Retailing is a convenient, convincing and comfortable method of selling goods and services. Retailing, though as old as business, trade and commerce has now taken new forms and shapes. This is because of new management techniques, marketing techniques and also due to ever changing and dynamic consumer psychology.
What is retailing:
Retailing is one area of the broader term, e-commerce. Retailing is buying and selling both goods and consumer services. With more number of educated and literate consumers entering the economy and market, the need for reading the pulse of the consumers has become very essential.
Retail marketing is undergoing radical restructuring. This is because of increase in gross domestic product, increase in per capita income, increase in purchasing power and also the ever changing tastes and preferences of the people. The entry of plastic money, ATMs, credit cards and debit cards and all other consumer finances, the taste for the branded goods also added for the evolution of retail marketing.
Retail marketing is not just buying and selling but also rendering all other personalized consumer services. With the RM picking up it has given a new look for various fast moving capital goods (FMCG) goods. This not only increased the demand for various goods in the market but also made retail marketing the second largest employment area, the first being agriculture.
Definition and Scope of Retailing:
Retail Industry, one of the fastest changing and vibrant industries in the world, has contributed to the economic growth of many countries. The term 'retail' is derived from the French word retailer which means 'to cut a piece off or to break bulk'. In simple terms, it implies a first-hand transaction with the customer.
Retailing can be defined as the buying and selling of goods and services. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable.
Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today.
Types of Retail Operations:
Retail operations enable a store to function smoothly without any hindrances. The significant types of retail operations consist of:
- Department store
- Specialty store
- Discount/Mass Merchandisers
- Warehouse/Wholesale clubs
- Factory outlet
Retail Management System targets small and midsize retailers seeking to automate their stores. The package runs on personal computers to manage a range of store operations and customer marketing tasks, including point of sale; operations; inventory control and tracking; pricing; sales and promotions; customer management and marketing; employee management; customized reports; and information security.
The Emerging Sectors in Retailing:
Retailing, one of the largest sectors in the global economy, is going through a transition phase not only in India but the world over. For a long time, the corner grocery store was the only choice available to the consumer, especially in the urban areas. This is slowly giving way to international formats of retailing. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar), convenience stores and fast-food chains.
It is the non-food segment, however that foray has been made into a variety of new sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, MusicWorld, Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo).
The emergence of new sectors has been accompanied by changes in existing formats as well as the beginning of new formats:
- Large supermarkets, typically 3,500-5,000 sq. ft.
- Mini supermarkets, typically 1,000-2,000 sq. ft.
- Convenience stores, typically 750-1,000sq. ft.
- Discount/shopping list grocer
The traditional grocers, by introducing self-service formats as well as value-added services such as credit and home delivery, have tried to redefine themselves. However, the boom in retailing has been confined primarily to the urban markets in the country. Even there, large chunks are yet to feel the impact of organised retailing. There are two primary reasons for this. First, the modern retailer is yet to feel the saturation' effect in the urban market and has, therefore, probably not looked at the other markets as seriously. Second, the modern retailing trend, despite its cost-effectiveness, has come to be identified with lifestyles.
In order to appeal to all classes of the society, retail stores would have to identify with different lifestyles. In a sense, this trend is already visible with the emergence of stores with an essentially `value for money' image. The attractiveness of the other stores actually appeals to the existing affluent class as well as those who aspire for to be part of this class. Hence, one can assume that the retailing revolution is emerging along the lines of the economic evolution of society
Theories of structural changes of retailing:
The evolution of RM has taken a fantastic transition from traditional methods to modern thinking. Starting as primary or traditional retailing with melas, fairs, jataras, weekly bazaars, rural fairs to mom and pop shop kirana stores the journey further reached to public distribution systems ( PDS) Khadi outlets, co- operative stores and finally reached the level of shopping malls , bazaars, super bazaars and special bazaars.
Traditional- melas, Fairs, weekly Bazaars, Rural fairs.
Indegenous- mom and pop, kirana stores Neighbor stores.
Contemporary- PDS, Khadi outlets, co-operative stores
Modern Retailing- shopping malls, Bazaars, Super Bazaars, Special bazaars.
