Retail Management

Nature and scope of retailing

Retailing scenario in India

Wheel of retailing
Syllabus
Types of retailing (Ownership based, Store
based retailing& Non-Store Based retailing )

Vertical marketing system

01
Introduction to
Retailing
retailing
MEANING OF RETAILING
• Retailer links the producer and ultimate
consumers.
• The word ‘retail’ is derived from the
French word retailer which means ‘
to cut a piece off’ or to break bulk.
DEFINITION
OF
RETAILING
• According to Kotler : ‘’Retailing
includes all the activities involved in
selling goods or services to the final
consumers for personal, non
business use.’’

• ‘’It is responsible for matching

individual demand of the consumer
with supplies of all the
manufactures.
 Retailing involves
• Understanding the needs of
consumers

• Developing good variety of

merchandise

• Displaying the merchandise in an

effective manner so that consumers
find it easy and attractive to buy.
Thus, We can Say ;

Example of Importance in the Economy

Retailing

Retailing refers to the An example of retailing is a

process of selling goods local grocery store that sells Retailing plays an

and services directly to food items to consumers. important role in the

consumers for personal use. economy by providing

jobs, supporting supply

It encompasses all activities Additionally, online retailers chains, and contributing

involved in selling products to like Amazon also exemplify to consumer spending,

final consumers, including retailing through their which drives economic

purchasing, storing, e-commerce platforms growth.

displaying, and marketing. that offer various products

delivered to consumers.
It serves as a bridge that
connects manufacturers
Nature of Retailing

Characteristics of Key Functions of Role in

Retailing Retailing Distribution
Channels

Retailing is characterized by Key functions include buying

Retailing acts as a vital link in
its variety, emphasis on and merchandising,
distribution channels, ensuring
customer service, and maintaining product
that products reach consumers
transient nature of consumer assortments, providing
efficiently.
preferences. customer service, and
facilitating transactions.
It influences the supply chain by
determining product availability
It requires adaptability to These functions help retailers
and accessibility within the
trends and efficient inventory operate effectively in a
market.
management to meet competitive landscape.
consumer demands.
Scope of Retailing
Areas Covered by
Future Prospects in
Retailing
Retailing
0 0 0
Challenges in
1 2 3
Retailing

Retailing faces several

Retailing covers diverse areas such The future of retailing is
challenges, including intense
as physical stores, e-commerce expected to witness growth in
competition, changing
platforms, customer service e-commerce, personalization
consumer behaviors,
practices, inventory through data analytics, and
economic fluctuations, and
management, and supply chain omnichannel strategies
the need for technology
logistics, all integral for a that provide seamless
integration to enhance
successful retail operation. shopping experiences across
operational efficiency and
various platforms.
customer experience.
02
Retail Management
Concepts
Concept of Retail Management

Overview of Retail Objectives of Retail

Strategies in Retail
Management
Management
01 02 Management
03
The primary objectives include Common strategies include

Retail management involves increasing sales revenue, customer relationship

the planning, organizing, and enhancing customer management, effective

controlling of retail experiences, maintaining merchandising techniques,

operations. inventory levels, and targeted marketing

optimizing operations to campaigns, and leveraging

It focuses on optimizing maximize profit margins in technology to improve

sales and driving customer a competitive market operational efficiency and

satisfaction through effective environment. customer engagement.

management practices.
RETAILING IN THE
MARKETING MIX
• Retailing is an important part of the marketing
mix, covering key areas like product, place, price,
people, presentation, and promotion.

• "Place" means making products available in

different locations.

• Customers often see a product for the first time

in retail stores.

• These stores help businesses sell their products

and collect feedback from customers on how well
the product is doing.
"The retail mix is the foundation of retail strategy, covering
key elements that help retailers meet customer
expectations and stay competitive in the market."

•All decisions in the retail mix should revolve

around the customer.

•The goal is to enhance the customer’s experience

and satisfaction.

• "Customer-centric strategies drive loyalty

and revenue."
 Price

Refers to the pricing strategy, which can influence customer perception and sales.

Key Components:

• Mark-down policy: Discounting strategies to attract customers.

• Price emphasis: Setting prices to reflect value, quality, or affordability.
• Margins: Managing profit margins to balance profitability and competitiveness.

Example: Walmart uses an “everyday low price” strategy, while luxury brands focus
on premium pricing.
 Activities designed to communicate with and
attract customers.

Key Components:
Promotion
• Public Relations (PR): Building a positive brand image.
• Advertising: Using media channels to promote products
and services.

