RETAILING

INTRODUCTION
Which business considers every individual as a customer? Which business accounts
for 10% labour force worldwide and still the single largest industry in most nations?
Retailing. When goods are put in the hands of consumers, retailers obtain revenue
and wholesalers, distributors, manufacturers who make the goods.
Retail goods are traditionally divided into durable goods, like furniture, cars, other
appliances which is expected to last at least five years and non-durable goods such
as food, clothing and others which normally a person sees across sales counters of
stores or at weekly markets.
Retail industry provides immense opportunities to entrepreneurs, workforce as sales
people and clerks, also for people who are interested in determining what goods will
be sold, getting the goods at right place, right time, managing operations, finances,
administration of retail companies.
MEANING/DEFINITION
Retailing is defined as a set of activities or steps used to sell a product or a service
to consumers for their personal use or family use. It is responsible for matching
individual demands of the consumer with the supplies of manufacturers.
According to David Gilbert Any business that directs its marketing effort towards
satisfying the final consumer based upon the organization of selling goods and
services as a means of distribution.
The word retail is derived from the French word retaillier, meaning to cut a
piece of or to break bulk.
Retailing also includes selling through mail, internet, door-to-door visits any
channel that could be used to approach consumers. E.g when manufacturers like
Dell Computers sell directly to the consumer, they also become the retailer.
Retailer is a person, agent, agency, company or organization which is
instrumental in reaching the goods, services to the ultimate consumer. They
perform activities such as anticipating customers wants, developing assortments of
products, acquiring market information, financing.
Factors influencing Retailing
1. Growth of middle class consumers:
In India the number of middle class consumer is growing rapidly. With rising
consumer demand and greater disposable income has given opportunity of
retail industry to grow and prosper. They expect quality products at decent
prices. Modern retailers offer a wide range of products and value added
services to the customers. Hence this has resulted into growth of organised
retailing in India.
Growing consumerism would be a key driver for organized retail in India.
Rising incomes and improvements in infrastructure are enlarging consumer
markets and accelerating the convergence (meeting) of consumer tastes.
2. Increase in the number of working women:
Today the urban women are literate and qualified. They have to maintain a
balance between home and work. The purchasing habit of the working
women is different from the home maker. They do not have sufficient time for

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leisure and they expect everything under one roof. They prefer one-stop
shopping Modern retail outlets therefore offers one store retailing.
Value for money:
Organized retail deals in high volume and are able to enjoy economies of
large scale production and distribution. They eliminate intermediaries in
distribution channel. Organized retailers offer quality products at reasonable
prices. Example: Big Bazaar and Subhiksha. Opportunity for profit attracts
more and more new business groups for entering in to this sector.
Emerging rural market:
Today the rural market in India is facing stiff competition in retail sector also.
The rural market in India is fast emerging as the rural consumers are
becoming quality conscious. Thus due to huge potential in rural retailing
organised retailers are developing new products and strategies to satisfy and
serve rural customers. In India, Retail industry is proving the countrys largest
source of employment after agriculture, which has the deepest penetration
into rural India.
Entry of corporate sector:
Large business tycoons such as Tatas, Birlas, and Reliance etc. have entered
the retail sector. They are in a position to provide quality products and
entertainment. As the corporate the Piramals, the Tatas, the Rahejas, ITC,
S.Kumars, RPG Enterprises, and mega retailers- Crosswords, Shoppers Stop,
and Pantaloons race to revolutionize the retailing sector.
Entry of foreign retailers:
Indian retail sector is catching the interest of foreign retailers. Due to
liberalisation multinationals have entered out country through joint ventures
and franchising. This further is responsible for boosting organised retailing.
Technological impact:
Technology is one of the dynamic factors responsible for the growth of
organised retailing. Introduction of computerization, electronic media and
marketing information system have changed the face of retailing. Organized
retailing in India has a huge scope because of the vast market and the
growing consciousness of the consumer about product quality and services.
One of the major technological innovations in organised retailing has been
the introduction of Bar Codes. With the increasing use of technology and
innovation retailers are selling their products online with the help of Internet.
Rise in income:
Increase in the literacy level has resulted into growth of income among the
population. Such growth has taken place not only in the cities but also in
towns and remote areas. As a result the increase in income has led to
increase in demand for better quality consumer goods. Rising income levels
and education have contributed to the evolution of new retail structure.
Today, people are willing to try new things and look different, which has
increased spending habits among consumer.
Media explosion:
There has been an explosion in media due to satellite television and internet.
Indian consumers are exposed to the lifestyle of countries. Their expectations

