Retail Management

Session I
Introduction to
Retailing
BBA Fall 2022
The variety of terms used
for marketing intermediaries that vary in specificity and
use in consumer and business markets
 Learning Objectives

1.1 To define retailing,

consider it from different perspectives,
demonstrate its impact on the economy,
note its special characteristics
and appreciate its contribution to the society.
1.2 To introduce the concept of strategic planning in retailing and apply
it
1.3 To show why the retailing concept is the foundation of a successful
business, with an emphasis on the total retail experience,
customer service, and relationship retailing
 Retailing
• Retailing encompasses the business activities involved in selling
goods and services to consumers for their personal, family, or
household use. It includes every sale to the final consumer.
• Last stage in the distribution process.
• Is retailing only sale of physical goods?
• Mail, Phone orders, D2C, C2C, Manufacturers, importers, non-profit
firms, wholesales and individual artisans (Etsy), e-commerce, social
commerce
• Classification of retailers in Pakistan
(Section G Wholesale and retail trade; repair of motor vehicles and motorcycles)

• Essentially is service.
• Digital goods?
 Retailing adds value
Consumer Utilities Offered by Retailing
• Place

• Possession

• Form

• Time
Value of Retailing
Which retailer provide best which utility ?
 Issues in Retailing
• How can we best serve our customers while earning a fair
profit?
• How can we stand out in a highly competitive environment
where consumers have so many choices?
• Low consumer confidence and high savings rates have
reduced consumer spending. At the same time retail
competition has increased through increased format blurring
(e.g., sales of cameras at office supply stores, carpeting and
major appliances at home improvement centers).
• How can we grow our business while retaining a core of loyal
customers?
• Can retailers flourish in today’s tough market place?
The Philosophy
• Retailers can best address these questions by fully
understanding and applying the basic principles of
retailing, as well as the elements in a well-structured,
systematic, and focused retail strategy.

• What if you are a budding fashion designer, how would

you choose to sell your product?

• You want to finance your degree by teaching O/A levels

student ?

• You want to buy car ? Choices?

Willingness to Adapt Is
Essential for Retailers
Why Study Retailing ?

• Impact on the economy

– The largest 250 retailers in the world generate more than $4.6
trillion in annual revenues. They represent 29 nations.
– Walmart vs. Amazon

•
Function in the distribution process

•
Relationship with firms for resale or use.

•
Career opportunities
Impact of Retailing on Economy
The global retail industry

• As an economy develops, more retail structure and

specialization helps multiple retailers (those with more
than one outlet) grow
• Emerging markets provide opportunities for global
retailers
• As disposable income rises (China)
• Many retailers are huge global organizations (e.g.
Walmart, Tesco, Ikea, Zara)
• As trade barriers have lifted, world has become their
market place.
Impact of Retailing on Economy
Interbrand rankings 2020
 Interbrand
rankings 2019
Impact of Retailing on Economy
Retail Landscape in Pakistan
Impact of Retailing on Economy
Retail Landscape in Pakistan

• Retail contribution to national GDP is almost 20%.

• Third largest sector of the country.
• Second highest employer (15% of labor force).
• Pakistan around 2/million retailers. 0.8/m represent FMCG
modern trade and general trade channels including kiryana,
general, medical, supermarkets, hypermarkets.
Impact of Retailing on Economy
Retail Landscape in Pakistan
Impact of Retailing on Economy
Retail Landscape in Pakistan
Pakistan’s Unorganized Retailing market
• Around 8.4 % sales is generated by modern retail. This will be 9% by 2020

• Limited to largest cities, Karachi, Lahore, Rawalpindi/Islamabad & Faisalabad

Future prospect 30/m in other 10 cities.

• Hypermarkets and superstores account for of national food retail sales.

• Grocery include, Utility Store Corporation at retail, Metro at whole sale,

convenience retailing.

• Specialty retailers, K&N (almost 100 outlets in 24 cities), Foodservice retailers

• Future Investment in Pakistan likely to focus on non-food and foodservice

Pakistan’s Retail Sector Tax potential
• According to Federal Board Revenue (FBR), out of 3.5 million traders, only 312,361
file for tax returns and 104,219 filed income tax returns in five major markets
(Karachi, Lahore, Islamabad, Rawalpindi and Faisalabad.
COVID-19 and Innovation in Retail
COVID-19 and Innovation in Retail
Selected retail occupations
A Typical Channel of Distribution
The Retailer’s Role in the Sorting Process

