Retail Formats In India

Jitendra Kumar Dixit

 Types of Retail Formats in India
Mom-and-pop Stores or Kirana Stores-
These are small family-owned businesses, which sell a small collection of goods to the
customers. They are individually run and cater to small sections of the society. These
stores are known for their high standards of customer service.

Department stores
Department stores are general merchandisers. very large stores offering a huge
assortment of "soft" and "hard goods; often bear a resemblance to a collection of
specialty stores. A retailer of such store carries variety of categories and has broad
assortment at average price. They offer considerable customer service.
Category Killers or Category Specialist
Specialty stores are called category killers. Category killers are
specialized in their fields and offer one category of products. Most popular
examples of category killers include electronic stores like Best Buy and
sports accessories stores .

General merchandise store – A hybrid between a department store

and discount store.

Convenience Stores: is essentially found in residential areas. They

provide limited amount of merchandise at more than average prices with a
speedy checkout. This store is ideal for emergency and immediate
purchases.
Discount Stores
Discount stores are those that offer their products at a discount, that is, at a lesser
rate than the maximum retail price. This is mainly done when there is additional
stock left over towards the end of any season. Discount stores sell their goods at a
reduced rate with an aim of drawing bargain shoppers.
Street vendors
Street vendors, or hawkers who sell goods on the streets, are quite popular in India.
Through shouting out their wares, they draw the attention of customers. Street
vendors are found in almost every city in India. These hawkers sell not just clothes
and accessories, but also local food.
Kiosks
Kiosks are box-like shops, which sell small and inexpensive items like
cigarettes, toffees, newspapers and magazines, water packets and sometimes,
tea and coffee. These are most commonly found on every street in a city, and
cater primarily to local residents.
E-tailers: The customer can shop and order through internet and the
merchandise are dropped at the customer's doorstep. They accept the payment
for the product but the customer receives the product directly from the
manufacturer or a wholesaler. This format is ideal for customers who do not
want to travel to retail stores and are interested in home shopping. Example:
Amazon and Ebay.

Vending Machines: This is an automated piece of equipment wherein

customers can drop in the money in machine and acquire the products. For
example: Mother Diary vending machine in Delhi.

Variety stores or "dollar stores" - these offer extremely low-cost

goods, with limited selection
Supermarkets
One of the other popular retail formats in India is the supermarkets.
A supermarket is a grocery store that sells food and household goods.
They are large, most often self-service and offer a huge variety of
products. People head to supermarkets when they need to stock up on
groceries and other items. They provide products for reasonable
prices, and of mid to high quality.
Hypermarkets
Similar to supermarkets, hypermarkets in India are a combination of
supermarket and department store. These are large retailers that
provide all kinds of groceries and general goods.
Big Bazaar and Reliance Fresh are hypermarkets that
draw enormous crowds.
Malls - Malls are the largest retail format in India
One of the most popular and most visited retail formats in India is
the mall. These are the largest retail format in India. Malls provide
everything that a person wants to buy, all under one roof. From clothes
and accessories to food or cinemas, malls provide all of this, and more.

Examples include Sahara mall ,Luck now, The great

India palace in Noida , Shipra mall in Ghaziabad India.
 Retail Institutions by
Ownership

Ownership

Store-based
Retail Strategy Mix

Nonstore-based
Retail Strategy Mix
 Ownership Forms
Independent
Chain
Franchise
Leased department
Vertical marketing system
 Competitive State of Independents

Advantages Disadvantages
 Flexibility in formats,  Lack of
locations, and bargaining power
strategy  Lack of economies
 Control over of scale
investment costs and  Labor intensive
personnel functions, operations
strategies  Over-dependence
 Personal image on owner
 Consistency and  Limited long-run
independence planning
 Strong
entrepreneurial
leadership
 Store-based Retail Mix
 Convenience store
 supermarket
 Food-based superstore
 Combination store
 Specialty store
 Variety store
 Traditional department
store
 Full-line discount store
 Off-price chain
 Factory outlet
 Flea market
Competitive State of Store based
Retail Mix
Advantages Disadvantages

 Bargaining power  Limited flexibility

 Cost efficiencies  Higher
 Efficiency from investment costs
computerization,  Complex
sharing managerial
warehouse and
control
other functions
 Defined
management
philosophy
 Considerable
efforts in long-run
Nonstore-based Retail Mix (Non-
traditional Retailing)

Direct selling
Vending machine
World Wide Web
 Few Indian Retailers
 Next retail India Ltd
 RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s Super, Daily & Fresh
 Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand
Factory, E-Zone etc.
 The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark, Titan Industries with
World of Titans showrooms, Tanishq outlets, Chroma.
 Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise
brand stores.
 Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.
 Vishal Retail Group-Formats: Vishal Mega Mart
 BPCL-Formats: In & Out
 Reliance Retail-Formats: Reliance Fresh
 Reliance ADAG Retail-Format: Reliance World
 Aditya Birla Group - more Outlets
 Store-Based Strategy Mix
A strategy mix is the firm’s
particular combination of:
store location,
operating procedures,
goods/services offered,
pricing tactics,
store atmosphere,
customer services, and
promotional methods
The Wheel of Retailing
 Retail Life Cycle

