Topic: Introduction of Retail

What is Retail?
Retail is the final stage of any economic activity. BY virtue of this fact Retail occupies
an important place in the world economy. In an attempt to understand the scope of
the term retail, various definitions of the term have been examined.
According to Philip Kotler: "Retailing includes all the activities involved in selling
goods or Services to the final consumers for personal, non-business use. A retailer
or retail store is any business enterprise whose sale volume comes primarily from
retailing. Any organisation selling to final consumers whether it is a manufacturer,
wholesaler or retailer is doing retailing It does not matter how the goods services
are sold (by person, mail, telephone, vending machine or internet or where the are
sold - in a store, on the street or in the consumer's home)" .
The North American Industry Classification System (NAICS)2 specifies that the retail
trade sector comprises establishments primarily engaged in retailing merchandise,
generally without transformation, and rendering services incidental to the sale of
merchandise.
The word retail is derived from the French word retaillier, which means to cut off a
piece or to ~k bulk. A retailer may be defined, as a 'dealer or trader who sells goods
in small quantities' or 'one who repeats or relates'.
Retailing thus may be understood as the final step in the distribution of
merchandise, for consumption by the end consumers. Put simply, an firm that sells
products to the final consumer is performing the function of retailing. It thus
consists of all activities involved in the marketing of goods and services directly to
the consumers for their personal, family or household use.
It is necessary to understand that in the complex world of trade today, retail would
include !2.0t only goods but also services, which may be provided to the end
consumer. In an age where the customer is the king and marketers are focusing on
customer delight, retail may be redefined as the first point of customer contact.

Functions of a Retailer:
From the customers point of view, the retailer serves him by providing the goods
that 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. This comes from four different perspectives:

1. First is utility regarding the form of a product that is acceptable to the customer.
The retailer does not supply raw materials, but rather offers finished goods and
services in a form that the customers want. Retailer performs the function of storing
the goods, and providing us with an assortment of products in various categories.
2. He create; time utility.-by keeping the store open when the consumers prefer to
shop.
3. By being available at a convenient location, he creates .place utility.
4. Finally, when the product is sold, ownership utility is created.

The rise of retailer

In the not so distant past, manufacturers created a product, advertised it slickly and
sold it through their distribution channel. The manufacturing companies enjoyed
economic power, as they were significantly bigger in size as compared to the
distributors or the retailers. They determined prices, the products that the retailer
could stock and also the dealer and distributor margins. They would also
independently advertise for their products. In case of a dispute with the distributor
or retailer it would not be rare for the manufacturer to discontinue supplies.
However, much has changed.
Today, retail has emerged as a separate function by itself. The environment in a
large organized retail store is significantly different from that of a traditional or a
mom and pop store. In this section, we examine the reasons behind this change.
Proximity to the Customer
Today, with the emergence of large supermarkets, hypermarkets and various other
formats like the department stores, the retailer is the closest to the consumer. Most
stores have their own policies and decide how to inf1uen~hoppers. In an age of
global manufacturing and selling, the organization 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 fact has given
the retailer tremendous power.
Technology
With the increasing use of technology and the use of the Point of Sale scanning
systems at barcode, a wealth of information is now available to the retailer

Lecture no.: 2
Topic: Retail as a career
RETAIL AS A CAREER
Retail is a people-centric industry, and is one industry which simultaneously can
expose you to many skills and disciplines. It offers many choices in terms of a
career, chief among them are:
Buying and Merchandising
Merchandising and Buying is often termed as a combination of art and statistics. It
is a key function for any retailer as this department is responsible for the
procurement of merchandise to be sold in the stores by it, sourcing it from vendors
or manufacturers. Key tasks in this career area include the selection of vendors,
costing of merchandise procured, allocation of merchandise to the stores,
developing distribution plans and calculating gross margins. A key aspect to be
remembered is that very often, it may require extensive traveling to locate vendors
and exclusive merchandise for the retail stores.
Marketing
In retail, marketing functions may be centralized and may include different
departments like advertising, sales promotion, and public/press relations. Marketing
would also look at ways of understanding the customer and his behavior by way of
focus groups and analysis of customer buying patterns to develop strategies and
plans that guide marketing components like advertisement, websites, store signage,
etc. The size of the retail organization would determine whether various functions
would be in one department or would be divided into various combinations.
Store Operations
Retail professionals in the store operations career area oversee the overall store
operations and profits. Positions include Head of Store Operations, Regional
Manager and District Manager, and responsibilities in this area may include
managing staff functions like loss prevention and/or human resources.
Responsibilities in operations may vary from being responsible for a department,
floor, the entire store or a group of stores.
Very often, sales is considered to be a part of store operations. Positions in sales

