Retail Management

An Introduction
Retailing is a global, high-tech industry that plays a major role in the global
economy. About one in five U.S. workers is employed by retailers. Increasingly,
retailers are selling their products and services through more than one channel
—such as stores, Internet, and catalogs. Firms selling services to consumers,
such as dry cleaning and automobile repairs, are also retailers.

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 fulfil their buying needs. Retail management makes shopping a
pleasurable experience and ensures the customers leave the store with a smile.
In simpler words, retail management helps customers shop without any
difficulty.

What is Retailing?

(1) Most common form of doing business.

(2) It consists of selling merchandise from a permanent location (a retail
store) in small quantities directly to the consumers.
(3) These consumers may be individual buyers or corporate.
(4) Retailer purchases goods or merchandise in bulk from manufacturers
directly and then sells in small quantities.

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 (5) Shops may be located in residential areas, colony streets, community
centers or in modern shopping arcades/ malls.

Meaning:

(1) According to Kotler: ´Retailing includes all the activities involved in

selling goods or services to the final consumers for personal, non
business uses’.
(2) A process of promoting greater sales and customer satisfaction by gaining
a better understanding of the consumers of goods and services produced
by a company.

Functions of Retailing:

(1) Delivery of the goods to the end consumer:

This makes shopping for all requirements quite hassle-free for the consumers.
This also facilitates consumption and maximizes consumer satisfaction.
Because the company cannot take responsibility of delivery to every single
customer, it appoints retailers. One of the functions of retailing is immediate
delivery.

(2) Is an essential part of the distribution chain:

Because the retailer takes over the cumbersome task of distribution of goods
manufactured to the target market, the manufacturer is relieved of this
responsibility and can divert his resources to manufacturing activities.

(3) Finances the wholesaler

While booking his order of goods with the wholesaler, the retailer pays some
percentage or the whole of the order price in advance. This helps the wholesaler to

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carry on with his operations seamlessly. In some industries, it is the retailer who
pays cash to maintain stock and in others the wholesaler has to carry the stock as
paid capital. Nonetheless, financing is one of the major functions of retailing. A
retailer who does not contribute to financing will bring down the effectiveness of
the supply chain.

(4) Stores the goods according to market requirement

The retailer invests his working capital in building a gamut of inventory reflecting

market requirements. He also sells the requisite quantity, however small or big, to
the final consumers satisfying their needs. The retailers know the
complete demand and supply potential due to their years of experience. Hence it is
one of the functions of retailing to balance the demand and supply as per external
market conditions.

(5) Lends a hand in manufacturer’s marketing initiative

Retailer plans and executes many advertising and promotion activities at the point

of purchase i.e. right in his store. This leads to gain in popularity of and favorable
market conditions for the product of the manufacturer.

(6) Assumes storage and credit risks

When the retailer orders and stores a large quantity of goods from the
manufacturer, he makes sufficient provisions to store it safely for some days. This
involves costs. Also, there is also a risk of loss of these goods on account of
destruction, theft, spoilage etc. The retailer assumes these risks while storing
goods.

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 (7) Extends credit facilities to the consumers and assumes credit risk

The retailer does so to encourage shopping. This adds to the vigor of commercial
activities in the economy. But there is also a risk that the customers won’t pay for
the goods bought or may return damaged goods to the retailer. This inherent risk in
trade is assumed by the retailer.

(8) Offers wide variety of customers and enticing price range in a product
line

In order to attract more customers, a retailer offers a wide range of merchandise at

attractive prices. This results in higher consumer satisfaction and higher standards
of living in any economy.

(9) Provides convenience in shopping

Retailers try to set up their shops nearby housing areas or near parks, schools – the
areas where the customer finds it very convenient to shop. This enhances the
consumer welfare.

(10) Hears the voice of the market

The retailer measures the pulse of the market by listening to the consumer
feedback, expectations, complaints, and by observing a shift in the tastes and
preferences of the consumers. This arms him with very critical market intelligence

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enabling the entire commercial fraternity to gear up for the
changing economic scenario.

Characteristics of Retailing:

(1) Direct interaction with customers/end customers.

(2) Sale volume large in quantities but less in monetary value
(3) Customer service plays a vital role
(4) Sales promotions are offered at this point only
(5) Retail outlets are more than any other form of business
(6) Location and layout are critical factors in retail business.
(7) It offers employment opportunity to all age

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Reasons for Studying Retailing
(1) The lifestyle of the people are shaped by retailing:

Retailing is an integral part of modern society. People highly depend on retail

stores to lead a comfortable life. In the past time, goods and service were made
available through the process of trading.

