Retail Management (English Version)-munotes

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RETAIL MANAGEMENT - I
Unit Structure :
1.0 Objectives
1.1 Introduction
1.2 Retailing
1.3 Summary
1.4 Exercise
1.0 OBJECTIVES
 Introduce students with the basic concepts of retail management and
the latest developments in retail industry in the Indian c ontext
 Develop knowledge of contemporary retail management issues at the
strategic level
 Establish an academic relationship to the above through the
application of retailing theory and research
1.1 INTRODUCTION
The final step in the marketing distributio n chain is retailing. The French
verb " retailer ," from which the English word "retail" has been derived,
implies "to cut a piece" or "to break bulk." It includes every step of the
product and service sales process. Retailing is the second -largest industry
in the world and is one with intense competition. Its capacity to give
customers more freedom of choice, accessibility to a wide range of goods,
and access to numerous services is what accounts for its appeal. The
typical size of a retail store varies sign ificantly between nations, mostly
dependent on the degree of economic development of that nation.
Retail management refers to the many procedures that enable customers to
purchase the necessary goods from retail establishments for their intended
uses. All the steps necessary to attract customers to the store and meet
their shopping demands are included in retail management. Retail
management guarantees that clients have a pleasant shopping experience
and that they leave the store smiling. Simply put, retail management
makes it easier for people to shop.
One-sixth of the labour force is employed by the largest private industry in
the world, retail, which accounts for 8% of the GDP. The retail commerce
is anticipated to be worth 7 trillion US dollars. The reta il industry has seen
a significant transformation recently, and many nations have only thrived
because of retailing. As far as India is concerned, it contributes 14% of our
GDP and is the second largest industry in terms of the number of people it munotes.in

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2 employs, behind agriculture. India is currently ranked second among
Asian nations and the fifth most desirable retail destination worldwide,
according to a poll. It is listed as the seventh most alluring retail location
globally.
1.2 RETAILING
MEANING AND DEFINITI ON
It is most typical way of conducting business It entails selling goods in
modest quantities to customers directly from a fixed location (a retail
store). These customers could be business or private buyers. Retailers buy
products or items directly from manufacturers in bulk before reselling it in
smaller amounts. Shops may be found on neighborhood streets, colony
streets, community centers, or contemporary shopping centers.
According to Kotler: ´Retailing includes all the activities involved in
selling g oods or services to the final consumers for personal, non -business
uses.
Selling goods and services to low -level consumers for their usage is
known as retailing. It focuses on putting finished products into the hands
of clients who are willing to pay for t he enjoyment of eating, wearing, or
using certain product items. Distribution of goods and services is the focus
of retailing because retailers are crucial to the path that products take from
a manufacturer, grower, or service provider to the consumer.
“A set of business activities carried on to accomplishing the exchange of
goods and services for purposes of personal, family, or household use,
whether performed in a store or by some form of non -selling.” – American
Marketing Association
The term 'retailing ' has a wider context and includes several transactions
which are several stages removed from sale to the ultimate consumer.
Subordinate services like delivery may be offered as part of retailing.
Buyers could be either people or companies. In the world of business, a
retailer buys vast quantities of commodities or products directly from
producers or importers or indirectly through a wholesaler before selling
smaller quantities to the final consumer. Shops and stores are common
names for retail spaces. The final link in the supply chain is the retailer.
Retailing is viewed by manufacturing marketers as an essential component
of their overall distribution strategy.
1.2.1 CHARACTERISTICS OF RETAILING :
In the context of emerging markets, retailers are essentia l participants. To
serve India's expanding middle class, big brands are racing to enter the
desired retail formats. Retailers perform numerous responsibilities such
supplying assortments, sorting, breaking the bulk, rendering services,
bearing risk, servin g as a conduit of communication, transportation,
advertising and holding inventory. They make a substantial contribution to munotes.in

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3 boosting the worth of the product and ensuring client satisfaction. The
duties of a retailer are listed below.

1. Sale to Final Consu mer
The fact that retailing involves selling goods or services to end users is its
most crucial feature. An advertising approach or a person or entity that
uses or consumes something can both be considered end consumers. It
implies that the subject consum es something. They don't buy it, sell it, and
then give it to someone else. The ultimate consumer is what we refer to as.
2. Various Channels
The downstream process, which addresses the issue of "How do we get
our product to the consumer," includes distribut ion networks. As opposed
to this, the upstream procedure, also referred to as the supply chain,
provides an answer to the query "Who are our suppliers?" A distribution
channel is the route that all products and services must take to reach their
target cust omers. On the other hand, it also specifies the payment route
that customers take to pay the original provider.
3. Small Order Size
Minimum order requirements are very sensible from the supplier's
perspective because they help them sell their inventory more quickly,
generate more money, and weed out customers who are just looking for a
deal. The wholesalers' cost of inventory is used to determine the minimum
order amounts, which helps them maintain a profit while also boosting
free cash flow. Even though whol esalers might not favor this approach,
there are times when they are left with little options since manufacturers
have minimum order requirements.
4. Large Number of Orders
The retailer caters to many orders dealing with its local business, this even
generat es lots of employment and bridge the gap between producer to
consumer.
5. Keeps a large assortment of Goods
In retailing, an assortment strategy refers to the quantity and variety of
goods that are available for consumer purchase in stores. This strategic
technique, often known as a "product selection strategy," is used by
merchants to control and boost sales. There are two main parts to the
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4  The breadth of products a store offers or the number of varieties it
carries (e.g. how many sizes or flavours of the same product).
 how many various types of things a store carries, or the breadth
(width) of its product diversity.
1.2.2 SCOPE OF RETAILING :
Retailing, from the standpoint of the retailer, can include anything that the
retailer wishes to sell. It co uld be either goods or services. Mobile phones,
computers, electronics, ready -made garments, textiles and clothing,
jewelry, books, paintings, medicines, stationery, and watches are examples
of such items, as are services such as catering, hospitality, and hospitals.
Employees perspective – Retail has created a plethora of job
opportunities. Small -scale retailers required a small number of employees
to assist them in their operations. The retailers hired these people to work
as salespeople, cleaners, cashie rs, and so on. However, with the expansion
of operations and the growth of retailing, the industry has undergone
significant change.

1. Purchase Department
All purchases for the company must be made through the procurement
department. This includes choosing the goods to sell to customers, their
price range, choosing the supplier from whom purchases are to be made,
etc. This department involves a significant amount of work, a great deal of
travel, and a great deal of paperwork. The staff members of this
depar tment should be well -spoken and knowledgeable about both the
industry and the vendors. They need to be capable of making prompt
decisions.
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5 2. Finance Department
Every organisation depends on its finances to function. The finance
department handles tasks incl uding creating and assembling financial
records, allocating funds to various departments, managing funds, setting
up funds, controlling cash flow, overseeing banks and investments,
selecting how much credit to grant, etc. The finance department may
occasio nally additionally perform a retail audit.
3. Marketing and Sales
The marketing division handles a variety of tasks, including public
relations, advertising, and sales promotion. When it comes to contacting
the clients, these activities are crucial. The mark eting division oversees
carrying out in -depth market research and determining customer needs.
The individuals needed in the marketing department should be well -
versed, possess the necessary product expertise, and be capable of
persuading customers to purch ase the products. They should be able to
comprehend the needs of the customer and respond accordingly.
4. Stores
The stores department is responsible for storing the goods. The store’s
manager should ensure that at every time the inventory is maintained at
proper levels so that there is no shortage of goods. At the same time the
department should ensure that too much inventory may cause problems of
storage, obsolescence, wear and tear, etc. So, the store’s manager must
always keep an up -to-date record of the i nventory and ensure
uninterrupted supply of materials.
5. Human Resources
The hiring, choosing, training, on boarding, and other aspects of personnel
management fall under the purview of the human resources department. A
human -centered industry is human resou rces. The individuals needed in
this department must possess the knowledge necessary to comprehend the
needs of those working for the company and to prevent productive
personnel from quitting.
6. Technology in retailing
India's retail sector is at a mature st age and uses information technology
with great confidence. The sector makes use of technology like Electronic
Data Interchange (EDI), which allows for the electronic transmission of
information via computers. The methods used to collect client information
and store it for later use include database management, data warehousing,
and data mining. In customer relationship management, data mining is
helpful. For supply chain management, radio frequency identification
systems (RFID) are utilized. E -tailing is a retailing idea that is constantly
expanding. It also covers the use of the internet for product sales.
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6 7. Supply Chain Management
Supply chain management refers to controlling the flow of goods,
services, and data throughout the supply chain. Profitability of the
company is increased by proper resource management. Systems for
managing the supply chain are used. Thus, there are numerous places in
which retailing can give individuals jobs. As a result, it may be said that
retailing has a very broad scope. Depe nding on one's abilities, finances,
etc., one can either start their own business or enter the industry as an
employee.
1.2.3 IMPORTANCE OF RETAILING
Retail marketing's significance for today's producers cannot be
emphasized. In order to expose businesses to a big audience and distribute
items extensively, retail outlets are crucial. Retailers can interact with
customers in -store (the ultimate consumers of your products).Retailers
have a history of selling products to customers. He has a thorough
awareness of his clients' likes and dislikes due to his regular interactions
with them. He sells goods in a variety of sizes and forms and keeps
inventory on hand to satisfy customer requests.

1. Sales to Ultimate Customer
In a retail transaction, the goods and servi ces are distributed to
ultimate or final purchasers. The items are not resold after this sale.
The products and services offered here can be utilized for a variety of
purposes, including commercial, domestic, and residential ones. The
manufacturer will con sequently interact with his customers through
the store and find out what they think.
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7 2. A Convenient form of Selling
Reselling things that have been disassembled into their constituent
elements is referred to as "retail." The merchant buys the goods in
bulk from the producer or middleman, and the majority is divided into
smaller quantities and sold to clients in accordance with their
requirements. To accomplish this, the shop will repackage products in
various quantities and varieties, making it simpler for customers to
choose and transport them.
3. Convenient Place and Location
Shops for retailers are frequently situated in places that are simpler for
clients to get to. A retail establishment can come in a variety of shapes
and sizes, including a coffee shop, a tiny store, or a multiplex.
Whenever they want, consumers may buy and sell products via
mobile apps and the internet.
Additionally, internet shopping is becoming into a contemporary
trend because of developments in technology and delivery methods.
As a re sult, an increasing number of companies are shifting their
activities online, making it possible for customers to access and buy
products from the comfort of their homes.
4. Affects Lifestyle
The retail industry is crucial to today's culture. To live comforta bly,
people rely largely on retail establishments. Previously, the trading
mechanism was used to make goods and services available. Today,
however, the buying and selling of goods has taken the role of trade,
making retail establishments a necessary compon ent of society.
5. Contribution to the Economy
A significant portion of the Gross Domestic Product (GDP) in many
nations comes from the retail sector. Its contribution has grown
considerably in recent years and is still expanding quickly. An
important economi c force that can support long -term growth is
retailing.
6. Dominates Supply Chain
In a supply chain, products and services move from a store or a
distributor to the ultimate consumers. The location of retail
establishments becomes even more crucial when there are numerous
consumers dispersed across the globe. Retailers act as a middleman
between producers and final consumers.
7. Inter disciplinary
Retailing has evolved with the help of economics, geography,
management, economics, and marketing. A store's financia l
management is aided by economics. Choosing the ideal location for a munotes.in

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8 shop requires a solid grasp of geography. Proper management is
essential for managing your staff and merchandise, and it's equally
important for helping you break into the market.
8. Provid es Maximum Employment
The sector that today employs the most people is retail. One in nine
people are reportedly employed in the retail industry. Additionally,
two-thirds of the retail workforce is made up of women, and more
than half of all retail employe es work part -time, allowing them the
flexibility to meet any employer's demands.
9. Vital Area for Study
Retailing is getting more and more attention because of its popularity.
The study of retail is distinct from that of management and marketing.
Studies hav e been conducted and specialists have been enlisted to
help this industry prosper. Additionally, academic publications that
concentrate on retailing are available anywhere in the world.
10. Offers Scope for Development
A great opportunity to enter global marke ts is provided by retail. To
increase the number of individuals who purchase their goods, a
retailer who wants to diversify their market by selling their goods
abroad creates stores there.
1.2.4 RETAIL FORMATS :
A retailer or retail store is a business ent erprise whose primary source of
selling comes from retailing. Retailing includes all the activities involved
in selling of goods or services directly to final consumer for personal, no n-
business use – Philip Kotler.
A retail establishment is a firm that sells products directly to end users for
non-commercial purposes. Usually, the products are jacked up in price.
There are various kinds of retail establishments that serve various client
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9

1. Specialty Store
Specialty shops have a deep selection of a very small number of
product categories. They provide a wide range of options in the
collection they carry for models, sizes, styles, colou rs, and other
crucial characteristics.
2. Departmental Store
A department store is a sizable retail establishment that carries many
different product lines. For the goals of purchasing, promoting,
providing services, and maintaining control, it is divided int o distinct
divisions and offers a large selection in each line. It is sometimes
referred to as a department store for mass merchandise, such as
military canteens.
3. Super Market
A supermarket is made to meet all demands for groceries, laundry
detergent, and housekeeping supplies. Its size is rather enormous. Its
business model is one of cheap cost, low margin, big volume, and self -
service.
4. Convenience Store
Near a residential area is a convenience shop. It is compact, long
hours are spent keeping it open. Con venience items are available for
purchase in a few different lines. The costs are marginally greater.
5. Discount Store
Standard goods are sold at cheaper prices in discount stores. Higher
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10 profita bility. Discount shopping has expanded into specialty retailers
including sporting goods, electronics, and bookstores.
6. Off-price Retailer
as the name implies, offer significant savings on the goods they sell.
Low prices, high volume, and high turnover serv e as the basis for
competition among discount retailers. Wal-Mart is among the best
instances of this kind of retail setting, as evidenced by their
catchphrase, "Save money."
An off -price store sells leftover products, overruns, and irregulars that
they ha ve purchased from producers or other retailers at a discount.
Three different sorts of discount stores exist.
a. Factory Outlets - Manufacturers are the owners and operators of
these. They sell excess, irregular, or discontinued products from
the producer. suc h as dinnerware, shoes, designer clothing, etc.
b. Independent Off -price Retailer - Entrepreneurs or departments of
larger retail businesses own and operate independent off -price
retailers.
c. Warehouse Clubs - Wholesale clubs are another name for these.
They only stock a small range of name -brand household goods,
apparel, and other stuff.

7. Hyper Market
They have been originated from France. Hypermarkets combine
specialty shops with shops carrying a small selection of products on
one floor. The range of products go es beyond everyday purchases. It
consists of things like furniture, big and small appliances, clothing,
etc.
The other elements of the hyper markets are bulk display and minimal
handling by store staff. Customers who are ready to move bulky
furniture and a ppliances out of the store are given a discount.
8. Catalogue Showroom
In the showroom, customers place orders for products from a
catalogue. Then they travel to a store's merchandise pickup location to
pick up these items.
9. E-Commerce Store
E-commerce store s are online shops that let customers make
purchases at any time and from any location. The customer places the
order online, and the products are delivered to the address they
provide.

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11 10. Dollar Stores
Discount stores include places like dollar stores. The y charge pitiful
prices for the things. The sole distinction is that their costs are set.
1.2.5THEORIES OF RETAIL CHANGE
Like any other business, retail has benefited from the introduction of new
firms and creative strategies. Since no single theory is ac cepted by
everyone, several theoretical viewpoints can be used to examine retail
development. Varied market conditions and different socio -economic
situations in the market are the main causes of this intolerability. The
Theories are

1. Wheel of Retailing
This theory discusses how retailing has changed structurally. Malcolm
P. McNair, a professor, put out the notion. This hypothesis explains
how retail establishments transform over the course of their existence.
It highlights four phases
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12 Phase 1: To draw customers and establish a clientele, a new business with
a questionable reputation price its goods and services competitively.
Phase 2: As the business expands, it upgrades its facilities and starts
progressively raising pricing.
Phase 3: At this point, th e business has established a solid name and starts
to provide greater diversity while maintaining higher profit margins and
even more expensive services.
Phase 4: A new competitor with the same traits as phase 1 joins the
market (i.e. low -costs and low -margin). As a result, for the present
company to remain competitive, it must lower its prices to prior levels.
The 'wheel of retailing' is now thought to have been finished by the
corporation.
When new retail establishments begin operations, they do so as low status,
low price, and low margin enterprises. Retail businesses seek to grow their
clientele when they experience success. They start modernizing their
storefronts, adding goods, and introducing new services. To cover the
additional costs, prices are rai sed along with margins. New retailers enter
the market to fill the void left by existing retailers that advance to the next
stage of their life cycles because of their success.
When a store reaches the end of its life cycle, a new format appears. When
the retail business first opened, it catered to low -income and price -
conscious customers. However, as the market expanded and prices and
margins increased, it transitioned to catering to affluent clients.
The idea has drawn criticism since it does not support all the changes that
occur in the retail industry, and in the current environment, not all
enterprises enter the market at a low price point.
2. Retail Accordion Theory
According to this perception, general stores transform into specialty
shops before returni ng to their original general store form. Hollander
used the orchestra as the inspiration for the analogy "accordion."
He proposed that players use closed accordions to depict a small
variety of merchandise focusing on specialty products or open
accordions to represent general stores. A different name for this idea
was the general -specific -general theory. The cyclical theories of the
retail revolution are known as the wheel of retailing and the accordion
hypothesis.
3. Theory of Natural Selection
This theory pr oposes that retail establishments adapt as their milieu
changes. The retailers who successfully adjust to the changes in
technology, economics, demographics, politics, and the law are more
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13 This theory is thought to be superior to the Wheel of Retailing
because it also discusses macro environmental factors. However, this
theory has the disadvantage of not considering customer preferences,
expectations, and desires.
4. Retail Life Cycle
Retail businesses go through distinct stages o f innovation, fast
development, maturity, and decline, just like products and brands. The
retail life cycle is the term used to describe this. Any organisation is
young and has few rivals when it is in the invention stage.
They strive to give the end users a unique advantage. Organizations
aim to expand quickly at this point, and management is trying out new
ideas because the concepts are still new. The stage may persist for a
few years, and profits will be modest. Online commerce in our nation
is still in its infancy when we talk about it.
In the phase of accelerated growth, firms experience a sharp rise in
sales, the emergence of competitors, and the use of leadership and
presence as a tool for positioning stability. Because there would be a
lot of competi tion, the investment level will be high. Up to eight years
may be at this level. This level includes hypermarkets and dollar
stores. The growth rate begins to slow down in the maturity stage as
competition increases and newer types of retailing start to em erge. At
this point, businesses should begin rethinking their strategies and
positioning themselves to survive the market. In this level are
supermarkets and cooperative businesses. The falling phase, which
marks the end of the retail life cycle, is when b usinesses start to lose
their competitive advantage. Overhead costs start to climb as
profitability continues to deteriorate. Thus, for an organisation to
survive in the market, it must adopt a distinct strategy at each stage of
its life cycle.
1.2.6 RETAI L ENVIRONMENT :
A deep recession, a spike in interest rates, and new risks like the oil
crisis are all brought on by the overall marketing environment, and
businesses find their markets crumbling as a result. The marketing
landscape has undergone several a brupt changes recently, prompting
Ducker to Toffler refers to it as the Age of Discontinuity and calls it a
period of Present Shock. Retail marketers must constantly keep an eye
on the evolving scene. They must employ their judgment and market
research to keep tabs on the environment's change. Retailers can build
early warning systems. will have the ability to quickly change
marketing tactics to address new difficulties the chances offered by the
surroundings. The external players and forces that impact a r etailer's
capacity to establish and preserve fruitful business connections and
interactions with its target customers make up the retail marketing
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1. Internal Environment
The term "internal environment" refers to the values, people, activities ,
and situations that exist within a company and have the potential to
affect decisions made by the company, particularly how its human
resources behave. All individuals who are directly or indirectly
connected to the organisation, such as the owner, share holders,
managing director, board of directors, employees, etc., are referred to
as members in this context.
2. External Environment
The elements that have an impact on a company's operations are
referred to as the external environment. Business environmental
elements including competitive, economic, social, ethical, political,
and global factors are included in the external business environment.
These variables are the primary determinants of how stockholder and
company owner business choices are made. For in stance, if the
government changes the laws governing the quantity and kind of
imported goods, the importation tax may rise, which would have a
significant impact on the viability of many enterprises. Its devided into
two parts Micro and Macro
A. Micro Environ ment
The main objective of all retailers is to profitably service and fulfil the
needs of their designated target markets. The retailer collaborates with
a group of suppliers and a group of middlemen to reach its target
customers in order to complete this objective. The chain of suppliers,
middlemen, and customers makes up the retailer's primary marketing
strategy. We'll now examine the factors that come into play after the
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15 a. Suppliers - Suppliers are companies and individuals who provide the
resources the shop needs. For instance, a retail store needs to buy a
variety of products from numerous vendors in order to offer them as
soon as clients inquire about them. The marketing strategies employed
by the retailer may be significantly impacte d by changes in the
"suppliers'" environment. Retail managers must monitor changes in
the prices of their essential commodities. The availability of supplies
worries them just as much. Lack of supplies and other circumstances
might make it difficult to exe cute on commitments, which can result
in lost sales in the near term and long -term harm to client loyalty.

