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An Introduction to
An Introduction !!
Retailing encompasses the
business activities involved in
selling goods and services to
consumers for their personal,
family, or household use. It
includes every sale to the final

A retailer is a business that

sells products and/or services

to consumers for personal or
family use.

Examples of Retailers

 Retailers:
 -Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy
Lube, AMC Theaters, American Eagle Outfitter, FAO
Schwartz, Kroger

 Firms that are retailers and

wholesalers that sell to other
business as well as consumers:
 -Office Depot, The Home Depot, United Airlines,
Bank of America, Sams Clubs

How Retailers Add Value

 Breaking Bulk
 -Buy it in quantities customers want
 Holding Inventory
 -Buy it at a convenient place when you want it
 Providing Assortment
 -Buy other products at the same time
 Offering Services
 -See it before you buy, get credit, layaway
How Retailers Add Value
The value of the product and service
as the retailer performs functions.

Doll can be
bought on credit
or put on layaway

Doll is featured
on floor display
Doll is offered
locations in
Doll is developed quantities of
in several many
Doll is developed
at manufacturer
˜How can we best serve our
customers while earning a fair
˜How can we stand out in a highly
competitive environment where
consumers have too many choices?
˜How can we grow our business, while
retaining a core of loyal customers?

Distribution Channel

PPT 1 -4
Retailers can best address these questions by
fully understanding and applying the basic
principles of retailing, as well as the elements in
a well-structured, systematic, and focused retail


Wholesale Final
r Consumer

Channel of
Nature of Retail Industry is

To Today ’ s Retailer

om and Pop Store

The Indian Retail Industry

 Seen as “THE GOLD MINE”

 It’s mouth-watering figures:
 Total retail market : 350 billion US$
 Organized RM : 8 billion US$
 Highly fragmented / Unorganized
 12 million Kirana stores
 Over 80% of them operates in less than 500 sq.ft


“Small in Size but Big in Deeds”
 Key Success factors of Conventional
 Reach
 Credit facilities
 Home delivery
 Intangible factors
 Is it viable for Organized retail to
emulate these factors?
 Probable opportunities for
Conventional retailers:
 Renovation of the existing formats
 Entry of B2B companies
 Consortium
•Lack Of Infrastructure •Variety : Customer Pull

•FDI •More for Less

•The refashioned •Technology

convenience store •Increasing Disposable Income

- +
•Rural Retailing
•Increasing Population of
- Working Women
•Limited Reach
•Steady Indian Economic
•Lack of Trained & Growth
Professional Workforce
•Increasing Margins by
removing Middle men
Which segment is taking the

The spending pattern of growing
Indian middle class
Category (2004) % Of Total

Food, Beverage and Tobacco 43%

Clothing and Footwear 5%

Gross Rent, Fuel and Power 12%

Furniture, Fixture and Appliances 4%

Medical and Healthcare Services 8%

Transport and Communication 15%

Recreation, Education and Cultural 3%

Miscellaneous 10%
Seek to establish and

maintain long-term bonds

with customers, rather
than act as if each sales
transaction is a completely
new encounter

Ø Concentrate on the
total retail
Ø Monitor satisfaction
Ø Stay in touch with
Ø Develop customer

Effective Relationship Retailing
 Use a win-win approach Retailing
 It is harder to get
new customers
than to keep
existing ones
Develop a customer

 Ongoing customer
contact is
improved with
information on
attributes and
Theme !!
¯Consumers will
demand more
for less from
the shopping
¯They will spend
less time
¯They will split
shopping trip
from the
value-added PANKAJ ARORA

Channel Perspective
¯Value is a series of activities and
processes - the value chain - that
provides a certain value for the
Customer Perspective

¯Value is the perception that the

shopper has of the value chain
¯It is the view of all the benefits from a
purchase versus the price paid.
Retail Value Chain

¯ Represents the total bundle of benefits offered

to consumers through a channel of
 Store location and parking,
 retailer ambience,
 customer service,
 brands/products carried,
 product quality,
 retailer’s in-stock position,
 shipping,
 prices,
 image, and other elements

Why Value ?

 Customers must always believe they got their money’s

 Retailers must work to ensure that customers perceive
the level of value provided in the manner intended.
 Value is desired by all customers.
 It is easy for customers to comparison shop through ads
and the Web.
 Meaningful retail differentiation is essential.
 A specific value/price point is required

Retailer Relationships
Customer Relations : Customer
Expected customer service is

the service level that

customers want to receive
from any retailer such as basic
employee courtesy

Augmented customer service

includes the activities that
enhance the shopping
experience and give retailers a
competitive advantage

Top Companies: An analysis
q Big Bazaar is a chain of
department stores owned by the Big Bazaar -
Pantaloon Group (Future
Group)and headed by Kishore
Biyani and headquartered at
Mumbai. It offers all types of Bharti Retail
household items such as home
furnishing, utensils, fashion
products etc.
q Bharti Retail, a wholly owned
subsidiary of Bharti
Enterprises. has announced Reliance Retail -
two joint ventures (JV)with the
international retailing behemoth,
q The first JV ensures cash and DLF Shopping Malls -
carry business, in which 100
percent FDI is permitted and it
can sell only to retailers and
Baby boomers
 (USA) has been a forerunner in the
Increased per capita spendin
evolution of retailing.

 Today, the organized players handle

85% of the retail trade in the US.
 Consumer preferences changed
 Wal-Mart alone handles 6% of the
total retail trade and the top 50
retailers control 36% of the
organized retail.

Dual income families
Retailers understood the needs of

the customers and realized

efficiencies through investments in Urbanization
Technology Infrastructure and

increased automobile penetration

Typical Customer Services
¯ Credit
¯ Delivery
¯ Alterations/ Installations
¯ Packaging/ gift wrapping
¯ Complaints/ Return handling
¯ Gift certificates
¯ Trade-ins
¯ Trial purchases
¯ Special sales
¯ Extended store hours
¯ Mail and phone orders
Understanding Retail Consumer
Behavior !!....
Any organization's growth

and survival in the highly

competitive market
depends on how well it
understands its customers
and responds to their
current and potential
In the retail industry,

understanding the retail

customers plays an
important role in the
success of a retail store..
Understanding Retail Consumer
Behavior !!..
The development of

technology and
globalization has led to a
new era of consumerism
where retailers focus
completely on meeting the
needs, wants and priorities
of the consumer.

To understand the nature

of the retail market, a

retailer should analyze
various factors like
population, demography,
and the geography of a
particular area
Understanding Retail Consumer
Behavior !!
Population analysis helps
the retailer to understand
potential markets.
The population of an area

is based on various
parameters, like
immigration ( migrate) and
departure) rates, race and
Immigration and

emigration rates help the

retailer to understand the
actual population of a
particular area.
Race and ethnicity help the

retailer to understand the

choices and buying
Understanding Retail Consumer
Behavior !!
 The urban consumer.
Getting exposed to
international lifestyles.
 Inclined to acquiring assets.
More discerning and

demanding than ever.

No longer need based

shopping. Shopping is a family

 Changing mindset.
 Increasing tendency to spend.
 Greater levels of education.

Understanding Retail Consumer
Behavior !!
Under demographic

analysis, the retailer

classifies customers on the
basis of their age, sex,
education, income,
occupation, race,
nationality, etc. This allows
the retailer to understand
the customers in a better
way and customize its
products and service
Understanding Retail Consumer
Behavior !!
Geographic analysis allows

the retailers to understand

the buying population,
based on the total
population. Moreover, the
population is classified on
the basis of region - metro
and non – metro- which
helps the retailer to have
more accurate data about
the buying population
Thanks A Tonn !!