for quality products have risen and they are demanding more choice and
money value services and conveniences.
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Rise of consumerism:
With the emergence of consumerism, the retailer faces a more
knowledgeable and demanding consumer. As the business exist to satisfy
consumer needs, the growing consumer expectation has forced the retail
organizations to change their format of retail trade. Consumer demand,
convenience, comfort, time, location etc. are the important factors for the
growth of organised retailing in India.
Functions of Retailing
Retailers play a significant role as a conduit between manufacturers, wholesalers,
suppliers and consumers. In this context, they perform various functions like
sorting, breaking bulk, holding stock, as a channel of communication, storage,
advertising and certain additional services.
Sorting
Manufacturers usually make one or a variety of products and would like to sell their
entire inventory to a few buyers to redu7ce costs. Final consumers, in contrast,
prefer a large variety of goods and services to choose from and usually buy them in
small quantities. Retailers are able to balance the demands of both sides, by
collection an assortment of goods from different sources, buying them in sufficiently
large quantities and selling them to consumers in small units.
The above process is referred to as the sorting process. Through this process,
retailers undertake activities and perform functions that add to the value of the
products and services sold to the consumer. Supermarkets in the US offer, on and
average, 15,000 different items from 500 companies. Customers are able to choose
from a wide range of designs, sizes and brands from just one location. If each
manufacturer had a separate store for its own products, customers would have to
visit several stores to complete their shopping. While all retailers offer an
assortment, they specialize in types of assortment offered and the market to which
the offering is made. Westside provides clothing and accessories, while a chain like
Nilgiris specializes in food and bakery items. Shoppers Stop targets the elite urban
class, while Pantaloons is targeted at the middle class.
Breaking Bulk
Breaking bulk is another function performed by retailing. The word retailing is
derived from the French word retailer, meaning to cut a piece off. To reduce
transportation costs, manufacturers and wholesalers typically ship large cartons of
the product, which are then tailored by the retailers into smaller quantities to meet
individual consumption needs.
Holding Stock

Retailers also offer the service of holding stock for the manufacturers. Retailers
maintain an inventory that allows for instant availability of the product to the
consumers. It helps to keep prices stable and enables the manufacturer to regulate
production. Consumers can keep a small stock of products at home as they know
that this can be replenished by the retailer and can save on inventory carrying
costs.
Additional Services
Retailers ease the change in ownership of merchandise by providing services that
make it convenient to buy and use products. Providing product guarantees, aftersales service and dealing with consumer complaints are some of the services that
add value to the actual product at the retailers end. Retailers also offer credit and
hire-purchase facilities to the customers to enable them to buy a product now and
pay for it later. Retailers fill orders, promptly process, deliver and install products.
Salespeople are also employed by retailers to answer queries and provide additional
information about the displayed products. The display itself allows the consumer to
see and test products before actual purchase. Retail essentially completes
transactions with customers.
Channel of Communication
Retailers also act as the channel of communication and information between the
wholesalers or suppliers and the consumers. From advertisements, salespeople and
display, shoppers learn about the characteristics and features of a product or
services offered. Manufacturers, in their turn, learn of sales forecasts, delivery
delays, and customer complaints. The manufacturer can then modify defective or
unsatisfactory merchandise and services.
Transport and Advertising Functions
Small manufacturers can use retailers to provide assistance with transport, storage,
advertising and pre-payment of merchandise. This also works the other way round
in case the number of retailers is small. The number of functions performed by a
particular retailer has a direct relation to the percentage and volume of sales
needed to cover both their costs and profits.
Career Opportunity in Retailing
Retail industry is one of the fastest evolving industries in Industry. The Indian retail
industry is undergone drastic changes with the consumers looking at convenience
with multiplicity of choices under one roof. It generates huge employment
opportunities. This has changed the face of retailing in India. As the sector is
booming in India, a career in retail sector is promising a growth potential for the
ambitious youngsters. The candidates are trained in supply chain management,
finance management, marketing information, electronic retailing, marketing and

business communication, customer relationship etc. With rapidly expanding

departmental stores and huge shopping malls, plenty of job opportunities are
opening all over India. Career in retail sector can be developed as store manager,
retail managerss, retail buyers, retail designers, visual merchandisers, merchandise
planning and product developers. Several institutes in India including Birla Institute
of Management Technology (BIMTECH) in Greater Noida, RPG Institute of Retail
Management, Indian Retail School offer various courses associated with retail
management.
Many multinational companies have come forward in the retailing business. Reliance
Group, ITC Retail, Aditya Birla Group, Tata Groups Trent & Westside, Subhiksha,
Shoppers Stop, and Future Groups Big Bazaar & Pantaloons, Apparel Chains,
Raymonds, Arvind Brands, Lifestyle. International, Spencers etc. are some of the
top companies. The boom in retail industry has created many employment
opportunities; people from varied skills and talent are required in the industry.
These actions are expected to generate 10-15 million jobs over next few years. As a
career, retail management is a dynamic field. Career in retailing is becoming one of
the highly sought career options in India.
Some of the career options in retailing are:
1. Sales and related jobs:
Sales are the main aspect of retail industry. It is an important part of store
operations. The important duty of the sales staff is to sell the products to the
customers. Other than sales, the related job involves, sales associate, cashier
for receiving payments by cash, check, debit card, or credit card and
operating cash registers etc. The retail staff also discharges duties like
preparing displays, making deposits at cash office, taking inventory etc.
depending upon their working hours. The retail staff should be well equipped
with excellent communication skill. In a very short span of time retail
revolution has taken place.
2. Store manager:
A store manager is the person ultimately responsible for the day- to-day
operations or management of a retail store. All employees working in the
store report to the store manager. Store manager is responsible for managing
human resource, hiring team, indulging training and development
programmes, managing profit and loss of the store, banking, and handling
customer complaints.
3. Visual merchandiser:
Visual merchandising is the activity of promoting the sale of goods. Visual
merchandising is an art intended to increase sales. It is a tool to achieve
sales target. It is the art of displaying merchandise in such a manner that
appeals to the eyes of the customer. Visual merchandiser is responsible for
merchandising. Creativity is essential to be a good visual merchandiser.
Visual merchandising includes window displays, signs, interior displays etc. A