include sales associate, cashier, store stock associate and stock receiver.
The primary duty of a sales staff is to serve customers on the selling floor, actually
selling goods. However In front-end sales staff may also be involved in receiving
merchandise into the store, counting it and then displaying it on the store shelf.
Responsibilities would also include receiving merchandise returned by customers.
These front-end positions need the ability to deal with people, flexibility and
importantly, the ability to working teams.
Finance
The finance retail career area includes all accounting and treasury functions like
accounting for income, paying expenses, compiling and maintaining financial
records, money management and cash flow control, banking, investment and
managing credit lines. Auditing of stores for merchandise and money may also be a
part of the responsibilities of this department. With the rapid development of retail
in the country, understanding and implementing project finance may also emerge
as a key area of responsibility in the next few years.
Human Resources
Human Resource in retail may range from recruiting and hiring employees to larger
areas like identifying training needs at various levels within the organization and
then designing and implementing the programmes. Responsibilities may also
include overseeing compensation and benefits, and planning for and ensuring legal
compliances in hiring and employment practices. It is necessary to remember that
retail is a people focused business, but at the same time, it calls for long working
hours at both the front and back end. The Human Resources department, needs to
understand these aspects of the retail business while creating and implementing
performance appraisals and promotions.
Technology and e-commerce
Retail is one of the most mature users of information technology. From RFID
implementation to e- technology-driven training programs delivered over satellites
or the internet, to state-of-the-art cash register and credit systems. Careers in this
department may involve the overall responsibility for the data processing efforts
within the chain, including systems design, programming, computer operations, and
information systems (IS). A retailer who has a presence in the e-commerce segment
may also look for individuals who may be made responsible for strategy
development, procurement of merchandise, fulfillment of orders and payments as
specific areas.
Visual Merchandising

Visual merchandising is largely associated with creating the look of the store. Visual
merchandisers are responsible for the total merchandise or service presentation,
the overall business image, and even the building and placement of design
elements. The increase in competition has necessitated retailers to differentiate
themselves from the competition. While products and services are the primary
methods of differentiation, visual merchandising is fast becoming an area of
differential advantage, as it is believed that attractive displays attract and
stimulate, which in turn is believed to cause increased sales.

Supply Chain Management and Logistics

Supply chain management and logistics are fast emerging as key focus areas in
retail. Supply Chain Management is the integrated management of the flow of
materials and products, services and information from raw material suppliers,
through operations, to the final customer and back again. Supply chain
management and logistics is an integral factor affecting cost. Effective management
of the supply chain enhances profitability. Depending on the size of the
organization, a job in supply chain management may involve analyzing and
negotiating contracts with suppliers, manufacturers and/or distributors, capacity
and production planning, resource allocation and facility location and scheduling the
transportation and logistics of a product/service to its final destination.

Lecture no.: 3
Topic: Retail in India
The Evolution of Retail in India
While barter would be considered to be the oldest form of retail trade, since
independence, retail in India has evolved to support the unique needs of our
country, given its size and complexity. Haats, Mandis and Melas have always been
a part of the Indian landscape. They still continue to be present 'in most parts o[ the
country and form an essential part of life and trade in various areas.
Traditional Indian Retail-Some Facts:
Haats: Haats are periodic markets that form a major part of the rural market system
in India. This is a location which witnesses a public gathering of buyers and sellers
at fixed times and at fixed locations.
Some interesting facts about Haats are:
Average sale per day: Rs. 2.25 lakh
Number of sales outlets per haat: 300 +
Number of visitors per haat: 4,500 +
Average sale per outlet: Rs 900
Villages covered by a 'mat: 20 50
Melas: Melas are fairs, and they can range from commodity fairs to religious fairs.
Virtually every state in India has melas for which it is known; it is estimated that
more than 25,000 melas are held annually in the country. It is also estimated that
the average outlets in every mela would be more than 800 and the average sale per
mela would be Rs.1431akh.
Mandis: Mandis are market set up by the state government for the sale of

