Why Retailing is necessary in management prospects

Group Members:1.Akshay Bhor 2.Nishant Jadhav 3.Harsh Tiwari 4.Sukesh Nagarkar 5.Abhishek Bhosle 6.Ajay Verma

 Retail is derived from the French word retaillier which means to cut a piece of or to break bulk. In simple words, it means a final transaction with the customer.

Akshay Bhor

Akshay Bhor

 If the Retail concept not existing????

Manufacturer

Wholsaler

Customer
Akshay Bhor 5

 Distribution Channel

Akshay Bhor

 Retail Include

Akshay Bhor

 Top 10 Retailers in India:1. Panloons Retail 2. Shoppers Stop K Raheja Group 3. Tata Trent Tata Group 4. Spencer's Hypermarket RPG Group 5. Landmark Group 6. Parimal Group 7. Subhikha Group 8. Bharti Walmart 9. Reliance Group 10.AV Birla Group Akshay Bhor

Characteristics of retailing
It offers direct interaction Sale volume is comparatively large in quantities Customer service Sales promotions are offered at this point only Location and layout are critical factors More employment opportunities

Nishant Jadhav

Retail Industry
The next phase of economic development in India will be consumption led. With the sustained and strong rates of economic growth, retail sales is expected to cross USD 400 billion, turning India into the biggest retail market in the world! Retailing is the second largest industry in the US in terms of number of people employed.

Nishant Jadhav

Conti..
In India, the retail industry is broadly divided into the organized and unorganized sectors. Of this total market, the organized sector accounted for Rs. 350 billion (about 3.5 % of the total) of the total revenues. Traditionally, the retail industry in India comprised of large, medium and small grocery stores and drug stores which could be categorized as unorganized retailing. Most of the organized retailing in India had recently started and was mainly concentrated in metropolitan cities. India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% - 11% of the country's GDP. McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. organized retail market in India is expected to reach US$ 50 billion by 2013.
Nishant Jadhav

Conti..
CB Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion. India retail industry is one of the fastest growing industries with revenue is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent organized retail, which accounts for almost 5 per cent of the market, is expected to grow at a CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013.

Nishant Jadhav

Functions of a Retailer
Retailers provide important functions that increase the value of the products and services they sell to consumers and facilitate the distribution of those products and services for those who produce them. These functions are.. 1) Providing an assortment of products and services Most consumers are well aware of the product assortments retailers offer. 2) Breaking Bulk To reduce transportation costs, manufacturers and wholesalers ship cases / cartons to retailers. This is called breaking bulk. It is cost effective for both manufacturers and consumers.
Sukesh Nagarkar

Conti
3) Holding inventory - A major function of retailers is to keep inventory

that is already broken into user friendly sizes so that products will be available when consumers want them.

4) Providing services a) Retailers provide services that make it easier for customers to buy and use products.

b) They offer credit so consumers can have a product now and pay for it later.
c) They display products so consumers can see and test them before buying. d) Some retailers have salespeople on hand to answer questions and provide additional information about products.
Sukesh Nagarkar

Conti
5) Increasing the value of products and services By providing assortments, breaking bulk, holding inventory, and providing services, retailers increase the value consumers receive from their products and services.

Sukesh Nagarkar

Study & Practice of Retailing

A successful retail manager requires analytical and creative skills. There are two methods for the study and practice of retailing. 1) Analytical method Retail manager is a finder and investigator Systematic decisions Standardized set of procedures, success formulas and guidelines.
Harsh Tiwari

Conti..
2) Creative Method The creative retail manager is an idea person. The manager must respond the unforeseen events in the environment Imaginative and creative mind. 3) A Two Pronged Approach Both methods are mainly implemented by the retail manager. Retailers in the 21st century cannot do without creativity or analytical skills.

Harsh Tiwari

Key Drivers
1) Consumer Pull a) high income segment b) Middle and lower income group 2) Rising Incomes 3) Explosion of Media 4) Change in Consumer Behavior

Harsh Tiwari

Conti
5) Consumerism Cycle

Over the time the distributor gains control over the market, at this stage the distributor becomes an important link between manufacturer and customer. 6) The rural Market waking up 7)Establishment of the Supply Chain Entry restrictions for multinationals have been removed in nearly all sectors This has enabled chain retailers to enjoy better range depth and sourcing options as well as improved margins. According to a study, there are 18,000 stock keeping units (SKU), while most retailers have the space for at most 5,0007,000 units. Because of this real estate companies and other corporates into investing in malls and other retail formats.

