1.

Retail
management-
An overview
 What is Retailing?

• Retailing – a set of business activities

that adds value to the products and
services sold to consumers for their
personal or family use.

• A retailer is a business that sells

products and/or services to consumers
for personal or family use.
 Retail Management

• The various processes which help the customers

to procure the desired merchandise from the
retail stores for their end use refer to retail
management.
• Retail management includes all the steps
required to bring the customers into the store
and fulfill their buying needs.
• Retail management makes shopping a
pleasurable experience and ensures the
customers leave the store with a smile. In
simpler words, retail management helps
customers shop without any difficulty.
 Retail Business

• A retail business is the sale of items and

services in small quantities to customers in-
store or online. Examples of retail businesses
include clothing, drug, grocery, and convenience
stores.
OR

• Retailers are in the business of buying goods

from wholesalers, manufacturers, or other
retailers and then selling them to consumers for
a profit.
Examples of Retailers
 Nature of Retail Industry is
Changing

To Today’s Retailer

Mom and Pop Store

 How Retailers Add Value

• Breaking Bulk

• Holding Inventory

• Providing
Assortment

• Offering Services
 How Retailers Add Value

The value of the product and service

increases as the retailer performs
functions.
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 Functions of a retailer

• Creates value (Assorting, breaking bulk, holding

inventory, providing services)
• Customer convenience
– Access to a broad variety
– Create place, time, and possession utilities
• Important link in the supply chain
• Supply of information
• Risk bearing (Spoilage, natural risks, change in
customer’s taste)
• Financing
• Introduction of new products
• Advertising
• Economic development
 Manufacturer’s Perspective

The Four P’s of

Marketing
Retailers are the part of
the distribution Product

channel
Distribution Price

Promotion
 Distribution Channel
P P T 1- 4
Distribution
Channel
 Factors influencing retail trade

• Increase in per capita income

• Demographical changes (young people, higher
savings, high standard of living, attracts big
retailers to India)
– Increase in number of working women
– Growth of middle class consumers
• Change in consumption pattern (number of
innovators or early adopters have increased)
• Availability of low cost credit to consumers
• Entry to various sources of financing (FDI, FII)
• Technological changes
• Media explosion
• Entry of corporate sector
 Scope of retail management

• Buying and merchandising

• Marketing
• Store operation
• Human resources
• Sales
• Finance
• Technology and E-commerce
• Visual merchandising
• Supply chain management and
logistics
Retail Institutions (Format)
 Store Based Retailing
Form of ownership

Independent retailer
• Owns and operates only one retail outlet.
Such stores can be seen under
proprietorship.
• The individual retailer can easily enter
into a retail market. The owner is
assisted by local staff or his family
members. These kinds of shops are
passed from one generation to other
generation.
• For eg. grocery store, stationery
 Advantages
Independent
retailer
• Flexibility
• Investment Costs
Down
• Ease in entry
• Strong Control
• Rapport with
customers
• Independence
• Entrepreneurial
Drive
 Advantages
Independent
retailer
• Lack of Power
• No Economies of Scale
• Labor Intensive
• Limited Access to Advertising
• Over-dependence on Owner
• Limited Resources for Long-run
Planning
Chain retailer/ corporate retail
chain
• When two or more retail outlets are
under a common ownership it is called a
retail chain. Chain Stores are groups of
retail stores engaged in the same
general field of business that operate
under the same ownership or
management, chain stores are retail
outlets owned by one firm and spread
nationwide.
• For example, Big bazaar, Shopper’s
stop, Monginis, CCD etc.
 Advantag
es Chain
retail
• Bargaining Power with the
suppliers
• Cost Efficiencies
• Operating Efficiencies
• Technical Abilities
• Advertising Availability
 Disadvantag
es Chain
retail
• Time and Resources Spent on
Long-run Planning
• Limited Flexibility
• Investments High
• Managerial Control is Difficult
• Limited Independence for
Personnel
 Franchising

• A franchise is a contractual agreement

between franchisor and a franchisee in
which the franchisor allows the franchisee
to conduct a business under an
established name as per the business
format.
• In return the franchisee has to pay a fee
to the franchiser.
• For example: Pizza hut, McDonalds, etc.
 Franchise
e
Advantag
• Small Capital Investment
es
• Brand Awareness
• Operation Procedures and Management
Skills
• Reduced Marketing Cost
• Exclusive Selling Rights
 Franchisee
Disadvantag
es
• Contract Provisions
• Cancellation Clauses
• Less authority in decision
making
 Franchiso
r
Advantag
• National or Global
Presence es
• Ownership Qualifications
Set
• Stringent Rules for
Franchisees
• Royalties Continue
• Smooth Operations
 Franchisor
Disadvantag
es
• Intra-franchise Competition
• Injured Profitability
• Franchisee Desire for
Independence
 Leased Departments

• These are also known as Shop in Shops.

