RETAIL MANAGEMENT (UNIT-1) RISHABH JAIN

Definition of Retailing - Retailing refers to the process of selling

goods or services directly to end consumers for personal or household use.
It typically involves the purchase of products from manufacturers,
wholesalers, or distributors and then selling them through physical or online
storefronts at a markup to cover the costs of operating the retail business,
such as rent, utilities, and employee salaries. Retailers can operate in
various forms, including department stores, specialty stores, supermarkets,
convenience stores, and online marketplaces, and they play a critical role
in bringing products and services to the consumer marketplace.

Functions of Retailing-
Providing products and services to consumers: Retailers are responsible for
providing consumers with a wide range of products and services that meet
their needs and preferences. They act as intermediaries between
manufacturers and consumers, enabling manufacturers to reach a wider
audience while making it convenient for consumers to purchase products.

1. Creating utility: Retailers add value to products and services by

making them more accessible, convenient, and appealing to
consumers. They provide a range of services such as product display,
packaging, and promotion to create utility that enhances the overall
shopping experience.
2. Offering personalized services: Retailers offer personalized services
to customers, such as product advice, assistance with sizing and fit, and
after-sales services. These services help to build customer loyalty and
can also differentiate retailers from their competitors.
3. Price determination: Retailers play a crucial role in determining the
final price of products sold to consumers. They consider various factors
such as the cost of the product, competition, and customer demand
when setting prices.
 4. Employment generation: Retailing provides employment opportunities
to millions of people worldwide, ranging from sales associates to store
managers and distribution center workers. This, in turn, contributes to
economic growth and development.
5. Economic growth: Retailing is a significant contributor to the economy,
with retail sales accounting for a significant portion of GDP in many
countries. The growth of the retail industry can lead to increased
economic activity, job creation, and higher standards of living for
communities

Types of Retailing -

Store Retailing: This refers to the traditional form of retailing where

customers physically visit a physical store to make their purchases. Store
retailing can be further classified into different types such as:

1. Department stores: Large stores that sell a wide range of products,

often organized into different departments.
2. Supermarkets: Large stores that sell primarily food and household
items.
3. Specialty stores: Stores that specialize in a particular type of product,
such as clothing, electronics, or jewelry.
4. Convenience stores: Small stores that offer a limited selection of
products and are usually open 24/7.

Non-store Retailing: This refers to retailing that does not involve a physical
store where customers can visit. Non-store retailing can be further classified
into different types such as:

1. E-commerce: The sale of products and services through online

platforms such as websites or mobile apps.
2. Direct selling: The sale of products directly to consumers through
door-to-door sales, home parties, or other personal interactions.
3. Telemarketing: The sale of products over the phone or through other
communication channels such as email or text messaging.
 4. Vending machines: Automated machines that dispense products such
as snacks, drinks, and tickets.

In recent years, there has been a growing trend towards omnichannel

retailing, where retailers combine both store and non-store retailing strategies
to provide a seamless shopping experience to customers across multiple
channels.

Present Indian Retail Scenario - The retail industry in India has undergone
significant changes in recent years due to various economic, social, and
technological factors. Here are some key points regarding the present Indian
retail scenario:

1. Growing Market Size: India is currently one of the fastest-growing retail

markets in the world, with retail sales expected to reach $1.75 trillion by
2026. The retail industry in India is expected to grow at a CAGR of
10.5% between 2021-2026.
2. Dominance of Unorganized Retail: The unorganized retail sector
accounts for around 90% of the total retail market in India, while the
organized retail sector is estimated to account for the remaining 10%.
However, the organized retail sector is expected to grow at a faster rate
in the coming years.
3. Shift towards Modern Retail Formats: In recent years, there has been
a significant shift towards modern retail formats such as supermarkets,
hypermarkets, and e-commerce. This is driven by changing consumer
preferences, rising income levels, and increasing urbanization.
4. Government Initiatives: The Indian government has taken various
initiatives to boost the retail sector, including the introduction of the
Goods and Services Tax (GST), FDI policy reforms, and the creation of
a National Retail Policy.
5. Increasing Adoption of Technology: Technology is playing an
increasingly important role in the Indian retail sector, with retailers
adopting new technologies such as AI, machine learning, and
augmented reality to improve the customer experience and increase
operational efficiency.
 6. Challenges: Despite the growth potential, the Indian retail sector faces
several challenges, including high real estate costs, supply chain
inefficiencies, and a complex regulatory environment. Moreover, the
ongoing COVID-19 pandemic has also affected the retail sector, leading
to store closures and a shift towards e-commerce.

