INSTITUTE - USB

DEPARTMENT - BBA
Bachelor of Business Administration
Retail Management
21BAT-374

Theories of Retail management DISCOVER . LEARN .

EMPOWER 1
 Introduction to Retail
Management
CO1 To describe the concepts, functions, types and importance of Retail
Industry in India.

CO2 To interpret and analyze the requirements of Store Design and Visual
Merchandising in Retail Stores.

CO3 To classify the factors influencing the Retail consumer, consumer behavior
and decision making process

CO4 To evaluate Merchandise Management through retail operation and pricing

http://p2plogistics.co.uk/

CO5 To formulate Customer Relationship strategies by Personalization, Special

Treatment Benefits, Communication Benefits, Rewards and Loyalty
Programs

2
Different
formats of
Retailing
A retailer is different from the
rest of the elements of the
supply chain because only the
retailer directly interacts with
the end-consumers and sell
them goods. You must have
observed while shopping that
there are different types of
retailers. The difference can be
made on the basis of the • https://www.123rf.com/photo_6181731_word-cloud-concept-illustrat
ion-of-retailing-retail.html
shapes and sizes of the retail
stores.

3
Food Oriented Retailers
• The major strategic formats used by food oriented retailers are
convenience stores, conventional stores,hypermarkets, box stores,
and warehouse stores.
Convenience Stores
• A convenience store is a neighbourhood store.
• Ease of shopping , routine rapport and situated within the residential
areas are major reasons for the patronage of these stores, even when
they charge average prices and carry a moderate number of items.
• Most customers shop at least two or three times a week at these
stores.
• Convenience stores face most competition from supermarkets that
have started providing longer hours and better stocks of non food
items.
• Example: Easy Day
Conventional supermarkets
• A conventional supermarket is a large self-service retail food store offering
groceries, meat and produce as well as some non food items such as health
and beauty aids and general merchandise.
• They are chosen due to variety, self service, and promotions.
• Self service allows supermarkets to cut costs as well as to increase volume.
• However ,competition from other formats due to different valued drivers,
such as better prices from hypermarkets and better service from kirana
stores has led to reduction in the number of such stores in developing
markets. India, however is witnessing growth of this format.
• Example: More, Reliance Fresh, Food Bazar
Conventional supermarkets
• In context of Indian marketplace, the supermarkets are further
categorised as:
Larger supermarkets with an area of 3500-5000 sq feet
Mini supermarkets with an area of 1000-2000 sq feet
• Supermarket is larger in size and offers wider selection than a
traditional convenience and smaller than a hypermarket.
Hypermarkets
The hypermarket retail market concept has three basic percepts:
1. The large floor space, varying between 40,000 sq ft to 2,00,000 sq
feet so that it can have the widest assortment of products. It is
associated to a large parking lot.
2. It aims to sell products at a discount in comparison to market prices
and thus offer low price points.
3. It deploys self service techniques based on effective merchandising
and sales promotion methods. Impulse sales are high in such
stores, even when the visit is planned.
Hypermarkets
• Consumers choose them for one stop shopping and do not mind
travelling to visit these stores.
• Hypermarkets achieve operational efficiencies and cost savings
through their large scale operations.
• The contribution of general merchandise in total sales is between 25
to 40%.
• Impulse sales are high in such stores, even when the visit is planned.
• Example : Big Bazaar, Reliance Mart
Box(limited stores)
• The box store is a food based discounter that focuses on a small
selection of items and few additional services.
• Customers carry the merchandise in their own bags.
• Box stores depend on low priced private label brands.
• They aim to price merchandise 20-30 percent below that of
supermarkets.
• Items are displayed in cut cases.
General Merchandise retailers
• Department Stores
• Full Line Discount Stores
• Speciality Stores
• Category Specialists
• Extreme Value Retailers
• Off Price Retailers
• Service Retailing
Departmental Stores
• Departmental stores are retailers that carry a broad variety and deep
assortment, offer customer services and organize their stores into
distinct departments for displaying merchandise.
• Traditionally, departmental stores sold both soft goods( apparel and
beddings) and hard goods(furniture, appliances and consumer
electronics).
• But now most department stores focus on soft goods only
• Example: Shoppers Stop, Westside ,Lifestyle
Full line discount stores
• A full line discount store is known for offering an assortment at a price
that is discounted upto 50 percent of the prices charged by the
department stores.
• It reduces its cost through a very low level of service, private brands,