• When a section or a department in a
retail store is rented to the outside party
it is called leased department.
• The licensor permits the licensee to use
the property and in turn the licensee
pays a fee to the licensor for using his
property.
 Leased
Department
Advantages
• Fills Merchandise
• Enlarged Market
• Reduces Store Costs
• Increased Percent of
Revenues
Leased
Department
Disadvantages
• Conflicts in Operating
Procedures
 Consumer co-operatives

• A consumer co-operative is a retail

organisation owned by its member
customers. The objective is to provide
commodities at a reasonable price. For
example: Sahakari Bhandar, Apna Bazaar
etc.
Retail Institutions (Format)
 Store Based Retailing
On the Basis of Merchandise offered

Departmental Stores
• A departmental store is a large scale retail
institution that offers several products from a
pin to plane such as clothing, grocery etc. Retail
establishment that sells a wide variety of
goods.
• Departmental stores are the largest form of
organized retailing today, located mainly in
metro cities, in proximity to urban outskirts.
• They lend an ideal shopping experience with an
amalgamation of product, service and
entertainment, all under a common roof.
Examples include Shoppers Stop, Pantaloon,
Dmart etc.
 Convenience stores

• These are relatively small stores located near the

residential area.
• They offer limited line of convenient products
• Sells items such as candy, ice-cream, soft drinks, lottery
tickets, cigarettes and other tobacco products,
newspapers and magazines, along with a selection of
processed food and perhaps some groceries, etc.
• Such stores enable the customers to make quick purchase
and offer them few services. They stock a limited range of
high-turnover convenience products and are usually open
for extended periods during the day; Prices are slightly
higher due to the convenience premium.
 Super Market

• These are retail organisations that provide low cost high

volume self-service operation to meet consumer
requirements. Most of the super market charge lower
price. Example: Subhiksha, Patel low price, Big Bazaar.
• They are the large self-service outlets, catering to varied
shopper needs. These are located in or near residential
high streets. A supermarket, also called a grocery store,
is a self-service store offering a wide variety of food and
household merchandise, organized into department.
• It is larger in size and has a wider selection than a
traditional grocery store and it is smaller than a
hypermarket or superstore. Supermarkets usually offer
products at low prices by reducing their economic
margins.
 Hyper Market

• A hypermarket is a superstore which

combines a supermarket and a
department store.
• Hyper markets are huge retail stores
that offer various products such as
clothes, jeweler, stationery, electronic
goods at cheaper price
• Example: WalMart, Star Bazaar, Giant
Stores etc. They focus on high volume.
Hyper Market
 Speciality stores

• Specialty stores carry a narrow product

mix
with depth of assortment within the line.
• The emphasis is on a limited number
of complimentary products and high
level of customer service
• Specialty store often sell shopping goods
such as Jewelry, apparel, computers,
music systems, sporting goods.
• Like; Tanishq, Titan watches, Van
Heusen, Raymond's.
 Specialty stores

• A specialty store is a store, usually

retail, that offers specific and
specialized types of items. They offer a
narrow product line that concentrates
on specialised products such as
jeweler, fabrics, furniture etc.
• Customer service and satisfaction are
given due importance.
• For example, a store that exclusively
sells cell phones or video games would
be considered specialized. A specialty
 Speciality Stores

PPT 1-39 Consumer Behavior Ignacio J. Vázquez E. © 2007

 Off price retailers

• Off-price retailers purchase

manufacturers seconds, outdated,
off seasons at a deep discount
• Odd size, unpopular colors or defected
units can be the merchandise

