ASST PROF. JONLEN DESAASST PROF. JONLEN DESA

The word retail is derived from the French word retaillier, which means to cut a piece or to break bulk.

Retailing is a distribution function of selling goods to the ultimate customer.

It occupies an important place in the economy. Retailing consists of selling merchandise from a retail

store directly to the customers in small quantities by a retailer.

Retailing is the final step in the distribution process. Retail is the first point of customer contact.

A retailer sells goods to final consumers. These consumers may be individual or institutional

consumers. A retailer purchases goods directly from the manufacturer

or wholesaler and then sells it to the customers in smaller lots.

The place where he sells his merchandise is known as retail store or retail outlet.

These retail stores may be located in residential areas, streets, malls etc.

Types of products offered

Direct interaction with customers. Customer service plays a vital role in the success of

retail business. Location & layout are critical factors in retail business. Sales promotions are offered at this point. Offers employment opportunities Retail outlets are more than any other form of business. Last link in the distribution channel Retailers buy goods in large quantities and sell in small

quantities.

Offers wide variety of products to meet customers needs. Provides utility to the customers. Serves as a marketing intermediary (Middleman/Link). Serves the manufacturer by distributing his products to

customers. Provides valuable information to the customers. Advertises the products. Offers services Buying & Assembling of goods Storage function

Organized retail vs. Unorganized retails Emergence of nuclear family concept Changing age profile Increased disposable income New business opportunities FDI in retail Fast changing Indian consumer Availability of skilled labour E-Commerce Increased credit friendliness Socio-Economic Factors

The concept of product life cycle is also applicable to retail organizations.

This is because retail organizations pass through identifiable stages of innovation, development, maturity and decline.

The ‘Retail Life Cycle’ is a theory about the change through time of the retailing outlets.

It is s-shaped

Multichannel retailing is when a company provides numerous ways for customers to purchase goods and services.

Multi-channel retailing is a marketing strategy that offers customers a choice of ways to buy products.

A true multi-channel strategy covers purchases from a store, purchases from a website, telephone ordering, mail orders, interactive television and comparison shopping sites.

It includes multiple ways of interacting and selling to customers.

Makes use of multiple channels. Multichannel retailing is a way to build a brand and

reach a lot of consumers. Main aim is to maximize revenue and customer

loyalty by offering them choice and customers.

Flexibility for customers during purchase & payment 24 hours access Higher sales and profits for the retailer Competitive advantage More Convenience to the customers Better interaction with customers Builds customer loyalty

Evolution: Barter system, weekly fairs (Melas), Kirana Stores, Khadi outlets and now supermarkets, specialty stores, shopping malls etc.

India is known as the nation of shops. After agriculture, retail is the 2nd largest employer. Retailing in India is one of the pillars of the Indian

economy, accounting for 22% of its GDP. Indian retail market is estimated to be US$ 500 billion and

one of the top 5 retail markets in the world. It is one of the fastest growing retail markets in the world. The Indian retail sector is divided into the organized and

unorganized retail sector.

There are around 14 millions shops in various parts of India In 2015, the organized retail sector was amounted at 3000

million. Most significant growth period was between 2000-2006,

when the revenues increased by 93.5%. Majority of the revenue came from the sale of clothes,

textiles, fashion accessories, mobiles, durable products, food and grocery items, footwear, jewelry, books, music and toys.

Organized retailing is mostly present in the metro cities. The organized retail sector has a share of just 3% in the total

revenue generated by the Indian retail sector.

The unorganized retail sector contributes to around 97% of the total retail revenue.

Mostly includes kirana stores, melas and other small shops in residential areas.

The organized sector in USA is around 15%, while in India it is 97%.

The unorganized sector dominates the India retail sector.

TOP 10 PLAYERS IN RETAILING BUSINESS

CLASSIFICATION OF RETAIL SECTOR IN INDIA

Pantaloon Retail K Raheja Group Tata Group RPG Group Land Mark Group Piramal Group Subiksha Bharati- Walmart Reliance AV Birla Group

Food Retailers Health and beauty Products Clothing and Footwear Home Furniture & Household

goods Durable goods Electronic Products Leisure & Personal Goods

SEGMENTSEGMENT COMPOSITIONCOMPOSITION SIZESIZE KEY PLAYERSKEY PLAYERS1. Food & Grocery

Fast food centers, restaurants, catering services, fresh groceries, dry groceries, packaged foods.

6,42,200 crores Food Bazaar, Subiksha, Spensers, Nilgiris, Reliance Fresh

2. Clothing & Textiles

Readymade garments. Fabrics, apparels and all wears

1,13,500 crores Raymond, Park Avenue, Arvind Brands, Century Textiles.

3. Consumer Durables

TVs, Fridge, ACs, Microwaves etc

41,500 crores Videocon, Onida, LG, Sony etc

4. Footwear Shoes, Boots, Slippers for all.

13750 crores Bata, Metro, Adidas, Reebok, Nike

5. Jewellery Jewellery, Diamonds, Gemstones

52000 crores Tanishq, Gili

6. Books, Music & Gifts

Books, CDs, instruments & Gifts

11,500 crores Landmark, Crossword

India is an attractive hub for FDIs, particularly in the retail sector.

FDI up to 100% is allowed for e-commerce activities. Entry modes into Indian market are franchising, licensing

and joint ventures. FDI in the Indian retail sector is still debatable. Up to 2011, the Indian Govt denied FDI in multi brand

retailing, forbidding foreign groups from ownership in any form of retail outlets.

Even single brand retailing was restricted to 51% ownership.

In November 2011, India's Central Govt announced retail reforms for both multi-brand stores and single-brand stores.

This market paved the way for retail innovation and competition among single and multi brand retailers.

However, there was a lot of opposition both for and against this reform, thus placing the reform on hold till a consensus could be reached.

In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India.

Indian government continues the hold on retail reforms for multi-brand stores.

In June 2012, IKEA announced it had applied for permission to invest $1.9 billion in India and set up 25 retail stores.

On 14 September 2012, the government of India announced the opening of FDI in multi-brand retail, subject to approvals by individual states.

On 20 September 2012, the Government of India formally notified the FDI reforms for single and multi brand retail, thereby making it effective under Indian law

On 7 December 2012, the Government of India allowed 51% FDI in multi-brand retail in India.

The government managed to get the approval of multi-brand retail in the parliament despite heavy uproar from the opposition.

 Some states will allow foreign supermarkets like Walmart, Tesco and Carrefour to open while other states will not.

Advantages & Disadvantages of FDI in retailAdvantages & Disadvantages of FDI in retail

Retail has played a major role in the economic development of many nations.

Countries like USA, UK, Mexico, China, Thailand, Dubai, Singapore, Malaysia have been assisted by the retail sector.

Retail industry employs more than 22 million Americans. Walmart is the world’s largest and the world’s most

successful retailer. 80% of all retail sales in USA, is by the organized retailers,

while in Europe it is 70%. However, economic recessions slows down the growth of

the retail sector.

The world of retail is changing fast. Global retailers need to study customer behavior and their

changing needs and also gain competitive advantage over its rivals.

Franchising & Joint ventures are emerging modes of entry. China & India are the emerging marketplaces in Asia. According to a Global Emerging Markets Survey; India,

Russia & Ukraine are the most active emerging retail markets, with India having a share of 27%.

Digitized retailing is the way of the future. Walmart, Carrefour, Home Depot are the top 3 key players

in the world of retail.