, these stores are technology superior (compared to other formats which employ number of staff) making them more efficient and cutting unnecessary cost wherever possible. Technologies such as sensor vision, deep learning, artificial intelligence, RFID tags, etc. make it possible to operate stores without the interference of humans. Retailers will need to significantly (or partner with others such as Microsoft) invest a lot in both talent and technology to be at par to develop these stores.