b. Intermediatories - Companies known as intermediaries help retail
stores market, sell, and distribute their products to end users. Large
corporations may employ agents to locate merchants in various South
Indian cities, and these agents may receive commissions based on the
stores' success. The agents don't acquire the goods; instead, they give
retailers orders on what to buy and eventually sell to cons umers.
Physical distribution companies help the retailer stock and transport
goods from their starting points to their final destinations.Before
moving items to their next location, warehousing companies store and
safeguard them. Every store must choose ho w much storage space to
provide for various goods as well as how much storage space to build
for itself.

c. Customer - A retailer establishes connections with suppliers and
middlemen to effectively provide the right goods and services to his
target market. I ndividuals and households that purchase goods and
services for personal use may be its target market.

d. Competitor - Rarely does a store work alone to service a certain
customer market. Similar attempts are made by others to match his
efforts in developing an effective marketing system to serve the
market. Numerous competitors surround and influence the retailer's
marketing system.To acquire and keep consumer loyalty, it is
necessary to watch and outmanoeuvre these rival businesses. Now it
is possible to sum marise a fundamental finding concerning the
challenge of effectively competing. Four fundamental considerations,
or the "Four CS of market positioning," are necessary for a retailer to
bear in mind

B. Macro Environment

a. Demographic Environment - Population is the first environmental
fact that matters to merchants since consumers make up markets. The
population's size, geographic distribution, density, mobility patterns,
age distribution, and social, racial, and religious composition are all of
great importan ce to retailers. Demographic structure rarely remains
constant for very long, and shifts in its makeup frequently put a
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16 affect consumer behaviour, which will directly affect the retai ler's
revenue.

b. Political/ Legal Environment
Political and legislative issues have a significant impact on retail
marketing decisions. Various organisations and people in society are
influenced and restrained by the laws, governmental bodies, and
pressure groups that make up this environment. Over time, the amount
of legislation affecting the retail industry has continuously risen.
c. Socio -Cultural Environment
People's core views, values, and social conventions are shaped by the
society in which they are rais ed. People who reside in various regions
of the nation may hold various cultural values, which must be
examined by retail businesspeople or firms. This will enable them to
adjust their strategy to better meet customer needs. Retail marketers
are particular ly interested in forecasting cultural changes because it
helps them identify emerging marketing possibilities and risks. In this
regard, a number of companies, like ORG, MARG, etc., provide
social and cultural projections. Marketers of foods, exercise
equipment, and other goods will, for instance, seek to address this
trend with pertinent items and messaging appeals.
d. Economic Environment
Both people and their purchasing power are present in retail markets.
A person's overall purchasing power depends on the ir current income,
pricing, savings, and access to credit. Major societal and economic
trends should be known to marketers. A firm's business strategies may
be negatively impacted by changes in the economy. The common
themes of shortages, rising costs, and up-and-down business cycles
are likely to muddle economic analysts' predictions as they look out
over the coming ten years. These alterations in the economic climate
present new difficulties and dangers for marketers. Effective
marketing programmes and ta ctics will determine how well these
obstacles may be turned into opportunities.
No economy, whether it is a free economy or a controlled economy, is
free from the tendency to fluctuate between boom and depression. In
any case, changes in the economy have a n impact on marketing since
they alter consumer spending. Retail marketing companies are
vulnerable to the economy both directly and indirectly through the
market. For instance, when the economy is doing well, all input costs
rise, which influences the pri ce of the final product and, in turn, the
sales. Through modifications in consumer behaviour, the effect on
consumers also affects marketing. This has an undirective effect.

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17 e. Technological Environment
Technology is the factor influencing people's lives mo st
dramatically.Technology advancements are a significant factor that
have two effects on retail marketing. First of all, they are completely
unpredictable, and secondly, limitations imposed by internal and
external resources frequently prohibit the adopti on of new
technologies. At the same time, it's important to keep in mind that
technology advancement both opens up new opportunities and puts
particular businesses at risk.
1.3 SUMMARY
It is essentially the marketing idea of a company -wide, customer -center ed
approach to creating and carrying out a plan. It lays forth the rules that all
merchants must abide by, regardless of their size, channel design, or mode
of sale.
Although the retailing concept is straightforward to embrace, many
retailers fail to adher e to it because they overlook one or more of the
aforementioned elements. For the retailer to be successful, there needs to
be a good balance between all the components of this concept. The
retailing notion, while significant, is constrained by the fact th at it does not
take into account the firm's internal resources or the level of competition
in the outside world.The customer may choose not to use that particular
outlet if some aspects of the shopping experience are poor. As a result, a
store must make su re that every aspect of the experience aims to meet
customer expectations. For different sorts of stores, this experience means
different things. For example, for a high -end apparel retailer, it can
suggest the presence of plush interiors and air condition ing, but a bargain
store needs to have enough inventory.
1.4 EXERCISE
Q.1. Fill in the blanks
a. The word Retail is derived from the ------ word. (Latin, French,
English, German)
b. Retailer is the person who sells the goods in a…………… (Large
Quantities, Small Qu antities, Both a&b, None of These)
c. In retailing there is direct relationship with ……….. (Profitability,
Sales Growth, Return on Investoment, All of these)
d. Retailing Creates ……………… (time utility, place utility, ownership
utility, All of these)
e. ……….. activit ies are performed by the retailers (assortment of
offerings, holding stock, extending services, all of these)
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18 Q.2. State True or False
a. The Atmosphere of retailing refers to the ambience. Music,Color,
Scent in a store.
b. E-retailing refers to selling using i nternet.
c. Retailing is marketing function which sells products to final
consumers.
d. Super markets are small retailers
e. Shopping malls sells limited variety of products
(Answer -1. True, 2. True, 3.True, 4. False, 5. False)
Q.3. Match the following
A B
1. Retai l word a. Organised retailing
2. Retail life cycle b. Unorganised retailing
3. Department stores c. To break bulk
4. Kiryana stores near you d. Phases of retail business
5. Convenienece to customer e. Role of retailer
Answers: 1 - c, 2-d, 3-a, 4-b, 5-e
Q.4. Wr ite shortnotes
a. Retailing
b. Legal Environment
c. Competitive Environment
d. Technologicval Environment
e. Economic Environment
Q.5. Explain the following
a. Define retailing and explain the features of Retailing.
b. Explain the importance of Retailing
c. Write a brief note on Business environment
d. Explain the Scope of Retailing
e. Write a brief note on Retail formats
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19 Bibliography
1. Fernie, J. and Sparks, L., 2009. Logistics and Retail Management:
Emerging Issues and New Challenges in the Retail Supply Chain. 3rd
ed. Chartered Institute of Logistics and Transport.

2. Fernie, J., Fernie, S. and Moore, C., 2004. Principles of retailing. 1st
ed. Amsterdam: Elsevier Butterworth -Heinemann.

3. Findlay, A. and Sparks, L., 2002. Retailing. 1st ed. London:
Routledge .

4. Ghemawat, P., 2006. Zara: Fast Fashion. Harvard Business School,
pp.15 -35.

5. Hagel, J., Brown, J., Samoylora, T. and Kuasooriya, D., 2014. The
hero’s journey through the landscape of the future. [online ] DU Press.
Available at: en/topics/operations/heros -journey -landscape -future.html> [Accessed
21 April 2017].

6. Hollander, S., 1960. The Wheel of Retailing. Journal of Marketing,
[online] 25(1), p.37

7. Isabelle, D., 2017. Zara’s business model and competitive advantages.
[online] Diane A. Isabelle

8. Jhamb, 2013. Case study Zara. [online] Slideshare.net


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20 2
RETAIL MANAGEMENT - II
2.0 OBJECTIVES
 Introduce students to the Indian Scenario of retailing
 Disseminating informat ion to students about the role of FDI in the
retail sector
 Introducing students to the challenges faced by retailers and the
presence of mall system
2.1 INTRODUCTION
Due to the introduction of numerous new businesses, the Indian retail
industry has become one of the most dynamic and quick -paced sectors.
Over 10% of the nation's gross domestic product (GDP) and about 8% of
employment are attributed to it. India is the fifth -largest international retail
market in the world. In the 2019 Business -to-Consumer ( B2C) E -
commerce Index published by the United Nations Conference on Trade
and Development, India came in at position 73. India is the fifth -largest
international retail destination in the world and is ranked 63 in the World
Bank's Doing Business 2020 repor t.
The key attractions for global retail behemoths trying to enter additional
markets are India's sizable middle class and its mostly untapped retail
market, which will aid in the country's retail industry expanding more
quickly. products in areas includin g apparel, cosmetics, footwear, watches,
beverages, cuisine, and even jewelry are progressively becoming popular
for use in business and leisure. According to a recent estimate by the
Boston Consulting Group, the retail industry in India is predicted to re ach
a staggering US$ 2 trillion in value by 2032. (BCG).


Unit Structure :
2.0 Objectives
2.1 Introduction
2.2 Retail Sector in India
2.3 Recent Trends in Retailing
2.4 Summary
2.5 Exercise
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21 2.2 RETAIL SECTOR IN INDIA
Size Of Indian Retail Market
India's retail sector is expected to increase at a 9% rate between 2019 and
2030, from US$ 779 billion in 2019 to US$ 1,407 billion by 2026, and
more than US$ 1.8 trillion by 2030, according to Kearney Research. In
FY20, offline retailers in India, commonly referred to as brick and mortar
(B&M) merchants, are anticipated to raise their revenue by Rs. 10,000 -
12,000 crore (US$ 1.39 -2.77 billion) . By the end of 2021, the direct
selling sector in India is anticipated to be worth US$2.14 billion.
E-retail has benefited from the pandemic, and a report by Bain &
Company in collaboration with Flip kart titled "How India Shops Online
2021" predicts that the market would reach US$ 120 –140 billion by FY26,
growing at a rate of about 25 –30% per year over the following five years.
The India consumer story is still strong despite extraordinary difficulties.
Household consumption reached Rs. 130 –140 trillion ( US$ 1.63 –1.75
trillion) in 2021, driven by wealth, accessibility, awareness, and attitude.
The third -largest country in terms of e -retailers is India (only behind
China, the US). By 2030, it is anticipated that Direct -to-Consumer (D2C)
shipments will total 2.5 billion. In the next ten years, the penetration of
online used automobile transactions is anticipated to increase by 9x.
In recent years, there have been numerous investments and changes
in India's retail industry.
 Between April 2000 and March 2022, I ndia's retail trading sector
drew 3.96 billion USD in FDI.
 The Consumer Price Index (CPI) -based retail inflation in India, which
is based on statistics from the Ministry of Statistics & Programme
Implementation (Mo SPI), was 6.71% YoY in July 2022 due to l ower
food costs.
 Aditya Birla Fashion and Retail Ltd 's Louis Philippe, the top premium
menswear brand in India, said in August 2022 that it would open a
store in Vadodara, Gujarat.
 As part of its entry into the packaged food market, Wipro Consumer
announce d the launch of traditional snacks and spices in August 2022.
 Reliance brands limited ( RBL and Tod's S.P.A, the renowned Italian
luxury brand, teamed in May 2022 to become the official retailer of
the brand in the Indian market for all product categories, including
footwear, handbags, and accessories.
 Wipro Consumer Care opened its Telangana facility in April 2022. It
has invested in a cutting -edge soap finishing line that can produce 700
Nos. of soap per minute at its top pace.
 The total amount of digital payment transactions in FY 2021 –2022
(up till March 20, 2022) was Rs. 8,193 crore (US$ 1.05 billion).
 As opposed to Rs. 10.14 lakh crore (US$ 126.94 billion) in June 2022,
the value of UPI transactions in July 2022 was Rs. 10.62 lakh crore
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22  Reliance Brands has acquired the India market in March 2022.
 The Department for Promotion of Industry and Internal Trade said in
November 2021 that it is developing a regulatory compliance portal to
reduce onerous compliance procedures between busin esses and the
government.
 Indian shops climbed by 14% in October 2021 compared to the
previous year.
 According to the Department for Promotion of Industry and Internal
Trade, Indian retail trading received FDI equity inflows totaling
US$3.61 billion betwee n April 2000 and June 2021. (DPIIT).
 Numerous corporations have made investments in the Indian retail
sector in recent months due to the growing demand for consumer
goods across numerous industries, including consumer electronics and
home appliances.
 Relia nce announced plans to introduce 7 -Eleven Inc. convenience
outlets in India in October 2021.
2.2.1 DRIVERS OF RETAIL CHANGES :
The practice of organized retailing is relatively new. The results of
socioeconomic factors are this. India is at the beginning o f a retail
revolution. The retail sector, one of the most dynamic and quickly
changing businesses, has helped our nation's economy grow. The Indian
retail market has quickly developed into the most alluring and promising
one in the entire world.
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23
1. Growth of Middle -class Consumer
The number of middle -class consumers in India is steadily increasing.
Rising customer demand and higher disposable income have created
opportunities for the retail sector to expand and thrive. They demand
reasonable costs for high -quality goods. Customers can choose from a
variety of goods and value -added services at modern merchants. As a
result, organized retailing has increased throughout India.
Organized retail in India would be primarily driven by rising
consumerism. Expanding consumer markets and advancements in
infrastructure are hastening the convergence (meeting) of consumer
desires.
2. Increase in number of working Women
Urban women today are educated and skilled. They need to manage
their time between job and home. Working w omen have distinct
shopping habits than stay -at-home women. They don't have enough
free time, and they want everything to be under one roof. They favor
purchasing at one location. Therefore, contemporary retail stores
provide one -store retailing.
3. Value for Money
Organized retail conducts business in huge volumes and benefits from
production and distribution costs that come with size. They remove
middlemen from the supply chain. Organized retailers provide
premium goods at fair pricing. Big Bazaar and Subhik sha are two
examples. More and more new business groupings are entering this
area due to the potential for profit.
4. Emerging Rural Market
In India today, there is fierce competition in the retail industry as well.
As rural consumers become more quality conc erned, the rural market
in India is quickly growing. Therefore, organized retailers are creating
new items and tactics to please and service rural clients because of the
enormous potential in rural retailing. After agriculture, which has the
greatest penet ration into rural India, the retail sector in India is
proving to be the nation's largest source of employment.
5. Entry of Corporate Sector
Large business tycoons like Tata, Birla, and Reliance, among others,
have entered the retail sector. They can provide high-quality products
and entertainment. As corporate s such as the Piramals, Tatas, Rahejas,
ITC, S. Kumar’s, RPG Enterprises, and mega retailers such as
Crosswords, Shopper's Stop, and Pantaloons race to revolutionize the
retailing sector, Crosswords, Sho pper's Stop, and Pantaloons race to
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24 6. Entry of Foreign Retailers
Foreign retailers are showing an interest in the Indian retail sector. As
a result of liberalization, multinational corporations have entered our
country thr ough joint ventures and franchising. This is also
responsible for the growth of organized retailing.
7. Technological Impact
One of the dynamic factors driving the growth of organized retailing
is technology. The introduction of computerization, electronic m edia,
and marketing information systems transformed retailing. Because of
the vast market and the growing consumer consciousness about
product quality and services, organized retailing in India has
enormous potential. The introduction of Bar Codes was a ma jor
technological innovation in organized retailing. Retailers are selling
their products online using the Internet as technology and innovation
become more prevalent.
8. Rise in Income
Increased literacy has resulted in increased income among the
population . Such expansion has occurred not only in cities, but also in
towns and rural areas. As a result, rising income levels have increased
demand for higher -quality consumer goods. Rising income and
education levels have aided in the evolution of a new retail s tructure.
People today are more willing to try new things and look different,
which has increased consumer spending habits.
9. Media Explosion
Because of satellite television and the internet, there has been a media
explosion. Indian consumers are exposed to other countries' lifestyles.
Their expectations for high -quality products have risen, and they are
demanding more variety and value for money in terms of services and
conveniences.
10. Rise of Consumerism
With the rise of consumerism, retailers are dealing w ith a more
informed and demanding customer. Because businesses exist to
satisfy consumer needs, rising consumer expectations have forced
retail organizations to change their retail trade format. Consumer
demand, convenience, comfort, time, location, and ot her factors are
critical to the growth of organized retailing in India.
2.2.2 FDI IN RETAILING IN INDIAN CONTEXT :
Retailing serves as the intermediary between the producer and the
individual consumer who purchases for personal consumption. This
excludes d irect interaction between the manufacturer and institutional
buyers like the government and other large customers. The retail industry
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25 is, those who are registered for sales tax, inc ome tax, and so on, engage in
organized retailing. These include corporate -backed hypermarkets and
retail chains, as well as privately held large retail businesses.
Unorganized retailing, on the other hand, refers to traditional low -cost
retailing formats such as local kirana shops, owner -operated general
stores, paan/beedi shops, convenience stores, hand carts, pavement
vendors, and so on. Approximately 95% of the retail industry in India is
unorganized. Pantaloon Retail, Shoppers' Stop, Marks & Spencer, H yper
City, Lifestyle, Subhiksha, Trent, Reliance Retail, and other well -
established retailers in India account for 5% of the total retail market. The
retail sector in India is estimated to account for about 10% of GDP,
compared to 8% in China, 6% in Brazil , and 10% in the United States. It is
estimated that India has approximately 15 million retail outlets.
India is now the final major market for globalized retail. Since the
economic liberalization of 1991, India's middle class has grown
significantly, as h as its purchasing power. However, unlike other major
emerging economies, India has been slow to open its retail sector to
foreign investment over the years. Recent government signals, however,
suggest that this may be about to change Wal -Mart (United State s),
Carrefour (France), and Marks and Spencer are examples of global
supermarket chain stores. As part of the liberalization process in 2000, in
addition to FDI in export trading, bulk imports with ex -port/ex -bonded
warehouse sales, and wholesale cash and carry trading, other permissible
modes of trading as per the Export -Import Policy were opened for FDI.
2.2.3 FDI POLICY REGARDING RETAIL SECTOR :
Foreign investment in India is broadly governed by the government of
India's FDI Policy, as well as the provi sions of the Foreign Exchange
Management Act (FEMA), 1999. This policy primarily controls the
industries that open foreign companies, thereby limiting the percentage
held by these companies. Except for a few sectors where prior approval
from the Foreign In vestment Promotion Board (FIPB) is required, all
foreign investors are permitted to invest in India. The Ministry of
Commerce and Industry revises the FDI Policy and notifies the Secretariat
for Industrial Assistance via Press Notes (SIA). i.e., the Depart ment of
Industrial Policy and Promotion (DIPP), on a regular basis to ensure that
the companies are operating properly.
Companies in India can receive FDI through two channels: the Automatic
Route and the Government Route. The automatic route does not requ ire
prior approval from the Central Government to establish business
enterprises, whereas the government route requires prior approval from the
Central Government or the Ministry of Finance before establishing any
business organizations in India. As a rule , any company receiving FDI
through either the automatic or government route is required to comply
with the provisions of India's FDI Policy.
In terms of FDI Policy in India, it is prudent to review Press Note 4 of
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26 as well as the consolidated FDI Policy issued in October 2010, which
allocate the sector specific for FDI with respect to the conduct of trading
activities. According to the previous policy, FDI in single -brand retailing
was permitted up to 51% with prior government approval, whereas FDI in
multi -brand retailing was prohibited. Under the automatic route, FDI was
permitted up to 100% in cash -and-carry retailing.
2.2.4 CURRENT SCENARIO REGARDING FDI IN RETAIL
SECTOR :
The centr al government first allowed FDI into India's retail sector in 2006,
with the goal of spurring economic growth in the country. Over the last
few decades, FDI in the retail industry has undergone massive
transformation and exponential growth in the country's developed
metropolitan cities. This sector, which is an integral part of the service
industry, has grown tremendously in recent years due to rapid urbanization
and is currently at its peak in terms of growth. As we all know, the retail
sector in India is divided into three categories: single -brand retail, multi -
brand retail, and cash -and-carry retail. Single -brand retail includes all
products manufactured under one brand's name, whereas multi -brand retail
includes products from multiple brands. As a result , each of its categories
has a different set of percentages for FDI, implying that the percentage of
FDI allocation depends on the retail category. Now, if we look at the
current situation of FDI with reference to the new FDI Policy of the
Central Governme nt of India, which was announced on September 15,
2012, we can see that FDI in single -brand retailing is allowed up to 100%
with certain conditions. The conditions are that the product must be sold
under 'one brand name' only, and that it must be sold inte rnationally,
among other things, whereas multi -brand retailing allows for up to 51%.
The basic conditions in this case are that 50% of total FDI be invested in
"back -end infrastructure" within three years. Manufacturing, processing,
distribution, and wareh ousing are all examples of back -end infrastructure.
Furthermore, at least 30% of the goods must be purchased from domestic
Indian markets, i.e., MSMEs. As a result, FDI in cash -and-carry retailing,
also known as 'wholesale retailing,' is permitted up to 10 0%.
Foreign Direct Investment (FDI) in the retail sector has proven to be a
critical step taken by the Indian government in transforming the country's
retail environment while also undertaking the growth and development of
the Indian economy, thereby integ rating with the global economy. Today
following the introduction of FDI in retail, there has been a drastic
transformation in the retail sector from the traditional format to the
modern format with exponential growth in developed metropolitan cities,
and t hus, in a developing country like India, this idea of FDI in retail has
largely proven to be fruitful for those involved in the organized sectors.
FDI in retail has primarily created job opportunities for India's
unemployed youth and has greatly aided in l owering production and
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27 Furthermore, it has contributed to the advancement of human resource
development. Thus, as an integral part of the service industry, this sector
has g rown tremendously over the last few decades and is currently at its
peak in terms of growth. Since FDI in the retail sector has both positive
and negative effects, we must focus on the positive aspects and try to
remove the obstacles that stand in the way of successful FDI policy
implementation.
2.3 RECENT TRENDS IN RETAILING
To meet customer demands, every aspect of a retail organisation should
use advanced marketing analytics software. Data -driven marketing will be
central to an organization's overarching customer -centric strategy, from
manufacturers optimizing their production to sales staff understanding
how to best communicate with customers.
1. Eliminating delayed Gratification:

