Retailing is the process of selling goods and services directly to final consumers either for personal or non-business use.

The manufacturer, wholesaler or distributor or retailer directly selling goods and services to consumers comes under the preview of retailing. It does not matter how goods are sold that is either by telephone,internet,vending machine etc.

Retailing

Evolution of Retailing

The term retailing is derived from the old French word retailer meaning a piece of or to cut up

Retail

David Gilbert has defined retail as any business that directs its marketing efforts towards satisfying the final consumer based up on the organization of selling goods and services as a means of distribution.

Retailing
The retail sector in South-Asia is witnessing a major transformation in size,structure,growth and format. In India retail sector accounts for 10 % of the GDP and 8 % of the employment. According to KPMG the retail sector is estimated to be 17800 billion industry compared to 10800 billion in the year 2006.The share of MTOS in the retailing in India is 3.4 % and it is expected to grow significantly in the coming years as per FICCI report and the share of MTOS is expected to increase 30 % of the retail industry in the next few years.

Factors which fuels the development of Modern Retailing

a) Economic development b)Proportion of young people in employment c) Life-style of people d)Increase in the number of working of women e)Double income families Development of media Development of technology More disposable income

Retail Formats
a) Specialty stores-it is having only narrow product line. In other words in specialty stores b) Convenience store-small store in residential area, often open 24x7, limited line of high-turn over convenience product plus take out. c)Chain of Stores d)Franchise e) Departmental stores-several product lines will be there. (Eg:Shoppers Stop) f)Super Markets g)Hyper Markets h)Shopping Malls I) Factory/Seconds Outlet (Continuation in next page)

d) Discount store-Standard or specialty merchandise, low-price low-margin, high volume stores Eg: Margin free,Wal Mart e) Off-price retailer-Leftover goods, overturns irregular merchandise sold at less than retail. Factory outlets, independent off price retailers. . g) catalog showroom-Broad selection of high mark-up, fast moving, brand-name goods sold by catalog at discount.

The Important elements in retail mix include the following

Store design and display Customer service Communication mix elements Pricing method or strategy Merchandise planning and assortments Location

Product classification of retailing

Durable and Non-durable

Changes impacting retailing in India

The level of economic growth Improvement in standard of living Increase in population Improvement in the educational standard of the people Increase in the discretionary time of the consumers

Factors attracting global retailers to India

As a part of the research, AT Kearney conducted a voice of the global retailer survey in order to understand what thy consider as key success factors while expanding outside their home markets. The factors that will be considered are Country risk Market attractiveness Market saturation Time pressure

The characteristic of retailing are as follows

The interaction between the retailer and the customer is service oriented Retailers sell small amount of goods to customers on a frequent basis Retailers provide the consumers facilities like location, payment, credit and after sales service Retailers attempt pricing policy which is modified depending upon consumers demand, level of competition etc

Arranging an assortment of offerings Breaking quantity Holding stock Extending services

Other functions of retailing are as follows or activities performed by retailers

Basic facts of Retail industry in India

Retail sector divided into organized and unorganized Largest employer after agriculture Retail sector contributes 10 % of India's GDP 8 % of people are employed The retail sector is 17800 billion industry in 2006 compared to be 10800 in 2001

The Indian retail market is estimated to be 350 billion. Organized retail market estimated to be 8 billion The share of MTOS is 3.4 % and expected to be 30 % within few years Organized retailing accounts for 3-4 % Un-organized sector accounts for 96-97 % of GDP Organized retail sector expected to grow by 10 % by the end of 2010. 12 Million retail outlets in India

FDI in Retail sector in India

Foreign Entry in India

Franchise agreements

Fast food retailer Dominos entered India through master Pizza Hut entered

Cash and Carry wholesale trading

100% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers The wholesaler deals only with smaller retailers and not customer Metro AG of Germany was the first significant global player to enter India through this route

Strategic licensing agreements

SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd

Challenges faced by Indian Retail Industry

Shortage of talented professional (middle Level) FDI restrictions Labour Laws Lack of infrastructure Different tax rates Does not have industry status

Global Retail industry related facts

1) Worldwide retail sales are estimated to be around US $ 7 trillion 2) The top 200 largest retailers account for 30 % of the world wide demand 3) The money spend on household consumption has increased by 68% between 1980 and 1998. 4)As per UNDP Human Development Report states that the advertisement expenditure is increasing fast pointing fact that retail sector is in boom only. 5) Out of US $10 trillion US $ 6.6 trillion (two third) of American economy is consumer spending 6) Retail turn over in 2001 in European Union was almost 2000 billion and the trend is expected to continue. 7) Retail trade in Europe employs 15% of the European workforce 8) Three million firms and thirteen million workers are associated with retail sector in Europe.

Organized retailing in South Asian countries

Organized Retailing Un-Organized Retailing
Malaysia Thailand Philippines Indonesia South Korea China India 50% 40% 35% 25% 15% 20% 2% 50% 60 % 65% 75% 85% 80% 98%

There are six steps involved in the development of a retail strategy, they are as follows

1) Defining the business of the firm in terms of orientation towards a particular sector 2) Setting long term and short term objectives with regard to image and profitability 3) Identifying the target market towards which to direct efforts on the basis of customers characteristics and needs 4) Deciding the broad direction the company must take in the future 5) Implementing an integrated plan that include all the aspects of retailing such as pricing, location and channel decisions. 6) Evaluating and revising the plan depending up on the nature of internal and external environment.

Retail concept

Customer orientation-The retailer makes a clear study of the needs of the customer and attempt to satisfy the needs. Goal orientation-The retailer has clear cut goals and devises the strategies to achieve those goals. Value driven approach-The retailer offers good value to the consumer with merchandise having the price and quality appropriate for the target market Co-Ordinated effort-Every activity of the firm is aligned and designed to maximize its efficiency and deliver to the consumer.

International retailing (steps for expansion)

1) Quantification 2) Market assessment3) Cultural difference 4) Competition 5) Price 6) Gross margin Analysis 7) Regulatory issues 8) Logistics planning9) System integration 10) Head office and Company structure11) Performa development12) Entry strategy and location analysis 13) Implementation services