Retail Management

Defn of Retailing
Retailing involves all activities in selling
goods or services to the final customers
for personal, non business use.
-Philip Kotler
Retaillier--French word
To cut a piece or To break bulk
Retail means,
First point of customer contact


Functions of a retailer
Utility as a form
Time utility
Place utility
Ownership utility
Evolution of Retail in India
Traditional
Formats
Established
Formats
Emerging
Formats
Evolution of retail formats in India
Traditional formats
Itinerant sales man
Haats
Melas
Mandis

Established formats
Kirana shops
Convenience/department stores
Fair price shops
Cooperative stores
Pan/bedi shops
Emerging formats

Exclusive Retail outlets
Hypermarkets
Malls/Specialty Malls
Multiplexes
Rural oriented formats
Fast food outlets
Major Retailers



Indias top retailers are largely
lifestyle, clothing and apparel stores
This is followed by grocery stores
Retail giants such as Pantaloon,
Shoppers Stop and Lifestyle are
likely to target metros and small
cities almost doubling their current
number of stores
Recent Trends

India is rated the fifth most attractive
emerging retail market: a potential
goldmine.
Estimated to be US$ 332.8
billion(Rs.1,330,000 crore), of which
organized retailing (i.e. modern trade)
makes up 5.8 percent
Currently(April 21st,09) 5%
Ranked second in a Global Retail
Development Index of 30 developing
countries drawn up by AT Kearney.


India has the highest number of outlets in the
world - widely spread retail network but with
the lowest retail space (@ 2 sq. ft. per
person)


Annual turnover of Wal-Mart (Sales in 2001
were $219 billion) is nearing to the size of
Indian retail industry.

Wal-Mart - over 4,800 stores where as
none of India's large format store
(Shoppers' Stop, Westside, Lifestyle) can
compare.
The sales per hour of $22 million are
incomparable to any retailer in the world.
Number of employees in Wal-Mart are
about 1.3 million
Developed economies like the U.S.
employ between 10 and 11 percent of their
workforce in retailing (against 7 percent
employed in India today).

M&M Mom & Me stores- motherhood and
childhood (maternity wear)
M&M tie-ups
Startrite of UK
Brainy baby of US
Mary Meyer of US
CAM of Italy
Avado of Australia etc.

Spar(Dubai-based Landmark group and
spencers retail)
Two in Bangalore one in Hyderabad

Newu Daburs retail- Beauty stores
Daburs Tie ups
Moda of Turkey
QVS of Australia


Expansion plans:

Spencers Retail:2000-3000 by 2011
750 in two years

Magamart: 30 large stores by 2010
20-22 in the next three years



Zedds footware retail
1500sqft
10 outlets in 2010(Franchises)

Railway Budget2009

Modernize 50 railway station
World class
Vadodara, pune, Bhuvaneshwar
CavinKare into resturant
business
Chennai Based
CKs Foodstaurant
Indo-American
CINNABON INDIA
Wadhawan hospitality with Us based Focus
Brands
Cinnabon Bakeries
150 outlets
Mothercare
In collaboration with TATA
21 retail outlets

Whats wrong with

Subhiksha
Globus
Pyramals

Can these retail brands still live?


Hot spot destination for retail in Tamil
Nadu as Coimbatore.
Fun Republic
Brookefield Plaza
Key Drivers of Retailing in India
Consumer pull population
Young population
Rising Income
Generators of wealth
Explosion of media
Change in consumer behavior
The rural market wake up
Building chains around brand
Technological changes
890 million people below 45 years in India

300 million middle class-Real consumers

Increasing population of women

Applicable areas
PROVISION STORES
SHOPPING MALLS
RETAIL STORES
Store Formats
By location
By ownership
By Merchandise categories
By size
By price
By concessions

Store formats By Location
Chain store format-multi locational
High-street format- busy shopping place
Destination format- particular area
Convenience store format- wide array
of pdts
Store Format by Ownership

Franchise format
Independent store format
Corporate Chains


Independent retailers-one store
ownership
Chain stores-many-one ownership
Franchises-many stores many
ownership
Basic forms of Franchising
Product and
Trade Name
Franchising
Business
Format
Franchising
Dealer agrees to sell certain products provided
by a manufacturer, but can use any sales tactics
he chooses.
Ex-Next,DAMRO