Example: Retailers like Amazon use

promotional campaigns such as Black Friday
sales to drive customer engagement.
 Refers to the physical or digital locations where
products are sold.

Key Components:
Place • Location: Selecting accessible store locations.
• Operating Hours: Adapting hours to customer convenience.
• Space: Utilizing the store layout for better customer flow.

Example: Convenience stores focus on location,

while e-commerce platforms focus on fast
delivery and seamless navigation.
 The range and quality of goods or services offered by
the retailer.

Key Components:
Product • Service Level: Customer service provided alongside the product.
• Categories and Assortment: Variety and availability of products.
• Brands: Offering a mix of private and national brands.

Example: Supermarkets focus on broad assortments,

while specialty stores focus on niche product lines.
 The visual and physical appeal of the store and
brand presentation.

Key Components:

Presentation • Merchandising: Organizing products for visual appeal and

ease of shopping.
• Uniforms: Consistent employee appearance to enhance
brand identity.
• Fleet: Store vehicles and delivery services representing
the brand.

Example: Apple Stores emphasize minimalistic

presentation to reflect product sophistication.
 Refers to the employees who interact with customers
and drive sales.

Key Components:

Personnel • Internal Marketing: Training and motivating employees to deliver

excellent service.
• Service Support: Providing post-sale assistance to enhance customer
satisfaction.
• Selling: Employees' ability to guide and influence purchasing
decisions.

Example: Nordstrom’s staff are known for exceptional

customer service, leading to high customer loyalty.
 Successful retailers integrate all
elements of the retail mix to create a
cohesive and customer-focused strategy.
Integrating the
Retail Mix Example: Starbucks focuses on premium
products, store ambiance, customer
service, and loyalty programs to
enhance customer experience.
Why are retailers needed?
Retailers create values
HOW?
•Providing a variety of products and
services: Customers can choose from a
wide selection of products, brands, sizes,
and prices in one place.

•Breaking bulk: Manufacturers produce

and ship items in large quantities, but
retailers sell them in smaller amounts that
are easier for customers to buy and use.

•Holding inventory: Retailers store

products so they are available when
customers need them.

•Providing services: Retailers offer services

that make shopping easier, like offering
credit or payment options.
03
Retailing Scenario
in India
evolution of retail in India

(Public Distribution System

Outlets)
Current Status of Retailing in India

01 02 03
Key Players in Consumer
Market Size and Indian Retail Behavior Trends
Growth

Key players include Trends indicate

The Indian retail
established traditional increasing consumer
market has been
retailers, modern preference for online
growing rapidly and is
trade formats like Big shopping, demand for
projected to reach a
Bazaar, and leading e- personalized services,
substantial size,
commerce platforms sustainable products,
driven by rising
like Flipkart and and experiences that
disposable incomes,
Amazon, all competing combine both physical
urbanization, and the
for market share in a and digital retail
expansion of
diverse landscape. environments.
organized retail
sectors.
Challenges and Opportunities

Regulatory E-commerce Innovations in

Challenges Growth Retailing
0 0 0
1 2 3

Try Lenskart's New Virtual AR Experience - Eyeglasses

Retailers in India face complex The rapid growth of e-commerce

regulations regarding presents both challenges and Innovations like contactless
foreign direct investment, opportunities. payments, augmented reality for
taxation, and compliance, virtual try-ons, and AI-driven
which can hinder growth Retailers must adapt to digital inventory management are
opportunities and operational platforms to reach a broader transforming the retail space,
flexibility. audience while managing supply creating opportunities for

chain efficiencies. competitive advantage.

04
Types of Retailing
Ownership-based Retailing

Independent Chain Stores Franchises

Retailers

Independent retailers Chain stores consist of Franchises allow

are small businesses a group of retail entrepreneurs to
owned and operated outlets under a single operate businesses
by individuals or brand or company. under established
families. They have They benefit from brands, benefiting
the flexibility to cater economies of scale, from brand
to niche markets and standardized recognition, training,
provide personalized practices, and broad and support from the
services to customers. market reach, franchisor while
improving brand maintaining some
visibility. level of operational
autonomy.
Store-based Retailing

Department Stores Specialty Stores Supermarkets

Department stores offer a wide Specialty stores focus on Supermarkets provide a
range of products across various specific product categories, comprehensive selection of
categories, providing a single such as electronics or fashion. groceries and household
shopping destination. They often Their tailored offerings and items. Their layout and pricing
include multiple departments, expertise attract customers strategies cater to diverse
enhancing customer seeking specialized products consumer needs, driving high
convenience. and services. foot traffic and sales volume.
Non-store-based Retailing

