RETAILING

MANAGEMENT
UNIT - 1

PRESENTED BY

K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC), (Ph.D)(MGU)
ASSISTANT PROFESSOR IN MANAGEMENT
VISHWA VISHWANI GROUP OF INSTITUTIONS
 BBA/MBA 5 year Integrated Course III Year - V Semester
Paper – 5.1: Retailing Management
Unit – I: Introduction:
Definition and Scope of Retailing; Retailing Scenario – Global; Retailing Scenario-India;
Prospects of Retailing in India’s; Trends in Retailing; Retailing formats; Retail Strategies.
Unit – II: Store Planning:
Store planning; Design and Layout; Retail merchandising; Supply Chain Management in
Retailing.
Unit – III: Retail Marketing and Advertising:
Retail Marketing Strategies; strategic Positioning; retail marketing mix; customer relationship
management; direct marketing; micro marketing in retailing, and adverting in retailing.
Unit – IV: Retail Operations and e-Tailing:
Store Operating parameter; using strategic resource model in Retailing; Designing performance
programme; online retailing, and online retail categories.
Unit – V: Retail Management Information System and Retail Research:
Retail Technology and Automations; Retail Technology and CRM; Human resources and
Executive information systems; Developing a research Methodology; Retail audit.
References:
1. Cullen & Newman, 2007, “Retailing, environment and operations”, Thomson. 2. Levy & Weitz, 2005, Retailing, TMH.
3. Gibson G. Vedamani, “Retail Management”, Jaico Publishing House, 2nd Ed.
4. Ron Hasty and James Reardon, 1997 Retail Management, McGraw Hill International Edition.
5. A J Lamba, 2006, The Art of Retailing, TMH. 6. Patrick M. Dunne and Robert F. Lusch ,2005, Retailing, Thomson Learning
 Unit – I: Introduction

Definition and Scope of Retailing;

Retailing Scenario – Global;
Retailing Scenario-India;
Prospects of Retailing in India;
Trends in Retailing;
Retailing formats;
Retail Strategies.
 RETAILING:

 Retailing is defined as a set of activities or steps used to sell a product

or a service to consumers for their personal or family use.

 It also includes the sale of services such as those offered at a

restaurant, parlor, or by car rental agencies.

 Retailing process involves buying in bulk quantities and selling in

small quantities.
Distribution Channel (Channel members, or marketing
intermediaries):

Example: Chocolate producer like Cadbury’s will use a number of

distribution channels for its confectionery, which involve members such
as agents, wholesalers, supermarkets, convenience stores, petrol stations,
vending machine operators and so on.
Characteristics of Retailing
1. It offers direct interaction with the customers

2. Small quantity makes large quantity

3. Customer service

4. Point of sales promotion

5. Different forms

6. Location and Layout being Important

7. Big Employment Provider

 Scope of Retailing
1. Merchandising
2. Marketing
3. Store Operations
4. Sales
5. Human Resources Management
6. Accounting and Finance
7. Technology and E-Commerce
8. Supply of Information
9. Visual Merchandising
10. Supply Chain Management and Logistics
 Functions of Retailing:
1) Delivery of the goods to the end consumer

2) Is an essential part of the distribution chain

3) Finances the wholesaler

4) Stores the goods according to market requirement

5) Lends a hand in manufacturer’s marketing initiative

6) Assumes storage/Warehousing of Products for sale at appropriate

time.
7) Extends credit facilities to the consumers and assumes credit risk

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

9) Provides convenience in shopping

10) Offers after sale services, differentiated packaging, giving more

information about the use of the product

11) Hears the voice of the market

12) Generating employment for masses

 History of Retailing In India
 In 2012, the country finally opened up the competition for Indian
retailers by allowing 100 percent brand ownership in single brand
retail (51 percent in multi brand retail).

Growth of retail sector

 The size of Indian retail has tripled over the last ten years to $1.1
trillion (from $354 billion in 2010).

 Since the relaxing of FDI norms, organized Brick and Mortar retailing
has been growing at more than 20 percent Y-o-Y. Contribution of
organized B & M retailing in the overall retail sector has also shot up
to 12 percent from 4 percent in 2009.