Harsh Tiwari

Conti
8) Emergence of Hubs of Retail Activity 9) Change in Scale of Operations Subhiksha and Food World has many stores spread over many cities. This growing scale enables the supermarkets to eliminate links in the purchasing chain and to make deals with food processors directly. Because of huge purchases, HLL has dedicated a team to deal with these emerging power retailers.
Harsh Tiwari

Conti
10) Entry to the Corporate Sector 11) Expansion of family owned businesses 12) New Entrepreneurs 13) Building chains around brands 14) Foreign retailers looking for entry options Should have a tie up with some of the indian retailers because of FDI restrictions. Tesco, Kingfisher, Metro, Carrefour and Ahold are exploring entry options.
Harsh Tiwari

Indian retail industry

Abhishek Bhosle

Key Challenges
1) The Kirana CRM practice Known about the customers families Credit and home delivery Consumer familiarity runs from generation to generation Open longer hours and stock most of the goods Consequently, a large number of customers are not willing to pay a premium for the shopping experience promised by large format retailers.
Abhishek Bhosle

Conti
2) High costs for the organized sector High expenses to organized sector . The lease cost up to 6-10 percent of sales Manpower cost is lower at 5-6 percent of sales Capital costs are more in retail business due to major renovations needed every 57 years.
Abhishek Bhosle

Conti..
3) Specialization The real boom in organized retailing will come once the supermarket start selling daily need goods at 90 percent of the regular price, as Carrefour is doing in China. Build strong sourcing networks that connect the business directly with farms, and sell fresh food at attractive prices. Ex. Subhiksha ( 7-8 percent markdown on the MRP) Indian consumers are buying mainly from store based retailers. Grocery still remains the main purchase from these stores.
Abhishek Bhosle

Conti
4) Correct Merchandise Mix (inventory planning and Management) Getting the right product mix is critical to retailing Every retailer wants to have high-value, high margin, and fast moving products. The retailers use to check volumes is sales density, which shows the amount of sales per sq ft of shop space.
Abhishek Bhosle

Conti..
5) Strong IT support The backbone of retailing is IT It would require large investments that connect every aspect of the operations seamlessly, from suppliers to the cash counters. 6) Poor Infrastructure Cold chains Roads and rail infrastructure Efficiency of Supply Chain A strict quality control increases the prices of the merchandise
Abhishek Bhosle

Conti..
7) Industry Status The Indian Retail Council was formed in 2000. The existing labour laws are difficult for shops to have flexible timings The industry is expected to see further growth of organized retailing in both food and non-food segments in the coming years. Indian retailing needs to adapt to change. The change can be in terms of modification and creation of new formats or new products for the same targeted customers.
Abhishek Bhosle

Why is Retailing Important?

As the final link between consumers and manufacturers, retailers are a vital part of the business world. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. It would be very costly and time consuming for you to locate, contact and make a purchase from the manufacturer every time you wanted to buy a candy bar, a sweater or a bar of soap. Similarly, it would be very costly for the manufactures of these products to locate and distribute them to consumers individually.

Abhishek Bhosle

 By bringing multitudes of manufacturers and consumers together at a single point, retailers make it possible for products to be sold, and, consequently, business to be done. Retailers also provide services that make it less risky and more fun to buy products. They have salespeople on hand who can answer questions, may offer credit, and display products so that consumers know what is available and can see it before buying. In addition, retailers may provide many extra services, from personal shopping to gift wrapping to delivery, that increase the value of products and services to consumers.
Abhishek Bhosle

The Future of Retailing

Advances in technology, like the Internet, have helped make retailing an even more challenging and exciting field in recent years. The nature of the business and the way retailing is done are currently undergoing fundamental changes. However, retailing in some form will always be necessary. For example, even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers, the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. On-line retailers, like Amazon.com, bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do.
Abhishek Bhosle

 In addition, traditional retailers with physical stores will continue to be necessary. Of course, retailers who offer personal services, like hair styling, will need to have face-to-face interaction with the consumer. But even with products, consumers often want to see, touch and try them before they buy. Or, they may want products immediately and won't want to wait for them to be shipped. Also, and perhaps most importantly, in many cases the experience of visiting the retailer is an important part of the purchase. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back.
Abhishek Bhosle

Case Study!

Ajay Verma

Thank You!