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Retailing
Retailing
Retailing
Retailing includes . . . .
all activities involved in selling, renting, and providing goods and services to ultimate customers for personal, family or household use. In the channel of distribution, retailing is where the
Pantaloon Retail
The flagship company of Future Group, Pantaloons Retail operates over 16 million square feet of retail space, has over 1000 stores across 73 cities in India and employs over 30,000 people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. The companies also operates in other retail segments such as - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar, collectioni), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara andHealth village in the pipeline), e-tailing (Futurbazaar.com), entertainment (Bowling co.) The turnover this year was 12500 crores.
K Raheja Group
They forayed into retail with Shoppers Stop, Indias
first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). They have signed a 50:50 joint venture with the Nuance Group for Airport Retailing. Shoppers Stop has a national presence, with over 2.05 million square feet area across 39 stores in 17 cities. It has also introduced new formats in the market viz Home Stop the exclusive home furnishings, dcor as well as furniture store and HyperCity a premium shopping destination for Foods, Homeware, Home Entertainment, Hi-Tech Appliances, Furniture, Sports, Toys & Fashion. Other format of the company includes -- Crossword Book Store, Mothercare & Early Learning Centre (ELC), Estee Lauder group , Airport Retailing, TimeZone Entertainment. The turnover this year was 1570 crores.
Tata group
Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired Landmark, India`s largest book and music retailer. Tatas has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics chain. Another subsidiary, Titan Industries, owns brands like Titan, the watch of India and Tanishq, the jewellery brand. Sales turover was 197.13 crore in December 2010.
RPG group
One of the first entrants
into organised food & grocery retail with Foodworld stores in 1996 and then formed an alliance with Dairy farm International and launched health & glow (pharmacy & beauty care) outlets. Now the alliance has dissolved and RPG has Spencers Hyper, Super, Daily and Express formats and Music World stores across the country.
Landmark group
Landmark
Group was launched in 1998 in India; currently owning 100 stores across various retail formats. The retail ventures of Landmark Group includes Home Centre, Centrepoint, Babyshop, Splash, Shoe Mart, Lifestyle, Max, Lifestyle Department Stores, SPAR hypermarkets, Foodmark, Fun City, Fitness First, Citymax India etc. It is a 3.8 billion dollar company.
Bharti-Walmart
Bharti have signed a 50:50
percent joint venture agreement with Walmart in which Wal-Mart will be taking care of cash & carry and Bharti will do the frontend. Further they plan to invest USD 7 billion in creating retail network in the country including 100 hypermarkets and several hundred small stores.
Reliance
The company owns more
than 560 Reliance Fresh stores and recently it has also launched Reliance Mart Hypermart. The company further plans to launch its hypermart in Delhi /NCR,Hyderabad, Vijaywada, Pune and Ludhiana region. The turnover was 4500 crore for this year.
AV Birla Group
AV Birla Group`s brand portfolio
includes brands such as Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town. Also, Madura garments is subsidiary of Aditya Birla Nuvo Ltd. The recently acquired food and grocery chain of south, Trineth, has further increased their number of store to 400 stores in the country. The company also own More supermarkets and hypermarkets. Currently it runs 600 supermarket and nine hypermarkets across India. The turnover this year was 1700 crores.
Metro
Metro Cash & Carry, the first
company to introduce cash and carry business, started its operations in India in 2003 with two Distribution Centres in Bangalore. Metro offers assortment of over 18000 articles across food and non food at the best wholesale prices. Currently Metro operates six cash and carry centres in Banglaore, Hyderabad, Kolkata and Mumbai.
Viveks Ltd
Vivek Limited is the largest
consumer electronics and home appliances retail chain in India, with 44 stores in south, covering a retail space area of over 1, 75, 000 sq. ft and a turnover of over Rs. 400 crore. Its brand, Viveks, is now a household name. The company plans to set up 50 more showrooms in South India.
Functions of a retailer
1.
Buying: A retailer buys a wide variety of goods from different wholesalers after estimating customer demand. He selects the best merchandise from each wholesaler and brings all the goods under one roof. In this way, he performs the twin functions of buying and assembling of goods. Storage: A retailer maintains a ready stock of goods and displays them in his shop. Selling: The retailer sells goods in small quantities according to the demand and choice of consumers. He employs efficient methods of selling to increase his sales turnover. Grading and Packing: The retailer grades the goods which are not graded by manufacturers and wholesalers. He packs goods in small lots for the convenience of consumers.
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Risk-bearing: A retailer always keeps stock of goods in anticipation of demand. He bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc. Transportation: Retailers often carry goods from wholesalers and manufacturers to their shops. Financing: Some retailers grant credit to customers and provide the facility of return or exchange of goods. In some cases, home delivery and after sale service are provided by retailers. Sales promotion: A retailer displays goods. He carries out publicity through shop decoration, window display, etc. He maintains direct and personal contacts with consumers. He persuades consumers to buy goods through personal selling. Information: Retailers provide knowledge to consumers about new products and uses of old products. They advise and guide consumers in better choice of goods. They also provide market information to wholesalers and manufacturers.
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Importance of a retailer
Providing variety & assortments: A typical supermarket provides thousands of products .it not only stocks brand varieties but also assortments within a particular brand.
Eg: shampoo- clinic plus, sun silk ,Pantene. -within that sub brand-clinic plus protein shampoo. Clinic all clear
Breaking bulk into smaller assortment: Though the retailer purchase products in bulk, in order to reduce transportation inventory and warehousing costs. he does not sell it bin bulk to end customer.