 However, this is still very less compared to developed economies,

where the overall organized retailing is more than 80 percent.
 India has now become a hotcake of retailing destination for local and
foreign brands.

 A $21 billion retailing opportunity around transit touch points, i.e.

airports, stations, bus-stops, etc., is to be realized in the next 10 years.

 The country is set to receive 65 million sq. ft of retail space in the

next three years.

 Modern retail story in India is getting written down in Tier-I cities

where consumers are going out in the market not just for the necessity
to dine and shop, but for the experience of it.

 The sector is expected to grow at a rate between 20 percent to 25

percent in the years to come, and there is a need for innovative
solutions to maintain the pace.
 India has 5th largest Retail market in the world.

 Even though modern trade is growing at 15 to 20% per annum, it

has a low organized retail penetration of just 8%.

 On 7 December 2012, the Federal Government of India allowed

51% FDI in multi-brand retail in India. 

 A number of merger and acquisitions have begun in Indian retail

market. PWC estimates the multi-brand retail market to grow to
$220 billion by 2020.

 The Government has approved 51% FDI in multi-brand retail

and 100% FDI in single-brand retail under the automatic route,
which is expected to give a boost to Ease of Doing Business and
Make in India schemes.
The first Indian malls started springing up in the
1990s, and from then on began more or less taking
over the retail landscape.

With the liberalization and privatization of the

economy, big international brands made their way to
India and the paradigm shift that followed naturally
led to the emergence of shopping malls. 

Today’s top-performing shopping malls are mixed-

use affairs with social entertainment possibilities that
provide unique appeal along with a certain depth in
shopping experience.
Some of the most innovative existing mall developments
have integrated public transit facilities, an aspirational mix
of global and domestic brands and local stores as well as
multi-purpose spaces.

Today’s consumers are seeking a shopping experience that

makes them comfortable, inspires them to stay longer and,
more essentially, persuades them to return. 

With growing competition from online retailing, F&B and

entertainment are their main allies in achieving this.
Malls that have given due thought are outnumbering other
developments in terms of repeat footfalls, and this clearly
indicates that customers value an experience that transcends
mainline shopping and also addresses their social needs.

In order to connect with the customers, malls have become

‘places’ that provide customers with numerous avenues of
relaxation and entertainment apart from letting people shop.

Retail is a constantly evolving business.  The retail

experience of the future is a constantly adaptive process
which is squarely focused on changing consumer aspirations.
The process of change involves everyone from retail centre
developer to consumers, from brands to facilities services
providers, from the smallest neighbourhood high street to the
most impressive shopping mall.

It is an ever-changing and constantly evolving race to stay

current on new trends and deliver a new, customized and
refreshing experience to people.

Those who succeed in doing this will flourish, and those who
refuse to or cannot adapt will perish.
Trends in Retailing:

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:
 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:
 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.
 All compete for the same customers.
 The small independent retailers survive by providing personal
services to the customers.
4. New Forms of Retailing:

 Modern malls made their entry into India in the late 1990s, with
the establishment of Crossroads in Mumbai and Ansal Plaza in
Delhi.

 Malls have given a new dimension to shopping experience.

 5. Technology:
 Technology today has become a competitive tool.

 It helps the organized retailer to score over the unorganized

players, giving both cost and service advantages.

 It 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.
 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.

Emerging Trends In Retail:
 Modern retailers are adapting new technology for marketing,
retail operations, and business transactions.

 Forward-thinking retailers are using social media to

communicate with the consumers.

 With the space crunch, modern retailers have learnt how to use
every inch of the floor constructively.

 Social media websites such as Facebook, changed consumer

behavior as well as made retailers sweat out to take the benefits
and develop their brands.
 E-tailing: The process includes the customer’s visit to the website,
purchasing products by choosing a mode of payment, product
delivery by the retailer and finally, the customer’s review or feedback.

