RETAILING

When self production stopped, retailing began It involves sale and interaction with the final

customer

Accessibility of location, convenience of timing, size, information, and lifestyle support is provided
Retailing involves dual adoption where the

product is symbolically adopted when it is launched, and the actual adoption happens when the retailers put forth the product in the right perspective.
Shift of perspective from distribution oriented

perspective to consumer value oriented perspective

Retailing and Development

Access to products Better merchandise Availability of particular product of choice Greater customer satisfaction through higher

levels of customer service

3 C theory- Change, Confidence and Consumerism

Functions / Utilities of Retailing What all does Retail ensure?

Wider product availability Reduced waiting time

Provides desired lot size

Enhances variety Utilities of Form, Place, Time and Size that

customer wants to optimize

History of Retailing
The newer formats have their genesis in Europe Ancient ruins indicate that the worlds first

department store was in Rome. With the fall of this empire, retailing disintegrated.
Development of retail as we see it in the current

formats were happening both in Europe and in North America and Canada.
History of American Retailing can be traced back to

shops located near ports where merchants from Europe would dock their ships and sell the merchandise
Development of railroad systems and refrigeration

between 1890- 1920 enabled shoppers to travel more widely and choose from a greater assortment of merchandise

History contd.. 1950 1970 witnessed the emergence of major players and formats.
Next major shift came when Sam Walton began his

first Walmart

1970-1980 saw the advent of category killers and

wholesale club stores like Toys r Us, Home depot, Circuit City and Sams Club.
Other formats like malls, speciality stores, and

grocery stores strated stressing on retailtainment.

This is when store brands started gaining

importance.

1990s saw the advent of e-commerce

History contd.. Retailers were turning into multi format entities especially with the help of internet.
Now the focus has shifted to emerging

economies and retailers are searching for a different business model to succeed in these markets ruled by small retailers.

1.

Theories of Retailing Wheel of Retailing: It is one of the oldest theories It postulates that retailers enter the business at a fairly low status, low prices and with low price operation. Then they mature as high cost, high price retailers who become vulnerable to new entrants, who in turn go thru the same process Either the innovators or successors fail to adapt to the changed environment and the laxity in management lead them along the wheel

Theories of retailing contd.. 2. Retail Accordion: This emphasizes that retail development is linked to human habitation

New area or location is developed and customers start living in that area, early stores deal with almost all products needed by these customers. This continues till the bell shape grows and the area is well developed. Once the growth starts to taper, retailers turn their attention to maximizing value per customer.

Theories of retailing contd.. Existing shops move to become general merchants where they tend to get everything under one roof.
There can also emerge category killers and price

players.

3. Melting Pot theory: A new value proposition by one retailer gives rise to two new retailers with the same value proposition.
Firms adapt mutually to the emerging

competition

Theories of retailing contd..

Thus mortality rate increases and many of them are not sure of the reason of death. Grocery stores also face this price-led dialectic process. To survive one needs to emerge above the found formula of success and look in for their own actual formula of success

Theories of retailing contd.. 4. Polarization Theory: This theory emphasizes that in a longer term the industry consists of mostly large and small size retailers.

Largers stores offer one stop shopping, while smaller stores, offer a limited range at a very competitive price. It is found that firms tend to more profitable when they are either large sized or small sized.

Retail Performance and Profitability

Profitability of any retail function is primarily based on Inventory Space & People

Wholesaling Includes all activities involved in selling goods and services to those buying for resale or business use.
So this function does not interact with the final consumer

Eg: Shah Alam wholesale market in Lahore, Crofet market in Mumbai.

Importance of Wholesalers? Selling and promoting

Buying and assortment building Bulk breaking Warehousing Transportation Market Information

Types of Wholesalers Merchant wholesalers

Full service wholesalers Retailer-wholesaler merchants and Manufacturer- industrial distributors Limited service wholesalers Cash and carry wholesalers Brokers

Types of Wholesalers contd.. Agents

Sellers and buyers themselves

Trends in Wholesaling Add value by increasing the efficiency and effectiveness of the entire marketing channel.
Large wholesalers and large retailers distinction continues to blur In the Asian subcontinent, global wholesalers are typically called Cash and Carry stores

Wholesale retailing in India Why increasing number of retailers are entering C&C space?

Traditional wholesaler business is and will remain larger than modern organized retail 100% FDI is permitted 12 million mom and pop stores

Opportunities it presents:

Traditional retail accounts for more than 90% of the market C&C operators will realize greater efficiencies and gains once they reach scale This will improve back end infrastructure, lower wastage and transparent pricing for farmers.

Consumers benefits:

Better pricing slabs Unorganized sector will also reap the benefits Bharati Walmart works with several small and medium suppliers across India

Boost in infrastructure development:

Increased investments in supply chain , better integration with farmers Greater backward integration Add to the infrastructure development

Retail in service industry: Services that are retailed to the end consumer constitute retail in the service industry
Key services under this category include - Retail banking - Car rentals - Providers like electricity, gas - F& B industry - Tourism packages

How different is service industry retailing different?

Working with intangibles People quotient is high Technology helps speed up the process No manufacturer Maintaining standard is very high Franchise rules strict Expectations of the customer also can be varied Though it is a very stimulating industry