Retail Management

Dr.Sumesh Raizada
Associate Professor
Ph.D,MBA,BE(Electrical)
 Unit
I
Retailing
 It consists of business activities involved in
selling goods and services to consumers for
their personal, family or household use

 The offerings may include automobiles, fast

food, movie in a multiplex, bank account, etc.

 It adds value to the products & services sold

to the consumers

 It is the last stage of distribution process

Supply Chain
Raw material suppliers /
Vendors

Manufacturers Transporters

Distributors

Wholesalers
Support
Agencies
Retailers

Customers
Traditional distribution Retailing
Chain

Supplier / vendor

manufacturer

distributor

retailer
wholesaler

customer
Modern Supply Chain Retailing

Supplier vendor manufacturer

Wholesaler / retailer

customer
 Retailing

 Retailing is done by organizing availability of

products / services on a relatively large scale
and supplying them to consumers on a
relatively small scale

 ‘Retail’ is derived from a French world

‘Retaillier’ meaning ‘to break bulk’ or ‘to cut a
piece off’

 Retailing involves selling through store,

internet, mail, television or door to door visit
 Retailer

 A retailer is a person, agent, agency, company

or organization, which facilitates the supply of
goods / services to the ultimate consumer

 Retailer attempt to satisfy consumer needs by

having the right merchandize, at right price and
at right place, when the consumer wants it

 Retailer sells to final (non business)

consumers, when final product do not undergo
any further change
Retailer  A business or non-final consumer buy
intermediate product for industrial use to
produce other goods or services

 Wholesaler buy products in bulk, and sell

in bulk to the intermediate / business
buyers such as retailers, industries, etc.

Retailers usually do not make any change in

the product except for some value addition in
the form of packaging, etc.

However, in some cases such as restaurant,

florist, computer assembly, etc.goods are
prepared at their premises
 Retailer

 Retailers often buy from a wide variety of

distant or global sources. They resell through
stores or organize the delivery and payment
collection services

 Retailers cover a diverse range of activities,

such as garages, restaurants, financial service
and banks.

 These usually require additional manual and

technical skills or knowledge as well as
financial investment on facilities
 Importance of Retailing

 Retail contributes nearly 8-10% of national

GDP and employs roughly 10% of population

 They are the last stage of distribution chain and

have direct interaction with the customer

 Hence the opinion, motivation and efforts of

retailer is extremely important for the success
of a product or service
Drivers of Change in Retailing

 Changing demographics and industry structure

 Expanding IT, telecom and media network

 Emphasis on lower costs and prices

 Emphasis on convenience, shopping experience

and service

 Focus on productivity

 Continuing growth of non-store retailing

 Changing aspirations and demands

 Characteristics of Retailing
 There is a direct end user interaction

 It is a only point in value chain for sales

promotion

 Sales are generally in smaller unit sizes

 Location is a critical factor

 Services are equally important as the product

 Large number of units compared to other

units of supply chain, due to high population
density and geographical coverage
 Activities performed by Retailers

Arranging
Assortment

Providing Activities of Breaking

Services Retailers Bulk

Holding
Stock
 Functions of Retailing

 Sorting: Assortment and arrangement of goods from

large number of suppliers

 Breaking Bulk: Receiving in large consignments and

repacking them in smaller lots

Holding Stock: To avoid stock outs,

inventories are maintained for
immediate supply to the customer
 Functions of Retailing

 Additional Service: warranty

/guarantee, credit, pre & after sales
services, exchange, home delivery,
product trials, answer queries

Channel of Communication: Source of information about

competitors and new products, market, sales & product feedback to
the wholesaler and manufacturer

Transport & Advertising: Point of sales promotion and personal

selling, transport, storage and pre payment assistance to small
manufacturers
 Services provided by the Retailers
 Accessibility of Location: Making
products and services available close to
the customer
 Convenience of Timing: Flexible store
working hours
Convenience of Size: Making products available in smaller lots /
packing to suit individual requirement

Information: It is provided to the consumers on regular basis

regarding government practices, company policies, competitors

Lifestyle support: Retailers builds up a regular customer base and

constantly renews the customer relationship through service, price,
accessibility and latest fashion products
 Retail Strategy

 It indicates that how the firm plans to focus its resources to

accomplish its objectives

 It influences the firm’s business activities and its response to

the market forces such as competition and economy
 Retail Strategy

Steps in developing retail strategy

 Defining the business of the firm

 Setting short & long term objectives
 Identifying the target market
 Deciding the broad direction company must take
 Implementing an integrated plan including aspects of retailing
such as pricing, location, channel decisions
 Evaluating and revising the plan depending on environment
 Retail Concept

 It provides broad guidelines that must be followed by

retailers irrespective of their size, channel design,
medium of selling.
 It covers four broad areas;

 Customer Orientation
 Goal Orientation
 Value driven approach
 Coordinated efforts
Retail Concept

 Customer Orientation
The retailer makes a detailed study of the needs of the
customer and attempt to satisfy those needs
 Goal Orientation
The retailer has clear cut goals and devises strategies to
achieve those goals
 Value driven approach
The retailer offers good value to the consumer with merchandise
having the price and quality appropriate for the target market
 Coordinated efforts
Every activity of the firm is aligned to the goal and is designed to
maximize its efficiency and deliver goods to the consumer
 Retail Industry Structure
 Food Stores: food, drink, tobacco comprise more
than half of total sales
Non specialized food stores: supermarkets,
cooperatives, convenience : food and non food
items
Specialized food stores: bakers, butchers, dairies,
fishmongers, vegetable grocer, etc.
 Predominantly non-food stores:more than half of
total sales through non-food items
Non specialized non food stores: department stores
Textile, clothing and leather footwear
Household goods stores: consumer durables, hardware,
etc.
 Retail Industry Structure

Other stores: Comprise wide collection of stores

including antique stores, bookshop, carpet,
chemist, photographer, sport or toys shop, CDs,
music, etc.

Non store Retailing:

General mail order firms
Non store retailers, including door to door retailers
Vending machines and mobile shops
Repair of personal and household goods
Images