Consumers today expect their needs to be met as soon as possible. It
wasn't long ago that online shoppers thought it was acceptable to wait
weeks for their orders to arrive. After about a decade, consumers have
come to expect free overnight shipping from online retailers. This,
combined with the fact that more people than ever be fore are
choosing to shop from home, means that retailers must be ready to
meet expectations.
Retailers must respond to this trend by developing processes that
allow for the most agile order fulfilment possible. This necessitates
accurately forecasting you r customers' demand by tracking purchase
cycles in your market and stocking products accordingly.

2. Streamlining offline and online experiences :

For most of the decade, personalization has been a mainstay in retail
innovation. This trend is expected to co ntinue in 2022 as retailers take
a more comprehensive look at customer data. Instead of sending
targeted advertisements and promotions to customers based on their
data, retailers will use personalized people -based marketing insights
to create simple, strea mlined shopping processes. This is a significant
value -add for today's time -pressed consumers. At a time when many
people prefer to shop exclusively online, creating a personalized
experience based on customer insights can help to fill the gap that
would o therwise be filled by an in -store salesperson. Retailers should
use information about a customer's likes, needs, and values to provide
customers with the most relevant experiences. As a result, when a
customer visits your online storefront, they should see personalized
recommendations based on their most recent search and previous
purchases, both online and offline.

3. Leverage Experiences Powered by artificial intelligence and
Machine Learning :

AI marketing and machine learning will be used to generate
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28 This enables them to make quicker, more informed decisions,
resulting in a better customer experience.
Peapod, a grocery delivery service, is an example of this. It uses a
service called "Ord er Genius," which generates personalized
recommendations for online grocery shoppers. It generates a smart
grocery list that can be completed in seconds by considering a
customer's previous purchases and purchase cycles. So, Order Genius
will recommend tha t a customer who previously ordered bread
reorder it on a weekly basis, whereas the same customer should only
repurchase deodorant monthly.

4. Socially Integrated Visualized Search :

Retailers are addressing this issue by optimizing their product
offerings for visual search. Users can simply take a picture of their
outfit - or download a photo of a similar outfit - and search for articles
of clothing within the picture using visual search. Then, a search
engine like Google will return a list of matching item s, making it
simple for users to make a purchase.
To prepare for the rise of visual search, retailers should establish a
presence on image -based platforms such as Instagram and Pinterest.
Fashion brands, for example, should constantly provide new
photograp hs showcasing their latest clothing.

5. E-Commerce Shopping on social media :

According to Forbes, approximately 15,000 retailers will close their
physical stores by 2020. As a result, many social media platforms
have begun to offer e -commerce shopping opti ons. Instagram, for
example, recently introduced the Shop tab, which allows users to
search for and connect with brands, creators, and products.
Alternatively, many brands are leveraging influencer marketing by
collaborating with popular content creators o n sponsored partnerships
and affiliate marketing. As these digital platforms continue to bring
the shopping experience to consumers, brands should think about how
they can use them to gain actionable insight into their target audience
for even more persona lization.

6. Transparency and Value Based Branding :

Approximately 71% of consumers prefer to buy from brands that they
believe reflect their personal values. People expect transparency from
today's brands, and with growing concerns about data privacy and
recent political unrest, they expect companies to "walk the walk."
Otherwise, they risk incurring reputational damage, which can have
long-term effects on brand equity and perception, even among loyal
customers.

7. Shopping Assistance via Smart Home Speakers :

The smart speaker market is rapidly expanding, with revenue
projections of $35.5 billion over the next five years. Customers can
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29 place orders without ever having to look at a screen. Furtherm ore,
retailers are abandoning face -to-face customer service in favor of chat
bots and virtual assistants to guide users through their online shopping
experience. As these trends continue to evolve, retailers must consider
how to optimize their strategies t o meet customers where they are.

8. Retailers Engaging in Omni channel Marketing :

Omni channel marketing is an excellent way to convert one -time
buyers into repeat customers in the new era of e Commerce sales. The
integration of various channels to create a consistent brand experience
is known as omni channel marketing.
Before deciding to buy a product or service, a potential customer
interacts with many touch points along the buyer's journey. This
means that it is prudent to reach out to a customer through various
channels at each stage of the purchasing cycle. Digital advertising,
websites, and social media, for example, are all ways to reach out to
potential buyers.

2.3.1 MODERN RETAIL FORMATS :



1. Departmental Stores :

A department store is a larg e retail trading establishment. It is divided
into several departments that are classified and organized accordingly.
Departments are created based on the various types of goods to be
sold. Individual departments, for example, are established to sell
packa ged food goods, groceries, garments, stationery, cutlery,
cosmetics, medicines, computers, sports equipment, and furniture, so
that consumers can purchase all basic household requirements under
one roof. It gives them the most shopping convenience and is t hus
known as 'Universal Providers' or 'One Stop Shopping.' The concept
of a department store was developed in France.
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30 2. Variety Store
A variety store sells a wide variety of small, low -cost items that are
popular among customers. The merchandise offered ma y be priced
differently or all items may be priced the same. These stores typically
sell household goods, toys, cleaning supplies, snacks, and office
supplies. More variety of items may be offered depending on the
physical size of the store, but all goods are typically perceived to be
good consumer values.
3. Super Market/ Hyper Market
A supermarket is a departmentalized self -service retail store that sells
a wide range of food products, such as meat, produce, dairy, and so
on, as well as various household ite ms. It is larger and has a broader
selection than a typical grocery store. Supermarkets are typically
located near residential areas to facilitate easy access and maximize
sales. While supermarkets provide consumers with convenience and
variety, they have received significant criticism. As with so many
technological and social advances, self -centered greed on the part of
those in power causes problems. To be beneficial to society, those
who own and manage supermarkets must accept responsibility for the
entire purpose, social and environmental.
4. Convenience Store
A convenience store is a small, local, easily accessible store that sells
staples like bread and milk as well as packaged foods. As more gas
stations transform into full -fledged convenience stores, cu stomers
expect to see a well -managed selection of fresh and chilled foods.
5. Discount Store
In merchandising, a discount store is a retail store that sells products
at lower prices than traditional retail outlets. Some discount stores,
like department stores , offer a wide variety of goods; in fact, some are
referred to as discount department stores.
6. Catalog Store
Catalogue Store means a retail establishment where orders are
accepted for the purchase of goods listed in a catalogue provided by
the establishmen t and where some or all of the goods so listed are also
available for sale at retail within the establishment." Online shopping
is becoming more popular in the business world. Furthermore, the
City has not received a request for a catalogue store in many y ears. As
a result, it is appropriate to remove the definition of Catalogue Store
from Section 2 of the Zoning By -law and to remove it from the list of
permitted uses in various Commercial Zones.

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31 7. Factory Outlet
A factory outlet is also referred to as a fact ory shop. It is a store where
producers sell their products directly to the public at steep discounts.
A factory shop center is a producer -owned store that sells the firm's
stock directly to the public. At a factory shop, this stock may be
discounted or fi rst-quality merchandise, damaged, end -of-line,
irregulars, and cancelled, out -of-date orders at extremely low prices.
2.3.2 MALL SYSTEM :
In comparison to Western countries, the concept of malls for retail
shopping is relatively new in India. Victor Gruen was the man who
introduced the Mall concept to the world first; few people realize that he is
regarded as the father of the American shopping mall. Gruen's first grand
shopping complex, the 800,000 -square -foot (74,000 -square -meter) South
dale Center in Edi na, Minnesota, opened in 1956, and over 1200 malls
followed soon after. Ansal's Plaza in Delhi opened the first shopping mall
in India in 1999, followed by Crossroads in Mumbai and Spencer Plaza in
Chennai. After 2003, malls began to proliferate in metro c ities such as
Mumbai, Delhi, Kolkata, Bangaluru, Chennai, Hyderabad, and Pune, as
well as tier two cities such as Gurugram, Noida, and Ghaziabad. The mall
concept has now spread to many suburban areas because it has become an
acceptable trend, and investor s and builders consider building a Modern
Mall to be a very profitable venture. The growth rate was tremendous
from 2003 to 2008, with a peak in 2007 to 2008 before the recession hit in
2008.
2.3.3 ADVANTAGES AND DISADVANTAGES OF SHOPPING
MALL :
1. Shopping C onvenience
A department store allows customers to purchase all their needs under
one roof, eliminating the need for them to shop from one shop to
another. Customers will appreciate the convenience, as well as the
savings in time and labour.
2. Wide Choice
The department store keeps a large variety of products and thus
allows customers to choose goods of their liking from a large stock of
goods of various qualities, brands, designs, colors, styles, and so on.
3. Economies of Large Scale
Department stores, as l arge-scale establishments, benefit from all of
the economies and benefits associated with large -scale organizations.
This lowers their costs while increasing their profits.

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32 4. Liberal Services
They offer many unique services to their customers, such as free
home delivery, telephone ordering, restaurants, recreational facilities,
reading rooms, after -sales service, and so on. Some of the stores even
provide credit to their customers.
5. Central Location
A department store/shopping mall is typically located in a c ity's
important central area. As a result, it is easily accessible to customers.
6. Economy in advertising
The advertisement of one department also serves as advertising for the
other departments. A customer who enters a department store to
purchase one item is enticed to purchase additional items displayed in
the store. As a result, one department promotes the other.
Furthermore, a department store pan advertises on a large scale,
saving money on advertising.
7. Use of Specialized Services
Department stores ca n afford to hire specialists with specialized
knowledge to perform a variety of functions. This reduces costs,
attracts customers, and increases sales and profits.
8. Large Volume of Sales
Department stores have higher sales because of the various services
they provide. Large turnover reduces the selling cost per unit on the
one hand while increasing profit on the other.
2.3.4 DISADVANTAGES :
1. Distance
People who live in remote areas cannot benefit from department stores
because they are generally located in ce ntral locations.
2. Higher Prices
Commodity prices in department stores are comparatively high due to
high operating and establishment costs. As a result, only the wealthy
can afford to shop at department stores.
3. Difficult to establish
Department stores nec essitate a significant initial capital investment
as well as many specialized personnel.

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33 4. Absence of Personal Contact
The owners of department stores are unable to make personal contact
with their customers. Employees who are not concerned with
customer sa tisfaction make the sales.
5. Lack of Coordination
There is a tendency for unhealthy competition to develop between
departments. Controlling and effectively supervising various
departments is also difficult.
2.3.5 CHALLENGES FACED BY THE RETAIL SECTOR :
The Indian retail industry is a pillar of the Indian economy, accounting for
14 to 15% of GDP and 15% of employment. When compared to other
countries with more than 2.25 billion people, Indian retail is growing at
the fastest rate. The Indian retail luxury mar ket is the world's 12th largest.
Many Indian and foreign firms are interested in Indian retail. In India,
there are over 6000 shopping malls in operation, with another 800 under
construction. This benefits both Indian retailers and foreign retailers, as
well as consumers. However, the Indian retail industry has not yet
developed to take advantage of the available opportunities. Retail
establishments face numerous challenges. Unorganized display, parking
issues, credit card issues, few promotional activities , long billing queues,
fewer trial rooms, competition, less skilled human resource, government
policies, tax structure, unorganized retail sector, etc. The Indian retail
industry requires more substantial investment from both domestic and
international pla yers. The following are the challenges that Indian retail
outlets face.

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34 1. Lack of Technology Adoption :
The major challenge that Indian retail outlets face is the availability,
feasibility, and adoption of technology. Technology is used in the
day-to-day o perations of retail outlets such as billing and payments,
shrinkage prevention, stock inventory management, and supply chain
management. However, the scope of technology is much broader.
Other software, such as RFID for understanding customer
preferences, CRM for customer relationship management, and ERP
tools for other outlet activities, can be used. Indian retail outlets must
embrace technology and use various high -end softwares to manage
their operations.
2. Lack of Infrastructure and Logistics :
Another is sue confronting the organized retail industry is a lack of
infrastructure and logistics. Inefficient processes are the result of
inefficient infrastructure and logistics. This is the most significant
barrier for retailers, as inefficient distribution chann els are difficult to
manage and result in significant losses. India’s infrastructure lacks a
solid foundation. Organization and globalization are compelling
companies to develop infrastructure facilities, including a more
efficient railway system. The high way must meet global standards.
Airport capacity and power supply must be improved. Warehouse
facilities and timely distribution are also issues. These major
impediments must be removed for India's retail potential to be fully
realized.
3. Scarcity of Skilled Workforce :
Personnel costs account for more than 7% of sales for Indian
organized retail players. Employee training is extremely expensive.
When compared to other industries, the retail industry has an attrition
rate of up to 50%. To retain skilled labou r, industry must pay more.
Store operations employ 70 -80% of the total workforce in the
organized retail sector. Unfortunately, there are very few courses
designed specifically for the retail industry. Graduates and
postgraduates from other disciplines are hired and trained in the retail
sector.
4. Frauds in Retail :
Retail shrinkage is one of the most significant challenges that
businesses will face. Retail shrinkage is the difference between the
book value of the stock and the actual stock available in the s tore.
Frauds, such as vendor frauds, theft, shoplifting, and inaccuracy in
supervision and administration, are difficult to manage. This is true
even after using security measures such as CCTV and a POS system.
The number of thefts, frauds, and discrepanci es in the system will
increase as the sector grows.
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35 5. Inefficient Supply Chain Management :
It is critical to deliver the right goods at the right time and in the right
place. There is a lack of efficient Supply Chain Management in India.
In India, supply ch ain management should be improved, and more
technology should be used to improve supply chain management and
reduce inventory costs. Savings can be used to give customers
additional discounts and benefits, and more money can be spent on
customer retention.
6. Price War :
Different retail organizations are engaged in a price war. Every
organisation strives to provide low -cost goods and offers a variety of
lucrative promotional schemes. In such a situation, gaining customer
loyalty is difficult, and businesses m aintain marginal profit in order to
provide goods at competitive prices.
7. Cultural Diversity
Because of India's vast size and socioeconomic and cultural diversity,
there is no established mode or consumption pattern across the
country. Manufacturers and ret ailers will have to develop strategies
for various sectors and segments, which will be difficult in and of
itself.
8. Complexity in tax Structure :
The tax structure in India is extremely complex. Another significant
challenge for Indian retail outlets is the complexity of the tax
structure. The sales tax varies by state, and organized players must
contend with multiple point controls and systems. With the
implementation of Value Added Tax (VAT) in 2005, retailers in many
areas have faced a multi -point octroi. Certain anomalies in the current
sales tax system, which are causing disruption in the supply chain, are
likely to be corrected over time.
9. Escalating Land and Rental Prices :
The rapid growth of the retail industry has created a high demand for
real estat e. This is causing property prices to rise. A large investment
in purchasing land is required to open a new store. This significant
investment is also a challenge for retail outlets. Rental prices are also
rising, resulting in an increase in overall costs.
10. Competition from Unorganized Retailer :
The main challenge for organized retail outlets is competition from
the unorganized retail sector. Kirana stores are part of the unorganized
retail sector. These are low -cost structures that are typically operated
by the owners and have almost negligible real estate and labour costs,
as well as no or very low taxes, and are located near or in residential
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36 customer loyalty, as well as to provide free home delivery
services. Kirana stores also offer credit to loyal customers. As a result,
this is the major challenge for retail outlets.
2.3.6 ETHICS IN RETAILING :
Whatever the nature of the business, practices have become an
increasingly important issue . The primary goal of retailing, like any other
business, is to make a profit while also providing excellent customer
service. To achieve this goal, retailers must follow the law and the
regulations put in place to monitor business. A retailer is responsib le for
developing a set of values and implementing appropriate
behaviour. Managing ethics in the workplace has significant moral and
practical benefits for leaders, managers, and employees. This is especially
true today, when it is critical to understand a nd manage highly diverse
workplace values. This unit discusses the significance of some of the
ethical deviations and unethical behaviour issues in retail management. It
also discusses the dimensions and benefits of managing ethics at work.
When it comes t o the effects of products/services and relationships with
stakeholders, ethics plays a significant role. Attention to ethics in the
workplace educates leaders and employees on how they should behave.
Perhaps most importantly, paying attention to ethics in the workplace
helps ensure that leaders and managers retain a strong moral compass
when faced with crises and confusion.
1. Compliances with Laws, Rules, and Regulations
The retailers and their employees are required to follow all applicable
laws, rules, and regulations in the country and other countries where
the company does business. This includes labour laws governing
employee employment, acts such as the Shops and Establishments
Act, Weights and Measures Act, Companies Act, and so on.

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37 2. Protection of Customers Interests :
Retailers and their employees must deal fairly with customers and
ensure that their interests, safety and security, and consumer rights are
not compromised in the pursuit of profit or any other goals the retailer
may have. This inclu des deceptive advertising, intentionally providing
incorrect information to customers, invading customers' privacy,
questionable pricing policies, a lack of quality control over products
presented to customers, rudeness to customers, and so on.
3. Avoiding Co nflict of Interest between Employee and Retailer :
A conflict of interest occurs when an individual's personal interests’
conflict with or appear to conflict with the interests of the retail
company. Employees have a duty to avoid financial, business, or
other relationships that may be detrimental to the Company's interests
or cause a conflict with the performance of their duties.
4. Accepting Gifts and Entertainment :
The retail company's goal is to discourage employees from seeking or
receiving special favor s from providers entertainment. Concern is that
larger -than-necessary gifts may place employees in a position of
"obligation." Employees are not permitted to solicit any third party for
a gift, gratuity, entertainment, or any other item, regardless of its
monetary value.
5. Confidentiality :
Employees are responsible for maintaining the confidentiality of
information entrusted to them because of their roles with the
Company, and they must safeguard the confidential information of the
Company and not disclose it to a third party without the prior consent
of senior management.
6. Fair Dealings :
Employees are expected to treat customers, suppliers, and competitors
fairly and not to take unfair advantage of anyone through
misrepresentation, concealment, abuse of pr ivileged information,
misrepresentation of material facts, or any other unfair dealing
practice.
7. Corporate Social Responsibility :
Many organizations frequently implement policies such as waste
recycling, donating to local charities, or paying employees to
participate in community events, donating or participating in events to
improve "Green" and environmental awareness, and so on.