Factory Outlet

Catalogue showrooms
Retail Institutions (Format)
 Non-Store Based Retailing

1. Direct Selling:
• Direct selling is a retail channel for the distribution of goods and services.
There is no fixed retail location. In direct selling there is a direct contact of
the retailer with his ultimate customers.
• It is highly an interactive form of retailing. Products like cosmetics, jewellery,
food items are sold in such manner. The retailers visit home place or work
place of the customers to sell the products. It is also known as network
marketing where the products and services are sold face to face.
2. Mail order:
• It is a retail format in which offerings are communicated to the customers
through a catalogue, letters or broachers. Such retailing is suitable for
specialty products. The buyer places an order for the desired products with
the merchant through website. Internet and online payment options, has made
shop from home easier.
3. Tele Marketing:
• It is a form of retailing in which the products are advertised on television.
Details about the product in regard to its features, price, warranty, direction to
use etc. are mentioned and explained. Phone numbers are provided due to
which customers can make a call and place an order for the product.
 Non-Store Based Retailing

4. Automatic Vending:
• This is a form of non store retailing in which the products are
stored in a machine and dispensed to the customers when
they deposit cash. Vending machines are placed at
ports,
convenientshopping malls,
and busy working
locations place
like air etc. This primari
machine contains products like chocolates, snacks ly
and drinks etc.
5.
• Electronic retailing:
It is also called as e-tailing or internet retailing. It is a retail
format in which products are offered to the customers
through internet. The customers can evaluate and purchase
the products from their homes or office place. This kind of
retail is gaining importance in recent years.
Organized Vs. Unorganized
Sectors
• The Indian retail industry is divided into organized and
unorganized sectors.
• The unorganized retail comprises of the local baniya
or kirana shop, paan and beedi shops and the other
owner manned general stores .
• These retailers normally do not pay taxes and most of
them are not even registered for sales tax, VAT, or income
tax.
• On the other hand, the organized retail comprises of the
licensed retailers who are registered for sales tax,
income tax etc. and it comprises of the malls,
supermarkets, hypermarkets etc.
 Organized retail

• ‘Organized Retail refers to the set-up of any

retail chain supported by a well defined Supply
Chain which usually has a small number of
middlemen when compared to the unorganized
sector.
• Due to a number of factors like cutting
down of middlemen, removing of bottlenecks
along the supply chain, efficiency in the
processes, etc., the end user is rewarded with a
better product at a cheaper price as against
the unorganized retail sector.
• As the consumer base is growing each
minute, the organized retail sector is
believed to have a huge growth potential.’
 Unorganized retail
• Unorganized retailing refers to the traditional formats of
low cost retailing for example, the local kirana shops,
owner manned general stores, paan-bidi shops,
convenience store, hand cart and pavement vendors.
• Traditional or unorganised retailing contributing to over
95% of total retail revenues.
• The unorganized retailing comprises of ‘mom and pop’
stores or ‘kirana’ stores.
• Trading hours are flexible and the retailer to consumer
ratio is very low due to the presence of several kirana
stores in the locality.
• More than 99% of retailers function in less than 500
Sq. Ft of area. The pricing was done on ad hock basis
or by seeing the face of customer.
 Significance of Organized Retail

• Experience Shopping to Middle Class

• Employment generation
• Increasing efficiency in agriculture
• Rapid economic growth
• Potential untapped market
• Deep Assortment of product or broad
choice to customer
 Challenges to organized retail

• Regulatory barriers
• Unfavorable taxation structure
• Lack of integrated IT usage
• High competition
• High training cost
• Constant changes in shopper
preferences
 Multichannel
retailing
• Multi-channel retailing is a marketing
strategy that offers your customers a
choice of ways to buy products.
• A true multi-channel strategy covers
purchases from
ordering,
a store, mail orders,
purchases from
interactive
a website,
television,
catalog ordering and comparison shopping
telephone
sites.
• The aim of a multi-channel retailing
strategy is to maximize revenue and loyalty
by offering your customers choice and
convenience.
Multichannel
retailing
 The Multi-Channel Retailer

Retailer Steve Cole/Getty Images

The McGraw-Hill Companies,

Inc./Andrew Resek, photographer

Digital Vision / Getty Images

A retailer that sells merchandise or service through more

than one channel. By using a combination of channels,
retailers can exploit the unique benefits provided by each
channel.
PPT 1-51 Consumer Behavior Ignacio
3-5 1
J . Vázquez E. ©
 Why are Retailers Using Multiple
Channels to Interact with
Customers?

