Origin

• The word retail has its origin in French word retaillier and means
“to cut a piece’’ or “to break bulk’.

• Retailing is the sale of goods and services to the ultimate consumer

for personal, family or household use.
• Retailing is responsible for matching final consumer demand with
supplies of different marketers.

• The reasons for its popularity lie in its ability to provide easier
access to variety of products, freedom of choice and many services
to consumers.
• 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.
• Retailing includes all the activities involved in selling goods or services
directly to final consumers for personal, nonbusiness use.
• Any organization selling to final consumer- whether it is a manufacturer,
wholesaler or retailer- is doing retailing. It does not matter how the
goods are sold (by person, mail, telephone, vending machine or
internet) or where they are sold (in a store, on the street, or in the
consumer’s home).
• Examples of well-known retailers are Wall Mart, Target, Shoppers Stop, Big
Bazaar, Pantaloon, Dhiraj Sons etc.
 Wheel of retailing
• A better known theory of retailing “wheel of retailing” proposed by
Maclcomb McNair says,
• Phase 1:
• A new retailer with a relatively low reputation offers its items and services at a
low price to attract customers and build a client base.

• Phase 2:
• As the company gains traction, they upgrade their facilities and gradually start
increasing their prices.

• Phase 3:
• The company has now built a solid reputation and begins to offer more variety
while continuing to operate at higher margins with even higher-priced services.
• Phase 4:
• A new competitor enters the market with the same characteristics as
phase 1 (i.e. low-costs and low-margin).

• As a result, the existing business is forced to reduce its prices to earlier

levels in order to remain competitive.

• The company is now considered to have completed the ‘wheel of retailing.’

 Functions of Retailers
• Time:
• He creates time utility by keeping the store open when the consumers
prefer to shop.

• Ownership:
• Finally, when the product is sold, ownership utility is created.
• Arranging Assortment:
• Manufacturers usually make one or a variety of products and would like to
sell their entire inventory to few buyers to reduce costs. Final consumers,
in contrast prefer a large variety of goods and services to choose from and
usually buy them in small units.

• Retailers are able to balance the demands of both sides, by collecting an

assortment of goods from different sources, buying them in sufficiently
large quantities and selling them to consumers in small units.
• Holding stock:
• Retailers maintain an inventory that allows for instant availability of the
product to the consumers. It helps to keep prices stable and enables the
manufacture to regulate production.

• Promotional support:
• Small manufacturers can use retailers to provide assistance with
transport, storage, advertising, and pre- payment of merchandise.
• Functions of Retailing
• Provide personal service to all

• Provide two way information

• Facilitate standardization and grading

• Undertake physical movement and storage of goods.

• Extend credit facility.

• Create demand by window display etc.

• Assume risk.
 Retailing related Marketing Decisions
• Target Market:
• A retailer’s most important decision concerns the target market.

• Until the target market is defined and profiled, the retailer cannot make
consistent decisions on a product assortment, store décor, advertising
messages and media, price and service levels.

• E.g. Wall mart follows EDLP (Every Day Low pricing) pricing strategy.
• Product assortment and procurement:
• In retailer’s product assortment must match the target market’s
expectations.

• The retailer has to decide on product assortment width and depth.

• Thus a garment store can offer a narrow and broad assortment.

• Price Decision:
• Prices are a key positioning factor and must be decided in relation to the
target market, product and service assortment mix, and competition.
• Most retailers either fall under Low Mark up with High Volume or High
Mark up with Low Volume.

• Place Decision:
• Location is the most important factor behind the success of a retailer.
• Generally customer selects the nearest store to shop with.
• Promotion Decisions:
• Retailers use a wide range of promotion tools to generate traffic and
purchases.

• They place ads, run special sales- reward programs, in store food
sampling and coupons on shelves or at checkpoints.
• Service and Store atmosphere: Retailer must also decide on the
services mix to offer customers.
• Pre purchase services include accepting telephone and mail orders,
advertising, window and Internet display, fitting rooms, shopping hours,
fashion shows, trade-ins.

• Post purchase services include shipping and delivery, gift-wrapping,

adjustment and returns, alterations and tailoring, installation, engraving.
• Ancillary Services include general information; check cashing, packing,
repairs, credit, restrooms, baby attendant service. The service mix is a key
tool for differentiating one store from another so is the atmosphere.

• Atmosphere is another element in the store arsenal. Every store has

physical layout that makes it hard or easy to move around. The store must
design an atmosphere that suits to target market and draw consumer
towards purchase.
 Brief Classification of Retailers
• There is no universally accepted method of classifying retailer. Various
schemes have been proposed to categories retailers based on
• Number of outlets

• Margin vs. turnover

• Location

• Size.

• Because of overlap of classification criteria, some stores may qualify as

under two different categories.
 Role of a Retailer
• The Retailer as a Link between the Producer and the Consumer
• From the customers’ point of view, the retailer serves him by providing
the goods he needs in the required assortment, at the required place and
time.