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38 8. Theft, Fraud and Misappropriation :
A critical organisational value for Misuse or theft of money, cash, or
merchandise is frown ed upon by most retailers. A serious matter, and
disciplinary action is usually taken.
2.4 SUMMARY
In the 1990s, the introduction of the Internet and its increasing use for e -
commerce resulted in a revolutionary shift in retailing away from brick -
and-mortar stores and toward online retailing, in which customers shop for
and purchase merchandise via personal computers, mobile phones, or
other Internet -connected devices. Many established retailers began selling
merchandise online to customers who valued the convenience of shopping
from the comfort of their own homes, while new wholly online retailers
and "e -malls," led by eBay (an online auction site) and Amazon.com,
experienced explosive growth. By the 2010s, these trends had resulted in
significant decline s in sales at many brick -and-mortar retailers, even
though most retail purchases in the United States and elsewhere were still
made in physical stores.
Whatever the nature of the business, ethical practices have become an
increasingly important issue. The primary goal of retailing, like any other
business, is to make a profit while also providing excellent customer
service. To achieve this goal, retailers must follow the law and the
regulations put in place to monitor business. A retailer is responsible fo r
developing a set of values and implementing appropriate behaviour.
2.5 EXERCISE
Q.1. Fill in the blanks
a. Form of payment which a retailer may accept is…………. (Cash only,
Cash and Cards, Debit Cards, all the above)
b. —— helps the retailers to face the crisis situations. (Risk Management,
Credit Management, Computerization, None of these)
c. —— is a key task for both large &small retailers. (Risk Management,
Credit Management, Inventory Management, All of These)
d. Consumer buying process in retailing involves —-. (Need Recognition,
Information Search, Evaluations, All the Above)
e. Atmosphere in retailing refers to …………. (Weather, Ambience,
Assortment of Product, Display of items)
Answers (1 -a, 2-a,3-d,4-d, 5-b)

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39 Q.2. State the following true or false
a. The word retail i s derived from Latin word.
b. Retailer sells goods in small quantities
c. In retailing there is a direct interaction with customers
d. Retailing creates only place utility
e. Risk management does not help to face crisis.
(Answers 1. True, 2. True, 3. True, 4. False, 5. False)
Q.3. Match the following:
A B
1. Malls a. Small quantity sales
2. Ambience b. Modern retail format
3. Facing Crsisis c. Retail atmosphere
4. Debit Card d. Mode of payment
5. Retailing e. Risk management
1- b, 2- c, 3- e, 4-d, 5-a
Q.4. Write short not es
a. Promotional Strategies
b. FDI
c. Drives in retail
d. Departmental Store
e. Convenience Store
Q.5. Explain in detail
a. Write a brief note on recent trend in retailing.
b. Explain the challeges faced by retailers
c. Write a brief note on drivers o f changes in retail sector.
d. Explain the importance of ethics in retailing.
e. Elaborate the concept of retailing ethics.

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40 Bibliography
1. https://egyankosh.ac.in/bitstream/1234567 89/15098/1/Unit -11.pdf

2. https://www.britannica.com/topic/retailing

3. Barnes, L. and Lea Greenwood, G., 1990. "Fast fashion in the retail
store environment", International Journal of Retail & Distribu tion
Management. 1st ed. Emerald Publishing.

4. Barnes, L., 2013. Fast fashion. 1st ed. Bradford: Emerald Group
Publishing Limited.

6. Buzzell, R., Sultan, G. and Gale Ralph, B., 1975. Market Share —a
Key to Profitability. [online] Harvard Business Review. Available at:

[Accessed 21 April 2017].

7. Calderwood, E. and Davies, K., 2013. Co-operatives in the Retail
Sector: Can One Label Fit All?. 1st ed. [ebook] Journal of Co -
operative Studies, 46:1, Summer 2013: 16 -31 ISSN. Available at:
137.pdf> [Accessed 21 April 2017].

8. Elliott, T., 2008. Website 411: Business Survival in the Internet
Economy. 1st ed. west conshohocken: Infinity Publishing.com.



5. Barry, C., 2017. White-Collar Employment: II—Characteristics.
Bureau of Labor Statistics, U.S. Department of Labor, [online]
Available at:
ts> [Accessed 19 April 2017].

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41
3
RETAIL MANAGEMENT STRATEGY - I
Unit Structure :
3.0 Objectives
3.1 Introduction
3.2 Retail Strategies
3.3 Summary
3.4 Exercise
3.0 OBJECTIVES
 Apply advertising and promotion objectives to meet organizational
goals.
 Demonstrate the creative process in developing an advertisement.
 Describe the advantage and disadvantages of various media.
 Discuss promotional objectives.
 Develop an integrated marketing communication plan.
3.1 INTRODUCTION
A retail strategy is a comprehensive marketing plan for a product or
service that is designed to reach the final retail channel and influence
consumers. This strategy covers everything from what retail channels a
product or service will be available into what price or sales incentive
should be given and how the product should be displayed on the shelf. A
retail strategy is developed for distributing products through retail outlets.
A variety of factors influence the sale of a product when it is sold through
a retail outlet. Retail strategy is a component of a strategic m arketing plan
that directly attracts or reaches consumers. It consists of product
pricing/discounts, commission structure, promotional schemes, product
performance demonstration, and retailer commission structure.
Retail strategy is a detailed marketing pl an related to the of the business,
its goals, and the ways and methods to achieve them in relation to retail. A
retail store must develop a strategy to promote its goods and services and
reach the right customers — the primary goal of retail strategies is to
increase sales as well as customer satisfaction.
A retail plan is generally dependent on a variety of factors such as
products, store location, customer nature, and other numerous external
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42 3.2 RETAIL STRATEGIES
PROMOTIONAL STRATEGY
Retail promotions have evolved into an essential component of the retail
marketing process. It is a method of communicating with customers with
the goal of informing, persuading, and remin ding them of various aspects
of the retail objectives. The elements of retail promotional mix are
discussed in the first part of this unit, and various aspects of retail
promotional strategy are discussed in the second part of this unit. Retail
promotion e ntails the retailer conducting a thorough examination of its
target customer group's purchasing habits from all angles in order to
define and implement promotional tools that will assist the retailer in
bringing customers into the store; and then making pu rchases of
merchandise available in the store. The strategies designed to get
customers inside the store and then buy the merchandise on offer must be
tailored to the customers' psychological, emotional, and physical desires.
This is required to ensure tha t marketing expenses are spent in the most
efficient way possible.
The following are various promotional strategies
3.2.1 ADVERTISING :
Advertising is a method of communicating with product or service users.
Advertisements, as defined by the Advertising A ssociation of the United
Kingdom, are messages paid for by those who send them and intended to
inform or influence those who receive them.
Advertising is always present, even if people are unaware of it. In today's
world, advertising uses every available m edium to spread its message.
This is accomplished using television, print (newspapers, magazines,
journals, etc.), radio, press, the internet, direct selling, hoardings, mailers,
contests, sponsorships, posters, clothes, events, colours, sounds, visuals,
and even people (endorsements).
It consists of the following elements: a) it is a paid activity, as the retailer
must pay the advertising agency for the services or media whose time or
space is being used. It is used by it; b) it is a non -personal presentat ion - a
standard message is delivered to it the total audience of the concerned
medium, rather than being tailored to each individual requirement; c) it is
an out -of-store mass media - such as newspapers, radio, and television
According to a study conducte d by Schonfeld & Associates in the United
States of retail ad spend by different types of retailers in 2004, the ad
spend of Apparel and Accessories stores is approximately 3.7 percent of
total sales, while that of Furniture stores is approximately 5.9 per cent; the
lowest spend is by Drug and proprietary stores, which is approximately
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43 Wal-Mart spends only 0.4% of its sales on advertising; it primarily relies
on word -of-mouth publicity, in -store events, and its well -known policy of
everyday low prices to establish Wal -Mart as a destination store.
3.2.2 POSITIVE ASPECTS IN ADVERTISING :
 Print media typically has a large audience, as evidenced by circulation
figures. The passing of a copy from one reader to another adds to the
circulation.
 The cost per reader, viewer, or listener is less than that of personal or
direct marketing.
 Because alternative media are available, retailers can select the media
that best suits their budget and target market.
 The advertiser has complete control over the message 's content,
graphics, timing, and size (9or length) of the advertisement.
 Thus, the message is standardized for delivery to the entire audience
in a predetermined format.
 The greatest advantage of print media is that it can be read at the
reader's or targe t audience's convenience and at the required
frequency.
 The advertiser can influence editorial content or a special feature (via
a print medium, TV show, news story, etc.). Such content contributes
to the credibility of a product or retailer.
 Because of ad vertising, self -service or reduced service operations are
possible, as customers become more aware of the retailer and its
offerings, reducing shoppers' reliance on sales representatives.
3.2.3 NEGATIVE ASPECT IN ADVERTISING :
 A standardized message, wheth er on television, radio, or print, lacks
flexibility because it cannot be changed to meet the needs of
individual customers in the target audience of the relevant medium
 Media advertising is typically very expensive and thus out of reach
for small business es stores.
 Media typically reaches a large audience spread across large
geographical areas.
 which may be inefficient for a retailer focusing on a specific trading
area or neighborhoods.
 The placement of advertisements in popular media requires a certain
amount of advance planning, which limits the retailer's ability to
capitalize on fad items, current trends, or events.
 Pamphlets or inserts placed in newspapers have a high throwaway
rate, reducing the percentage utility of such medium; small newspaper
ads o r a 30 -second TV or radio ad cannot include certain details,
reducing their usability.




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44 3.2.4 PUBLIC RELATIONS :
Public relations (PR) refer to the techniques and strategies used to manage
how information about an individual or company is disseminated to the
public, particularly the media. Its primary objectives are to disseminate
important company news or events, to maintain a brand image, and to put
a positive spin on negative events to minimize their fallout. A company
press release, news conference, interviews with journalists, social media
posting, or other venues may all be used for public relations.
Every individual or entity operating in the public eye faces the public
dissemination of information about them or their practices. While public
relations is a separate industry, any attempt to present oneself in a
particular way to others can be considered a form of public relations.
Public relations are critical to any company's success, especially when
shares are publicly traded and the value of a sh are is determined by the
public's trust in a company or brand. In addition to handling media
inquiries, information requests, and shareholder concerns, public relations
professionals are frequently in charge of crafting and maintaining the
corporation's im age. Negative PR or willful attempts to discredit a rival
brand or company are occasionally used by PR professionals, even though
such practices are against the industry's code of ethics.
3.2.5 POSITIVE ASPECTS OF PUBLIC RELATIONS :
 Image enhancement for t he retailer.
 Because of the extensive coverage, a news item appearing in a well -
known news channel or newspaper carries high credibility as well as
publicity value.
 There is no direct cost for the provided space or time for the message.
 Customers create a favorable positioning of the store in their minds to
suit their perception of its offerings, which is superior to paid
advertisements.
3.2.6 NEGATIVE ASPECTS OF PUBLIC RELATIONS :
 Many small to medium -sized retailers may find that organizing an
event or sp onsoring a worthwhile public event is out of their price
range, and a paid ad may be a better option.
 The retailer has no control over the timing or placement of the
message or its content. The fund requirement and planning for the
public relations effort may not be suitable for gaining quick and short -
term publicity, particularly for small to medium sized retailers who
are primarily concerned with short term goals.
3.2.7 PERSONAL SELLING :
Personal selling is one -on-one selling, or even one or more people selling
to one or more people. It entails oral communication and may make use of
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45 level and type of personal selling will be determined by the following
factors:
 The image intended to be conveyed.
 The level of service inputs to be used in selling.
 The type of products sold.
 Interest in building long term relationship with customers
Personal selling can be done in the store by personally attending to
customers visiting the store, at the pro spective customer's home or at their
place of work, or through telemarketing.
3.2.8 POSITIVE ASPECTS OF PERSONAL SELLING :
 A good salesperson first understands the needs of the customer and
then tailors his or her message accordingly.
 If the customer is pr operly guided on the merchandise offerings, he
will be eager to spend time in the store.
 A salesperson can change merchandise offerings based on the
customer's needs and concerns, and there is the option for immediate
feedback, which aids in improving merc handise offerings or personal
selling inputs.
3.2.9 NEGATIVE ASPECTS OF PERSONAL SELLING :
 Personal selling can be expensive because each customer must be
handled by a well -trained salesperson to maximize the customer's
interests.
 Only a limited number of customers can be served at any given time.
 Customers may be offended by an aggressive salesperson who asks
too many questions and interrupts them, and the negatives of a
salesperson's behavior may reflect negatively on the retailer's image.
3.2.10 SALES PR OMOTION :
Sales promotion encompasses all paid communication activities that aid in
increasing consumer purchases and encouraging dealers to go above and
beyond to improve sales of the merchandise or service in question.
Displays, contests, sweepstakes, co upons, frequent shopper programmes,
prizes, samples, demonstrations, referral gifts, and other limited time
selling efforts that are not advertising, public relations, or personal selling
efforts are included.
According to MasterCard Spending Pulse, Americ ans spent $36.4 billion
online during the 2011 Christmas season. In 2011, the National Retail
Foundation estimated that online Valentine's Day sales were worth $3
billion. It is undeniable that holiday seasons increase consumer spending.
According to the U RL http://salesbumpblog.com/2011/07/plan -a-
salespromotion -strategy -around -key-holiday -periods/, you can increase
traffic to your website and improve your online sales by planning a sales
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46 A sales promotion is a marketi ng strategy in which a company uses short -
term campaigns to generate interest and demand for a product, service, or
other offer. Sales promotions can have a variety of goals and ideal
outcomes, which we will discuss in depth throughout this article.
Sales promotions are primarily used to motivate purchasing behavior or to
trigger an increase in purchases in the short term to meet a benchmark or
goal. Although the primary goal of a sales promotion is to increase sales,
there are numerous other advantages to developing a strategic sales
promotion technique with marketing team.
3.2.11 POSITIVE ASPECTS OF SALES PROMOTION :
 The promotional themes and tools aid in the creation of appropriate
importance and distinction for specific merchandise.
 The retailer can cre ate an eye -catching appeal for the merchandise by
using proper displays and schemes.
 It aids in increasing store traffic and thus sales. It aids in promoting
customer loyalty to the store. It aids in promoting impulse purchasing.
 It aids in creating a fun and exciting environment through contests
and product demonstrations.
3.2.12 NEGATIVE ASPECTS OF SALES PROMOTION :
 Over time, too much of any promotional feature may have a
diminishing effect.
 If a store is constantly using promotional gimmicks, it will b e
perceived as a promotion -based outlet, reducing its selling potential
during non -promotional periods.
 Sales promotions may only have a short -term effect and should be
used in conjunction with other promotional activities. The cost of
sales promotional ac tivities may reduce the store's profitability if the
desired sales results are not achieved.

3.2.13 RETAIL PLANNING PROCESS :
Promotional strategy is an important component of a retailer's strategic
mix, and it must be used in a systematic and planned man ner to maximize
the output from its implementation. Any incorrect timing or inappropriate
use of the promotion type may only result in a net loss for the retailer from
the promotion scheme's execution. In the following sections, we will look
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47

1. Determining Objectives
According to Mr. Chiplunkar R M, 'Product Category Management,'
Ch 11 pp 233 - 234, Tata McGraw Hill Education Pvt. Ltd., New
Delhi 2010, the following are the most common promotional
objectives:
 Increase the customer walk -ins or traffic
 Increase sales
 Increase profit
 Clear dead stocks
 Create brand or product awareness
 Induce trial for new products
 Establish awareness of the reta il outlet/chain.
 Enhance customer relations
 Positive word of mouth publicity

2. Establishing Promotional Budget
A retailer may use a variety of methods to determine the overall
budget for its promotional activities. The following are the most
common:
Affordability: In this method, the retailer may choose the budget for
promotion at random, which could be a one -time spending activity
during a specific season or festival. The budget chosen is based on the
retailer's ability to pay.
Incremental method: Under this Programme , the shopkeeper may
opt to spend 10% more on promotional activities this year than he did
last year if he spent Rs. 1 lac. on them the year before.
Parity with competitors: Using this strategy, a store may decide how
much money to spend on advertising based on the advertising The flow of the process is depicted in Figure.
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48 strategies employed by its main rivals. The shop would copy the plan
with a few hypothetical adjustments if the rival decided to run a deal
throughout Christmas and New Year's.
Strategy based on a percentage of sales: In this method, the retailer
may choose to allocate a specific portion of the projected sales budget
for promotions. The percentage of spending may be determined by the
competitors' trends or by what the retailer can afford given its net
profitability. The entire budgets for promotions at many retailers
range from 2 to 10 percent.
Objective and Task Method: This strategy, known as the objective
and task method, is uncommon and is mostly used by a sizable retail
chain with a long -term outlook. According to th is strategy, the retailer
may believe that it needs to increase "top of mind" recall for the store
and may set a goal to reach the same level with 80% of the populace
in the nearby trade area.
3. Selecting a Promotional Mix
The promotional mix refers to the various percentages of total
spending that will be allocated to various promotional activities like
advertising, public relations, personal selling, and sales promotion to
make up the overall expenditure amount that is based on the
promotional budget. For instance, a small store with a constrained
promotional budget of, say, Rs 5 lacs can choose to spend 25% of the
budget on activities that promote sales, such as window and
counter/floor displays, another 25% on gift certificates, and the
remaining 50% on p rizes and presents. Spending 50%, 30%, and 20%
of the total allocated amount, respectively, on advertising, sales
promotion, and public relations, a large format store may use a
combination of these strategies.
The varying percentages of total expenses to be spent on promotional
activities including public relations, personal the merchant must
consider the hierarchy of effects when choosing the promotional mix,
such as raising awareness, increasing knowledge about the store,
increasing customer fondness for the store, and then increasing
preference and conviction, which will ultimately result in a purchase
from the store. Depending on the goal to be accomplished, a different
type of promotional mix may be required for each of the effects.
4. Implementation of P romotional Mix
The store will require a retail team with a certain level of competence
to deploy various promotional mixes. The team will need to decide on
the best promotional mix, within each promotional element to select
the appropriate vehicles or too ls, message contents, sales force, and
the persons responsible for coordinating various promotional
activities, and finally the overall control of the team and its
performance. This requires a team that has a strong understanding of
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49 together a marketing team with solid knowledge of the various print
media, their use in various contexts and purposes, techniques of
selection, etc., to choose the appropriate print media under the
advertis ement.
5. Review and Revision of Promotional Strategy
This is a crucial activity to carry out following the conclusion of the
relevant promotion scheme or before to planning promotions to
determine what supported the scheme's goals and objectives and what
didn't. Knowing the causes of the scheme's success or failure is
crucial to make the necessary changes to the structure of the scheme
or the plan itself to make it more likely to achieve the intended goals.
To assess if the plan is successful or unsuccessful , the targets should
be precise.
3.2.14 RETAIL MARKET SEGMENTATION :
Markets are diverse throughout the board. This is clear through
observation as well as from the abundance of well -known
publications explaining the diversity of local and worldwide market s.
Consider The Nine as an example. Latitudes, Nations of North
America (Garreau, 1982), an atlas of American tastes, trends, and
attitudes Weiss’s 1994 book Politics and Passions and Mastering
Strategies for Today’s Trade Globalist: Global Markets(2003)
Czinkota et al. When contemplating nature consumer behavior ,
markets, and competition. As a result, for a marketing and business
plan to be effective, the market must be divided into homogeneous
groups, the requirements and wants of these segments must be
understood, products and services must be designed to fulfill those
demands, and marketing tactics must be developed. Thus,
segmentation is the key to efficient resource deployment and
allocation, which is at the heart of firms’ aspirations to become
custom er driven. An issue that is getting more attention is the degree
of segment aggregation.
Most of us immediately consider psychographics, lifestyles, values,
habits, and multivariate cluster analysis techniques when the term
“market segmentation” is used. H owever, market segmentation is a
far bigger idea that permeates company operations all over the world.
The word “market segmentation” refers, at its most basic level, to the
division of a market along certain lines of affinity, resemblance, or
commonality. In other words, a market segment’s participants have
something in common. In order to acquire a competitive edge within
the segment, segmentation focuses marketing effort and resources on
the subdivision (or market segment). It is comparable to the milita ry
doctrine of “concentration of force” to completely outnumber an
adversary. Market segmentation is a conceptual tool used to help
attain this focus. The essence of every marketing strategy is the
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50 Let’s analys es different market segmentation strategies before talking
about psychographic or lifestyle segmentation (which is what most of
us mean when we use the word “segmentation”). Even though we are
primarily interested in consumer markets rather than business
markets, most of the following ideas also apply to B2B.
3.2.15 BASIS OF SEGMENTATION :

