The term retail organisation refers to the basic format or structure of a retail business designed to cater to the needs of the end customer

A Retail unit could be owned by

Manufacturer

Wholesaler

Independent Retailer

Consumer

Cooperative Society

Government

Franchiser & Franchisee

a) Nature of Ownership:

Sole Proprietorship

Partnership

Joint Venture

Limited Liability Company (Private &Public L.L.C).

b) Operational Structure:

Independent trader(one retail outlet operation)

Multiple or Chain store

Franchising

Consumer co-operative.

c) Length & Depth of Merchandise:

Offer a wide range of goods

Dealing in specific product category

d) Nature of Service:

For eg: Self-service, and providing following services such

a delivery, credit, gift wrapping, repairs, etc.

e) Pricing Policy:

Some retail businesses choose,

Low price emphasis, while some offer

Attractive attribute such as convenient location, premium

merchandise mix or distinctive image.

f) Retail Location:

Classified according to their store’s geographic location.

Out-of-town locations, whilst others

Locate in ‘cluster’ locations in downtown centers

g) Customer Interaction:

Retail stores facilitating face-to-face contacts.

Non-store retailing operations(mail order catalogues,

telephone selling, vending machines, door-to-door selling or

mobile vendors.)

1. Sole Proprietorship:

The characteristics of this retail format are:

It’s easy to form, less expensive to organize and the

proprietors have full control

The income generated reaches the proprietor and he can

make the ultimate decision to keep it or reinvest in business

The business is easy to dissolve, if desired

Their business and personal assets are at risk; due to

unlimited liability, they are also legally responsible for all

the debts.

Often limited to using funds from personal savings or

consumer loans, and

May have a hard time attracting high-caliber employees

The characteristics of this retail format are

Partnerships are relatively easy to establish and with more than one owner, the ability to raise funds may be increased.

Prospective employees may be attracted to the business if given the incentive to become a partner and the business usually will benefit from partners who have complementary skills.

Partners are jointly and individually liable for the actions of the other partners.

Since decisions and profits are shared, disagreements can occur.

A joint venture is not well defined in the law.

Unless incorporated or established as a firm as evidenced by

a deed, joint ventures may be taxed like association of persons,

sometimes at maximum marginal rates.

It acts like a general partnership, but is clearly for a limited

period of time or a single project.

LLC’s must not have more than two of the four characteristics

that define corporations i.e.

Limited liability to the extent of assets; continuity of

life; centralization of management; and free

transferability of ownership interests.

It is designed to provide the limited liability features of a

corporation, tax efficiencies and operational flexibility of a

partnership. Yet formation is more complex and formal than

that of a general partnership.

1. Independent Trader:

Generally operates one outlet and offers personalized

service, a convenient location and close customer contact.

Roughly 98% of all the retail businesses in India, are

managed and run by independents, including barber shops,

dry cleaners, furniture stores,bookshops,LPG Gas Agencies

and neighborhood stores.

This is due to the fact that into retailing is easy and it

requires low investment and little technical knowledge.

This obviously results in a high degree of competition..

Most independent retailers fail because of the ease of

entry, poor management skills and inadequate resources.

It involves common ownership of multiple units. In such

units, the purchasing and decision making are centralized. It

includes specialization, standardization and elaborate control -

systems.

Chain stores have been successful, mainly because they have

the opportunity to take advantage of “economies of scale” in

buying and selling goods.

Examples : Shoppers stop; West side and IOC, convenience

stores at select petrol filling stations.

2. Multiple Or Chain Store

Is a contractual arrangement between a “franchiser”

and a “franchisee”.

It is a certain form of business under an established

name and according to a specific set of rules.

In exchange for fees, royalties and a share of the

profits, the franchiser offers assistance and very often

supplies as well.

Examples; McDonalds, Pizza Hut and Nirulas.

A retail cooperative is a group of independent

retailers, that have combined their financial resources

and their expertise in order to effectively control their

wholesaling needs.