 Augmented reality (AR) and artificial intelligence (AI): Consumers

listed Augmented and Virtual Reality as the top technologies they’re
seeking to assist them in their daily lives, with 51% saying they would
be willing to use AR technology to assess products.

 Brands like IKEA, Home Depot, and Target all have proprietary AR
shopping experiences.

 Shopify introduced Shopify AR, an easy-to-use toolkit for businesses

to create their own AR experiences to showcase their products to
customers and showed a 94% higher conversion rate than products
without AR.
Retailing Formats
 Store Based Retailing
(A) Based on Merchandise offered:
(1) Convenience Stores:

 A shop with extended opening hours, stocking a limited

range of household goods and groceries.

 Convenience stores usually charge significantly higher

prices than conventional grocery stores or supermarkets, as
these stores order smaller quantities of inventory at higher
per-unit prices from wholesalers. 
(2) Supermarkets:

 A supermarket is a self-service shop offering a wide

variety of food, beverages and household products,
organized into sections.
 It is larger and has a wider selection than earlier grocery
stores, but is smaller and more limited in the range of
merchandise than a hypermarket.
 The supermarket typically has aisles for meat, fresh produce,
dairy, and baked goods.
 Shelf space is also reserved for canned and packaged goods
and for various non-food items such as kitchenware,
household cleaners, pharmacy products and pet supplies.   
(3) Hypermarkets:
 A hypermarket is a retail store that combines a department store
and a grocery supermarket.
 Often a very large establishment, hypermarkets offer a wide
variety of products such as appliances, clothing, and groceries.
  Hypermarkets allow customers to satisfy all their routine
shopping needs in one trip.
(4) Discount Stores:
 A discount store or discount shop is a term that has been used
over time and across different countries for a number of different
retail formats, all of which sell products at prices that are in
principle lower than an actual or supposed "full retail price".
 Most of the discount stores are like departmental stores as they
sell a variety of products under the roof.
(5) Specialty Stores:
 A specialty store is a shop/store that carries a deep assortment of
brands, styles, or models within a relatively narrow category of
goods.
 Furniture stores, florists, sporting goods stores, and bookstores are
all specialty stores.
 Specialty stores compete with other types of retailers.
(6) Departmental Stores:
 A departmental store may be described as a large retail
organisation having number of departments in the same building
under centralised control.
 Each department deals in particular type of trade and is a complete
unit in it.
 Departments often include the following: clothing, furniture, home
appliances, toys, cosmetics, house ware, gardening, toiletries,
sporting goods, do it yourself, paint, and hardware.
(7) Off Price Retailer:
 Retailers who provide high quality goods at cheap prices.
 They usually sell second-hand goods, off-the-season items etc.
 Off-price retailers are independent of manufacturers and buy
large volumes of branded goods directly from them.
 The off-price retail model relies on the purchase of over-
produced, or excess, branded goods at a lower price.

(8) Factory Outlet:

 An outlet store, factory outlet or factory shop is a brick and
mortar or online store in which manufacturers sell their stock
directly to the public.
 Traditionally, a factory outlet was a store attached to
a factory or warehouse.
 (B) Based on form of Ownership:
(1) Independent Retailer:
 An independent retailer is someone who is completely responsible
for his or her own business.

 The retailer owns or has bought an independent store and has built

the business from the ground up by assessing all needs of the store,
which can include staffing, marketing, merchandising, sales, etc

(2) Chain Retailer:

 A chain store or retail chain is a retail outlet in which several
locations share a brand, central management, and standardized
business practices. 

 Chain stores can cater to the needs of people in different localities.

(3) Franchise Retailer:
 Retail franchising is the method of opening a single store based on
the name, branding, trademark, and products of an existing business. 
 Franchising is based on a marketing concept which can be adopted
by an organization as a strategy for business expansion.
(4) Leased Departments:
 Leased departments are broadly defined as operations of one
company conducted within the establishment of another company.
 Typical examples may include jewelry counters or optical centers
within department stores.
(5) Consumer Co-operatives:
 A consumers' co-operative is an enterprise owned by consumers and
managed democratically which aims at fulfilling the needs and
aspirations of their members. 
 Non-Store Based Retailing
(1) Direct Selling
 Direct selling consists of two main business models: single-level
marketing, in which a direct seller makes money by buying
products from a parent organization and selling them directly to
customers, and multi-level marketing, in which the direct seller
may earn money from both direct sales to customers and by
sponsoring new direct sellers and potentially earning a
commission from their efforts.
(2) E-Mail Order
 Mail order is the buying of goods or services by mail delivery.