1. Geographic Segmentation
This type of market segmentation, in which businesses target a certain
geographic area, is possibly the most prevalent. For instance,
businesses could decide to market their brands only in certain nations.
One market, one state, or one region in the United States may be the
sole place where a brand is offered. To achieve force concentration,
many restaurant chains concentrate their efforts in a ce rtain
geographic area. There are regional variances in customer
preferences, which frequently serves as the foundation for geographic
specialization.
2. Distribution
Different distribution channels can be used to target various markets.
The "tick and flea col lar" market, for instance, could be segmented by
a business selling the product to supermarkets under one brand name,
mass merchandisers under another, pet stores under a third, and vets
under still another. This kind of segmentation of distribution is
typical, particularly among small businesses who give each
distribution channel its own brand in order to increase distribution
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51 department stores or a premium hair product distributed only thro ugh
upscale beauty clinics are two other instances of distributional
segmentation.
3. Media Segmentation
Media segmentation is occasionally a possibility, while being
uncommon. It is based on the observation that various media
frequently target various audien ces. If a company invests all of its
resources in one media, it may be able to control the market segment
that reads that magazine or listens to that radio station. Companies
who have some degree of control over the media and can in some way
deter competit ors from using that media are most likely to engage in
media segmentation.
4. Price Segmentation
It is popular and commonly used to segment prices. Different
household income levels present a chance to divide some
marketplaces along a pricing axis. According to the logic, a business
should provide some inexpensive, some midrange, and some pricey
products if individual incomes range from low to high. The variety of
vehicle brands that General Motors has historically promoted is a
good example of this form of pr icing segmentation. To appeal to
progressively higher income groups, Chevrolet, Pontiac, Oldsmobile,
Buick, and Cadillac offered a range of prices (and status) along a
well-defined spectrum.
5. Demographic Segmentation
Common demographic factors include gende r, age, income, home
type, and educational attainment. Some brands solely appeal to
women, while others only appeal to males. While hearing aids are
typically marketed at the elderly, music streaming services are
typically targeted at the young. Market seg ments are often determined
by education levels. For instance, private primary schools may choose
highly educated households with women of reproductive age as their
target market. A segmentation strategy nearly usually includes
demographic segmentation.
6. Time Segmentation
Time segmentation is less common but can be highly effective. Some
stores stay open later than others or stay open on weekends. Some
products are sold only at certain times of the year (e.g., Christmas
cards, fireworks). Chili is marketed mo re aggressively in the fall, with
the onset of cooler weather. Football is played in the fall, basketball in
the winter and spring, and baseball in the spring and summer (or at
least this used to be the pattern). The Olympics come along every four
years. D epartment stores sometimes schedule midnight promotional
events. The time dimension can be an interesting basis for
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52 7. Occasion Based Segmentation
At different times or situations, people frequently act and think in
different ways. For instance, dietary preferences and habits varies
depending on the occasion: breakfast is different from supper; going
out to eat on a Friday night is different from packing a lunch during
the week; Thanksgiving dinner is distinct from most other dinners.
These kinds of distinctions can serve as the foundation for market
segmentation. Occasion -based segmentation might be a useful option
if the aim is to create new product development templates for a
restaurant chain.
8. Psychographic Segmentation
The final segmentation m ethod is psychographic (or lifestyle), which
is based on multivariate studies of customer attitudes, values,
behaviors , emotions, perceptions, beliefs, wants, benefits, wishes, and
interests. If we can discover the appropriate segmentation variables
(or li festyle statements, words, visuals, etc.), then psychological
segmentation is a valid method of market segmentation.
3.3 SUMMARY
Retail promotions are now a crucial component of the retail marketing
strategy. It is a method of speaking with customers with the intent of
informing, reminding, and influencing the target consumer about several
parts of the retail objectives. The crucial components of the promotional
mix are public relations, personal selling, and relations and the promotion
of sales. Advertisi ng is a non -personal presentation since it conveys a
standard message. The entire audience of the concerned medium, rather
than being customized for each person requirement. It is an outside mass
media outlet that consists of newspapers, radio, each mass c hannel,
including TV, the Internet, and others, has its own audience, which turns
into upon payment of the specified space or time, is made available to the
advertiser. It's impersonal.
There are several types of commercials in use, including thanksgiving,
competitive, reminder, institutional, and pioneer ads. Public relations'
main goal is to help the public form a favorable opinion of the retailer.
The goal is to have a broad impact on all the stakeholders, including
customers, investors, the government, channel participants, staff, and
members of the public, on the store's reputation. There are essentially two
different kinds of PR that could happen: planned PR and unanticipated PR.
According to the type of coverage the event may garner, unanticipated PR
may be distracting or detrimental, whereas planned PR is typically an
image enhancer.


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53 3.4 EXERCISE
Q.1. Answer the following
a. All the ___________ merchandising material including the point -of-
sale materials. (Visual / Physical)
b. The retailer may decide on spending based on its _______________
sales. (Month to month / Year to year)
c. _____________ in sales is derived by offering some discounts.
(Increase / Decrease)
d. …………… is done by the customers
e. ……………. Is controlled by the company
Answer -a) Visual b) Mon th to Month c) Increase d) Publicity
Q.2 True or False
1. Huge profit of the manufacturer is not a contributing for rapid growth
of sales promotion.
2. Product mix is not the factor of promotion mix.
3. Eureka Forbes is a strategy of direct marketing
4. In advertising , message, media and everything is not controlled by
marketer
5. Publicity is done by the retailer.
(Answer 1. True, 2. True , 3. True, 4. False, 5. False)
Q.3 Match the column
1. Advertising a. Satisfied or unsatisfied Customer
2. Publicity b. Target Cus tomer
3. Segmentation c. Promoting Sales
4. Sales Promotion d. Sells to final Customer
5. Retailer e. Paid Promotion
(Answer - 1- e, 2-a, 3-b, 4-c, 5-d)



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54 Q.4 Shorts Notes
1. Planning Process
2. Advertising
3. Personal Selling
4. Publicity
5. Sales manship
Q.3 Long Answers
1. Write a brief note on retail Market Segmentation
2. Explain the Basis of Retail Market Segmentation
3. Write brief note on retail planning process
4. Explain the importance of advertising
5. Write a brief note on Sales Promotion.
Bibliography
1. https://egyankosh.ac.in/bitstream/123456789/15033/1/Unit -6.pdf

2. https://www.pipedrive.com/en/blog/sales -promotion

3. https://pos.report/Resources/Whitepapers/f4003a5c -e8a6 -4153 -be6d -
06400305407e_experian.pdf










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55 4
RETAIL MANAGEMENT STRATEGY - II
Unit Structure :
4.0 Objectives
4.1 Introduction
4.2 Relationship Marketing Strategies
4.3 Consumer Strategies
4.4 Summary
4.5 Exercise
4.0 OBJECTIVES
 To understand importance of CRM in retailing
 To discuss retail va lue chain and retail lifecycle
 To understand the role and challenges of HR in retailing
 To Examine Consumer behavior and buying decision process
 To Describe Customer service as a part of retail strategy
4.1 INTRODUCTION
Relationship marketing employs a mix of tactics to promote long -lasting
contentment and customer loyalty. Relationship marketing includes things
like proactive customer service, loyalty programmes, asking for feedback,
and highlighting a product's benefits over flaws.
4.2 RELATIONSHIP MARKET ING STRATEGIES
A combination of strategies are used in relationship marketing to
encourage enduring happiness and consumer loyalty. Proactive customer
service, loyalty programmes, soliciting feedback, and emphasizing a
product's advantages over disadvantag es are all examples of relationship
marketing.
4.2.1 CRM IN RETAILING :
In order to manage and analyses customer interactions and data across the
customer lifecycle, businesses employ a combination of practices,
strategies, and technologies known as custom er relationship management
(CRM). The objective is to strengthen interactions with customers in order
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56 4.2.2 SIGNIFICANCE Of CRM IN RETAILING :
The objective is to strengthen interactions with customers in ord er to
promote client retention and increase sales in the following ways:
1. Customer Conversion :

A customer has made the decision to spend their money when they
convert by making a purchase. From a CRM perspective, this is an
excellent chance to learn more about your consumers and increase the
value of the purchases they make. Remarketing products to customers
at the point of sale, offering opportunities for add -on purchases, and
enticing customers to sign up for newsletters, emails, and loyalty
offers and p rogrammes are a few examples of how to do this.

2. Customer Retention :

The goal of the retention phase is to keep customers coming back and
making repeat purchases over an extended period of time in order to
foster loyalty. Due of the ability to offer cli ents products that are
comparable to or complementary to their previous purchases,
customer relationship management is important throughout the
retention stage.

3. Strengthen customers’ Loyalty :

CRM enables a shop to concentrate on each consumer separately in
order to better understand their demands. This will enable the
business to give long -term clients points, bonuses, and prizes, which
will encourage consumer loyalty. Retailers will benefit from this since
loyal customers are more likely to make repeat purchases, which will
boost sales and profit levels.

4. Segmentation :

Customers can be divided into distinct sections so that they can be
attended to appropriately thanks to the collection of all the customer -
related data. Retailer can segment your market in this way. Families,
children, vegetarians, non -vegetarians, first -time purchasers, seasoned
buyers, buyers who frequently make large purchases, buyers who
seldom make large purchases, etc. Market segmentation makes it
easier to develop a better plan tha t works for your target audience.

5. Customer Data :

CRM keeps track of every customer's profile and information,
including their most recent purchase, business cards, and phone
numbers. This assists in documenting a customer's entire history so
that one ca n get to know them all personally and more thoroughly
understand who are regular clients and what their demands are. It also
aids him in recognizing needs, gaining better business, and improving
the shopping experience for customers at establishment.
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57 4.2.3 RETAIL VALUE CHAIN :

A value chain is a series of tasks that a business completes before
delivering a product to clients. A value chain is made up of all the steps
that go into getting a product from the point of ideation to the point of
distribution, i ncluding design, production, distribution, and marketing. For
businesses that produce things, the value chain starts with the raw
materials utilized in product development and spans the entire period
before the product is sold to final consumers.
A value c hain can help a business find wasteful areas of operation, then
support decisions and streamline processes to boost output and profit.
Value chain analysis can also assist companies make sure that their
customers are confident and secure enough to stick wi th them.



The value chain concept's creator, Michael E. Porter, categorizes a
company's activities into two main groups: primary and support.
Primary activities contribute to a product’s physical creation,
maintenance, sale, and support.
The productio n, upkeep, sale, and support of a physical object are all
impacted by primary activities.

The term "inbound logistics" describes how external resources, including
vendors, are managed and handled internally. These outside resources,
also referred to as "i nputs," can comprise raw materials.

Operations are all procedures and actions that transform inputs into goods
or services (also known as "outputs") that a business sells to customers for
an amount greater than the cost of production and raw materials.

Product and service delivery to customers is known as outbound logistics.
The process includes systems for gathering, storing, and distributing
information.
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58 marketing and sales. Examples of efforts that seek to attract an audience,
increase visibility, and justify a consumer's decision to purchase a good or
service include branding and advertising.

Service. Customer service and product assistance

The company's primary activities are supported by the supporting
activities, which include:

Procurement. loca ting suppliers, managing connections with them,
negotiating prices, and other tasks involved in obtaining the necessary
materials and resources to build a product or service.

technological progress Activities like research and development, IT
management, and cyber security aid in a company's establishment and
maintenance of its technological capabilities.
HR administration. This includes hiring, training, building and upholding
a company culture, and maintaining solid employee connections.

All essential b usiness functions, including general management, legal,
administrative, finance, accounting, quality assurance, and public
relations, are included in a company's infrastructure.
Retailers can gain from the value chain architecture in the following ways:
a. Find inefficient locations and take corrective action there.

b. Support decision -making for a variety of corporate operations.

c. Increase output while reducing costs by optimizing operations.

d. Understand the relationships and interdependence between the variou s
business sectors and operations.

e. Recognize your main strengths and areas for improvement.

f. Establish a cost advantage over rivals.
4.2.4 RETAIL LIFE CYCLE :
Retail life cycle theory describes how and why the current retail formats
grow in the manner tha t they do. The influence of the retail life cycle is
linked to a variety of elements, including price cycle, market environment,
macroeconomic volatility, and more, which strengthens the case for the
idea. It consists of 4 stages given below:
1. Introduction:

In introduction, there is reformation and development of business
processes as well as birth of new retail formats. Additionally, it is
difficult for retail businesses that use the new techniques to turn a
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59 to this hypothesis, changing business practices enables innovation in
retail organizations . Restructuring business practices mostly entails
lowering operating expenses and product or service prices. It can also
be innovated by enhanc ing the product mix, customer service, sales,
store selection, retail design, or sales promotion, as well as other
methods, some of which are frequently combined. The business that
pioneers a new retail format occasionally becomes the focus of
attacks. The creation of new forms throughout this time might also
bring to rivalry and revenge. Due to its little market share at this time,
it has minimal effect on the current competitive landscape.

2. Growth:

In the expansion stage, consumers begin to embrace new b usiness
structures, and industry professionals are well -versed in their
characteristics. As a result, both the market share and imitations are
increasing. Retail Organization using new methods and others using
traditional ways are in increasingly fierce ri valry. Organizations that
have first improved their operational procedures can then boost their
mark sales and profitability.

In the interim, the competition between businesses offering novel and
innovative retail models starts to heat up. Customers of no n-
innovative companies now aim to choose the goods and services of
retail organizations that have undergone quick transformation.

3. Maturity:

Firms with novel retail models are currently unable to increase their
market share and customer base. Retailers wh o excelled during the
growth stage are currently attempting to hold onto their market share.
However, the profit margin starts to shrink because no company could
gain an advantage over the others with the new retail formats, thus
businesses had to lower th eir prices to outbid rivals. Therefore, the
fundamental challenge that every business faces is how to cut costs. In
a competitive environment, businesses seek to develop a more
established and stable market in order to achieve a distinct edge. The
distinct ive qualities of new formats have gradually disappeared, and
they are being replaced by traditional forms. As a result, it becomes a
crucial chance for the urgent adoption of another new structure.

4. Decline:

The market is beginning to contract as a result of changing consumer
purchasing habits and the emergence of fresh formats. Traditional
formats (the original new formats) were unable to turn a profit but
may have suffered significant losses as a result of the declining sales.
Some businesses make the de cision to abandon the market during this
time. As a result, there isn't much competition between similar retail
formats, but there will be more and more across distinct formats.
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60 profit to de cline over time. Due to their advantages in other areas like
service, product quality, and business operations, retailers using the
new format have an advantage over the competition.



4.2.5 HRM IN RETAILING :

Performance in a retail firm is assessed in relation to the HRM objectives.
If objectives are clearly stated and embraced by employees, they will
encourage voluntary cooperation and foster harmony among human
endeavors. HRM in retail has a truly broad and diverse use. HRM covers,
in general, all th e tasks that a retail store employee must complete from
the time of his admission to the time of his departure. Recruitment,
selection, on boarding, training and development, supervision, and pay are
just a few of the survival -integrated operations that ma ke up HRM in the
retail industry.

4.2.6 GROWING IMPORTANCE OF HR IN RETAILING :

A retail business may need to structure and assign responsibilities,
procedures, and resources in order to fulfill the target market 's,
management administration's, and emplo yees' rapidly changing
requirements given the rate at which new and new corporations are joining
the retail industry. Retail firms have made employee growth and retention
policies a priority due to the high turnover rate and rising need for
qualified worke rs.
Over these years, each retailer's main priorities were expansion tactics,
brand building, and sales. But dealing with the lack of competent, future -
ready talent, maintaining high performance, and keeping critical talent
present enormous hurdles. Theref ore, the crucial question for the Indian
retail sector is how businesses can maintain high performance while
coping with both economic difficulties and a talent deficit. In order to
meet the challenge of escalating competitiveness brought on by
liberalizat ion, Indian organizations have started implementing cutting -
edge HR management methods to encourage innovation and creativity
among staff members. Only aggressive HR strategies will be able to keep
up with the retail sector's expanding needs.
For any retai ler, successful planning, organiz ing, and strategizing go hand
in hand with outstanding execution. Additionally, execution is solely
reliant on the teams' skills. Any company operating in this industry must
develop systems of high performance work practice s, including thorough
recruitment and selection processes, reward policies, performance
management systems, and extensive employee involvement and training,
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61 recruitment and selection proce dures, reward policies, and performance
management systems. The success of retail firm greatly depends on the
kind of HR tactics it is employing and how people are managed. HR
personnel are the backbone of every organisation. The retail sector is
experienc ing difficulties as a result of growing competition among
organised retailers.
The HR department in retail, which began as an operational function but is
soon anticipated to become a strategic partner in the business, is being
significantly impacted by rap idly changing retail trends. The way the HR
department operates has changed as much as the retail landscape in India.
Initially, HR was viewed as a supporting role that primarily focused on
employee hiring and leave management. Key performance measures for
HR were solely focused on hiring rates. The role of a business partner has
now evolved as a result of the evolving business environment and
increased exposure to HR activities through education. There are many
issues facing the HR teams as a result of the opening up of FDI and the
entry of huge retailers, such as retention, innovations in hiring,
productivity increase and reducing turnover

4.2.7 CHALLENGES FACED BY HR IN RETAILING :

There are many hardships in manpower management in retailing as
discusse d below:

1. Retention of Employees :

One of the biggest issues in recent years for retail HR has been
finding and keeping employees. The challenging task of tackling these
issues falls on HR. In order to recruit and keep personnel in a volatile
business, th ey must develop creative strategies. Increasing employee
engagement, rewarding hard work, raising pay and benefits, providing
predictable schedules and guaranteed hours, and conducting in -depth
departure interviews to understand difficulties and what emplo yees
are actively looking for in an employer are a few examples of how to
do this. Numerous retailers have already stepped up their efforts to
recruit and keep workers.

2. Workforce Management :

Managing a staff has always required skillfully juggling a var iety of
various jobs and duties. Due to the expansion of employers' duties of
care, employers are now held accountable for their employees in more
ways than ever before, making workforce management a challenging
undertaking. This is unlikely to change very soon because of the
growing number of legislation in areas like pay transparency that are
on the horizon. Additionally, failing to stay on top of the full range of
management responsibilities can have disastrous effects on employee
satisfaction and, ultim ately, employee retention rates. By using
workforce management software, you can give your HR managers a
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62
3. Employee training :

For em ployees to strengthen their abilities and advance their skills,
both at work and beyond the office, having a training plan is essential.
Nevertheless, putting into practice a training programme that is in
accordance with employee demands can be challenging , particularly if
there is a significant staff turnover rate.
As a result, the HR team must work extra hard to strike a balance
between hiring and training. The business must make an investment in
the training of each new hire. Once qualified, they will co ntribute
significantly to the team. As a result, maintaining this type of person
and ensuring their engagement must also be a priority.

4. Use of Technology :

The HR division is not an exception to how gradually the digital
transformation is spreading. To i mprove productivity, talent
management teams are faced with the task of digitising and
automating their procedures.
Mechanical and administrative duties can be accomplished more
rapidly thanks to technology and specialis ed HR software, freeing up
time for strategic work and enabling access to vital information for
better decision -making.

5. Employee engagement and Wellbeing :

All businesses must manage employee engagement and wellbeing,
which typically falls under the purview of the human resources
division. The advantages are significant:
increased effectiveness and productivity
more contented clients.
lower turnover rates and absenteeism levels.
increased income
Regular staff satisfaction surveys are one approach to gauge employee
satisfaction. The HR divis ion can put preventative measures into place
with the use of this information and track the results. It's critical to
show that workers have a voice and that the organisation cares about
their issues.

6. Regulations :

Government regulations and rules change between countries as well
as between states in India. These regulations involve laws in
employment, pays, safety and health etc. The field of HRM becomes
volatile and exposed to all fluctuating legal demands.