combination of colour and theme plays an important role in visual

merchandising.
4. Regional Sales Manager:
A regional sales manager reports to national sales manager. A regional sales
manager requires excellent interpersonal and communication skill. A Retail
Sales Manager is responsible for the day-to-day operations of a retail store.
They also must have computer skills and be patient with both employees and
customers. Retail Sales Managers must be able to motivate and organize
their employees. A retail sales manager must have obtained a degree in
marketing, business or communication. Regional managers are responsible
for a group of retail stores. They visit stores to observe performance and to
help solve problems. Regional managers report store performance to
company headquarters and make important decisions concerning employees.
5. Finance and Accounting:
A retail store requires well run financial department. A financial manager is
responsible for keeping the records of accounts of income, paying expenses,
maintaining financial records, cash flow control, banking etc. The financial
manager must be efficient enough to handle the risk of debts.
6. Human resources:
Human resource is one of the most important aspects in retail industry. This
aspect focus on recruiting right people for a particular job, because the
success of retail depends upon right sales force.

The HR function includes recruitment, selection, training and development

programmes, compensation and benefits etc. proper knowledge is require on
the part of HR manager to understand qualification and qualities to hire
efficient staff. HR function is in dealing with staff grievances and any
disciplinary matters.
7. Logistic:
The logistics process consists of the process of integration of several aspects
such as material handling, warehousing, information, transportation,
packaging and inventory. The logistics department is entrusted with the
responsibilities of ensuring that the entire process of logistics is maintained
and developed in accordance with the goals of the business at an economical
cost.
8. Marketing:
Marketing .department includes functions like advertising, sales promotion
and public relation. People with specialised knowledge, creativity etc are

required. Advertising managers direct a firms advertising and promotional

campaign. Marketing managers work with advertising and promotion
managers to promote the firms products and services.

Trends in Retailing
1. Shift from Unorganized to Organized Retailing:
Retailing in India is thoroughly unorganized. There is no supply chain
management perspective. The key factors that drive the growth of organized
retailing in India are higher disposable incomes, rising urbanization, growing
consumerism, nuclear family structure, growing number of educated and
employed women population.
2. Store Design:
Irrespective of the format, the biggest challenge for organized retailing is to
create an environment that pulls in people and makes them spend more time
in shopping and also increases the amount of impulse shopping.
3. Competition:
Competition is increasing between different types of retailers. Discount
stores, departmental stores, supermarkets, etc. all compete for the same
customers. The small independent retailers survive by providing personal
services to the customers.
4. New Form of Retailing:
Modem malls made their entry into India in the late 1990s, with the
establishment of Crossroads in Mumbai and Ansal Plaza in Delhi. Indias first
true shopping mall, Crossroadscomplete with food courts, recreation
facilities and large car parking spacewas inaugurated as late as 1999 in
Mumbai. Malls have given a new dimension to shopping experience.
5. Technology:
Technology today has become a competitive tool. It is the technology that
helps the organized retailer to score over the unorganized players, giving
both cost and service advantages. Technology has also made possible the
growth of non-store retailing.
6. Consumer Buying Behaviour:
In India, there are no uniform trends with respect to consumer buying
behaviour. There are visible differences in the shopping pattern of consumers
across income segments. Organized retailing has definitely made headway in
the upper class. However, even in this segment, items such as milk, fruits,
vegetables and a significant portion of through-the-month purchases seem
to be done at traditional outlets. Organized retail outlets seem to be
associated with branded items/special purchases. Organized retailing does
not seem to have made an impact on the lower class, except for curiosity
shopping.
7. Entertainment:

Modem retail formats provide a place for people to assemble, and a means of
entertainment, by providing facilities such as food courts, mini theatre,
childrens play spaces and coffee shops. These facilities help the customers
enjoy shopping.