But in present times trading is replaced by buying and selling goods which makes
retail stores an important part of the society

(2) Retail businesses contribute to the economy

In many countries, the retail business is one of the biggest contributors to the Gross
Domestic Product (GDP) and its contribution has increased as compared to past
and is also increasing by leap and bounds. Retailing is a driving force of the
economy and its ambition is to encourage sustained growth.

(3) Retail dominates the supply chain

In a supply chain, goods and services flow from the manufacturer or a service

provider to final consumers and when there is a huge number of consumers and
they are distributed worldwide then the role of retail stores become much more
important. Retailers play the role of a connecting link between a manufacturer
and final consumers.
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Because of their crucial importance in the supply chain the structure of retail
stores has improved gradually over the years. In modern times, retailing is
categorized by large multiple chains and not by small scale independent retail
stores. The increasing importance and formalization of retailing have made it a
powerful part of the supply chain.

(4) Retailers provide maximum employment

At the present time, the retail world employs maximum people. As per an
estimation, one in nine of the workforces is employed in the retail industry.
Moreover, two third of the total workforce in the retail world is women and
more than half employees in retailing are part-time employees, which provides
flexibility to workers to adapt to the particular needs of any employer

In the past, the salaries paid to employees were very low. Therefore, people
worked on a temporary basis in the retail sector. But as the work conditions and
salaries paid in the retail sector are improving more and more people are
considering retail jobs as a permanent career.

(5) Retailing is an important subject area of study

Because of the importance of retailing more and more emphasis is being paid to
the area of retailing. Retailing is a separate subject of studies like management and
marketing. researches have been conducted and professionals being hired to make
this sector flourish.

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In addition to this, academic journals concentrating on retailing are being
published worldwide.

(6) Retailing offers scope for expansion in other countries

Retail provides a great opportunity to expand in international markets. A retailer

who wants to extend their business by selling their goods in other countries opens
stores in different countries to increase the number of consumers of their products.

However, it is not easy to expand your business as it requires a lot of paperwork

and formalities to be done to be able to get clearance to take your business to other
countries.

(7) Retailers rule the channel of distribution

Retailers are becoming the rulers of a channel of distribution. In past times, the
power was in the hand of suppliers because of a limited number of suppliers in the
market. Retailers had no other option than getting goods from the supplier to sell in
their stores. But in present times there are many suppliers for a single type of
product.

Therefore, a retailer can make a decision for which brand to stock in their stores
and consumers buys products stock provided by the retailers. Therefore, retailers
play an important role in shaping the demands of consumers.

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 (8) Provide services to the manufacturer

The retailer is the end part of the supply chain and he is the one who interacts with
the customers. therefore, he has the opportunity to know about the views of
customers and their likings and disliking. Retailer gathers this information from his
customers and shares it with the manufacturer.

(9) Convenient Place and Location

Retailer stores are generally set up at locations which are convenient for consumers
to reach. A retail store can be of various forms such as it could be a small shop,
small store, or a multiplex. Goods can be sold through internet and mobile apps as
per the convenience of consumers.

(10) Sales to Ultimate consumers of the products

In a retail transaction, the goods and services are sold to ultimate or final

consumers. The products don’t get resold after this transaction. Goods and
services sold at this point can be used for various purposes such as for domestic
use, household use or for industrial use.

Hence, at this point manufacturer can interact with his consumers through
retailer and know about their views.

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Marketing

Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.

Definition of Marketing Research:

Marketing research is the function that links the consumer, customer, and public
to the marketer through information–information used to identify and define
marketing opportunities and problems; generate, refine, and evaluate marketing
actions; monitor marketing performance; and improve understanding of
marketing as a process. Marketing research specifies the information required to
address these issues, designs the method for collecting information, manages
and implements the data collection process, analyzes the results, and
communicates the findings and their implications

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Types of Retailing:
 Store Retailing:

Department store is the best form of store retailing, to attract a number of

customers. The other types of store retailing includes, speciality store,
supermarket, convenience store, catalogue showroom, drug store, super store,
discount store, extreme value store. Different competitive and pricing
strategy is adopted by different store retailers.

 Non-store Retailing:

It is evident from the name itself, that when the selling of merchandise takes
place outside the conventional shops or stores, it is termed as non-store
retailing. It is classfied as under:

 Direct marketing: In this process, consumer direct channels are

employed by the company to reach and deliver products to the customers.
It includes direct mail marketing, catalog marketing, telemarketing, online
shopping etc.