agricultural produce directly from the fanners. Close to 6,800 Mandis exist in India
and are believed to cater to a population ofl.36Iakh.
The PDS or the Public Distribution System would easily emerge as the single largest
retail chain existing in the country. The evolution of the public distribution of grains
in India has its origin in the 'rationing' system introduced by the British during World
War II. The system was started in 1939 in Bombay and subsequently extended to
other cities and towns. By the year 1946, as many as 771 cities/towns were
covered. The system was abolished post war, however, on attaining Independence,
India was forced to reintroduce it in 1950 in the face of renewed inflationary
pressures in the economy.
The system, however continued to remain an essentially urban oriented activity. In
fact, towards the end of the first five-year plan (1956), the system was losing its
relevance due to comfortable food grains availability. At this point in time, PDS was
rell1trooucedand other essential commodities like sugar, cooking coal, and kerosene
oil were added to the commodity basket of PDS.

The Khadi & Village Industries (KVIC) was also set up post Independence. Today,
there are more than 7,000 KVIC stores across the country. Retail Snapshot 2.2
focuses on the growth of KVIC as an Indian retailer. The co-operative movement was
again championed by the government, which setup the Kendriya Bhandars in 1963.
Today, they operate a network of 112 stores and 42 fair price shops across the
country. Mother Dairy, another early starter, controls as many as 250 stores, selling
foods and provisions at attractive prices. In Maharashtra, Bombay Bazaar, which
runs stores under the label Sahakari Bhandar and Apna Bazaars, runs a large chain
of co-operative stores.
Fig.: Evolution of Retail in India.

Types of retailers

A. Instore Retailing: In store retailing can be defined as retail establishment that offers a variety
of product lines.

1. Department stores: Large retail organizations characterized by wide product mixes and
organized into separate departments to facilitate marketing efforts and internal management. Ex.
Sears, JC Penny
2. Discount stores : Self-service, general merchandise stores offering brand name and private
brand products at low price. Ex. Kmart, Wal-Mart

3. Supermarkets : Large, self-service stores that carry a complete line of food products, along
with
some
nonfood
products.
Ex.
Big
Bazaar
4. Superstores : Giant retail outlets that carry food and nonfood products found in supermarkets,
as well as most routinely purchased consumer products. Ex. Wal-Mart Supercenters
6. Hypermarkets : Stores that combine supermarket and discount shopping in one location. Ex.
Carrefour
7. Warehouse clubs : Large-scale, members-only establishments that combine features of cashand-carry .wholesaling with discount retailing. Ex. Sam's Club, Costco
8. Warehouse showrooms : Retail facilities in large, low-cost buildings with large on-premise
inventories
and
minimal
services.
Ex.
Ikea
9. Catalog showrooms : A form of warehouse showroom where consumers can shop from a
catalog
and
products
are
stored
out
of
buyers
reach
10. Specialty Retailers : Also called limited-line and single-line retailers , Carry a narrow
product mix with deep product lines (e.g., pet supplies) , Have higher costs and higher margins ,
Provide more product selection (first-line brands), product expertise, and high levels of personal
service.
Ex.
Talbots
11. Off-price retailers : Buy manufacturers seconds, overruns, returns, and off-season
merchandise for resale to consumers at deep discounts , Charge less than department stores for
comparable
merchandise
and
offer
few
customer
services
12. Category killers : Concentrate on a major product category and compete on the basis of low
prices and product availability. Ex. Home Depot, Best Buy, Office Depot.
b. Non store Retailing: The selling of products outside the confines of a retail facility.
1. Catalog Marketing : A type of marketing in which an organization provides a catalog from
which customers can make selections and place orders by mail, telephone, or the Internet
2. Direct-Response Marketing : A type of marketing that occurs when a retailer advertises a

product

and

makes

it

available

through

mail

or

telephone

orders

3. Telemarketing : The performance of marketing-related activities by telephone

4. Television Home Shopping : A form of selling in which products are presented to television
viewers, who can buy them by calling a toll-free number and paying with a credit card
5. Online Retailing: Retailing that makes products available to buyers through computer
connections.