Dealer must sell the franchisers product in the
exact way the franchiser prescribes.
Ex McDonalds, Wendy's

Store format by merchandise
categories
Family store - eg: Chennai silks
Specialty store- eg: Park avenue by raymonds-
Mens speciality store
Departmental store - eg: Shoppers Stop(>
10000sqft)
Supermarkets - eg: Spencers, More
etc.(>3000sqft)
Emporium
Store format by size
Super store(>5000sqft)
Shopping Mall(>20,000sqft)
Shopping centre(>1000sqft)
Hypermarket(>20,000sqft)
Store format by Price
Discount format
Every day low price format
Category killer format
Factory outlet format
Warehouse format
Single price denomination
format(1dollar shop)
Store formats by concessions
Stopover store format
Kiosk

Non store Based retailers
Electronic Retailing
Catalog retailing
Catalog and direct mail Retailing
Direct selling
Television home shopping
Vending machine retailing

Theories of Retailing
Environmental Theory
Cyclical Theory
Conflict Theory
Environmental theory
Darwins theory

Survival of the fittest

Customers
Competitors
Changing technology
Cyclical Theories
The Wheel of retailing
Accordion Effect
Open accordions
Closed accordions
Cyclical theory
Wheel of retailing(Mc Nair)

Innovative
Retailer
Traditional
Retailer
Mature
Retailer

Wheel of Retailing
High End Strategy
High prices
Excellent facilities and services
Upscale consumers
Low End Strategy
Low prices
Limited facilities and services
Price- sensitive consumers
Limited product offerings
Medium Strategy
Moderate prices
Improved facilities
Broad base of value and service
conscious consumers
Retail Strategy Alternatives
Wheel of Retailing
Innovative retailer (Entry phase)
Traditional retailer (Trading up phase)
Mature retailer (Vulnerability phase)
Accordian Effect- Closed and Open
accordian effects
Wheel of retailing + Accordian theory
= Cyclical Theories
Conflict Theory
Conflicts between
Thesis
Antithesis
Synthesis
The Retail Life Cycle
Innovation
Accelerated Development
Maturity
Decline
Retail Shoppers

RETAIL
SHOPPERS
Demographics
Retailer Actions
Needs and
Desires
Life-Styles
Shopping
Attitudes and
Behavior
Environmental
Factors
Consumer Demographics
Market size
Gender
Age
Household size
Marital and family status
Income

Birth rates
Mobility
Where people live
Employment status
Occupation
Education
Ethnic / Racial background


Consumer Lifestyles-Social factors
Culture
Social class
Reference groups
Family life cycle
Time Utilization
Consumer Lifestyle-Psychological
factors
Personality
Class conscious
Attitudes
Perceived risk


Impact of perceived risks
Types of perceived risk
Functional
Physical
Financial
Social
Psychological
Time
Factors affecting
perceived risk
Retailers newness
Consumers budget
Consumer experience
Alternatives
Visibility
Information
price

Consu
mer
Outcome
Purchase new
product
Stick with old brand
Talk to friends
Seek more
information
Non-purchase
Retailing influence of consumer
demographics:

Gender Role
Consumer sophistication and confidence
Poverty of time
Component life-styles

Consumer profiles:

Generation Y: 6-24
Generation X: 25-36
Baby Boomers: 37-55
Seniors: 56 and older
Generation Y Strategies
Getting young people involved in the store
Being conscious of the rights
Being honest
Trying advertising with sports and music
Getting them involved in community
service
Developing partners with schools
Creating touchy-feely departments

Generation X strategies
Not rushing to buy
Presenting a lot of options and product
information
Using technology whenever and however
possible

Baby Boomers Strategy

Selling Nostalgia
Selling Natural
Selling youth and fitness
Consumer Needs and Desires
In-home shopping
Online shopping
Out shopping