Retail institutions pass through

identifiable life stages
introduction
growth
maturity
decline
Convenience Store Strategy
Mix
Prices:
Location:
Average to
Neighborhood
Above average

Atmosphere and
Services:
Merchandise: Average
Medium width
and low depth
of assortment;
average quality Promotion:
Moderate
Conventional Supermarket
Strategy Mix
Location: Prices:
Neighborhood Competitive

Atmosphere and
Merchandise: Services:
Extensive width Average
and depth
of assortment;
average quality; Promotion:
manufacturer, Heavy use of
private, and generic brands newspapers, flyers,
and coupons
Combination Store Strategy
Mix
Location:
Prices:
Community shopping center
Competitive
or isolated site

Atmosphere and
Services:
Average
Merchandise:
Full assortment plus health
and beauty aids and
general merchandise Promotion:
Heavy use of
newspapers, flyers
Specialty Store Strategy
Mix
Location: Prices:
Business district or Competitive to
shopping center Above average

Atmosphere and
Services:
Merchandise: Average to excellent
Very narrow width and
extensive depth of
assortment; average to Promotion:
good quality Heavy use of displays
Extensive sales force
Traditional Department Store
Strategy Mix
Location: Prices:
Business district, shopping Average to
center or isolated store Above average

Atmosphere and
Services:
Merchandise: Good to excellent
Extensive width and
depth of
assortment; average to Promotion:
good quality Heavy ad and catalog
use; direct mail;
personal selling
 Full-line Discount Store
Strategy Mix
Location:
Prices:
Business district, shopping
Competitive
center or isolated store

Atmosphere/ Services:
Slightly below
Merchandise: average to average
Extensive width and
depth of
assortment; average to Promotion:
good quality Heavy on newspapers;
price-oriented; selling
Variety Store Strategy Mix

Location:
Prices:
Business district, shopping
Average
center or isolated store

Atmosphere/ Services:
Merchandise: Below average
Good width and
some depth of
assortment;
below-average Promotion:
to average quality Use of newspapers
Off-Price Chain Strategy Mix

Location:
Prices:
Business district, shopping
Low
center or isolated store

Atmosphere/ Services:
Merchandise: Below average
Moderate width and
poor depth of
assortment;
Promotion:
average to good quality;
Use of newspapers;
low continuity
brands not advertised;
limited selling
Flea Market Strategy Mix

Location: Prices:
Isolated store Very Low

Atmosphere/ Services:
Merchandise: Very low
Extensive width and
poor depth of
assortment;
low continuity; Promotion:
variable quality Limited
Identifying and Understanding
Consumers
What Makes Retail Shoppers Tick
Demographics
consumer data that is objective, quantifiable, easily
identifiable, measurable
Lifestyles
ways in which consumers and families live
and spend time and spend money
Understanding Consumer Lifestyles:
Social Factors
Reference
Culture
Groups

Social Lifestyle Time

Class Utilization

Household Family
Life Life
Cycle Cycle
Understanding Consumer Lifestyles:
Psychological Factors

Personality Attitudes

Perceived Lifestyle Class

Risk Consciousness

Purchase
Importance
 The Consumer Decision Process
A-The Decision Process

Problem Informat Evaluation

Stimu of Post-
Awaren ion Purchas
lus Alternativ Purchas
ess Search e
es e

--------------------
B-Factors affecting
the process

Demograph
ics Life Style
----------
 Solid arrow connect all the elements in the decision process & show the impact of
demographics & life-style up on the process.
The Impact of Perceived Risk on
Consumers
Marketing Strategy
 Types of Impulse Shopping

Completely unplanned
Partially unplanned
Unplanned substitution
 Reasons for Leaving an Apparel Store
Without Buying
 Cannot find an appealing style
 Cannot find the right size
 Nothing fits
 No sales help is available
 Cannot get in and out of the store easily
 Prices are too high
 In-store experience is stressful
 Cannot find a good value
Institutional Change in Retailing

 Wheel of Retailing
 Accordian Theory
 Dialectic Process
 Natural Selection
 Retail Life Cycle
Wheel of Retailing
Retail Accordian Theory

Broad-based outlets with wide assortment

↓
More specialized with narrow assortment
↓
Back to wide assortment
Dialectic Process
Retailers mutually adapt in the face of
competition from “opposites” When challenged
by a competitor with a differential advantage, the
established retailer will adopt strategies and
tactics in the direction of that advantage (making
the innovator less attractive)
 Dialectic Process
Thesis
Department Stores
•High Margin
•Low turnover
•High Price
•Full Service
Synthesis
•Downturn location
Discount Department
Store
•Average Margin
•Average Turn-over
Anti-Thesis •Moderate Price
•Limited Services
Discount Stores •Sub urban locations
•Low Margin
•High Turnover
•Low Price
•Low rent Location
•Self Service
Natural Selection and Adaptive
Behavior-

 Environmental need for a certain kind of

retailing institution → it will evolve
 Need ceases to exist → the institution will
tend to disappear
 Institutions that most effectively adapt to
 environmental changes are most likely to
survive
Retail Life Cycle

 Introduction
 Growth/ Accelerated Development
 Maturity
Remodel stores
Lower costs
MIS – technology
Every day low prices
Reevaluate mgt. practices and service
Figure out how they can deliver value
 Decline