Direct Selling Telemarketing

E-commerce
Platforms
E-commerce platforms Direct selling involves Telemarketing is a retailing

have revolutionized selling products directly to method that uses phone

retailing by allowing consumers through face- calls to sell products or

consumers to shop from to-face interactions, home services directly to

home. They provide a wide parties, or online potential customers. It

selection, competitive platforms, capitalizing on requires effective

pricing, and convenience personal relationships to communication skills and

through home delivery drive sales. targeted outreach

options. strategies.
Vertical Marketing System

Definition and Structure Benefits of Vertical

Marketing

A vertical marketing system is a Benefits include improved

coordinated network of producers, efficiency, reduced costs, and
wholesalers, and retailers working enhanced communication among
together to optimize distribution. It channel members. It ensures that
includes three main types: all participants work towards
corporate, contractual, and common goals, ultimately
administered systems. Examples of Vertical benefiting the consumer.
Marketing Systems
Examples include franchises like
McDonald's, where all elements align in
branding and operations, and corporate
systems like retail giants that own
manufacturing facilities, ensuring product
quality and distribution.
05
The Wheel of
Retailing
 The wheel of retailing
It was proposed by professor Malcom P.
McNairy (who taught at Harvard business
school for 43 years).

It is basically a theory of cyclical or circular

development. The wheel of retailing concept
describe how retail institutions transform during
their evolutionary life cycle.

The process wherein the retail

businesses start on low cost, low
price and low margins but as their
sales start increasing they quickly
shift to a high cost, high revenue
model.
 02 Key Principles

1.Cycle of Retail Innovation:

1. New retail formats emerge, offering lower prices and basic
services.
Thus, we can say that 2. Over time, they improve services and raise prices to attract
higher-end customers.
2.Price and Service Quality Relationship:
1. Retailers often start with low prices and minimal services.
The Wheel of Retailing concept is
2. As they evolve, they enhance service quality and increase
originated to explain the evolution of retail prices, leading to a higher-cost structure.
formats. 3.Disruption by New Entrants:
1. New retailers with innovative formats enter the market,
offering better value or prices.
It illustrates how retailers begin with low 2. These new players disrupt established retailers, forcing them
prices and basic services, eventually to innovate or risk losing market share.
4.Adaptation to Maintain Market Position:
escalating to higher prices and enhanced
1. Established retailers must adapt to changing customer
services over time. expectations and new competition to stay relevant.
2. Innovation and responsiveness to market trends are essential
for survival.
The wheel of retailing
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 to remain competitive. The company is now considered to have completed the ‘wheel of
retailing.
 Relevance in E-
Application in Modern Retail commerce

The principles of the Wheel

of Retailing are
increasingly significant in
e-commerce, where new
online retailers disrupt
traditional models,
leading established players
to innovate and alter their
strategies.
Future Implications

01 Adapting to Market Changes

Strategic Recommendations 02
Retailers must remain agile Strategic recommendations include
and responsive to changing diversifying product offerings, investing in
consumer behaviors and technology, enhancing customer
experience, and employing data analytics
technological advancements.
for informed decision-making to meet
Embracing digital evolving consumer needs.
transformation is crucial for
long-term survival and growth
in the market.
 Debate Format:
Opening Statements: Each
Debate Team Preparation: team will present a 3-minute Evaluation
Instructions Formation: opening statement explaining Criteria:
their stance.
The class will be split Each team should research the Wheel of Clarity and Structure
into two teams: Retailing, which describes how retailers Main Arguments: Each team of Arguments
often start as low-cost, low-margin will have 10 minutes to present
• Team A: Supporting Relevance of
operators and eventually move toward detailed arguments and
the relevance of Evidence and Real-
the Wheel of higher prices, improved services, and supporting evidence.
World Examples
Retailing. premium products. Rebuttal Round: Teams will
• Team B: Opposing Ability to Rebut
Teams must find real-world examples of have 5 minutes each to
the relevance of Opposing Points
companies that have followed or respond to the opposing team’s
the Wheel of arguments. Persuasiveness of
disrupted this model (e.g., Walmart,
Retailing. Presentation
Amazon, luxury brands, or fast fashion Closing Statements: Each team
retailers). will have 2 minutes for a final
Prepare at least three key arguments summary of their position.
that either support or oppose the
model’s relevance.
 Thank you
for listening.