• From an economic standpoint, the role of a retailer is to provide real

added value or utility to the customer.
• The first utility provided by the retailer is that of the form of a product that is
accessible to the customer.
 • The retailer performs the function of storing goods, and providing us with an
assortment of products in various categories.

• He creates time utility by keeping the store open when the consumers prefer
to shop.

• By being available at a convenient location, he creates place utility.

• Finally, when the product is sold ownership utility is created.

• All these are real benefits, which retailers offer by getting close to
potential customer.
• The Retailer as a Channel Member
• The retailer serves the manufacturer by performing the function of
distributing the goods to the end consumer, and thus forming a channel of
information to the consumer.

• He is the final link in the distribution chain and very vital too.
• For several product categories where, brand loyalty is not very strong or for
unbranded products, the retailer’s recommendation is vital.
• With the growth of industrialisation and urbanization, the distance between the
manufacturer of a product and the actual consumer has increased.
Many Products are manufactured in one country and sold to a market in another.

• Most producers no longer sell their products or services directly to the

consumer. Instead, they use intermediaries to get their product reach the final
consumer. Thus the marketing channel design is largely based on the level of
service desired by the target consumer.
• Here, the retailer provides valuable inputs to the manufacturer on the
products and the consumers.
• The Retailer as an Image Creator
• An image is a mental picture in the mind of the consumer. It is what the
store stands for.

• Thus, itis important for the retailer and also for the producer/
manufacturer whose product are being sold in the store to first determine
what the store stands for.
• The image of a discount store will be different from the image of a high-end
fashion retailer.
• This is important because every retailer needs marketing and the
marketing efforts of a multi brand retailer like Shopper's Stop are
different from those of an own brand retailer like Westside.

• However, the basic principles of marketing are no different for a retailer

than for any other supply organization.
• There are two specific dimensions to retail marketing.
1. How to attract customers into the retail environments -- shop,
restaurant, supermarket or the ‘virtual’ internet store for instance and

2. How to persuade those customers to make a purchase from the store.

• Both are necessary to achieve success.

 The rise of the retailer
• Till a few years ago
• Manufacturers used to create a product, advertised it slickly and sold it
through their distribution channel and also independently advertise for
their products.
• The manufacturing companies used to enjoy economic power as they
were significantly bigger in size in comparison to the distributors or the
retailers.
• They determined prices of the products that the retailer could stock and
also the dealer and distributor margins.
• Proximity to the Customer
• Today, with the emergence of different formats like the department stores,
the retailer is the closest to the consumer.

• Most stores have their own policies and decide how to influence the
shoppers.

• In an age of global manufacturing and selling, the organisation may be

based in one part of the world and may actually retail its products in
various other regions.
• The retailer is the first contact point that the consumer has with the
product, and this ka given the retailer tremendous power.
• Increased customer expectations
• Retailers are a part of a dynamic world today. The retailer faces a more
knowledgeable and demanding consumer and since business exist to
satisfy the needs of the consumers, the demands and expectations of the
consumers often have forced retail organisations to change their formats
and product offerings. What has also changed is the range of services
offered.
• The customer demands convenience, and a certain level of comfort while
shopping.

• Time required to shop and travel to a particular location are important

factors, which affect the consumer’s decision.

• This has led to rise of specialists and the increase in the services offered
by the retailer.
• For example, the petrol pump not only retails petrol and diesel, but also has a
store, restaurant and an ATM.
• The introduction of the Private Label
• An increasingly large number of retailers now decide on the products that
they want to stock. They decide on the brands that they wany to stock.
Retail shelf space is now of prime importance.

• Another significant change is that most retail stores have developed their
own in store brands /products known as private labels.

• It is not only by the large departmental and specialty stores, but also by
the grocery retail stores.
• Technology
• With the increasing use of technology a wealth of information is now
available to the retailer.

• This information enables the retailer understand the consumer profile of

his store, the products purchased, the price ranges and the promotional
offers which have worked.

• Retailers have developed their own customer cards, which help them
track purchases and learn more about the lifestyles of their customers.
• The arrival of the internet has made it possible for business to develop
across geographies.
• Innovative retailers can now offer their products and services on the
internet without actually having a brick and mortar store, while
traditional retailers are setting up their own online operations.
• The emergence of Amazon.com and e-Bay has changed the dynamics of
the retail business.
• It is believed that mobile retail will again change the dynamics of the
industry.
• The need to grow not only nationally, but also internationally has led to
the field of retail witnessing many a mergers in the field of retail.

• Retailers have been forced to think of ways of reducing supply chain costs
and have led the development of concepts like Category Management.
 Challenges of Retailing
• Consumers are Choosing Multichannel Buying Experiences
• Customers are moving seamlessly between online and offline experiences,
and are open to retailers who can best facilitate these transitions.

• Around 96% of Americans utilize online shopping in one way or another.