fixtures and ambience.
• Competition is forcing these stores to improve the experience and
services to the customers without compromising on the price.
• Example: Aldi
Speciality stores
• A speciality store deals in a specific product or service.
• Speciality stores provide a high level of service to their customers.
• These stores carry books, medicines, photographs, toys, jewellery etc.
Speciality Stores
Speciality stores are of two types:
• Category killer
• Do it yourself stores
Category Killer
• A category killer is a specialist discount store.
• It attracts customers by offering a particular product at the lowest price and the largest
assortments.
• Category killers are successful because they focus on one category and they stock deep.
• Category killers are known to kill brands by making price the most important
consideration.
• In the process they commoditize the category.
• These retailers concentrate on reducing costs by increasing operational efficiency and
expanding into less competitive international markets.
• Example: Toys R Us has 10,000 toy items in a store as compared to 3,000 in a
departmental store.(International Category killer).
• In Mumbai: The Loft ,a 15000 sq feet store is catering to footwear alone.
Do it Yourself Stores
• These stores are category specialists who offer equipment and
material mainly to contractors to make home improvements.
• Salespeople are available to assist customers in selecting merchandise
through demonstrations and workshops.
• Individuals customers also buy from such stores.
• It is a place where customers can be creative and choose what they
visualize with the help of design consultants.
• Example: IKEA
Off-price Stores
• Off price retailers sell branded merchandise and designer labels at a
low price.
• They generally offer a range of out of season designs, seconds and
order rejects.
• The buying is totally opportunistic, though many of them have
evolved buying strategies that establish long term relationships with
suppliers.
• Special types of off price retailers are factory outlets, closeouts.
Variety Stores
• A variety store handles a wide variety of assortment of inexpensive
and popularly priced goods and services such as stationery, gift items,
women accessories, health and beauty products, toys, imitation
jewellery and greeting cards.
• They face competition mainly from the speciality stores, discount
stores, hypermarkets and closeout off price retailers.
• Example:49 and 99 stores
Flea Markets
• A flea market is a form of traditional street selling.
• Shoppers pick and sample the products.
• Bargaining for prices is common.
• These markets are located mainly in places where there is high traffic
or people come together for function or an event.
Non Store based retail Strategy mix
and non traditional retailing
• Vending Machine
• Online Store
• Telemarketing/Teleshopping
Vending Machines
• A vending machine is a retailing format involving the coin or card
operated dispensing of goods(such as beverages) and services(such as
life insurance sales at airports).
• It eliminates the need for personnel and allows for round the clock
sales.
• Machines can be placed wherever they are most convenient for the
consumers-inside or outside the store, in a hotel corridor, at a station,
airport,or a street corner.
Vending Machines
Electronic Retailing
• Electronic retailing, also called e-tailing, online retailing,or internet
retailing,is a retail format in which the retailer and customer
communicate with each other through the internet.
• After an electronic dialogue between the retailer and the customer,
the customer can order the merchandise.
• The merchandise is then delivered at the address of the customer’s
choice.
Electronic Retailing
Other retailing formats
• Malls
• Recycled Merchandise Retailers
• Liquidators
• Video kiosks
• Car Boot Sales
• Mobile Vans
• Catalogue Stores
• Shopping Strips
• Rural Marts
• Flower Markets
• Cattle fairs
Malls
• Malls are formats that house a cluster of stores that are owned and
managed by independent retailers.
• They also contain cinemas and eateries.
• Malls are designed to accommodate department stores,
hypermarkets, speciality stores, exclusive branded outlets, variety
stores and several other formats.
Malls
Liquidators
• Liquadators are retail formats that come in and liquidate leftover
merchandise when an established retailer shuts down or downsizes.
• They are often called as retailing’s undertakers or vultures.
• They earn by buying the merchandise at a price that is 30 percent less
than the wholesale price for the closeout retailers.
• Retailers utilize the services of liquidators because running closeouts
requires some special retailing skills.
Video Kiosks
• The video kiosk is a freestanding, interactive electronic computer terminal
that displays products and related information on a video screen.
• They enable the consumers to place orders, complete transactions pay
mostly with the credit/debit card,and arrange for products to be shipped.
• It is a small computer terminal that is set up in an area, such as a mall or