(UNIT - 2)

Buying Decision Process - The buying decision process is the process a

consumer goes through when making a purchase decision. It involves several
stages that the consumer goes through before deciding to buy a product or
service. The stages of the buying decision process are as follows:

1. Problem recognition: The first stage of the buying decision process is

problem recognition. This occurs when a consumer realizes they have a
need or want that is not being satisfied. This could be triggered by an
internal or external stimulus, such as a change in personal
circumstances or an advertisement.
2. Information search: Once the consumer has recognized a problem or
need, they will typically start searching for information about potential
solutions. This could involve searching for information online, asking
friends or family, or visiting stores to gather information about different
products and services.
3. Evaluation of alternatives: After gathering information about potential
solutions, the consumer will evaluate the different options available to
them. They will weigh the benefits and drawbacks of each option and
compare them to their personal needs and preferences.
4. Purchase decision: Once the consumer has evaluated their options, they
will make a purchase decision. This involves choosing a specific
product or service and deciding where and when to make the purchase.
5. Post-purchase evaluation: After the purchase is made, the consumer
will evaluate their satisfaction with the product or service. If they are
satisfied, they are more likely to become repeat customers, and if they
 are not satisfied, they may return the product or service or provide
negative feedback.

It is important for marketers to understand the buying decision process to

tailor their marketing strategies to meet the needs of consumers at each
stage of the process.

Influence of Group and Individual Factors - Group and individual factors can
significantly influence retail management. Here are some examples of how
group and individual factors can affect retail management:

Group Factors:

1. Culture and Social Class: Culture and social class can influence the
types of products and services that consumers purchase, as well as
their purchasing behavior. Marketers must take into account the cultural
and social class differences of their target audience to develop effective
marketing strategies.
2. Reference Groups: Reference groups refer to the groups of people that
an individual uses as a point of reference when making purchasing
decisions. These groups can include family, friends, colleagues, and
even online communities. Marketers can use reference groups to
influence consumers by targeting their advertising and promotions to
these groups.

Individual Factors:

1. Personality and Motivation: Personality and motivation can impact

consumer behavior and purchasing decisions. Marketers can use
different marketing strategies to appeal to different personality types
and motivate consumers to make purchases.
2. Perception and Attitude: Perception and attitude can affect how
consumers perceive and evaluate products and services. Retailers must
 work to create positive perceptions and attitudes towards their products
and services through effective marketing and branding.
3. Lifestyle and Values: Consumers' lifestyles and values can impact their
purchasing decisions. Retailers must understand their target audience's
lifestyles and values to create marketing strategies that resonate with
them.

Overall, understanding the influence of group and individual factors on retail

management is critical for retailers to develop effective marketing strategies
and create a positive customer experience.

Customer Shopping Behavior and Satisfaction - Customer shopping behavior

and satisfaction are critical aspects of retail management. Here are some key
points regarding customer shopping behavior and satisfaction in retail
management:

Shopping Behavior:

1. Impulse Buying: Impulse buying refers to the unplanned and

spontaneous purchasing behavior of customers. Retailers can
encourage impulse buying by placing products in prominent locations,
offering discounts or promotions, or creating an appealing store
atmosphere.
2. Brand Loyalty: Brand loyalty refers to customers' willingness to
repeatedly purchase products or services from a particular brand.
Retailers can build brand loyalty by creating a positive brand image,
providing excellent customer service, and offering loyalty programs.
3. Online Shopping: Online shopping has become increasingly popular in
recent years. Retailers must ensure that their online store is
user-friendly, secure, and offers a wide range of products and services
to cater to the needs of online shoppers.

