unit 2 Retail Models & Theories of Retail Development.pptx

Retail Theories

1. Retail Models & Theories of Retail Development Presented by-Mahendra Singh Negi Associate Professor- Amrapali Institute of Hotel Management

2. Theories  of Retailing

3. THEORY OF WHEEL OF RETAILING  The theory was given by Malcolm P. McNair. One of the well accepted theories regarding institutional changes in retailing. This theory states that in a retail institution changes takes place in a cyclical manner .

4. The cycle is: the new retailer often enters the market with a low status, low profit margin, and low price store formats. Later they move to up market locations and stock premium products to differentiate themselves from imitators. Eventually they mature as high cost, high price retailers, vulnerable to new retailers who come up with some other novel retailing format/concept. This same retailer will in turn go through the same cycle of retail development. The cycle can be broadly classified into three phases: Entry Phase  Trading up phase  Vulnerability Phase  

5. Theory 2- THE RETAIL ACCORDION THEORY /   General-Specific-General Theory 

6. At this early stage, the retail institution is a general store. As time passes, the retail institution becomes specialized by carrying a limited line of merchandise with a deep assortment. At this point, the retail institution is a specialty store.  The theory suggests that retail institutions go from outlets with wide assortments to specialized narrow line store merchants and then back again to the more general wide assortment institution. It is also referred to as the general-specific-general theory. 

7. In short…

8. Theory 3 – Melting Pot/ Dialectic Process Proposed by Thomas J. Maronick and Bruce J. W     Two institutional forms with different advantages modify their formats with different advantages modify their formats till they develop a format that combines the advantages of both formats. This model implies that retailers mutually adapt in the face of competition from ‗opposites‘. Thus when challenged by a competitor with a differential advantage, an established institution will adopt strategies and tactics in the direction of that advantage.

9. In Short…… Retail firms adapt mutually to the emerging competition and tend to adopt the plans and strategies of the opposition.  Emergence of new retailer by combination of two retailers

10. POLARIZATION THEORY     T his theory suggests that, in a longer term, the industry consists of mostly large and small size retailers. The medium size becomes unviable. This is called polarization. Large stores offer one stop shopping. The smaller ones tend to offer limited range of products, but add value to their offers with other services. It is found that firms tend to be more profitable when they are either small in size or big. The medium ones fall into the ―Bermuda Triangle

11. In short…… This theory suggests that, in a longer term, the industry consists of mostly large and small size retailers   Large stores offer one stop shopping.   The smaller ones tend to offer limited range of products, but add value to their offers with other services   It is found that firms tend to be more profitable when they are either small in size or big

12. AIRPORT RETAILING

13. Meaning Airport retailing is referred to as the availability of retail services of various products within the airport in order to provide greater convenience to travelers . Airport retailing provides a wider variety of products and is an easy option for travelers . 

14. Airport Retailing/ Travel Retail

15. AIR PORT RETAILING Airports where airfares are low are not able to generate high revenue from aeronautical business. Therefore, they shift to non-aeronautical businesses such as retail shops, restaurant, bars, and cafeterias. Airport retailing can also include services such as hotels, nursing homes, car rental outlets, banks, exchange offices, drugstores, and other stores such as jewelry , books and magazines, gifts and crafts, clothing & accessories, convenience stores, optics, perfumes, and souvenirs

16. Key players- Airport Retailing Are Key players operating in the airport retailing market are: Dufry AG Tata Inc., Shoppers Stop Ltd William Penn Ltd. Pavers England Limited WH Smith PLC Hidesign Accessories Ltd. World Duty Free Group.

17. Services Retailing Many organizations that offer services to customers such as banks, hospitals, doctors, lawyers & other consultants do not consider themselves to be retailer. Due to increased competition , these organizations are adopting retailing principles to attract customers & satisfy their needs. Service Retailing Banks Car-rentals Service contracts Medical services Providers of various services

18. Importance of Information in Retailing A customer goes through a number of stages as before deciding and to buy a product However, customers get to know about a product from each other.  Smart retail managers therefore insist on recording customers’ feedback upon using the product. They can use this information while interacting with the manufacturer on how to upgrade the product.

19. Retail Operations Management Refers to the task of managing retailing & logistics and finding out ways to control cost in order to transfer items from the hands of the producers to the customers. The individual concerned with retail operations management is a retail operations manager

20. Role of Retail Operations Manager A retail operations manager is responsible to take care of all retail activities within an organization. He plays a vital role in the day-to-day operations of the retail chain. A retail operations manager aims at increasing the profits at a low operational cost. A retail operations manager ensure efficient workflow and operations  within a retail unit He takes care of staffing activities within his retail store He provides proper training to the employees. He improves their job performance and enhances their skills. With the help of inventory analysis conducted by the retail operations manager, he determines the optimal stock levels. He defines the product’s quantity to be supplied to the stores. He monitors the operations of the customer service unit of retail.  Retail Operations Manager reviews the sales record to meet the set financial objectives .