 Direct selling:Otherwise called as multilevel selling and network

selling, that involves door to door selling or at home sales parties. Here, in
this process the sales person of the company visit the home of the host,
who has invited acquaintances, the sales person demonstrate the products
and take orders.

 Automatic vending: Vending machines are primarily found in

offices, factories, gasoline stations, large retail stores, restaurants etc.

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 which offer a variety of products including impulse goods such as coffee,
candy, nnewspaper, soft drinks etc.

 Buying service: The retail organization serves a number of clients

collectively, such as employees of an organization, who are authorized to
purchase goods from specific retailers that have contracted to give
discount, in exchange for membership.

 Corporate Retailing:

It includes retail organizations such as corporate chain store, franchises,

retailer and consumer cooperatives and merchandising conglomerates. There
are a number of advantages that these organizations can achieve jointly, such
as economies of scale, better and qualified employees, wider brand
recognition, etc.

With the emergence of new forms of retailing, competition is also increasing

between them. It is one of the fast-growing and challenging industry.

Marketing in the Concept of Retailing

The functions of retailing and retail marketing are based on the four
P's: product, price, place and promotion. These are the basic foundations of
any retail business, and you may hear them referred to as the "marketing mix".
Each of these four fundamentals must work in conjunction with each other in
order to create an aligned marketing strategy that is designed to capture the
attention of the consumer.

Finding the Best Product

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The first step to creating a successful retail business is having the right
product for your audience. It is important to understand the needs and
challenges of your target market. Conduct market research to see where the
gaps are in the market and how your business can fill them. Do not sell a
product that you think customers will like; sell a product that they need.

Consider Product Packaging

One of the critical factors of your product is the packaging. Instead of being
just an afterthought, note that packaging adds to the user experience. It is a
way to inform consumers about your brand and its values, and it is also a way
to stand out in the market.

Consider top-performing brands and their unique packaging. Take Apple, for
example. All of their packaging design is minimalist and is aligned very
closely to their visual brand strategy. It is easy to spot an Apple product from
afar in a sea of products.

Be sure to align the product and the packaging with the key values and
goals of your target market. For example, if your audience values
sustainability, source environmentally friendly materials to create your
product. Continue that into your packaging and reuse recycled materials
instead of single-use plastics.

Deciding on an Attractive Price

In the concept of retailing, price plays a critical role in the buying decision.
Your price must cover the cost of the goods in addition to overhead costs with
enough margin for you to make a profit. There are many pricing strategies
retailers can use:

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 Everyday bargain pricing: Some retailers choose to keep their prices
low all the time. While they have thin profit margins, they make up for it in
volume of customers.

 High/low pricing: For some retailers, it is more profitable to keep the

pricing of a product high and only lower it when the product is no longer
trendy or in season.

 Competitive pricing: This pricing strategy involves pricing products

based on what direct competitors are doing.

 Charm pricing: This involves using odd numbers, such as $4.95 instead
of $5.00. Consumers associate $4.95 as being closer to $4.00 than $5.00,
which makes that price more attractive.

 Value-based pricing: Retailers who take this route price products based
on what they are worth to customers and not how much the product costs to
make.

Being in the Right Place

In retailing, place is a critical factor because this is where the sale between the
retailer and the customer occurs. The place can be a retail store, online, pop-up
shop, farmer's market, street-side stand or anywhere else your customers are
found. When selecting the place for your retail operation, it is important
to conduct research to see where your target audience shops the most.

Captivating Audiences with Engaging Promotions

The retail services definition also includes promotion, which is the process
of communicating the benefits of your product to the consumer. There are
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several ways to promote your products to entice customers: advertising,
personal selling, sales promotions, direct marketing and public relations.

When deciding on which promotional channels to use, it is important to first

establish your goals for the promotion. For example, public relations is a good
way to increase brand awareness, while sales promotions are a good way to
increase revenue in the short term.