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63 7. Downsizing :

Downsizing is the process of permanently reducing a company's
workforce by eliminating underperforming employees or departments.
Downsizing is a prevalent organisational technique that is frequently
linked to recessions and failed companies. The quickest approach to
reduce expenses is to eliminate employees, and closing down an
entire branch, store, or division also frees up assets for sale during
company reorganisations. Due to rivalry and unstable business
conditions, it is also seen in the retail sector.

4.3 CONSUMER STRATEGIES

Consumer buying behaviour is the ultimate consumer's purchasing habits.
A retailer must examine consumer behaviour for the success of products
and services is significantly impacted by how customers respond to its
marketing approach.

The marketing conce pt emphasises the necessity to study the what, where,
when, and how consumers purchase in order to develop a marketing mix
(MM) that satisfies (provides usefulness to)customers. Without clearly
defining what or who a consumer is, we have been discussing co nsumer
behaviour for a long time. Over the past few decades, India has seen a
rapid expansion of the retail sector. Both structured and unorganised retail
markets make up the Indian retail sector. It has seen rapid expansion in
recent years, with a clear p reference for organised retailing structures. The
market is moving toward a contemporary idea of retailing. The demand for
retail spaces is quite high as India's retail industry aggressively expands.
being built. Additionally, the widespread use of debit a nd credit cards has
substantially aided India's strong and expanding retail consumer culture.
Research into contemporary consumer behaviour is growing more and
more important for the retail industry as customers become more
powerful, intelligent, and smart . Consumers consider store characteristics
while choosing where to shop when they make the decision where to shop.
Store attributes are presented by retailers according to their specific
functional strategies.

4.3.1 CONSUMER BEHAVIOR IN RETAIL CONTEXT :

Understanding retail consumers involves comprehending their shopping
habits at retail establishments. To understand who, when, and how
purchases are made, it is crucial to comprehend the consumer.
Understanding how to assess consumers' reactions to sales p romotions is
equally crucial. For the survival and success of the firm, it is crucial to
comprehend the consumer in the retail industry. In order to develop and
implement successful marketing strategies and apply the four Ps of the
marketing mix (Product, Price, Place, and Promotion) to produce high
revenue over the long term, a retail organisation must have a solid
understanding of consumer behaviour. Understanding and gratifying
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64 duty. Consumer behaviour includes all facets of the acquisition, use, and
disposal of goods and services. Within the context of the customer, groups
and organisations are taken into consideration. Failure to comprehend
consumer behaviour is a recipe for catast rophe, as several businesses have
painfully learned. For instance, Wal -Mart began operations in Latin
America with a store layout that was identical to US markets. However,
consumers in Latin America are completely different from those in the
US. Wal -Mart experienced negative effects and failed to make a
difference.

4.3.2 BUYING BEHAVIOR PROCESS :
"Buying behaviour is a complicated amalgam of needs and desires that is
influenced by elements such as the consumer's (1) societal function
(parent, spouse, work er, etc.), (2) social and cultural context and norms,
and (3) aspirations and inhibitions," according to the Harvard Business
Review. Buying process starts with seeking information and ends with
post purchase reactions.
4.3.3 STAGES IN CONSUMER BUYING DECI SION
BEHAVIOUR :

1. Need Arousal or Problem Recognition - The source of the problem
is people's needs, and unmet demands produce tension and discomfort
in the thoughts of customers. Consumers can obtain and consume
goods and services to meet their r equirements. For example, need for
food arises when hunger strikes.

2. Information/ Knowledge Search - When a consumer's demand is
great enough, he or she will try a readily available product to meet his
or her needs, but in many circumstances, the aroused c onsumer will
go in search of information.

(a) Improved attention -In this scenario, the consumer becomes more
responsive to information about the product that may meet his
demands. The hunt for information is passive in this case.

(b)Active information s earch —In this case, the consumer is the
information seeker, and he gathers information from a variety of
sources. For example, information search is little in case of buying
pizza than buying a computer.

3. Alternatives Evaluation - At this stage, the consume r will compare
and contrast different products or brands based on alternative product
qualities that have the ability to provide the benefits the customer is
looking for.

4. Purchasing choice - After assessing several items or brands based on
various product qualities, the consumer makes a purchase decision
based on his or her preferred brand. The choice of brand is dependent
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65
5. Post-purchase behaviour: The consumer may be satisfied or
unsatisfied with the product a fter acquiring it. The buyer's happiness
or dissatisfaction is determined by the buyer's expectations and the
product's perceived performance.


Source: Philip Kotler The five stage model in consumer behaviour’
Kotler (2012)
4.3.4 CUSTOMER SERVICE AS A P ART OF RETAIL
STRATEGY :
A retail company needs to develop some distinctive service guiding
principles in order to effectively leverage customer service as the
differentiator. Correctly defining the organization's line of business is the
first step in build ing a strong service organisation. A company that defines
its business too narrowly runs the risk of developing what is known as
marketing myopia. The following are steps for the same:
Step 1:
Identifying the key customers and listen and respond to them
The retailer must recognise and give priority to its customers. Once the
company has identified its important clients, it is simple to comprehend
their purchasing patterns and occasions and then cater to them properly.
Customers' needs and expectations fluct uate for a variety of reasons.
Consumer expectations would vary as a result of a change in the
consumer's lifestyle, which would also affect his needs. Young people
have different requirements and desires than middle -aged people and
senior citizens. Simila r to how an individual's wants might alter as he
moved up the income scale. The business must keep tabs on and be clear
about the expectations of its clients in the current environment. The
importance of this to the organisationis to be able to plan futur e business
and pre -empt the competition.
Step 2
Define Superior Service and establish a service strategy
The objectives and the means by which they can be expressed must be
established in a strategy before it can be implemented. The requirements
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66 service. These requirements must be spelled out in detail and sent to all
organisation members .Mc Donald's is an illustration of one such company
whose aim includes providing excellent cus tomer service.
Step 3
Set Standards and measure performance
The necessity for a system to capture, evaluate, measure, and track an
organization's performance on multiple metrics develops after the
identification of the main customers and their expectations and their
connection to corporate objectives. For instance, Domino's Pizza is
committed to making deliveries within 30 minutes. One can express
specific standards that are useful and measurable.
Setting performance criteria helps to increase credibility e very time the
requirements are met or exceeded in addition to ensuring compliance with
the targets. The stepping stone to customer delight is this. At the same
time, failing to fulfil goals reveals service shortcomings that can later be
closed.
Step 4
Select Train and Empower Employees to work for the customer
The retailer must build a team of committed employees with decision -
making authority if it hopes to deliver outstanding service. Customer
skills, communication, and product skills need to be covered i n training.
Giving staff decision -making authority is one way to entrust them with a
lot of responsibility. If management approval is required for the action to
be conducted, customers who frequently return items to a store or are
unsatisfied with a produc t or service are sure to become even more
disillusioned.
Step 5
Recognize and Reward accomplishment
While most people priorities financial security, acknowledging hard effort
and showing appreciation can greatly influence employees' willingness to
give the ir all. This necessitates extra attention from the retail organisation,
as the salesman frequently serves as the organization's public face.
Rewards don't always need to be monetary; they can also be symbolic, like
lapel pins, unique nametags, or holidays. It is essential for front -line
employees in the retail industry to be aspirational about giving their clients
great service.


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67 4.4 SUMMARY
In order to manage and analyses customer interactions and data across the
customer lifecycle, businesses employ a c ombination of practices ,
strategies, and technologies known as customer relationship management
(CRM).
A value chain is a series of tasks that a business completes before
delivering a product to clients. A value chain is made up of all the steps
that go in to getting a product from the point of ideation to the point of
distribution, including design, production, distribution, and marketing.
Retail life cycle theory describes how and why the current retail formats
grow in the manner that they do. The influenc e of the retail life cycle is
linked to a variety of elements, including price cycle, market environment,
macroeconomic volatility, and more, which strengthens the case for the
idea.
HRM in retail has a truly broad and diverse use. HRM covers, in general,
all the tasks that a retail store employee must complete from the time of
his admission to the time of his departure. Recruitment, selection, on
boarding, training and development, supervision, and pay are just a few of
the survival -integrated operations t hat make up HRM in the retail industry.
Understanding retail consumers involves comprehending their shopping
habits at retail establishments. To understand who, when, and how
purchases are made, it is crucial to comprehend the consumer.
Understanding how t o assess consumers' reactions to sales promotions is
equally crucial. For the survival and success of the firm, it is crucial to
comprehend the consumer in the retail industry. In order to develop and
implement successful marketing strategies and apply the four Ps of the
marketing mix (Product, Price, Place, and Promotion) to produce high
revenue over the long term, a retail organisation must have a solid
understanding of consumer behaviour.
4.5 EXERCISE
MCQ
1. Consumer behavior depends on Personal and ___ fac tors.
(a. Social, b. Convenience, c. Comfort, d. all of these)

2. ___ is a strategy that aims at creating customers for life and enhances
the sales and market share of the organization.
(a. CRM b. HRM c. Buying behavior d. Segmentation)

3. ___ consists of phases from introduction to decline.
(a. Retail Value Chain b. Retail Life cycle c. CRM d. Buying
behavior)
4. ___consists of Recruiting, compensation and worker management.
(a. CRM b. HRM c. Buying Behaviour d. Segmentation)
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68 5. ___ is last stage in buying behaviour.
(a. Post Purchase, b. Purchase c. Need identification d. Evaluation)
Answers
(All of these, CRM, Retail Life cycle, HRM, Post Purchase)
True or False
1. Relationship marketing focuses on one time sale of a product.
2. Post purch ase behavior is the satisfaction or dissatisfaction after the
purchase
3. CRM is customer rapport merchandising
4. Retail loses its competitive advantage in decline stage.
5. Use of technology in retailing is the challenge faced by HR.
(False, True, Fals e, True, True)
Match The column
A B
1. Social factor a. Reference groups
2. HR training b. Challenges of Employee
3. Need identification c. First stage of consumer behaviour 4. Growth stage d. Advance Technology used in retail
5. RFID e. Increase in sale
(1-a, 2-b, 3-c, 4-e, 5-d)
Shorts Notes
1. Buying behavior in retail context

2. Significance of CRM in retailing

3. Consumer behavior

4. Challenges faced by HR in retailing.
Long Questions
1) State The importance of CRM in retailing

2) What are Challenges faced by HR in retailing?

3) Explain Buying decision process.

4) Explain Consumer behavior in retail context.
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69 References:
RETAIL MANAGEMENT Edited By Dr. Anand Thakur , Excel books
private limited
https://www.pdfdrive.com/retail -store -management -e47690441.html
Modern Day Retail Marketing Management 1st edition © 2017 Venkatesh
Ganapathy & bookboon.com ISBN 978 -87-403-1934 -7


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70 5
RETAIL LOCATION, LAYOUT AND
MERCHANDISING - I
5.0 OBJECTIVES
 To understand Retail Location: Importance, Types, Steps involved in
choos ing a Retail Location.
 To Understand Merchandising Concept and Merchandising Planning
Process,
 To describe Retail Branding, Merchandising Buying, Visual
Merchandising
5.1 INTRODUCTION
One of the most crucial considerations a retailer must make is where to
locate their store. Given the significant expenditure and capital
commitment required for a retail location, it is a long -term and strategic
choice. The location of the retail shop will serve as the basis for all other
strategies.
5.2 RETAIL LOCATION
Retail location is one of the most important decisions that retailer has to
make. Retail location is long term and strategic decision , as it involves
huge outlay and capital investment. All other strategies will be designed
based on the location of retail outlet.
5.2.1 IMPORTANCE OF RETAIL LOCATION :
1. Competitive Edge :

A favourable retail location offers a competitive edge that the
opposition cannot imitate. One site can house one retail space, and
time is just as important as the physical place. This geo graphic
advantage cannot be simply replicated by rivals. Unit Structure :
5.0 Objectives
5.1 Introduction
5.2 Retail Location
5.3 Merchandising
5.4 Summary
5.5 Exercise
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71
2. Customers Convenience :

Retailers must open a location that is handy for customers by
considering how they would think. Retailers cannot construct a store
in every neighborhood because people are g eographically dispersed
wherever they may possibly be, thus they must instead choose a
central site that would be accessible to the majority of the community
within a specific radius of the circle. The retail establishment should
be proximate to the custom ers' location.

3. Cost Factor and Supply Chain management :

A handy retail outlet makes it easier for the organisation to organise
the supply chain and distribution for a specific outlet. As a result, the
organisation will incur less expense, and the retai l outlet will have no
trouble satisfying the customer's urgent requests and meeting their
immediate needs.
The whole cost of supply chain management and operations is
decreased as a result of the decreased transportation costs, allowing
the retail establis hment and the retail organisation to go very near to
the six -sigma process.

4. Huge Investment :

Selection of retail location is long term decision and it requires large
capital investments. It is indeed a long term marketing strategy.

5. Revenue generation :

The amount of customer footfalls depends upon ideal location so it
impacts the revenue generation in a larger way.
5.2.2 TYPES OF RETAIL LOCATIONS :
Various types of commercial retail spaces are available. Considering
town's businesses, like other commun ities, there are undoubtedly both new
and lively retail outlets as well as some hidden stores. When picking a
location for their business, retailers must take into account a variety of
shop location criteria. Here are some of the more typical kinds of reta il
establishments.
1. Mall Spaces :

A mall houses a variety of merchants that compete with one another
under one roof, from kiosks to huge anchor stores. Typically, there are
three to five anchor stores, sometimes known as huge chain stores,
and dozens of sm aller retail establishments. In comparison to other
retail sites, rent in a mall is typically substantially more. This is a
result of the substantial volume of foot traffic a mall receives. Mall
merchants will need to give up some of their autonomy and fol low a
set of guidelines provided by the mall administration.
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72 2. Shopping Centers :

Strip malls and other related, adjacent retail venues will likewise have
preferences for their tenants' business practises. Compared to a mall,
these regulations are arguably more lax. There are numerous,
different -sized shopping centres. As little as 3 units or as many as 20
stores may be found in some shopping malls. There will be a variety
of retailers in the strip mall, as well as products and services they
provide.

3. Downt own Area :

This kind of store placement can be another exclusive option, similar
to the mall. The business owner, however, might have more latitude
and fewer restrictions. The downtown sections of many municipalities
are actively being revitalised, and sh ops stand to gain significantly
from this work. Parking, however, is typically a major problem for
downtown businesses.

4. Free Standing Location :

Any standalone structure can serve as a retail facility of this type. It
might be hidden away in a residentia l area or just off a busy road.
There may be limitations on how a shopkeeper should run his
business depending on the landlord. Parking should be no problem
and the price per square foot should be fair. Traffic could be the cost
of all that freedom. The re tailer at a free standing location must work
at marketing to bring the customer inside, in contrast to attached retail
establishments where customers may stumble in because they were
nearby buying.

5. Office Buildings :

Another choice for a retailer is a bu siness park or office complex,
particularly if they serve other companies. Tenants split maintenance
costs, and the building typically has an up market, businesslike
appearance.

6. Home Based :

More and more retail companies are starting out of their homes. While
many continue to operate out of the owner's spare room, some may
eventually relocate to a commercial space. Although this kind of
location is less expensive, expansion can be constrained. This
arrangement makes it more difficult to distinguish betwe en work and
home life, and the store can encounter issues if there isn't a distinct
company address and/or phone number.




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73 5.2.3 STEPS INVOLVED IN CHOOSING RETAIL LOCATION :
The series of steps involved in choosing retail locations are as follows:

1) Selection of Geographical Trading area:

Following factors are determined in this -Size of the trading area: The
area from which shoppers travel to a city is referred to as the trading
area. A city's trading region would include both its suburbs and
neighbori ng towns and cities. Due to their ability to pull clients from
nearby cities and villages, cities like Mumbai and Delhi have
significant trading areas.
-Population or population growth in the trade area: An area's potential
for retail sales may also improv e with rapid population expansion.
-Total purchasing power and its distribution: Stores selling expensive
goods may choose cities with large populations of wealthy and upper
middle class customers as their location. --The distribution of total
purchasing p ower among a sizable middle class base has contributed
to a retailing boom in and around India's major cities. Potential total
retail sales for several product categories: A city may develop a niche
market for particular types of commerce. Brassware and My sore silks
are now produced mostly in Moradabad.
-Before choosing a city, the store also takes the quantity, scope, Cost
of development and caliber of competitors into account.

2) Selection of Area :

Evaluating factors for this are;
-Customer attraction po tential of a certain business (commercial street
in Bangalore, Chandni Chowk in Delhi), a shopping area, the quantity
of stores nearby, and other factors.
-Accessibility of routes - Congestion and traffic jams shouldn't exist
-Retailers should review the z oning plans to understand the nature of
the requirements.
-Municipal corporations in reference to the development of residential
neighborhoods, flyovers, and shopping centers .
-The direction in which the city is spread. For instance, Navi
Mumbai's suburbs in Mumbai is expanding quickly.

3) Selection of Specific Site :

- The site's suitability and anticipated traffic flow: Since they
represent potential clients, it is important to gauge how much traffic
there is on the roads and among the shoppers walking pas t a certain
location.
- The site's capacity to stop traffic that is passing it. Only if it
represents the market segment the store is seeking will the vehicle or
pedestrian traffic passing the location be drawn.
-The complementary nature of the nearby busi nesses: A store that
sells school uniforms would have more potential if the nearby
businesses sold school supplies like books and stationary.
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74
4) Site Selection Analysis :

When choosing a site, a shop must take into account the following
elements.

1. Type of goods sold :

 Convenience items: high visitor volume is crucial, and a venue
with a large window display area is typically preferable.
 Shopping Goods - Quality of Traffic is Most Important. The
development of multiple garment factory outlets within a short
distance on the Delhi - Jaipur route is fueled by this aspect.
 Specialty Goods: One might choose to situate close to a shopping
goods or retail store.

2. The cost of the location:

Traditionally, the retail community has owned the property. A
significant aspect is space cost, which includes rent, utilities,
leasehold improvements, general decorating, security, insurance,
and any other costs associated with having a place to perform
commercial operations.

3. Location of competitors:

The region's fierce competitiveness indicates that new enterprises
will have to share the market with current companies.
4. Simple access and traffic flow (studying flow of traffic, nothing
one way street, street widths, and parking lots)

5.3 MERCHANDISING :

In busin ess, merchandise refers to the things that are purchased and sold.
The term "merchandising" describes the actions taken to promote the
speedy retail sale of items utilising point -of-sale strategies like shelf
talkers, bundling, display techniques, free sam ples, in -store
demonstrations, pricing, and free samples. "Planning involved in
marketing the right product or service at the right place, at the right time,
in the right quantities, and at the right price" is what the American
Marketing Association define s as merchandising.
5.3.1 MERCHANDISING PLANNING PROCESS :
Choosing, controlling, buying, exhibiting, and pricing the products in a
way that maximises returns on investment, adds value to the brand name
by meeting consumer wants, and prevents the formation of excess
inventory is known as merchandise planning. Additionally, merchandising
planning aims to provide the correct product in the right quantity, at the
right price, in the right location, and at the right time.
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75 The process of merchandise planning in volves the following steps
Step 1 : Developing the Sales Forecast
Based on past sales data, an analysis of market surveys and trends, and
salesperson projections, a sales forecast is a projection of the money that
can be earned through sales. Since the vol ume of sales revenue impacts
almost every area of a firm, the sales forecast, also known as the sales
budget, serves as the foundation of a business plan. Forecasting entails
speculating on what a consumer would do in a specific scenario.

Depending on the retail organisation, the merchandiser may create a sales
prediction based on the goals set by the top management or may deliver
one directly. The first stage in estimating the product or category's
inventory needs is a sales prediction.
The following step s are involved in creating sales forecasts:

a) Examining Previous Sales: To determine whether there is a pattern
or trend in the sales data, it is required to study the previous sales
records. If the conditions remain the same, looking at the sales figures
from the previous year for the same time period would provide a
prediction of the sales in the current year.

b) Examining the changes in economic conditions: Because these
changes directly affect consumer buying patterns, it is important to
take them into con sideration. Business is affected by economic
slowdowns, rising unemployment rates, and other factors.

c) Examining the shifts in the sales potential: It is now important to
link the market's changing demographics to those of the retailer and
the goods being offered for sale.

d) Examine how the retail organization's marketing methods have
changed in relation to the competitors.: The organization's
marketing strategy, as well as the competition, must be taken into
account while constructing the sales projection. Is there going to be a
new product line introduced, a new store opening, or a makeover of
an existing store? All of those things must be taken into account.

e) Producing the sales forecast: Next, a projection of the expected
growth in sales is calculated. To determine the predicted sales
statistics, this is then applied to the various products/categories.