• However, those same Americans spend about 65% of their total shopping
budget in traditional brick-and-mortar locations.

• In other words, while almost everyone is shopping online, they are

making more purchases in-store.
• The solution here is to focus on creating a second-to-none customer
experience across all channels.

• Customers are looking for retailers they can trust to deliver exceptional
service time and again.
• Customers Expect a Seamless Experience
• When transitioning between online and in-store experiences, customers
not only want the same products to be available, they also want their
experience to be seamless.

• Loyalty programs can help, by collecting relevant information and putting

it to use.
• Attracting customers
• Bringing customers to the store constantly is the biggest challenge due to
constant change in the consumer behaviour.
• Retaining customers
• Another challenge for offline retailers is retaining customers.

• In such situation Loyalty programs can help retailers in creating

differentiation.
• Keeping up with changing customer expectations
• With changes in customer behaviour, it is important for retailers to deliver
what their customers expect.

• This is where the use of Analytics comes into play. Using Analytics,
retailers can understand what their customers want and keep up with
their customers' expectations accordingly.
• Supply chain management
• Managing supply chain is one of the toughest task in retailing especially
during problems like Covid.

• The inventory and logistics need to be planned in a streamlined manner

so as to have smooth functioning and to save cost also.
 Career in Retail
• Cashier
• Cashiers work at cash registers, receiving customer payments and
providing receipts.

• They're also responsible for helping customers with returns, refunds and
exchanges.

• Cashiers count money in the register before and after each shift, answer
customer questions and relay customer complaints to management.
• Sales associate
• A retail sales associate is responsible for helping customers find products
and make purchases.

• They greet customers, answer questions and place orders for out-of-stock
merchandise.

• Sales associates may also operate cash registers and assist with financial
transactions.
• Customer service representative
• Customer service representatives may have responsibilities like working
at the customer service desk, handling returns and exchanges, providing
product information and responding to questions about availability and
delivery.

• This position is ideal for individuals with strong communication and

problem-solving skills.
• Visual merchandiser
• Visual merchandisers usually work closely with buyers to highlight and
sell merchandise in retail stores.

• Visual merchandising includes keeping track of inventory and presenting

specific products in a visually appealing way.

• This position is ideal for creative individuals with problem-solving skills.

• Loss prevention officer
• Security and loss prevention specialists prevent shoplifting.

• Other responsibilities may include greeting customers, checking bags and

inspecting store alarms and locks.
• Leadership development associate
• Leadership development associates are responsible for leading
management training programs for the organization.

• They typically train new employees or those being promoted from within
and may have to travel for group training sessions at different locations.
• Human resources specialist
• Human resources specialists recruit, hire and train employees.

• They're also responsible for handling employee relations and benefits

administration.

• Human resources specialists usually have strong customer service and

communication skills.
• Logistics coordinator
• Retail logistics coordinators keep track of inventory, order stock and
allocate merchandise and resources to stores.

• They're also responsible for incoming and outgoing orders to ensure

shelves are fully stocked with the correct merchandise.
• Store manager
• Store managers are responsible for day-to-day store operations like
creating work schedules, follow up with customer complaints and ensure
sales goals are being met.
• Buyer
• Buyers are responsible for purchasing wholesale merchandise for
retailers to sell in stores or online.

• They track inventory and sales trends and negotiate with suppliers to
maximize profit margins.

• Buyers are also responsible for staying up to date with current trends so
they can address customer demands for new products and offers.
• District manager
• District managers oversee operations at a group of stores located within a
specified geographic area.

• They train, mentor and evaluate store managers and solve problems
within their region.

• District managers should have strong communication skills and be able to

confidently address concerns from the corporate level.
• Project line manager
• Project line managers are responsible for a specific department of a store
or company.

• They manage and oversee staff and evaluate employee performance,

contribution and development.

• Project line managers may also schedule and lead yearly performance
reviews with individual employees to gain feedback on ways to improve
their designated department.
 Drivers of growth for Retail in India
• Growth of Middle class
• In India the number of middle class consumer is growing rapidly. They
expect quality products at decent prices.

• With rising consumer demand and greater disposable income has given
opportunity of retail industry to grow and prosper.
• Increased number of working woman
• They have to maintain a balance between home and work.

• The purchasing habit of the working women is different from the home
maker.
• Emerging rural market:
• The rural market in India is fast emerging as the rural consumers are
becoming quality conscious.

• Thus due to huge potential in rural retailing organised retailers are

developing new products and strategies to satisfy and serve rural
customers.
• Entry of corporate sector:
• Large business houses such as Tata’s, Birla’s, and Reliance etc. have
entered the retail sector.

• They are in a position to provide quality products and entertainment.

• Entry of foreign retailers:
• Indian retail sector is catching the interest of foreign retailers.

• This further is responsible for boosting organised retailing in India.

• Value for Money:
• Big organised retail outlets basically deal in volumes and thus can offer a
good range of products at reasonable price, this helps attracting
customers at a very large scale.