■ Customer wants to interact in different

ways
■ Each channel offers a unique set of
benefits for Customers

PPT 1-52 Consumer Behavior Ignacio

3-5 2
J . Vázquez E. ©
Multichannel
retailing
Benefits Provided by Different
Channels

3-5 4
Ignacio J . Vázquez E. ©
 Virtual Communities
• People who seek information, products and
services communicate with each other regarding
specific issues
• Social shoppers: seek not just information but
also an enhanced emotional connection to
others participants in the shopping experience

Royalty-Free/CORBIS
3-5 5
Ignacio J . Vázquez E. ©
How Can the Electronic Channel
Overcome The
Challenges??
Use technology to convert “touch and feel”
information into
“look and see” information
• 3-D Imaging
• Zoom Technology
Technology
• Live Chat increases
• 360 Degree conversion rates
Viewing
• Virtual rates:
Models
conversion % of consumers who buy the product
after viewing it
3-5 6
Ignacio J . Vázquez E. ©
Benefits of Multi-Channel Retailing

• Increased assortments
• Low cost in terms of investment
• Updated with current information
• Increasing customer satisfaction
• Gaining insights into consumer
shopping behaviour
• Expanding market presence
• Building a strategic or competitive
advantage
Multichannel Vs. Omnichannel
Types of multichannel retailing

E-
tailing

Automate Catalogu
d e
selling channel

Multichann
el

TV Direc
home t
shoppin sellin
g g
Store
chann
el
 E-
tailing
• Electronic retailingis the sale of goods
and services through the internet.
• Electronic retailing, or e-tailing, can
include business-to-business
(B2B)
consum (B2C)
and sales
business-to-
of
er products and through
services, subscriptions
content, or to website
through advertising.
• E-tailing requires businesses to tailor
traditional business models to the rapidly
changing face of the internet and its
users.
Advantages And Disadvantages
of E- tailing

Advantages Disadvantages
• Wider reach • Expensive
• Helps understand • No physical
consumer shopping
behaviour experience
• Convenience • Privacy Issues
• Efficiency • Unfamiliarity
 I T in
retail

Advantages Disadvantages
• Collection of • Implementati
data on expenses
• Efficient stocking • Security
of merchandise breaches
• Efficiency • Unemployment
in and lack of job
operations security
• Helps
 Electronic Data
Interchange
• Electronic Data Interchange (EDI) is the electronic interchange
of
business information using a standardized format;
• It’s a process which allows one company to send information to
another company electronically rather than with paper.
• Business entities conducting business electronically are
called trading partners.
• A key benefit of EDI to the retailer is the reduction, or
elimination, of manual processes.
• eliminating the data entry task EDI allows costly resources
(manpower) to be dedicated to other critical functions
increasing productivity and reducing costs.
• EDI can increase the accuracy of orders, invoices, and
shipping notices (on average) by 20 percent or more.
 Bar coding

• A bar code is a series of narrow and

wide lines printed on a label or tag.
• Each bar on the label represents a
character for a "bar code reader" to
interpret.
 Radio Frequency Identification
(RFID)
• Radio-Frequency Identification (RFID) is the
use of radio waves to read and capture
information stored on a tag attached to an
object.
• A tag can be read from up to several feet
away and does not need to be within direct
line-of-sight of the reader to be tracked.
 RFID

• RFID are used in many industries,

example, an
tags for RFID tag attached to an
automobile during production can be
used to track its progress through the
assembly line; RFID-tagged
pharmaceuticals can be tracked
through warehouses; and implanting RFID
microchips in livestock and pets
allows for positive identification.
 Electronic surveillance
The technology to monitor unusual behavior in the outlet. CCTV is one
such example
to ensure security of merchandise in retail store.
 Green Retailing
• Green Retailing (GR) refers to the management
approach that pursues environmental protection
to through
chain improve the
eliminating waste,
retail value
increasing
efficiency
reducing costs.and
• It is a part of the larger obligation of business-
C S R that describes the voluntary actions taken by a
company to address the ethical, social, and
environmental impacts of its business operations.
• Eco friendly practices are;
– Less elaborate packaging
– Make bags and receipts optional
– Reuse packing material etc
 Airport Retailing

• Airport is a high pedestrian area that has

become popular with national retail chains.
• The time spent by the passengers at
airports has increased due to early check in
times set by airlines following security and
operational concerns.
• This has increased the retail opportunities.
• The cost of operating are high as the rent
paid is also high.
2. Retail
Consumer and
Retail Strategy
 Retail Shopper