Shopping Attitudes and Behavior
Shopping enjoyment
Attitudes towards shopping time
Shift feelings about retailing
Why people buy or dont buy in a shopping
trip
Attitudes by market segment
Attitudes towards private brands
Where people shop
Cross shopping
Types of consumer decision
making
Extended decision making
Limited decision making
Routine decision making
Impulse purchases
Completely unplanned
Partially unplanned
Unplanned substitution
Retailers action
Mass marketing strategies
Concentrated marketing strategies
Differentiated marketing strategies
Environmental Factors
Inflation
Economy
Price wars
Entry of new formats
Changing societal values and norms
More working people at home
Govt. regulations
Consumer Decision Process

Stimulus Problem
Awareness
Purchase Evaluation of
Alternatives
Post-purchase
Behavior
Information
Search
Types of Needs

1. Psychological needs:
Social experience
Learning new trends
Status and power
Self reward
2. Conflicting Needs

Sources of information :
External sources
Internal sources
Retail Planning Process
Establish
Mission
Analyze
Situation
Identify
opportunities
Set Objectives
Develop
Implementation
Plans
Obtain and
Allocate
Resources
Monitor
Progress &
Control
Wal-Mart: To give ordinary folk the chance
to buy the same thing as rich people

McDonalds: Quality, Service,
convenience, and value

Caf Coffee Day: To be the best caf
chain in the country by offering world class
coffee experience at affordable prices
Situation Analysis
SWOT analysis
PEST analysis: Political, Economic, Social
and Technological factors
BCG Matrix
Porters Competitive advantage framework
Elements in situation Analysis
Market factors: size, growth, business
cycles, seasonality
Competitive factors: Barriers to entry,
Scale economies, Bargaining power of
vendors, Competitive rivalry
Environmental Factors
Growth Strategies
Retail Format
Development
Market Expansion
Diversification
Market Penetration
R
e
t
a
i
l

F
o
r
m
a
t

Existing
Target market Segment
N
e
w

E
x
i
s
t
i
n
g

New
Customer Service
A set of activities and programs
undertaken by retailers to make the
shopping experience more rewarding for
their customers
Customer Service Strategies
Customization Approach
Standardization Approach
Customer Evaluation of SQ
Role of Expectations
Perceived Service


Cues Affecting Customer
Perception of SQ
Tangibles
Appearance of store or website
Display of Merchandise
Appearance of salesperson
Access
Short waiting lines
Convenient operating hours
Convenient store locations
Providing information on order status

Understanding and knowing customers
Providing individual attention
Personalization of website
Recognition of regular customers
Notes sent to customers on new merchandise

Competence
Knowledge and skill of employees
Depth of information provided

Security
Feeling safe in parking lot
Describing security on internet transactions

Responsiveness
Returning customer call
Giving prompt service
Trust worthiness
Reputation and honoring commitments
Guaranties and warranties
Return policies

Reliability
Accuracy in billing
Delivering merchandise when promised
The Gaps Model
Service Gap
Customer
Expectatio
ns for SQ
Management
Perceptions
of customer
Expectation
Retailer
communic
ations
about SQ
Custome
r
perceptio
ns of SQ
Actual
service
delivered
Standards
of service
to be
delivered
Delivery Gap
Standards
Gap
Knowledge
Gap
Communication
Gap
Knowing what the Customer Wants:
Knowledge Gap
Researching Customer Expectations
and Perceptions
Comprehensive studies
Gauging satisfaction with individual
transactions
Customer panels and interviews
Interacting with customers
Customer complaints
Feedback from store employees
Setting Service Standards: The
Standards Gap

Commitment to service quality
Developing solutions to service problems
Defining the role of the service providers
Setting service goals
Measuring service performance
Meeting and exceeding service
standards: The Delivery Gap

Giving information and training
Providing emotional support
Improving internal communications and
reducing conflicts
Empowering store employees
Providing Incentives
Communicating the service promise: The
Communications Gap

Realistic Commitments
Managing customer expectations
Service Recovery
Listening to the customer
Providing a fair solution
Distributive Fairness
Procedural Fairness
Resolving Problems Quickly
Giving clear instructions
Speaking the customers language

Loyalty Strategies
Pull loyalty strategies
Pure loyalty strategies
Push loyalty strategies
Purchase loyalty strategies
Purge loyalty strategies