Retail store operations:
When retail-marketing space is a best shopping zone for the consumers, it is quite challenging to the businessman. It has to ensure not only product availability but also make the shopping more creative and pleasurable. RM has to take care of various areas like,
- Store administration and management
- Inventory and stock management
- Managing of receipts
- Theft management
- Customer service
- Sales promotion
- Employee morale
RM is once again a wonderful economic activity that creates a win win situation. It brings not only the success of the businessman but also the success of both consumer and the employees. This is possible only if there is product and price satisfaction.
1. Store administration and management- this involves cleanliness, discipline, proper documentation, no objection certification for various products and skilful management of products and personnel.
Inventory management- it becomes the duty of the retail manager to check day to day and time to time the stock so as to ensure the product is made available at the counters. Not only the expected product availability has to be maintained but also the quality and shelf life has to be guaranteed. Inventory has to be evaluated correctly and receipts have to be properly maintained. With retail marketing shopping has taken a trendy and pleasurable affair. With all these changes customer service has become the most important service to be rendered in the marketing field. The customer has to be given maximum possible choice with a blend of perfect sales promotion from the side of the retailer. So the overall picture of retail stores promotion has become a exclusive area of management.
All other 5 points to be detailed
Characteristics and trends in retailing
- Interaction with the end consumers
- It enhances the volume of sales but the monetary value is less
- Customer service plays a vital role
- There is a tendency for automatic sales promotion
- With more outlets retail marketing creates visibility
- Location and layout plays a vital role.
- Creates employment opportunities to all age groups, gender , irrespective of qualification and religion.
- Generates job opportunities in flexi timings.
- Retail marketing creates a place, time and possession utility for a product.
History of Retail Management:
Retail marketing started from Mediterranean regions and spread to Egypt and Babylonia. For over 2000 years Retail marketing flourished in Rome. After the destruction of Roman Empire retailing spread across the globe and Romans are the first ones to conduct sophisticated retailing. As sophistication and human relations go hand in hand Retail marketing has got lot to do with the psychology of human behaviour. So retail marketing can be conveniently called has psychology of marketing.
Trends in retailing: Retail Marketing is largely based on three Vs- Value, Volume and Variety. Though the Retail marketing had the quantitative development across the globe, the quality is no doubt being compromised with the Globalization.International quality products are competing with indiginised products. This variation in size, quality and competition has made Indian market face ridiculous growth. As the competition is between international and indiginised products, its taking a great toll on both the sectors.
With the big giants entering the market, there is a grave competition in the Indian Economy. After 1995 the great companies like Food world, Reliance, Planet M, Music World and many others also entered the retail market. The visibility and the craze to remain in the forefront of business has made many of the giant companies to move from manufacturing to front line retailing. With this Retailing has become prominent giving world class shopping experience to the customers under one roof.
Indian retailing, thus enjoys many unique features, is still done in a primitive way. Barring a few exceptions, Indian retailers, particularly FMCG retailers, are not in a position to implement world-class practices of supply chain management. The concepts of Quick Response or Efficient Consumer Response are unheard of in Indian retailing. The two bases of modern retailing management, the Electronic Data Interface and a mutually respectable partnership among retailers and suppliers (the manufacturers) are missing to a great extent in Indian context. Also, Indian marketing channel members are performing some unnecessary tasks, which makes the channel structure heavy and inefficient. Though these inefficiencies are observed in all retailing irrespective of industry, the symptoms are more evident in Indian FMCG retailing. Inefficiency in retailing leads to lower profitability of the retailers and lower service outputs for the consumers.
Ways and means to strengthen the position of the retailing industry, doing away with the causes for the inefficiencies, therefore, are to be taken up in an urgent manner. Such measures may include establishment of retailers co-operatives, merger and buy-out, use of technology to the greatest possible extent, setting up of nonstore retailing centers and increase in franchisee network.
The Author is having 15 years of career experience as Lecturer, in Hyderabad, Mumbai and Chennai. Currently she is working as a facilitator and a student counselor at Neo Rosary High school.