Introduction to Retailing
Learning Objectives
 Understanding how retailing originated in India
 Knowing the functions a retailer has to perform
 Describing the status of retailing in India and abroad
 Explaining the present and future of traditional kirana stores
 Identifying the essence of productivity in modern retailing
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Picture Gallery
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Vegetables and Fruits Retailing
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Self Service
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Self Service
What is Retailing
 Most common form of doing business
 It consists of selling merchandise from a permanent location
(a retail store) in small quantities directly to the consumers.
 These consumers may be individual buyers or corporate.
 Retailer purchases goods or merchandise in bulk from
manufacturers directly and then sells in small quantities
 Shops may be located in residential areas, colony streets,
community centers or in modern shopping arcades/ malls.
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Retailing Defined
 According to Kotler: ´Retailing includes all the
activities involved in selling goods or services to the final
consumers for personal, non business uses.
 The Indian retail is dotted by traditionally market
place called bazaars or haats comprises of numerous small
and large shops, selling different or similar merchandise .
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What and How of Retailing
Retailing Provides:
 Time utility
 Place utility
 Possession utility
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Through:
 Store location
 Store environment
 Merchandise selection
 Salespersons
Features of Retailing
Retailing is different from other forms of business in following
ways:
 Direct interaction with customers/end customers.
 Sale volume large in quantities but less in monetary value
 Customer service plays a vital role
 Sales promotions are offered at this point only
 Retail outlets are more than any other form of business
 Location and layout are critical factors in retail business.
 It offers employment opportunity to all age
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Channel of Distribution
Wholesaler
Manufact
urer
Final
Consumer
Retailer
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Functions of a Retailer
Identifying Consumer Demands
2. Management of Merchandise
3. Convenience of timing
1.
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Retailing Principles
1.
2.
3.
4.
5.
6.
7.
8.
9.
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Clear definition of objectives and policies
Role Clarity
Unity of Command
Supervision and Control
Interest in employees
Monitoring of Human Resource
Rule of Simplicity
Responsibility and Authority
Division of Labour
Retail Sales Goals
 to serve a link between the manufacturer and end consumers
 to improve communication with retail customers
 to improve sales target
 to provide efficient customer service
 to build image among general public
 to improve social responsibility
 to serve different markets
 to get quick feedback about the merchandise sold
 to convert visitors to buyers
 Optimum utilization of fixed cost related expenses.
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The changing Urban Consumer
 Inclined to international styles
 Inclined to acquiring property
 More demanding and discerning
 High level of education
 Ready to spend on shopping
 Shopping is a family fun
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Retailing in India
The Indian retail industry is broadly divided into two segments:
1. Organized retailing, and
2. Unorganized retailing.
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Organised Retail
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Shoe Retail
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Grocery Retail
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Retailing in India
Organised Retail
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Unorganised Retail
Organised Retail
 Organized retail is nothing but a retail place where all the
items are segregated and brought under one roof.
 4-9% of the total volume
 Licensed/registered retailers
 These include the corporate-backed hypermarkets and retail
chains, and also the privately owned large retail businesses.
 Examples: Pantaloon Retail, K Raheja Group, Tata group, RPG
group, Piramal Group, Bharti-Walmart, Reliance, AV Birla Group
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Apparel Retail
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Fashion Retail
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Electronics Retail
BOGOF
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Reasons of organised Retail Growth
Rapidly increasing income level
2. Change in lifestyles
3. Favorable pattern of geography
4. Retail offers one-roof shopping experience
5. Emergence of nuclear family concepts
6. Improved purchasing power of Indian middle class
7. Presence of domestic and foreign players
8. Expansion of family owned businesses
9. Effect of LPG (Liberalization, Privatization and Globalization)
10. Building chains around brands
11. Mass inflow of FDI in Indian retail sectors
1.
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Organised Retail in India
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Sectors Contributing Indian Retail
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Large Indian Retailers
Department store
 Lifestyle
 Pantaloons
 Piramyds
 Shoppers Stop
 Trent
Hypermarket
 Big Bazaar
 Giants
 Shoprite
 Star
Entertainment
 Fame Adlabs
 Fun Republic
 Inox
 PVR
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Unorganised Retail
 It refers to the traditional formats
of low-cost retailing
 The unorganized retailing
comprises of ‘mom and pop’ stores
or ‘kirana’ stores.
 These are very small shops located
near the residential areas,
popularly known as ‘baniya shops’.
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Percentage of organised retail across the
Globe
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Various Segments in the Indian Retail
industry
Segment
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Percentage of the
overall retail pie
Penetration percentage of
organised retail
Food and grocery
66
1
Apparel (clothing
and footwear)
7
24
Medical & health
services
10
1
Jewelry and
watches
5
5
Durables
5
14
Personal care and
effects
3
4
Others
2
3
Sports and leisure
2
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Retail Trade in India & South East Asia
Countries
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India
Organized Unorganized
Retail
Retail
2
98
China
20
80
South Korea
15
85
Indonesia
25
75
Philippines
35
65
Thailand
40
60
Malaysia
50
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Reasons for Retail Growth
 Emergence of nuclear family concept and changing age profile
 Increased disposable Income
 Emergence of New Business Opportunities
 FDI in retail
 Fast changing Indian consumer
 Benefits of organized retail
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Emerging Trends in retailing
 Going internationalisation
 Emergence of new retail formats and combinations
 Benefits of buying online
 Heavy usage of plastic money
 Decreasing gap between organized and unorganized
 Value driven retailer to values driven retailer
 Enhanced Service Offerings
 Expanding private Brands
 Consolidation
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