Holding inventories:
the broken bulk is kept in stock until the customer comes for the purchase. Proving information: Informn regarding the products, services & promotions to the customer. he gives informn regarding the customers, purchase pattern & demand pulse to the manufactures. Implied functions: Merchandising:- identifying the right products for retail sourcing them and ensuring that they reach the end consumer Quality control: -internal part of merchandising-involves establishing the stds for merchandise procurement and ensuring that the consumers get quality product at expected stds.. Storage & maintenance:-perishable & non perishable Logistics:- transportation -includes proper planning ,follow up & contingency planning
Other services : Offering credit to consumers Displaying products Giving demonstration for the product Providing samples for testing and tasting Handling enquires, complaints, guarantees, warranties Providing home delivery, installation ,gift wrapping Advertising and promotion
Level of service
Merchandise line
large assortment of each item, such as shoe stores that offer running shoes, dress shoes, and childrens shoes.
Breadth of product line refers to the variety of different
items a store carries. -- scrambled merchandising refers to retailers that offer several unrelated product lines in a single store. -- hypermarkets are very large retail outlets that have the goal of offering customers everything at one outlet. -- Supercenters are retailers that combine a typical merchandise store with a grocery store.
Shoes
Appliances
CDs
Nike running shoes Florsheim dress shoes Top Sider boat shoes Adidas tennis shoes
Amana refrigerator Sony TV sets JVC videocassette recorders General Electric dishwashers Sharp microwave ovens
Automatic Vending
Non-store retailing that makes it
possible to serve customers where stores cannot. Maintenance and operating costs are high. Small convenience products are available in vending machines. Of the 3 million vending machines now in use, 1.8 million are soft drink machines.
through segmentation and targeting. Customer value is enhance by providing a fast and convenient means of making a purchase. In 1998 Americans increased their catalog spending to $87 billion. A typical household receives 50 catalogs each year.
watch a shopping channel on which products are displayed; orders are placed over the telephone. Two popular home shopping programs reach 60 million homes and have combined sales of $2 billion. TV home shopping programs traditionally attract 40-50 year old females. Limitations of TV shopping have been the lack of buyer-seller interaction and the inability of consumers to control the items they see.
Online Retailing
Online retailing allows consumers to search
for, evaluate, and order products through the Internet. The advantages of online retailing are: ability to comparison shop privacy variety Forecasts suggest that current annual sales of $10 billion could reach $100 billion in just a few years.
Telemarketing
Telemarketing involves using the telephone to interact with and sell directly to consumers.
According to the American Telemarketing Association, telemarketing sales exceed $500 billion. As the use of telemarketing grows, consumer privacy has become a topic of discussion among consumers, Congress, the Federal Trade Commission, and businesses.
Direct Selling
Direct selling involves direct sales of goods and services to consumers through personal interactions and demonstrations in their home or office. Industry sales are more than $16 billion, but are declining in the U.S. as retail chains begin to carry similar products at discount prices, and the increasing number of dual-career households reduces the number of potential buyers at home. Many direct selling retailers are expanding into international markets to offset the decline in domestic sales.
retail outlets on two dimensions: breadth of product line and value added. Breadth of product line is the range of products sold through each outlet. Value added includes such elements as location, product reliability, and/or prestige.
Kmart
Bloomingdales
Tiffany
For a store to be successfully positioned, it must have an identity which has some advantages over competitors, and at the same time are recognized and valued by consumers.
The retailing mix includes: 1. Goods and services 2. Physical distribution 3. Communications tactics chosen by a store.
Personal selling Consumers Advertising Window displays Internal displays Public relations Store layout Catalogs Telephone sales
Keys to Success
Creative merchandising image-excitement, leader High price/high margin Store Ambiance Economies of scale--volume Image--good guys, conveniences Low price/low margin Low or self-service Efficiency of operations Unique of high quality products Image--exclusive specialty High price/high margin Personal service/advice Expensive presentation Specialty mass merchandising Image--value conscious, consistent Low price, loss leaders Little or self-service Cookie-cutter stores
to the cost the retailer paid for the product to reach a final selling price.
Original markup is the difference between the
between the final selling price and retailer cost and is also the gross margin.
name merchandise at lower than regular prices. The difference between the off-price retailer and a discount store is that off-price merchandise is bought by the retailer from manufacturers excess inventory at prices below wholesale prices.
strip location
power center
Passage of time
4. New form of outlet enters retailing environment with characteristics of outlet in Box 1
On-line retailers
Single-brand stores
Accelerated development
Warehouse clubs
Fast food outlets Convenience stores Supermarkets Department stores
Profit
Market share
Maturity Decline
Malls (?)
Catalog Retailers General store
LO3
LO3
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Wheel of Retailing
Some would argue that McDonalds has become a victim of the wheel of retailing. When McDonalds started out, it served a select menu. Over the years, the McDonalds product offering has expanded to the inclusion of playgrounds, thus opening the way for new, low-cost fast-food providers, such as Checkers.
LO3
Time
Narrow Assortment
Wide Assortment
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LO3
LO3
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LO3
Market share stabilizes and profits decline because: 1. managers used to managing simple small retail outlets must now manage large complex firms, 2. industry has over expanded, and 3. competitive assaults by new retail formats.
LO3
Decline
The once promising idea is no longer needed in the marketplace. As a result, market share and profits fall.