Step : 2 : Determining the Merchandise Requirements

Planning is necessary to give any merchandise department direction and a
foundation for control. One n eeds to prepare a course of action in order to
be able to deliver the appropriate items to the consumer at the appropriate
location and time. Product planning is done on two different levels.
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76 The creation of a merchandise plan can be done in two ways. Planning
from the top down and planning from the bottom up. The merchandising
team receives the sales plan, which the top management has been working
on, as part of top to wn planning. Individual department managers work on
the expected sales predictions during bottom -up planning. The
total sales is then calculated by adding these.
Inventory levels need to be planned following the completion of the sales
forecasting process. The budget for merchandise is established at the
beginning of the planning process. It is a financial strategy that specifies,
in monetary terms, how much should be invested in product inventories.
The merchandising budget typically consists of five compo nents:
(a) The sales strategy, which specifies how much of each product must be
sold; this can be done departmentally, organizationally, or
geographically per store.
(b) The stock support plan, which outlines the quantity of stock or
inventory required to gene rate those sales.
(c) The anticipated price cuts that would be necessary if the product
doesn't sell.
(d) The anticipated purchase levels, or the number of each item that must
be purchased from the market.
(e) Gross profit margins (the difference betw een sales a nd cost of goods
sold that the department, division or store contributes to the overall
profitability of the company.)
The product mix that will be made available to consumers as a whole is
described in the assortment plan, together with the me rchandise that will
be sold in each product category. After determining the amount of money
available for the inventory, this is the following step.
Step 3 : Merchandise control – The Open To Buy
The idea of "Open to Buy" serves two purposes. First, the goods purchases
can be modified in accordance with the month's sales and reductions.
Second, it is possible to maintain the anticipated relationship between
stock and sales. Open to buy, when utilised properly, guarantees that the
buyer -
(a) Limits both o verbuying and under buying
(b) Prevents sales losses brought on by a lack of the necessary supply.
(c) Continues to make purchases within the parameters of the budget.
(d) Lowers markdowns that can occur as a result of excessive purchase.
The buyer will not be able t o purchase an amount equal to the intended
stocks for any given month while planning. This is due to the possibility
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77 Step 4: Assortment Planning
For shops, planning the assortment is both crucial and difficult.
An assortment is "a group of products offered within a product category"
and "the collection of all products made available in a store." These goods
are a group because they have comparable physical qualities. Dete rmining
the quantity of each product that will be purchased to fit into the overall
merchandise strategy is known as assortment planning. Specifications
regarding colour, size, materials, brand, etc., must be made. The basic goal
of an assortment plan is t o produce a well -balanced selection of goods for
the buyer.
The planning of the assortment is influenced by a number of elements.
The type of goods that will be stocked in the retail store is the first of these
factors. Products can be categorised as fashi on, convenience, speciality, or
basic or staple products.
Step 5: Range Planning
The range plan's objective is to develop a balanced selection for each
product category that the shop choose to carry. Range planning makes
ensuring that the objectives of the merchandise plan fit into particular lines
and frequently, SKUs. Essentially, effective long -range planning should
address the following:
The consumer should always have enough options at their disposal, and
they should be presented in a way that makes it easy for them to choose.
Overbuying and under buying should be kept to a minimum thanks to the
range planning procedure.
The product should be offered in sufficient quantities to satisfy the needs
of every store and be accessible in every store across all locations.
Step 6 : The Model Stock Plan
A choice must be made regarding what to buy and how much to buy after
assessing the amount of money that can be used for purchases. The Model
Stock Plan is the product of this. The specific items and quantities th at
must be purchased for each product line are listed in the sample stock
plan. To create the model stock plan, the buyer must first decide on the
levels under each attribute, then allocate the entire amount of money or
unit availability to the appropriate item categories. These steps should be
completed in the order listed above.
5.3.2 RETAIL BRANDING :
Using the retail branding strategy, a retailer turns its physical locations
into its products, which may then be individually promoted to maximize
exposure and revenue. Retail branding is a notion that is similar to
corporate branding in that it describes the process by which a retailer's
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78 therein, become the product. This can be seen as a thorough and integrated
marketing management strategy that places a strong emphasis on creating
long-term client loyalty and preference. Types of retail brands are:
National (Manufacturers) Brands
National brands include well -known names from some of th e biggest
manufacturers in the world, including Downy, Tide, Jif, Crest, and
Cheerios. These brands feature identifiable branding and packaging, are
some of the more expensive products on store shelves, and enjoy
significant brand appeal and brand loyalty. They are readily accessible,
whether you are in a big -box retailer or a more local supermarket.
Premium private label (store) brands and private -label products
Claims may even be made on the packaging of private -label and premium
private -label products, w hich are displayed on store shelves next to
manufacturer -branded goods. These goods have a comparable quality to
those of name brands, but at a lower price, and they are promoted by the
retailer.
Consumer impression is frequently all that separates a priva te-label from a
premium private -label. The more expensive premium brands compete
more directly with name -brand goods than its more affordable counterpart,
the basic private label, thanks to their sexier packaging, upscale
nomenclature, and branding. Sam's Choice, a premium private label at
Wal-Mart , has a more prestigious -sounding name and more attractive
packaging.
Copycat Brands
Though they are mainly store brands or generic names, copycat brands are
so termed because they mimic the manufacturer's brand r ight down to the
packaging. These goods are sold for less money and are typically thought
to be of lower quality.
Generic Brands
A type of consumer goods that is available on the market but lacks a well -
known name or emblem since it normally isn't advertis ed is referred to as
a generic brand. Due to the absence of advertising that brand names
receive, generic brands are typically less expensive than their brand name
equivalents. These brands, which are created to provide as alternatives to
more expensive br and-name products, are particularly prevalent in the
food and pharmaceutical industries and frequently experience an increase
in popularity during recessions.
Exclusive Brands
A circumstance where a specific merchant is the only one permitted to
resale a s pecific supplier's products is referred to as exclusivity. For a
retailer, this connection has numerous clear benefits. Some shops instead
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79 Licensed Brands
The licensor has granted the licensee the right to use that brand. While the
licensee uses the brand name to sell their good or service, the licensor
receives royalties. Examples of licences include a business using Mickey
Mouse or another well -known character's image on merchandise. Another
illustrati on would be a clothes maker like Life is Good granting a local
business a license to use its designs and brand in that nation.
5.3.3 IMPORTANCE OF RETAIL BRANDING :
1) An increase in business value
Retailers should concentrate on boosting their brand value if they want to
stay competitive in a crowded industry. Since modern consumers are
frequently aware of the values underlying the brands they buy, brand value
can have a big impact on your company's performance.
2) Improve Recognition
The target market recognise s the organisation thanks to a strong branding
strategy. Retailers are able to develop a presence and favourable
awareness in their specialty through digital marketing platforms.
3) Generate leads
Strong connections can be made with potential clients through effective
branding. People who may not be familiar with your brand will learn more
about the advantages your business has to offer and will be more inclined
to become customers if your branding is consistent and positive.
4) Build loyalty and trust
When done successfully, branding builds customer trust and loyalty as
well as a new audience. Once customers begin to believe in a brand, they
become devoted and are less inclined to switch to rivals.
5) Encourage Employee Pride
Employees of a well -known brand feel mor e in control than those of a
lesser -known brand. An employee who supports their employer's brand
among their peers and performs better at work is inclined to do so.
5.3.4 MERCHANDISING BUYING :
Purchasing merchandise from producers to sell on their behalf is a crucial
aspect of retail management that entails retailers finding the products they
need. Some businesses opt to buy their goods only from producers, while
others develop their own brands, or private labels, specifically for their
operations. The maj ority of large -scale stores have entire departments
devoted to purchasing goods, where employees may have varying
responsibilities about what they must buy. For instance, a department shop
might employ one individual to handle home goods purchases, while
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80 retailers to have smaller, more regionalized goods procurement teams that
may address the preferences and requirements of particular target markets
or geographical areas. Since the n eeds of the audience vary depending on
the local climate, a national retailer's locations in Florida might sell lighter
winter jackets than those in the Midwest. When deciding which products
the business needs and how many units to fill the shelves, invent ory
departments and merchandise buying teams commonly collaborate.
5.3.5 MERCHANDISING BUYING PROCESS :
Purchasing merchandise often involves four processes, including:
1. Identify the suppliers of the goods :
Finding sources from which to buy high -quality products to sell to
customers is the first step in the purchasing process. Before agreeing to do
business with a vendor, perform extensive research about their product
quality and corporate history given the abundance of manufacturing and
wholesale option s available. When selecting a source for goods, factors
like their costs, quality of materials, and delivery method should be taken
into account.
2. Bargaining with producers :
Negotiating with the product source of your choosing is the next stage
when pur chasing goods for a retailer. Most businesses want to purchase
goods in bulk to guarantee that they have plenty of inventory and extra
stock in case sales go above expectations. When purchasing a lot of
something, it can be advantageous to bargain for a lo wer price based on
the sheer volume of your purchase. One can use the money saved from
these bargains to buy other things, either from the same merchant or
somewhere else.
3. Decide which things to buy :
The next phase in the item buying process is choosin g the products you
wish to buy and sell on behalf of your merchant once you've bargained a
price with the manufacturer. The majority of consumers who buy goods
have a definite number of units in mind, although the exact products they
buy can vary depending on the season, region, economy, and product
availability. To prevent getting scammed, it's crucial to keep a thorough
record of everything you want to buy.
4. Purchase of Merchandise :
The actual purchase of the merchandise for the store using company fun ds
is the last step in the merchandise purchasing process. Consignment,
which entails establishing an agreement in which the retailer pledges to
pay for the products once they've been sold, is one of the various
purchasing processes that producers and buye rs employ. Others might
bargain for the purchase of goods on a recurring basis to save time on
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81 recurring purchases and shipments of paint since they are aware that they
need particular brands and shades of paint throughout the entire year.
5.3.6 VISUAL MERCHANDISING :
When entering a store, one is greeted by visual merchandising. Customers
are attracted to products by presentation and organisation, which
encourages them to buy and visit the store again. It is essential for retail
marketing since it is a well -defined approach that tries to affect customers'
decisions inside of a business.
Visual merchandising is the process of enhancing product displays and
retail store displays to better showcase their features and benefits and
spark customer interest.
1) Enhance the customer experience :
A successful business relies heavily on the customer experience, and
visual merchandising is a ke y component of that experience. It helps
organise the retail area and makes it easier for visitors to find what they're
looking for, which enhances their experience while visiting your store.
Furthermore, professionally planned displays aid in improving cl ient
attraction, engagement, and education.
2) Sell targeted products:
Vendors want to sell more of the products that generate the highest
earnings. These particular products are highlighted via visual
merchandising, which increases sales of those product s.
3) Influence Decisions made by consumers:
Neuromarketing strategies are also used in visual merchandising to sway
consumers' choices by appealing to their subconscious thoughts. Strategic
product placement is involved in this.
4) Meeting sales targets :
The salesperson who subconsciously induces a consumer to buy the
desired goods is called visual merchandising. Marketers achieve this by
placing lucrative goods in prominent locations that would draw attention
to them and entice customers to purchase the m.
6) Market -related shop s:
The goal of visual merchandising is to make the store distinctive and stick
in the minds of the customers. This is accomplished by employing
placement, aesthetics, and visual clues to get people to stop, gaze, and
occasionally even take pictures or spread the word naturally.
5.3.7 SIGNIFICANCE OF VISUAL MERCHANDISING INCLUDES
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82 5.4 SUMMARY
Retail location is one of the most important decisions that retailer has to
make. Retail location is long term and strategic decision, as it involves
huge outlay and capital investment. All othe r strategies will be designed
based on the location of retail outlet.
Choosing, controlling, buying, exhibiting, and pricing the products in a
way that maximises returns on investment, adds value to the brand name
by meeting consumer wants, and prevents t he formation of excess
inventory is known as merchandise planning.
Retail branding is a notion that is similar to corporate branding in that it
describes the process by which a retailer's stores and outlets, along with
the names, symbols, and emblems inclu ded therein, become the product.
This can be seen as a thorough and integrated marketing management
strategy that places a strong emphasis on creating long -term client loyalty
and preference
5.5 EXERCISE
MCQ
1. ____ are the products designed, produced and mar keted by a vendor
and sold to many retailers.(National brands, Private Brands, Licensed
brands)
2. ___ can be defined as the orderly, logical and intelligent way of
putting stock on the floor.(Visual Merchandising, Franchising,
Budgeting )
3. ___ brands imitate t he manufacturer’s brand in appearance and
packaging.(National brands, Private Brands, Copycat brands)
4. ___ is t ype of retail location in stand alone buildings.(Free standing
sites, Downtown area, Shopping centers)
Answers: National Brands. Visual Merchandisi ng, Copycat brands, Free
standing sites
True or False
1. It is easy for retailer to change locations every now and then.
2. Location is prime consideration in customers store choice decision.
3. Freestanding locations are unplanned areas occupied by retail stores.
4. Copycat brands imitate the manufacturer’s brand in appearance and
packaging
5. Store design and store layout is same thing.
(False, True, True, True, False)




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83 Match The column
A B
1. Copycat brand a. Strip Malls
2. Retail location b. Imitation
3. Visual merchandising c. Strategic decision
4. Shopping mall d. Presentation of goods
5. Assortment e. Required for planning
(1-b. 2-c, 3-d, 4-a, 5-e)
Shorts Notes
1. Visual Merchandising
2. Types of Retail brands
3. Role of retail location
4. Merchandise buyin g process
5. Steps in deciding location of retail shop
Long Questions
1. Explain significance of retail location.
2. What are steps involved in choosing retail location?
3. What is visual merchandising ?
4. Explain retail branding
5. Explain merchandise buying process.
Refe rences:
RETAIL MANAGEMENT Edited By Dr. Anand Thakur , Excel books
private limited
https://www.pdfdrive.com/retail -store -management -e47690441.html
Modern Day Retail Marketing Man agement 1st edition © 2017 Venkatesh
Ganapathy & bookboon.com ISBN 978 -87-403-1934 -7

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84 6
RETAIL LOCATION, LAYOUT AND
MERCHANDISING -II
Unit Structure :
6.0 Objectives
6.1 Introduction
6.2 Store Design
6.3 Store Layout
6.4 Summary
6.5 Exercise
6.0 OBJECTIVES
1) To Understand Store Design & its Elements,

2) To Know what is Store Layout & its Importance,

3) To Describe Steps for Designing Store
6.1 INTRODUCTION
The layout and style of a store can reveal a lot to customers. It is a
very potent instrument in the hands of the business owner for
engaging with clients and creating an impression of the store in their
minds. The creation of this image must come first in all marketing
campaigns.
Looking at store design from both the retailer's and the customer's
viewpoints is necessary to comprehend its significance.
6.2 STORE DESIGN
Customers may lea rn a lot about a store by looking at its layout and
design. For connecting with customers and forming an impression of
the store in their minds, it is a highly powerful tool in the hands of the
merchant. All marketing initiatives must begin with the constr uction
of this image.
Understanding the significance of store design requires looking at it
from both the retailer's and the customer's perspectives.
A business must be easy for the customer to navigate, appealing to his
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85 security, and enjoyment during the shopping experience. While the
products, salespeople, location, and pricing all contribute to the
creation of an image, it is the physical characteristics of a store that
influence the customer's sensory perceptions and influence how he
relates to the store. Together with the other components, they help to
create the intended ambiance or image. The atmosphere that is formed
in a retail store is a result of a mix of the store's outside a ppearance,
interior design, ambience, and any events, promotions, or themes that
are a part of that store.
6.2.1 ELEMENTS OF STORE DESIGN
A - Exterior design
The fascia, which was already discussed, the store door, the building's
architectural details, and windows are all included in most stores'
exteriors. Depending on the type of store format and the products
offered, these outside store components may or may not play a
significant role in the overall design of the store.
Superstores, hypermarkets, and ca tegory killers, for instance, hardly
ever use window displays but feature eye -catching fascias and
straightforward entrances. While the centre management team may
have control over the outside of stores in a planned regional shopping
centre, stand -alone st ores may be required to adhere to strict
architectural rules enforced by government planning authorities.
The design of entrances can either be open and inviting or private and
exclusive. The requirement to be reachable is a crucial factor for
merchants. C reating and organising every aspect of the physical
environment is part of store design. The entire front and exterior of the
store are included in the storefront. The marquee (or outdoor sign),
entrances, windows, banners, planters, awnings, and lighting are
examples of elements. Storefronts distinguish retail establishments
from one another as important means of image communication. This
is particularly true in shopping malls and centers where a store has a
difficult time standing out from the stores arou nd it in terms of visual
identity.
The architectural design of a retail establishment hints at the type,
caliber, and cost of the goods sold there as well as the standing of the
business in the industry. For customers who are travelling on foot or
in a car , exterior visibility is crucial. Retailers can draw in potential
customers by using a distinctive building design and unusual
landscape. The architectural design of a retail establishment hints at
the type, caliber, and cost of the goods sold there as wel l as the
standing of the business in the industry. For customers who are
travelling on foot or in a car, exterior visibility is crucial. Retailers can
draw in potential customers by using a distinctive building design and
unusual landscape. Retailers have access to a range of exterior store
design strategies. Structures that are prefabricated or modular are
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86 transported to be set on a slab or connected to other modules. These
structures are typically found in self -service settings, like a
convenience store. Companies that operate chains of freestanding
stores could employ uniform prototypes in various sizes with
standardised specifications to cut costs. Signs and windows also are
important co mponents of the exterior appearance of a retail business.
Notes Like other elements of the design mix, they help the retailer
establish an identity in the minds of target customers.
B - Interior design
The entire interior of the store, including the fixtur es, graphics,
flooring, ceiling, lighting, and other visual features, is included in
interior design. The ability of interior design to transmit a store's
image and elicit particular feelings and emotions in customers is the
greatest of all the visual merc handising and store design elements.
Aisle width, how pipes and vents are handled, how walls are
decorated, and the type of lighting fixtures are all fundamental
elements of interior design. All of these components play a part in
how shoppers view the stor e and react to it. The exhibits throughout
the store should complement those in the windows. To move
customers through the store, good display effects should remain
inside.
It includes:
1) Space Management : A retail establishment's planned selling
environmen t and its financial productivity are linked by the
allocation of space to its products. Long -term goals for market
positioning and customer loyalty must be balanced with short -
term goals for stock turnover, sales, and profitability in space
management. A s tore that appears to be beautifully large will not
remain that way if there are insufficient sales of the products to
support the operation, but if the store is packed to the gills with
goods, some customers may decide not to visit.
Space Management Object ives are
a. Use space effectively whether floor, page or virtual
b. Optimise short - and long -term returns on investment into
retail space
c. Provide a logical, convenient and inspiring product -customer
interface
d. Make right selection of products available
e. Communic ation of retailer’s brand identity

2) Atmospheres and aesthetics
a. Atmospherics and aesthetics are the key components of a store's
interior design. The art of creating an atmosphere that appeals to a
customer's senses and emotions by using visual cues, lightin g,
colour, music, and aroma can have an impact on their purchasing
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87 Indian retailers are quickly discovering the effects of several
atmospheric factors on customers.
b. In contrast, aesthetics cons iders elements like the store's real size,
the colours, textures, and other design elements utilised inside the
store to produce a specific look and feel for the store. Texture is
concerned with how things appear and feel. Any surface can
cause light to be refracted, creating visual texture. On the other
side, balance is how a display's weight is distributed. There are
three different kinds of balance: symmetrical, asymmetrical, and
open.

c. The fixtures, flooring, ceiling, lighting, and signage utilised insi de
the store to create a certain look are factors in the interior design
of the store.
6.3. STORE LAYOUT
Each square foot of the allotted selling space in a retail store can
generate the most revenue with the help of a well -planned store
layout.
The size a nd position of each department, any permanent structures,
fixture locations, and consumer flow patterns are typically displayed
in store plans. The type of products sold, the location of the building,
and how much the company can afford to invest in the ov erall store
design will all affect each floor plan and shop layout.
There are several distinct sorts of layouts that are frequently used in
retail establishments. The product range's breadth and depth, the
nature of the product categories sold, the type of fixture being utilised,
and the outlet's physical limits will all have an impact on the layout.