Customer Satisfaction:
 1. Service Quality: Service quality is a critical factor that impacts customer
satisfaction. Retailers must provide excellent customer service by hiring
knowledgeable and friendly staff, providing quick and efficient service,
and addressing customer complaints promptly.
2. Product Quality: Product quality is another key factor that impacts
customer satisfaction. Retailers must ensure that their products meet
customer expectations and provide good value for money.
3. Store Atmosphere: The store atmosphere can also impact customer
satisfaction. Retailers can create a pleasant store atmosphere by using
appealing visual merchandising, providing comfortable seating, and
playing appropriate music.

Overall, understanding customer shopping behavior and satisfaction is crucial

for retail management. Retailers must focus on providing high-quality
products and services, creating a positive shopping experience, and building
customer loyalty to succeed in a competitive retail market.

Retail Planning Process - The retail planning process is a strategic approach

to managing a retail business. It involves a series of steps that retailers can
follow to develop effective retail strategies and achieve their business
objectives. Here are the key steps in the retail planning process:

1. Define business objectives: The first step in the retail planning

process is to define the business objectives, which may include
increasing sales, expanding the customer base, improving profitability,
and enhancing the brand image.

2. Analyze the market and competition: Retailers must analyze the

market and competition to identify market trends, customer needs and
preferences, and competitor strategies. This information can be used to
develop effective marketing strategies.

3. Develop a retail strategy: Based on the market and competition

analysis, retailers must develop a retail strategy that aligns with the
 business objectives. This strategy may include a mix of pricing,
promotion, product, and placement strategies.

4. Create an action plan: Once the retail strategy is developed, the next
step is to create an action plan that outlines the specific activities,
timelines, and resources required to achieve the business objectives.

5. Implement the action plan: Retailers must implement the action plan
by executing the activities outlined in the plan. This may include product
development, pricing strategies, promotional activities, store layout and
design, and customer service initiatives.

6. Monitor and evaluate performance: Retailers must monitor and

evaluate their performance against the business objectives and make
adjustments as necessary. This involves analyzing sales data, customer
feedback, and other key performance indicators to measure the success
of the retail strategy and identify areas for improvement.

Overall, the retail planning process is a dynamic and ongoing process that
requires retailers to be proactive and responsive to changes in the market and
customer needs. By following these steps, retailers can develop effective retail
strategies that help them achieve their business objectives and stay
competitive in the retail market.

Risk Analysis - Risk analysis is an essential aspect of retail management as

it helps retailers to identify potential risks that could impact their business and
develop strategies to mitigate those risks. Here are some key areas where
retailers need to conduct risk analysis:

1. Market Risks: Retailers face market risks such as changes in customer

preferences, demographic shifts, and economic conditions. Retailers
must analyze these risks to ensure that their business is aligned with
the changing market conditions.

2. Operational Risks: Retailers face operational risks such as supply

chain disruptions, inventory management, and employee turnover.
 Retailers must develop contingency plans to manage these risks and
ensure the smooth operation of their business.

3. Financial Risks: Retailers face financial risks such as cash flow issues,
credit risks, and exchange rate fluctuations. Retailers must analyze their
financial risks to ensure that they have adequate capital and financial
resources to manage their business effectively.

4. Legal and Regulatory Risks: Retailers face legal and regulatory risks
such as compliance with labor laws, environmental regulations, and
taxation laws. Retailers must ensure that they comply with all legal and
regulatory requirements to avoid legal penalties and reputational
damage.

To conduct risk analysis, retailers must identify potential risks, assess the
likelihood and impact of each risk, and develop strategies to mitigate or
manage the risks. This may involve implementing risk management policies
and procedures, investing in risk mitigation tools such as insurance, and
developing contingency plans to ensure business continuity in the event of a
risk event.

Overall, risk analysis is a critical aspect of retail management as it helps

retailers to identify and manage risks that could impact their business. By
conducting regular risk analysis, retailers can develop effective strategies to
mitigate risks and ensure the long-term success of their business.