store, and plays messages advertising new services and products.
• The kiosk is owned by a certain company and typically advertises a specific
product.
• A cell phone kiosk would advertise the new phones and features offered by
the company who owns it, while a laptop kiosk would advertise a brand of
laptop.
Car Boot Sales
• Car Boot sales are becoming increasingly popular, where often a
vehicle is modified for the sale of variety of merchandise, such as
books, magazines, clothes, music cassettes, export surplus and/or
rejects, and fast food items.
• It also provides opportunities to small traders who may lack the
capital for permanent premises.
• Car boot sales or boot fairs are a form of market in which private
individuals come together to sell household . They are popular in the
United Kingdom, where they are often referred to simply as 'car
boots'.
 Car Boot Sales
• Car boot sales generally take place in the summer months. However,
in a growing trend, indoor boot sales and all year hard-standing
outdoor boot sales are now appearing in some parts of the UK.
• Items for sale are extremely varied, including for example antiques
and collectables.
Car Boot Sales
Mobile Vans
• Mobile Vans are modified vehicles that usually sell books,
newspapers, poultry and meat products.
• They move from location to location, for fixed periods of time, thus
providing convenience by coming closer to customers.
Catalogue Stores
• A catalogue store, unlike regular stores, do not house and display all
products.
• Customers can view the products available in the store from a printed
or online catalogue.
• The order is brought to the sales counter, where a clerk retrieves the
items from the warehouse area to a payment and checkout station.
• Catalogue stores also give the customers the advantage of browsing
through the products on the catalogue from home at any time
without taking the pain to visit the physical store, thereby creating a
virtual store.
Catalogue Stores
Shopping Strips
• A shopping strip is an open area where the shops are arranged in a
row with the pavement along with the parking space in the front.
• Today in India, although malls have been on a phenomenal rise,
shopping strips are still increasingly gaining attention.
Rural Marts
• The main idea behind the format of the rural mart is to facilitate the
marketing process for those who have not been able to procure the
right price, sizeable production and effective display.
• In India, the national bank for Agriculture and rural Development
(NABARD) launched rural marts with effect from 2005 in nine states
and extended them to all the states during 2006-2007.
• The main objectives are to facilitate marketing linkages for the
artisans, for their handicrafts and agro-based products, through the
setting up of a retail outlet and cover the risk involved in the initial
stages of this process.
Flower markets
• This format is currently picking up in India because of Government support
although the industry as a whole suffers from logistical bottlenecks.
Several schemes have been initiated by the Government for promotion and
development of the floriculture sector. Integrated Development of Commercial
Floriculture is one such scheme implemented with the objectives of:
• improve production and productivity of traditional as well as cut flowers through
availability of quality planting material and transfer technology.
• improve human resource capabilities for growing flowers scientifically.
• promote production of off season and quality flowers through protected
cultivation as well as improve on farm post harvest handling of flowers.
• Connaught Place in Delhi hosts what is arguably the largest flower market in Asia.
Cattle Fairs
• This format has its origins in India from ancient times.
• The biggest cattle fair of Asia, the Sonepur Cattle fair, is held on the full
moon day and lasts between fifteen days and one month.
• In 2013, the Fair started on November 16 and continued till December 15.
• Besides providing the platform for cattle trade, this format also provides a
great opportunity to enjoy various leisure activities such as tug of war,
cockfights and bullock fights.
• People from around the the world have been attracted to this format
because it offers a lifetime experience alongside campfire, and enjoying
folk music.
ASSESSMENT PATTERN
Theory

Components Continuous Internal Assessment (CAE) Semester End Examination (SEE)

Marks 40 60

Total Marks 100

Sr. No. Type of Assessment Weightage of actual conduct

1 Assignment 10 per assignment

2 Exam 20 per MST

3 Quiz/Test 4 each quiz

4 Surprise Test 12 each test

5 Attendance and class performance 2

44
APPLICATIONS
• Concept of Retail Management

• Concept and importance of retail layouts and retail design

• Importance and scope of retailing

• Understanding of various formats of retail management

45
References
• Retail Management by Suja R. Nair.
• The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption by Barbara E. Kahn
• https://erply.com/what-is-retail/

46
THANK YOU