Retailing as a Career

Retailing is a fast-moving and exciting sector that requires strong leaders and
energetic employees. Most staff employed in retail businesses need to prepare to
work longer hours than in other comparable occupations. Modern thinking
about the importance of a career in retailing has boosted the job market.
Retailers demand better trained employees and educational institutions have
responded with better and a variety of courses that cater for different levels of
staff and industry experience. Traditional attitudes in retailing still persist,
however, and this has led to two different career paths: one at the core of the
industry and the other on the fringes. The core consists of full-time workers at
various grades, who are usually better paid, better trained and has a distinct
career path within the organization. Part-time workers have until recently been
kept at the fringes. Fringe workers may work at different levels in the company,
depending on their previously acquired skills, but will not usually be able to
access the development that core workers can. In order to attract people into the
company, retailers have to set pay and conditions at levels comparable to those
generally available. The company also operates an internal staff structure, which
determines pay and promotion to various grades within the workforce according
to the company‟s own specific requirements. However, there are likely to be
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significant barriers to promotion at various entry levels. So, women who make
up the vast number of sales assistants find it difficult to climb further up the
company. This also makes it difficult for women managers to progress further.

Career options for retail management

There are different types of jobs you can do if you’re considering a career in
retail management, including:
 Retail manager.
 Store manager or director.
 Team leader or supervisor.
 Store general manager.
 Retail buyer.
 Merchandiser.
 Merchandise manager or planner.
 Analyst.
 Supply chain distributor.
 Marketing executive.
 Warehouse manager.
 Brand manager.
 Customer care executive.
 Image promoter.
 Department manager.
 District manager.
 Pricing and signing coordinator.

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What’s more, once you gain a certain level of management experience and
skills, you can choose to specialise in a particular area, such as:
 Buying.
 Pricing.
 Merchandising.
 Sales.
 Marketing.
 Personnel management.
 Supervisory.
 Customer service.
 Administrative services.
 Client communication.
 Training.
 Operations.
 Warehousing.
You can set yourself up to specialise in one of these areas with training in retail
management.

Why you might choose a career in retail

management

Retail isn’t going anywhere as companies will always sell goods and services,
and they’ll always need people who can help them do that in an inefficient and

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profitable way. This means retail management will continue to be an in-demand
career path.
A career in retail management can also give you the chance to be in charge of
operating your own store, from behind the scenes functions (such as buying and
merchandising) to interactions on the sales floor (such as sales and customer
service). As a retail manager, you’ll oversee everything that makes a retail store
successful – the products, visual presentation, sales team, and customer service.
Moreover, a career in retail management may be a good fit for you if you have
the qualities and skills required to be a successful retail manager, such as a
strong customer focus, the ability to manage people, and leadership skills. It can
also be a rewarding career if you enjoy interacting with your community and
staying up-to-date with product trends.

Trends in Retailing:
The top seven trends in retailing in India are as follows: 1. Shift from
Unorganized to Organized Retailing 2. Store Design 3. Competition 4.
New Form of Retailing 5. Technology 6. Consumer Buying Behaviour 7.
Entertainment.

1. Shift from Unorganized to Organized Retailing:

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Retailing in India is thoroughly unorganized. There is no supply chain
management perspective. The key factors that drive the growth of
organized retailing in India are higher disposable incomes, rising
urbanization, growing consumerism, nuclear family structure, growing
number of educated and employed women population.

2. Store Design:

Irrespective of the format, the biggest challenge for organized retailing is

to create an environment that pulls in people and makes them spend more
time in shopping and also increases the amount of impulse shopping.

3. Competition:

Competition is increasing between different types of retailers. Discount

stores, departmental stores, supermarkets, etc. all compete for the same
customers. The small independent retailers survive by providing personal
services to the customers.

4. New Form of Retailing:

Modem malls made their entry into India in the late 1990s, with the
establishment of Crossroads in Mumbai and Ansal Plaza in Delhi. India’s
first true shopping mall, ‘Crossroads’—complete with food courts,
recreation facilities and large car parking space—was inaugurated as late
as 1999 in Mumbai. Malls have given a new dimension to shopping
experience.

5. Technology:
Technology today has become a competitive tool. It is the technology that
helps the organized retailer to score over the unorganized players, giving

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both cost and service advantages. Technology has also made possible the
growth of non-store retailing.

6. Consumer Buying Behaviour:

In India, there are no uniform trends with respect to consumer buying
behaviour. There are visible differences in the shopping pattern of
consumers across income segments. Organized retailing has definitely
made headway in the upper class.

However, even in this segment, items such as milk, fruits, vegetables and a
significant portion of ‘through-the-month’ purchases seem to be done at
traditional outlets. Organized retail outlets seem to be associated with
branded items/special purchases. Organized retailing does not seem to
have made an impact on the lower class, except for ‘curiosity’ shopping.

7. Entertainment:

Modem retail formats provide a place for people to assemble, and a means
of entertainment, by providing facilities such as food courts, mini theatre,
children’s play spaces and coffee shops. These facilities help the
customers enjoy shopping.

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