Unit 4: Introduction to Retailing

Introduction to Retailing

Retailing is the process of selling goods and services directly to consumers for personal use. It involves various activities such as buying, storing, and selling products through different channels like physical stores, e-commerce, and direct selling.

Key Features of Retailing

• Direct Interaction with consumers
• Small quantity sales
• Multiple sales channels (offline and online)
• Creates utility (place, time, possession)

Examples of Retailing

• Supermarkets (Big Bazaar, Reliance Fresh)
• Department Stores (Shoppers Stop, Lifestyle)
• Online Retailers (Amazon, Flipkart)
• Convenience Stores (7-Eleven, More)
• Specialty Stores (Nike, Apple Store)

Factors Influencing Retailing

Retailing is influenced by multiple factors, including customer behavior, economic conditions, technology, and competition.

Factors Influencing Retailing

Strategic Retail Planning Process

The Strategic Retail Planning Process helps retailers design and implement effective strategies for growth and profitability.

Steps in Strategic Retail Planning

• Define Business Mission – Identify purpose and goals. Example: DMart’s mission is to provide quality products at low prices.
• Conduct Situational Analysis – Analyze market trends, competition, and consumer behavior. Example: Reliance Retail studies changing consumer preferences for online shopping.
• Identify Target Market – Define customer segments. Example: Big Bazaar targets middle-class families.
• Set Objectives and Strategies – Develop pricing, marketing, and expansion plans. Example: Myntra focuses on personalized fashion recommendations.
• Develop Retail Mix – Product assortment, pricing, promotion, store layout, etc. Example: Decathlon provides a wide range of affordable sports gear.
• Implement Strategy – Execute the retail plan. Example: IKEA expands in India with affordable home furniture.
• Evaluate and Control – Measure success through KPIs. Example: Amazon tracks sales, customer retention, and delivery performance.

Retail Organization

A retail organization refers to the structure, roles, and responsibilities within a retail business.

Types of Retail Organizations

Retail Organizational Structure

A typical retail organization has the following hierarchy

📌 Top Management (CEO, CFO) → 📌 Middle Management (Store Managers, Department Heads) → 📌 Operational Staff (Cashiers, Sales Executives)

Retail Models and Theory of Retail Development

Retail models explain how retail businesses operate, grow, and adapt to market conditions.

Retail Models

Theories of Retail Development

Modern Retail Formats in India

Retailing in India has evolved from traditional small stores to large, organized formats.

Modern Retail Formats in India

Retailing is a dynamic industry influenced by consumer behavior, technology, and competition. Modern retail formats, strategic planning, and evolving retail theories shape the sector's growth in India. With digital transformation, omnichannel retailing is becoming the future

Store Location & Site Selection

Store location and site selection play a crucial role in a retail business's success. A good location ensures high foot traffic, easy accessibility, and proximity to the target audience.

Key Factors for Store Location & Site Selection

• Customer Accessibility – Near residential or commercial areas.
• Competition – Presence of other retailers in the area.
• Visibility & Traffic Flow – High visibility for better brand recognition.
• Affordability – Cost of land or rent should be feasible.

Trading Area Analysis

A Trading Area is the geographical area from which a retailer attracts its customers. It is divided into three zones

Trading Area Zones

Methods for Trading Area Analysis

• Customer Spotting – Tracking customer locations using surveys or loyalty cards.
• GIS (Geographic Information System) – Mapping customer demographics and behavior.
• Traffic Flow Analysis – Studying foot traffic and vehicle movement.
• Competitive Mapping – Identifying competing stores in the area.

Types of Store Locations

Choosing the right location depends on the business model, target customers, and market conditions.

Types of Store Locations

Key Considerations for Choosing a Location

• Customer demographics – Income levels, preferences.
• Competitor presence – Saturation of similar businesses.
• Accessibility & Parking – Availability of transport and parking space.

Location & Site Evaluation

Once a general location is selected, the specific site must be evaluated for feasibility.

Key Factors for Site Evaluation

• Population Density & Target Market Fit Example: A luxury store in an upscale neighborhood (e.g., South Delhi).
• Traffic Patterns & Accessibility Example: High visibility on highways increases brand exposure (e.g., Decathlon stores).
• Competitor Proximity Example: Multiple clothing stores in one mall create a shopping hub.
• Land & Rental Costs Example: Renting a space in Mumbai’s Bandra area is costly but attracts premium customers.
• Infrastructure & Security Example: Retailers prefer well-maintained areas with low crime rates.

Site Evaluation Checklist

Objectives of Good Store Design

A well-designed store improves customer experience, enhances brand image, and increases sales.

Key Objectives of Store Design

• Enhance Customer Experience Example: Apple Stores have open spaces for hands-on product experience.
• Improve Product Visibility Example: Supermarkets place daily essentials at the back to encourage exploration.
• Efficient Space Utilization Example: IKEA uses a warehouse-style layout to showcase all products.
• Create a Unique Brand Identity Example: Starbucks maintains consistent design aesthetics across all stores.
• Ensure Safety & Accessibility Example: Wider aisles for easy movement and wheelchair accessibility in retail stores.

Store Design Elements

Choosing the right store location and site is a strategic decision that affects foot traffic, brand visibility, and sales. Trading area analysis helps in identifying potential customer bases, while location evaluation ensures the best possible site selection. Lastly, a well-planned store design enhances customer experience and boosts revenue.