1. Communicating
2. Small suppliers support
3. Complete transaction with customers
Common marketing channels by the
kind and number of intermediaries
 The relationship among retailers and
suppliers - Distribution Types
• Exclusive: Suppliers make agreements with one
or few retailers, designating such retailers as the
only ones to carry certain brands or products
within a specified geographic area
• Intensive: Suppliers sell through as many
retailers as possible
• Selective: Suppliers sell through a moderate
number of retailers
Exclusive Vs Intensive Distribution
• Exclusive Distribution: Fate of retailer is tied to
manufacturer success, retailer has no “free-rider”
concerns, retailer has less price competition,
manufacturer is better assured of high levels of customer
support
• Intensive Distribution: Manufacturer is better assured of
maximizing sales (especially for convenience goods),
retailers face strong competition for price and service,
intratype competition
Comparing Distribution Types
Special Characteristics Affecting
Retailers
 The contribution of retailing to society

• Additional roles to ‘breaker of bulk’:

–Promotion and communication of products
available
–Advice and guidance – to match consumer need
to product
–Negotiating sales and forming contracts,
implementation of law (e.g. sale of alcohol)
–Financial management (e.g. payment on credit)
–Handling of warranty claims and after sales
facilities
 The contribution of retailing to society
• Retailers play a considerable role in terms of
learning and development of ourselves (what we
want to buy and where we want to buy it)
• Starts with early age (personal & social life)
• Are there place where you would like to be seen
or otherwise (aspires)?
• Share your life event
• Where you feel more comfortable for shopping?
The retailer in society

• Leisure and entertainment , e.g. shopping with friends or

family
• Consumers have opportunity to learn about products
from sales personnel
• Central hub in a community, local information service
• Additional services to fulfill societal needs e.g. utilities
payment, online order collection service
• Community relationships e.g. sponsorship of local
events, animal tested products
• Close association with consumers.
Consumer-led retailing

Over time the consumer has become a more powerful

member of the distribution channel.
Reasons:
• Abolition of laws that allowed producers to set prices of
goods. Consumers therefore free to go to retailer with
lowest price
• Increased knowledge about consumer buying patterns
and preferences via computerized information systems
(especially EPOS – electronic point of sale)
• Consumer can now compare retailer offers easily and
quickly on the internet
 Importance of developing and applying a
retail strategy – Case in point ?
• Define the type of business category (goods or services) and
specific orientation (full service or no frills).
• Set long term and short term sales objectives for sales and profit,
market share, image etc.
• Determine the consumer markets to target on the basis of
characteristics and needs.
• Develop an overall long term plan to give direction to the employee
and owner.
• Implement integrated strategy (assortment, display, location, pricing,
promotion).
• Regularly evaluate performance and correct weakness or problems
observed.
Applying the Retailing Concept
Creating a Unique Shopping Experience
 The total retail experience
Store of the Future
Includes all the elements in a retail offering that encourages or inhibit
consumers during their contact or journey with a retailer.
Such as “nbr. of salespeople, display, prices, brand names, mobile app
or web page design, accurate product or pricing information, inventory
etc.”

Please click URL to view:

https://youtu.be/IKouQFI1aM4
Customer Service Lessons: Richard
Branson and Virgin Airlines
Read post here:
https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com
/sites/carminegallo/2013/05/09/seven-customer-service-lessons-i-learne
d-in-one-day-with-richard-branson-video/&refURL=&referrer=

What are the problems faced by retail sector in Pakistan? May 22, 2021
by Haseeb Ahmed Khawaja
Pakistan’s booming retail sector by Shahram Haq, April, 27, 2016, the
express tribune
Retail Sector: A $5 billion tax potential, September 6, 2020 by Huzaima
and Dr. Ikaramul Haq
• #BachaaParty is looking to hire skilled & experienced candidate for the position of 
#SeniorHRExecutive.

#Responsibilities:
• Recruitment of retail stores staff, warehouse and head office.
• Maintain talent pool for all key positions of Stores, Warehouse, & Head office.
• Manage whole employee on-boarding cycle. (Employee forms, ID Creation,
Orientation)
• Daily reporting of recruitment to the line manager.
• Ensure Execution & Compliance of HR policies.

•
• Assist in handling employee’s grievances.
• Assist in training session as and when required.
• Conduct counseling sessions as and when required.
• Disburse FNF Settlements and conduct exit interviews.
• Daily other tasks as required by the management.

#Requirements:
• Education: MHRM/BBA in HR.
• Experience: Min 2 years in a similar capacity – Retail Industry preferred
• Computer literate: Excellent skills on Microsoft Office and HR Software.
• Flexible in timings and travelling.

Interested candidates can send their #CVs at careers@bachaaparty.com by mentioning

the position in the subject line.
 Class Activity Session I
Future of Retailing in Pakistan

–Discussion point # 1 : Do you think organized

retailing will eventually replace the Kiryana
shops in future?
–Discussion point # 2 Describe the key
opportunities and threats facing small retail
business today?