 The buyer places an order for the desired products with the
merchant through some remote method like sending an order
form in the postal mail
 (3) Telemarketing
 Telemarketing is the direct marketing of goods or services to potential
customers over the telephone.
(4) Website/E-Commerce
 Ecommerce, also known as electronic commerce or
internet commerce, refers to the buying and selling of goods or services
using the internet, and the transfer of money and data to execute these
transactions.
(5) Automated Vending Machines/Kiosks
 A vending machine is an automated machine that provides items such
as snacks, beverages etc., to consumers after cash, a credit card, or a
specially designed card is inserted into the machine.
 A kiosk refers to a small, temporary, stand-alone booth used in high-
traffic areas for marketing purposes.
 A kiosk is usually manned by one or two individuals who help attract
attention to the booth to get new customers. 
Retail Strategies
Strategy:
Strategy is that which the top Management does.
Strategy refers to basic directional decisions.
A strategy describes how the ends (goals) will be
achieved by the means (resources).
Strategy generally involves setting goals and
priorities, determining actions to achieve the
goals, and mobilizing resources to execute the
actions.
Steps involved in developing a retail strategy:

1. Define the Mission or the Purpose of the

Organisation.
2. Conduct a Situation Analysis
3. Identifying Options/ Strategic Alternatives
4. Set Objectives
5. Obtain and Allocate the Resources needed to
compete
6. Develop the Strategic Plan
7. Implement the Strategy, Evaluate and Control
 1. Define the Mission or the Purpose of the Organisation
 A retailer’s mission statement highlights,
 The Products and Services that will be offered
 The Customers who will be served
 The geographic areas that the Organisation chooses to operate in
 The manner in which the firm intends to compete in it’s chosen
markets.

2. Conduct a Situation Analysis

 Conduct Situation Analysis by PEST analysis, SWOT analysis.

 Conduct Industry analysis using Porter’s Five Forces model to know the
competitive forces like,
 Potential Entrants
 Threat of Substitutes
 Bargaining Power of Buyers
 Bargaining Power of Suppliers
 Rivalry among the existing players
 3. Identifying Options/ Strategic Alternatives
Various alternatives available for tapping a particular market
Ansoff’s Matrix helps retailer to understand the options available.
 4. Set Objectives
 Objectives are a translation of the mission statement into
operational terms.
 The purpose of setting Objectives is to give direction and set
standards for measurement of performance.
 Market performance and Financial performance are important to
Retailers.
 Examples of objectives in Retail,
 Sales volume targets
 Market share targets
 Retail expansion targets
 Profitability to be achieved
 Liquidity
 Returns on Investment
5. Obtain and Allocate the Resources needed to compete:
 Most important resources in retail are
 Human Resources
 Financial Resources
 Financial Resources takes care of Salaries, Rent and payments for
merchandise
 Human Resources Management involves Recruiting, Selecting,
Training, Remuneration and Motivating employees.
6. Develop the Strategic Plan
The Target market is defined.
The Retail Mix that will serve this audience finalized.
Retail mix involves Merchandise mix, Pricing Policy,
types of locations of Stores, Services offered, Positioning.
7. Implement the Strategy, Evaluate and Control
 Every aspect of the Store must be focused on the Target
market.
 Effectiveness of the Strategy must be evaluated periodically.
 Effective corrective Strategy should be developed for
sustained Strategy.
Assignment and Important Questions

1Q. Define Retailing. Explain the Scope of

Retailing?
2Q. Discuss the Prospects/Future of Retailing
in India?
3Q. Discuss various Retailing Formats in
India?