RM 4x

Retailing Introduction

  • Textbooks:

    • Retailing Management by Michael Levy, Barton A Weitz, Dhruv Grewal - McGraw Hill India, 9th Edition

    • Retail Management: A Strategic Approach by Barry Berman, Joe Evans, Patrali Chatterjee, and Ritu Srivastava - Pearson India, 13th Edition

What is Retailing?

  • Definition: Retailing comprises activities that add value to products and services for consumers’ personal or family use.

  • Retailer: A business selling products/services directly to consumers for personal use. The term originates from France, meaning "breaking bulk".

Retail Industry and Economy

  • Overview:

    • Retailing is the largest private industry.

    • It contributes over 8% to GDP in Western countries, surpassing finance and engineering sectors.

    • Major retailers make up over 50% of the Fortune 500 and around 25% of Asia's top 200 companies.

    • In developed countries, retail can account for up to 40% of the market share.

  • Significance: The retail sector's growth is propelled by the expanding service sector.

Retail Industry in India

  • Accounts for around 10% of India's GDP, with:

    • Organized retail contributing 15% of market share and expected to grow to 20%.

    • India is the 4th largest retail market globally.

  • Employment: Contributes approximately 8% of total employment.

  • Statistics (2022):

    • Expected retail market value: $844 billion.

    • Projected growth to reach $2 trillion by 2032.

Online Retail in India

  • E-commerce Trends (2022):

    • 7.8 million daily transactions, totaling $300 billion in digital transactions.

    • Anticipated growth in online shoppers to 500 million by 2030.

Examples of Retailers

  • Organized Retailers: Entities like Reliance, D Mart, and Star Bazaar.

  • Retailers and Wholesalers: Companies such as Office Depot and Home Depot serve both businesses and consumers.

  • Segregated Policies: Metro Cash and Carry only serves retailers in India.

Issues in Retailing

  • Key questions retailers face include:

    • Best methods to serve customers while making a profit?

    • How to differentiate in a competitive market?

    • Strategies to grow the company while retaining loyal customers?

  • Retailers must understand and apply core retailing principles through a systematic retail strategy.

Characteristics of Retailing

  • Direct interaction with end-users.

  • Unique promotional platform.

  • Smaller unit sales at retail level.

  • Location is crucial for retail success.

  • Retail services carry equal importance as core products.

  • Typically, a higher number of retail units compared to other value chain members.

Distribution Channels

  • Types of Distribution:

    • Exclusive: Limited retailers carrying specific brands in geographic areas.

    • Intensive: Maximizes retail partnerships to reach as many retailers as possible.

    • Selective: Balances the number of retailers to distribute products.