• Consumers have need tha motivat

different
them to go s t e
shopping.
• The can be classified as utilitarian
needs or
hedonic. needs are associated with work
– hedonic needs
whereas
are associated
with fun.
Utilitarian
Factors influencing retail
shoppers
• Range of merchandise
• Convenience of shopping/ Time to
travel
• Socio Economic background and
culture (Asians prefer more spices
in their food)
• The stage of family life cycle
 Changing profile of retail
shoppers
• The new age Indian shopper is
innovative, a risk taker.
younger,
• He is comfortable to adopt new technology,
has a higher disposable income but a
shorter attention span and he is less
tolerant of service failures.
• Consumers are ready to spend for
shopping experience.
• Not only utilitarian value but hedonistic
value also appease the customers.
 Changing profile of retail
shoppers
• Socially connected
• Style conscious (from impulse buying
to high involvement products)
• Low brand loyalty
• Informed purchases
• Spends on leisure
• Shortage of time (Speedy delivery,
availability of stock matters)
• Health conscious
Technology adoption life cycle
Market research as a tool for
understanding retail markets
and shoppers
• Research prior to setting up a retail
store:
– Primary information required:
• Demographic data (Population, Age,
Purchasing power, Disposable income
etc.)
• Consumer data (Buying and spending
pattern)
 Significance of research

• Evaluating the customersatisfaction

with the existing range of
products and service
• Generating ideas for developing new
products
• Evaluating the acceptability of the
products
• Pricing of new products
• Understanding the customer profiles
 CRM

• Customer relationship management (CRM) is

a technology for managing all your
company's relationships and interactions
with customers and potential customers.
• The objective is to retain the customers for
life.
• CRM is a strategic approach that is
concerned with creating improved
shareholder value through the development
of appropriate relationships with key
customers
 Benefits of CRM in retail

• Improved customer relations

• Maximize upselling and cross-selling
• Expand customer base
• Optimize marketing
• Improve retailer’s efficiency
 Customer retention approaches
• Frequent shopper programs
– Rewards according to the volume of purchase
– Offer choices
– Incorporate charitable contributions (donate a part of
their sales revenue)
– Reward on all purchase (irrespective of the merchandise)

• Special customer services (Premium membership)

• Personalization
• Community (Blogs)
 Steps in developing retail
strategy
• Defining the mission of the
organization
• Setting objectives
• Conducting a situation analysis
• Identifying strategic alternatives
– Market penetration
– Market development
– Retail format development
– Diversification
• Obtain and allocate resources
• Develop the strategic plan
• Implement the strategy
• Evaluation and control of strategy
 Retail value chain
• The retail value chain defines a series of actions
that enable businesses to sell their products to
customers. Each action in the chain brings a
portion of value to the entire process.
• “Reconfiguring” the value chain can provide
cost
advantage to the firm.
The four steps in the retail value
•chain are:
creating the product,
• storing the inventory,
• distributing the goods
• making the product available for
consumers.
 Composition of a value chain

• Inbound logistics (transport, storage

and delivery of goods coming into a
business)
• Operations
• Outbound logistics
• Marketing and sales
• Service
• Procurement
• Technology development and HRM
What Are the Three Most Important 7
8-
4
Things in
Retailing?

Location!Location!Location!
Eddie Tan/Life File/Getty Images
Why is Store Location Important for
a Retailer?
• Location is typically prime consideration
in customer’s store choice.
• Location decisions have strategic
importance because they can help to
develop sustainable competitive
advantage.
• Location decisions are risky: invest or
lease?
 Selection of a store location

• Accessibility, Visibility, and Traffic

• Signage, Zoning, and Planning
• Competition and Neighbors
• Location Costs
• Others:
– Is there adequate fire and police protection
for the area?
– Is there sanitation service available?
– What is the crime rate in the area?
 Types of retail location

A. Freestanding sites: location for

individual store unconnected to other
retailer
Advantages:
• Convenience
• High traffic and visibility
• Modest occupancy cost
• Separation from competition
• Few restrictions
Freestanding sites
 B. Part of a business district

1. Central business district

– Ballard Estate, Bandra Kurla
Complex, CBD Belapur and Nariman Point

Advantages
• Draws people into areas during business hours
• Hub for public transportation
• Pedestrian traffic
• Residents