They share purchases, storage, shopping facilities,

advertising planning and other functions. .

Example : Amul

It refers to department in a retail store that are rented

to an outside party.

Usually this is done in case of department and

speciality stores and also at times, in discount stores.

The proprietor of a leased department is usually

responsible for all aspects of its business and normally

pays the store a percentage of sales as rent.

Example : store beauty salon,banks,watch repair

Differentiate themselves on the basis of the range and variety

of Merchandise they maintain in their store.

Wide range of goods

Product category with a minimum range of Merchandise

within that product category

Variety of merchandise mix can be classified as follows:

Departmental stores

Discount Stores

Specialty Stores

Supermarket and Hypermarkets

Departmental stores:

A large retail store organized into number of departments

offering a broad variety and depth of merchandise;

commonly part of a retail chain Ebony, Globus, Lifestyle,

Pantaloon, Shoppers Stop and

Westside

Discount Stores:

Retailers offering a broad variety of merchandise mix,

limited or no service, and low prices. Subhiksha, Margin

Free market and outside India, Wal-Mart is a classic

example of the most successful retailer operating as a

discount centre.

Specialty Stores:

Complementary product categories and extend a high level

of service to their customers.

For e.g.: Vivek’s retailing consumer durables in Chennai, shopper’s store housing planet m.

Supermarket and Hypermarkets:

Hypermarkets are characterized by large store size, low operating costs and margins, low prices and comprehensive

range of merchandise.

For e.g. : Big Bazaar ,RPG owned Giant Hypermarket.

Successful international hypermarket chains include Carrefour of France and Continent of South Africa.

Retailers are classified on the basis of level and kind of services extended by them to their customer

These retail outlets have been converted to or built as self-services units, and are providing services such as delivery, credit, gift-wrapping, repairs, etc

Low price rather than the service element of their retailing mix

They will generate business on the basis of some other attribute such as convenient location, premium merchandise mix or distinctive image

1. Retailers at Freestanding location:

Retailers located at site, which is not connected

to other retailers and therefore they depends on

its own drawing power and promotion to attract

customers, classified as neighborhood or

highway stores.

For e.g. : McDonalds outlet in Delhi- Ludhiana highway.

Retailers in Business Associated location: who located their store where a group of retail outlets offering a variety of merchandise, work together to attract customers to their retail area, but also compete against each other for the same customers, classified as unplanned business districts and planned shopping centres.

For e.g. :

Trichur Round Market Place in Kerala covering garments, grocery, jewelry, shoes, home products, confectioneries etc can describe a planned business district .

Traditional independent retailers or chain stores particularly prefer specialized markets .

For e.g.:

The Chowk area in Lucknow famous for its food and cotton embroidery cloth materials.

Retailers at airports are mostly comprising of duty-free shops, newsstands and book stores but now also seen opening food retail chains like cafe coffee day etc.

Retail units can be classified into two groups on the basis of

the nature of interaction between retailer and customers

namely store retailers and nonstore retailers.

They operate from fixed point-of-sale location to attract a high volume of walk-in customers

Mass media ads to attract consumers

It serve business and institutional clients

It provide after sales services, such as repair , alterations and installation

Electronic Retailing- It is also called e-tailing and internet

retailing is a retail format in which the retailers communicate

with customers and offer products and services for sale on the

internet.

Catalog Retailing-It is a non-store retail format in which the

retail offering is communicated to a customer through a catalog

Direct-Mail Retailing-It is a non store retail in which the

offering is communicated through letters and brochures.

Direct selling : It is a retail format in which a salesperson, frequently an independent businessperson, contacts a customer directly in a convenient location either at the customers house or at work and demonstrates merchandise benefits, takes an order and delivers the merchandise to the customer.

TV Shopping: It is a retail format in which customers watch a TV program demonstrating merchandise and then place orders for the merchandise by telephone

Vending machine retailing: It is a non-store format in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card.