2. Main street
3. Inner city
 9th position
Connaught Place
30th
position

19th
position
 C. Shopping center

• A shopping center is a group of retail and

commerci establishments that are planned,
other
al
developed owned and managed as a single
,–
Security
property
– Parking lot lighting
– Outdoor signage
– Advertising
– Special events for
customers
 Types of Shopping Centers

• Neighborhood and Community

Centers
• Power Centers
• Lifestyle Centers
• Outlet Centers
• Mixed use developments
• Theme centers
 7
Neighborhood and Community -

Centers 93

Managed as a
unit

The McGraw-Hill Companies, Inc./Andrew Resek, photographer

Attached row of
stores

Onsite
parking
 7
Power -
94

Centers
Big box Open air set
stores up

Available Many located

parking near enclosed
malls
Free-standing
stores Large trade
areas

PhotoLink/Getty Images
Low occupancy Convenie
costs nt

Limited small Desirable

specialty Modest vehicular shopping
stores and pedestrian experienc
traffic e
Power Centers
 7
Lifestyle -
96

Centers
• Usually located in affluent residential
neighborhoods
• Includes 50K sq. ft. of upscale chain specialty
stores
• Open-air configuration
• Design ambience and amenities
• Upscale stores
• Restaurants and often a cinema or
other entertainment
 7
Outlet -
97

Centers

These shopping centers contain mostly manufacturers and retail

outlet stores

Courtesy of Beall’s,
Inc.
 HRM in
retail
What is HRM??
• Human Resource Management (HRM) is the
term used to describe formal systems
devised for the management of people
within an organization.
• The responsibilities of a human resource
manager fall into three major areas:
staffing, employee compensation and
benefits, and defining/designing work
Functions and significance of HRM in
retail
• Identifying the roles in the
organisation
– Buying and merchandising
– Store management and operations

• Recruiting and selecting

employees
• Training (induction, skill devt.)
• Motivating employees
• Compensation and benefits
•
 Organisation structure in retail

• An organisation structure enables the

activities and tasks to be performed by
each employee.
• It determines the lines of authority
and responsibility in the firm
Basis to designs of organisation
structure
• Organisational size
• Scale of operations (local, regional, national
international)
or
• Strategy (Differentiation strategy or cost
leadership)
• Environment
– – Stable environment(customer’s
Dynamic (customer’sdesires
desire are
aremostly
consistent)
environment continuously
changing)
• Departmentali
zation
Porter’s Generic Competitive
Strategies
Organization structure for small scale
retail
Organization structure of a chain/
department store
 Retail Pricing
Considerations in setting retail
price
• Business model
• Target market
• Customer price sensitivity
• Store image and policies
• Competition (monopoly/
oligopoly)
• Economic condition
• Pricing strategies
 The pricing
strategies
• High/ low pricing
• Everyday low pricing
• Market skimming
• Market penetration
• Leader pricing/ loss
leader
• Odd pricing
• Single pricing
• Multiple pricing
 Types of variable pricing

• Individualized variable pricing/ first degree

price discrimination : charging each
individual customer a different price
based on their willingness to pay.
• Self selected variable pricing/ 2nd degree
price discrimination : promotional
markdowns, clearance markdowns,
price bundling etc
• Variable pricing by market segment/ 3rd
degree price discrimination
 Managing
and
sustaining
retail
Responsibilities of a store
manager
• Recruiting and training employees
• Merchandising
• Compliance/ adherence to all legalities
• Improving sales by customer
satisfaction
• Monitoring stock levels
• Build and maintain store brand image
• Other responsibilities like, cleanliness,
proper order, signage, etc
 The 5 S’s of retail operations

Systems Standards

Shopper’s
benefit

Stock Space Staff

PPT 1-126 Consumer Behavior Ignacio J. Vázquez E. © 2007

Elements of store design
 Exterior store design

• The store marquee : A marquee is a structure

that bears a signboard, projecting the entrance
of the retail store.
• The store front
Interior store design
• Space planning
• Atmosphere/ aroma
• Fixtures
• Flooring and ceilings
• Lightings
• Graphics (Theme, campaign and promotional
graphics)
 Types of Store Layout

A. Grid layout
If you ever wondered why milk is at the far end of a
grocery store, it's because this design forces customers
to walk past an assortment of impulse purchase items
both on the way to and from the staple item that they
need.
 Grid layout

• Nearly every convenience store,

pharmacy, and grocery store utilizes this
layout.
• Merchandise are displayed on a
predictable pattern of long aisles where
customers weave up and down, browsing
• The grid maximizes display
as they go.
product
minimizes white space. and
This
about product, product, layout
product. is
all
 Pros of grid layout

• Best stores with lots of merchandise,

for
especially when products are
varied
• Lots of exposure to products, as the
layout
encourages customers to browse multiple
aisles
• Familiar for shoppers
• Predictable traffic flow means you can
put
promos where you know customers will see
them
• Lots of infrastructure suppliers, such as
shelving, are available as this layout is used
so much
 Cons of grid layout

• Least likely to create an experiential retail

space; this layout is a dime a dozen
• Customers may be frustrated they can’t
shortcut their way to what they need
• Customers may not understand your
product groupings, leading to frustration
and questions (or worse, departure)
• Cramped aisles often lead to customers
bumping into one another
The aisle is not working
out!
 B. Race track/ loop layout

• The loop, or racetrack layout takes the grid’s fairly

predictable traffic flows a step further and creates a
deliberate closed loop that leads customers from the
front of the store, past every bit of merchandise, and
then to the check-out. Customers are exposed to the
most merchandise this way, but the path they take is
PPT 1-134 Consumer Behavior Ignacio J. Vázquez E. © 2007
 Pros and cons of a loop layout
• Maximum product exposure
• Most predictable traffic pattern; easiest to
place
promotions and have highest assurance they’ll be
seen
• Can be experiential — may work with retail
where a journey makes sense
• CONS are:
• Customers don’t get to browse at will
• May waste customer’s time who knows what
they’ve come for; they may avoid this shop in the
future when buying intent is specific
 C. Freeform layout

• The free-flow layout is almost

philosophy rejection of the a
others.
• Merchandise is arranged in asymmetric
• an manner. al
With free-flow, there is no
force
deliberate
customers
attemptto
through predictable
traffic
patterns; wandering is encouraged.
• There are far fewer rules.
• This layout doesn’t use the retail space to
its maximum.
Freeform layout: Pros and cons???
Signage and graphics
 What is a Signage ?

• Any visual representation which gives

information to the customers about a store,
any office, building, street, park and so on is
called a signage.
• Signage helps the customers to easily
reach their desired destination or locate a
building by simply following the
instructions displayed on it.
 Role of Signage and Graphics in
Retail Industry
• A customer can easily locate the store with
the help of a signage. It is the signboard
which actually attracts the customers into the
store.
• Signboard gives all necessary information
• about
The
the store.
are an medium of
signboards effective the retailer the
communication between and
customer.
• A signage goes a long way in influencing
the customer’s buying decision.
 Types of
signage
A. Category
signage
B. Promotional Signage
C. Point of sale signage
Digital Signage
What can an effective signage
do?
• Be a cost effective marketing
tool
• Promote products and services
• Communicate essential
information
• Create a positive first
impression
• Create goodwill
• Commands attention
 Signage can be placed at?

• Windows
• Entrances
• Freestanding
displays
• End caps
• Promotional aisle
• Walls
• Dressing rooms
• Cash wraps
Concerns of an Indian retail
market
A sense of concern was expressed over
the following challenges to the Indian
retail market:
• lack of quality locations
• shortage of trained staff
• rising rental values
• mall management
 Mall Management

• Positioning
• Zoning – formulating the right tenant mix
and its placement in a mall
• Promotions and marketing
(exhibitions, concerts etc)
• Facility management – infrastructure,
traffic and ambience management
• Finance management
 Positioning

On the basis of offerings

• Prestige goods
• Value for money
• Economy
On the basis of anchors
• Entertainment based
• Presence of hyper
market
• Specialty based
 Issues

Buying merchandise Internet

• Terms of
conditions of • Online privacy
purchase • Privacy
• Bribery protection
(Federal Trade
• Counterfeit
Commission for
merchandi online
se marketing
• Exclusive practices)
dealing • Licenses
 Career options in retailing

• Buying and
merchandising
• Marketing
• Store operations
• Finance
• HR
• Technology
• Visual merchandising
• SCM
Thank
you!!