6.3.1 TYPES OF LAYOUT :

A - Grid Layout :

The most typical store layout you'll see in retail is the grid pattern
(Table 1). When a retail establishment wan ts to make the most of its
area or when it carries a lot of things (especially diverse sorts of
products), it is employed in supermarkets, drug shops, and many big
box retail stores. Retailers are aware of how to use the grid format to
boost sales conversi on because it is so widely used in the industry.
They accomplish that in the following ways:

Properly timed promotions. In actuality, it was at eye level and
slightly to the left. You will notice what is somewhat ahead of you if
you are moving countercloc kwise through a store with a grid layout.
When you turn, the promotion will be a bit to your left and at eye
level from where you are looking as you walk. In corners, nothing
gets noticed.
Power walls: In a grid style store, you can take advantage of how
effectively you can utilise your wall space by erecting power walls. munotes.in

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88 Power walls let you showcase goods to entice customers into a space
that they might otherwise pass by in regular traffic patterns. Retailers
make use of repetition by displaying numerous e xamples of a specific
product on the wall, maybe in various colours or sizes.
Visual displays and end caps: Aisle fixtures must come to an end, and
typically, those ends make excellent locations for product displays.
Grid Layout Map

Advantages
 It’s easy to categorize products
 Shoppers are used to the grid layout style and shop it easily
Disadvantages
 It’s boring, and it’s difficult to use this layout to create “shopping
experience” for the customer
 Customers often can’t take shortcuts to what they need
 Line of sight is limited, forcing a customer to look up and down
aisles
 Visual “breaks” are needed to keep shoppers engaged
B - Racetrack Layout
The racetrack, or loop, layout is one to take into consideration if a
business is selling a product that consumer s want to peruse, touch, and
look at (Table 2). Customers experience the goods along a
predetermined path and in the manner that the retailer intends. Given
that traffic can only really move in one direction in this type of
arrangement, the store is not re ally required to affect traffic flow. This
is what makes the design ideal for carrying out marketing. The store
places promotions at eye level and slightly to the right since they
know where the customer will glance next.
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89
Table 2. The Racetrack or Loop L ayout


Advantages
 Retailers can provide a great “shopping experience” using this
layout
 Promotions are easier to execute because the layout really
controls what the shopper sees
 Encourages browsing
Disadvantages
 Customers who want to run in and p ick up something quickly are
often discouraged when faced with this layout
 Not a good layout for a high -turnover store, like a pharmacy or a
convenience store
C - Mixed or free flow layout
This design can take any form or location that the retailer chooses
(Table 3). The only predictable component of this plan is how
customers will act: we know they will enter and turn to the right, we
know they won't want to travel up or down a floor, and we know they
won't shop in an aisle that is too small. If there is n o rhyme or reason
to the way things are presented in the store, it can confuse customers
and can easily disrupt traffic flow. Customers who are confused
almost always leave the business without making a purchase.




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90 Mixed or Free Flow Map

Advantages
 Ideal for a store offering smaller amounts of merchandise
 Easy to create a shopping experience in this layout
Disadvantages
 Less space to display product
 Easier to confuse the customer
6.3.2 IMPORTANCE OF STORE LAYOUT :
1) Determining consumers’ shopping beha vior :

It is a well -established truth that a store's layout significantly
affects how customers behave when they shop. A consumer is
more likely to make more purchases the longer they remain in a
store. Retailers therefore take advantage of any chance to
lengthen the buying process. To make people search through
other products to find staples like milk, bread, and eggs, for
instance, the majority of retailers place them toward the back of
the store. Not only that, but the placement of departments,
fixtures , and elevators can all impact the flow of customers
through a store.

2) Effective Space management :

Given the limited area that a retail store has, making the most of
every square inch of that space is absolutely essential to the
success of any brick -and-mortar store. Retailers may be sure that
each brand has the best space possible based on its potential for
sales and customer demand by choosing the correct store design
and floor plan. Therefore, the merchant can rearrange inventory to
fulfil sales targe ts if a certain location is experiencing a sales
decline. For instance, expensive mobile phones will be displayed
next to inexpensive accessories. To increase the sale of both
things, high -priced items will be given more room in this
arrangement, while low -priced items will be stacked on a fixture
next to these.
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91 3) Foster positive atmosphere :

In order for customers to reflect the same feelings toward the
products they intend to purchase, retailers want them to feel
relaxed and at ease when browsing. The fe elings evoked during a
shopping trip can be significantly influenced by a store's layout.
Customers' shopping experiences might be ruined by even the
best-looking furnishings of a business if the layout is not
optimised.

For instance, too tall or low shel ves can ruin a customer's
shopping experience. Similar to this, tight or congested aisles can
make individuals feel claustrophobic, while large aisles might
tyre and inspire no interest in shoppers. Contrarily, a well -
balanced layout with plainly visible i tems can reduce shopper
uncertainty and encourage them to stay longer.

4) Stock Turnover :

An effective layout gives you the chance to affect store
turnover. Turnover is directly impacted by the proper shelf
arrangement, product assortment, and strategical ly placed
special offers. A clever layout could therefore significantly
increase a store's turnover.
6.3.3 STEPS FOR DESIGNING STORE LAYOUT :
The following are steps for designing store layout
1. Decide on retail store layout :
Whether big or small, the major ity of retail establishments
employ one of the six standard layout types: grid, loop, free -
flow/mixed, diagonal, forced -path, and angular. The layout
retailer choose will rely on available area, the kind of shopping
experience one want to offer, and the g oods you sell.

For instance, grid layouts are frequently used in grocery stores
since they are easy to predict and apply. Contrarily, boutiques
frequently employ more inventive layouts that let businesses
promote various products.
Pick a floor plan that b enefits your company, enables to increase
earnings, and enhances the customer experience.

2. Creation of Blueprint :

After carefully weighing all of your available layout possibilities,
it is time to begin planning how to set one up in your particular
location. It is important to initially draught store layout on paper
before starting to implement it. Once everything is set up, this
will provide you a bird's -eye view of your store, assist in
comprehending your space, and direct the installation procedure.
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92 with your store's blueprint if you have one. If not, create your
own sales floor schematic. You can utilise online store design
tools like Smart Sheet or grid paper for this.
Everything sh ould be included in your blueprint, from the tables
and checkout counter to the built -in racks and shelving. Your
schematic should include any items that will be fixed fixtures in
your shop. To accurately gauge the amount of room you have,
you need also ma ke sure that everything you are sketching is done
at scale.

3. Consider Traffic flow and consumer behavior :

Customer flow is one of the main factors that your retail layout
will affect. To prevent causing discomfort and promote a great
customer experience , your store layout should accommodate the
natural ways that customers move around your area. You may
design a layout that is both comfortable and natural and increases
sales by working with your clients' natural purchasing behaviours.

4. Position of Check out :

The area where your point -of-sale (POS) system or cash register
is located and where clients pay for their purchases is referred to
as a cash wrap, sometimes known as a cash well or checkout
counter. In general, the checkout counter should be placed on the
front left of a retail establishment. When entering a store,
customers tend to veer to the right, circle around, and then exit on
the left side. The final phase of the shopping experience is located
on your customers' natural exit path at the front left of your store,
where there is a checkout desk. Additionally, its positioning
doesn't obstruct shoppers' vision or occupy valuable product
display space.

5. Use Smart Product Placement to Maximize Exposure :

Once the store has outlined your floor layou t in rough draught
form, it is time to start product mapping. Place your products such
that they encourage customer interaction, result in a satisfying
shopping experience, and increase sales. When determining
where products should go, retailers need to ta ke a number of
factors into account.
a. Identify top sales or important products:
b. Designate an area for sale items to be displayed.
c. Establish a location for products that are in season or have a
limited supply.





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93 6. Optimize Products With Fixtures & Displ ays :

Think of the displays and fixtures at stores.
Fixtures include things like lights, counters, fixed shelving, wall -
mounted racks, and dressing rooms that are permanent and fixed
elements of your store.
Displays: Modular units, tables, slat wall, and free-standing
garment racks are examples of items that hold product and are
typically portable, adaptable, and configurable.
When it comes to furnishing your store with fixtures and displays,
start by making an investment in high -quality fixtures, add
adap table displays that can be used in different ways, and then
look for reasonably priced temporary displays from product
suppliers.
7. Add Comfort zones and customer amenities :
Retail floor plan is about bringing customers inside, making them
feel at home, a nd giving them an experience that makes them
want to come back, in addition to managing customer flow,
producing effective displays, and boosting sales.
Customers' shopping experiences will be made memorable by
thoughtful amenities like sitting, changing r ooms, and customer
service spaces, which will motivate them to keep interacting with
your company. When designing the layout of your store, take
comfort for customers into account. Simple seating options
include entry benches, a lounge area near the dressi ng rooms, and
stools at the checkout. However, in some circumstances, seating
plays a role in making shopping easier in addition to simply being
comfortable.
For example, a shoe store should provide seating throughout its
space so customers have a spot to sit and lace up.
8. Ensure store is accessible :

One should be sure that you are adhering to the requirements set
forth by the Americans with Disabilities Act in order to guarantee
that your area is accessible to everyone and to prevent any
exorbitant fines. Retailers are required to abide by regulations to
make sure that facilities are accessible and comfortable for
Americans with disabilities. The parking and entry, navigable
store, restrooms, changing rooms, and elevators are the primary
considerations you need to take into account while designing the
layout of your retail store. Information about clients .

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94 6.4 SUMMARY
The atmosphere that is formed in a retail store is a result of a mix of
the store's outside appearance, interior design, ambience, and any
events, promotions, or themes that are a part of that store.
Each square foot of the allotted selling space in a retail store can
generate the most revenue with the help of a well -planned store
layout.
The size and position of each department, any permanen t structures,
fixture locations, and consumer flow patterns are typically displayed
in store plans. The type of products sold, the location of the building,
and how much the company can afford to invest in the overall store
design will all affect each floo r plan and shop layout.
6.5 EXERCISE
Fill in the blank
 _____ are used for storing and displaying merchandise.
 The ____ layout has parallel aisles with merchandise on shelves
on both sides.
 ___ is design and appearance of the store.
 The race track layout i s also called ____ .
 ---- is merchandise arranged in an asymmetrical way.
(fixtures, Grid, Store design, Loop, Freedom layout)
True or False
1) The storefront is a reflection of personality of store.
2) Courtesy signs are mainly to inform customers about loca tion of
various sections of store.
3) Deciding on a retail store floor plan is the step of store layout.
4) Race track is also known as loop layout.
5) There is no need of store planning .
(True, False, True, True, False)
Shorts Notes
1. Steps for designing store layo ut
2. Types of retail layout
3. Store design
4. Importance of store layout.
Long Questions
Explain Elements of Store design
What is Store layout, explain its importance
Explain steps for designing store layout. munotes.in

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95 Match The following
A B
1. Grid Layout a. Interior design
2. Blueprint c. Exterior design
3. Outside Store components c. Easy for display
4. Furniture and fixture d. Layout on Paper
(1-c, 2-d, 3-c, 4-a)
References:
RETAIL MANAGEMENT Edited By Dr. Anand Thakur , Excel
books private limited
https://www.pdfdrive.com/retail -store -management -e47690441.html
Modern Day Retail Marketing Management 1st edition © 2017
Venkatesh Ganapathy & bookboon.com
ISBN 978 -87-403-1934 -7



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96 7
USE OF TECHNOLOGY IN
RETAILING
Unit Structure:
7.0 Objective
7.1 Introduction
7.2 Use of technologies in retailing
7.3 E-Retailing
7.4 Summa ry
7.5 Exercise
7.0 OBJECTIVES
After studying this unit the student will be able to -
 Understand the use o f technology in retailing such as Electronic
Data Interchange (EDI), Radio Frequency Identification (RFI)
and Data Base Management System.
 Know the various functions and challenges in E -retailing
7.1. INTRODUCTION
Technology is transforming the way busines s is being undertaken.
Retail sector is not an exception for the same. The technology assist
retailer to enhance their operations in terms of increasing sales as well
as increasing reach of the business to global market. The retail sector
is moving away fr om old techniques and embracing modern
technology for the majority of their business needs. It has enabled
retailer to keep up with fast -paced society.
Technology has added a new dimension to the retail industry. The
development of point -of-sale devices, bar codes for invoicing, and
payment databases has made large setups much easier to operate.
Digital devices have made consumer buying journey very easy. It has
made consumers in making better buying decisions. It also allows
retailers to assist customers and obtain relevant data for buying
products.


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97 7.2 USE OF TECHNOLOGIES IN RETAILING
7.2.1 ELECTRONIC DATA INTERCHANGE (EDI) :
Electronic Data Interchange (EDI) is the computer -to-computer
exchange of business documents (purchase orders, invoices and
advance ship notices) in a standard electronic format between business
partners. EDI is simply termed as paperless exchange of data /
document.
EDI has replaced paper -based exchange of documents such as
purchase orders or invoices. These documents now can be exchanged
via computer. Here the information moves directly from a computer
application in one organization to a computer application in another
organization. With EDI data / documents can be shared rapidly.
Fig. 1 Traditional exchanging of documents v/s
Electronic Data Interchange

Source:www.edibasics.com
Above chart shows that in traditional way of data / document
exchanging, the buyer generates purchase order and sends to the
supplier via fax or mail. Thereafter, supplier enters details in the
syste m and then generate and print the sales invoice.
On the other hand in Electronic Data Interchange (EDI), the buyer
enters data into system and invoice is generated.
7.2.2 BENEFITS OF EDI TO RETAILERS :
1) Reduces errors and saves costs:
Traditional way of exchanging of data involves a lot of manual
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98 instance of human intervention. EDI eliminates manual work and
automates the process. It reduces cost involved in paper handling,
filing, storage an d mailing by manipulating data electronically
without the cost of manual entry. Retailers and suppliers can save
costs and reduce errors with EDI integration. They can save up to
90 percent of invoicing costs with EDI.
2) Saves time of transaction:
EDI docum ents / data can be exchanged in minutes whereas
paper -based documents / data which can take days to be delivered.
Therefore, EDI fasters invoice processing and improved cash flow
(receive payment faster). Retailers receive EDI invoices directly
into their software so they can process them quickly and
efficiently.
3) Staff can focuses on more valuable tasks:
EDI in the retail industry helps to automate processes and lets
employees focus more on higher value tasks. Instead of spending
time on data entry, employ ees can spend time on more strategic
work to help the business to grow.
4) Improved communication:
EDI improves the overall quality of communications through
better record keeping; fewer errors in inputting orders, order
receipt, and Advanced Shipment Notice (ASNs). Therefore there
is less human error in the interpretation of data.
5) Saves time in communicating with suppliers:
The retailer can set up automatic reorders if inventory levels drop
below a certain point. They can check the status of orders to see
when it will arrive and order everything to arrive “just in time”.
6) Measure performance of supplier:
The retailer can see which of their suppliers respond quickly,
fulfill their orders completely and deliver on time. It helps them
decide whether they need t o find new suppliers or continue with
the existing suppliers.
7) Stock Management:
Maintaining an unnecessarily large inventory in a warehouse is not
cost-effective, as it increases expenditure due to higher storage
costs. By using EDI, companies can better predict how much stock
they need to store in order to meet customer demand, helping them
to cut storage costs and save money.

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99 8) Increased customer satisfaction:
EDI means faster deliveries – benefitting businesses and end
consumers alike. With the help of track -and-trace features,
customers are updated in real time on the status of their order,
giving them peace of mind as to exactly when their order will
arrive. This increases customer satisfaction, which in turn
improves customer retention.
7.2.3 RADIO F REQUENCY IDENTIFICATION (RFID) :
Radio frequency identification (RFID) is a new tracking technology
that involves small tags that emit distinct signals. Retail business
owners can use remote scanners to read RFID tags placed on
individual products, enablin g them to record a variety of
information, including quantities of various stock items and their
precise locations.
The development of the social economy has changed the way people
shop. Consumers not only have high requirements for quality, but also
expec t a better shopping experience. With the rise of smart retail and
high competition among companies, RFID technology plays an
increasingly important role in improving the competitiveness of
modern retail enterprises.
RFID has come a long way since the early 2000s. At that time, Wal-
Mart was the first big retailer to experiment with the new technology,
which cost $1.50 per tag. It was a sparkling new concept, used
primarily for inventory accuracy.
RFID in retail involves the placement of RFID tags on products that
emit signals to RFID readers which are then processed by software,
generating real -time results for stock taking, transactions, inventory
levels, or individual customer purchase order history. RFID in retail
simplifies the typical retail inventory pr ocess which is very manual,
time-consuming, and only done at predetermined intervals. Products
tracking is one of the major ways that retailers use RFID. RFID in
retail can be used to prevent theft and track products that are
frequently moved and often mis placed. RFID technology allows
retailers to track their inventory throughout the retail supply chain,
from the warehouse shelves all the way to the sales floor.





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100 Fig. 2 Radio Frequency Identification

Source: Google images
7.2.4 USES OF RFID IN RETA IL MARKETING :
1) Consumer Research :
RFID tags carry unique product numbers. If consumers pay for
goods with a credit, debit or shopper’s discount card, retailers can
link the purchases to the recorded RFID data and use that
marketing information to map out individual consumers’
movements through a store. This sort of data can help a retail
store make improvements. Example – In case of footwear and
clothing retailers, RFID can be added to shoe cabinets, clothes
panels, fitting rooms, fitting mirrors, shelves and warehouse
entrances and exits to record customer shopping behaviors. up
and trying on products, so that products can be optimized with the
desired configuration, resulting in higher sales.
2) Inventory Tracking :
Manual inventory tracking requires lot of physical work by the
workers. On the other hand RFID scanner can read tags as far
away as 20 feet and record hundreds of tags per second, meaning
employees can quickly scan shelves to record quantities and
locations. Some stores find it cost -effective t o install permanent
RFID scanners to provide real -time monitoring of stock. The
greater efficiency helps marketers ensure that products are always
in sufficient supply to meet consumer demand.
3) Security :
Shoplifting is a serious concern for retail store o wners. One
option is to direct staff to watch customers closely, but this
approach has two major disadvantages: the extra work distracts
staff from other responsibilities, and customers hate being
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101 scan of shoppers as they leave your store can reveal if they are
leaving with stolen merchandise. As the cost of RFID technology
decreases, this security solution becomes an increasingly cost -
effective way of decreasing theft.
4) Smart Shelving :
To find out certain products in a store is difficult task. RFID can
help to trace the location of the product in the store where it is
stored. Example - Retail shoe stores are often filled with all kinds
of shoes with different specifications, models and colors.
However, due to a limited display area, there is only one sample
for each shoe. Staff often needs to search manually in storefront
warehouses, and it is often difficult to find a specific product in a
short time. As a result, many customers are unwilling to wait and
leave without purchasing anything. RFID assists in fast and
accurate product searches. Using an RFID terminal, staff can
detect goods quickly in the warehouse and lock targeted goods
accurately, which greatly shortens search time and helps worker s
responds to customer requirements with high efficiency.
5) Reduces checkout (billing) wait time :
RFID can also help reduce wait times at the checkout i.e. during
billing of the products purchased. While traditional barcodes
require line of sight for scann ing, and each item has to be scanned
individually, an entire shopping cart can be scanned all at once,
instantly, with no items being removed from the basket. This is
the time -saving advantage of RFID, where entire areas can be
scanned in seconds.
6) Provide s Real -Time Data :
RFID has helped to get analytics and data in real -time. The
retailers without RFID don’t really know what’s happening with
their stores and customers in any specific detail. The data
collected by retailers about their stock and customers is often
historical and at risk of being outdated. However, with RFID all
this can be changed. RFID produces far more detailed insights
about stock and customers. This includes how well individual
items are doing in specific stores (such as which sizes of items are
selling better). Accordingly retailers can take steps to move or
reinforce stock at specific stores.
7) Incase process efficiency :
An RFID reader can read hundreds of individual items at once.
Each item has a unique ID, they can never be read more than
once. The signals also do not require line of sight to be read.
Naturally, this makes RFID inventory counts and
inbound/outbound checks incredibly fast and reliable. In the case
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102 times by 96%. This therefore means they are far more convenient
to perform and can be done multiple times in a week rather than a
year.
7.2.5 DATA BASE MANAGEMENT SYSTEM :
A Database Management System (or DBMS) is essentially nothing
more than a computerized dat a-keeping system. DBMS is a software
package designed to store, retrieve, query and manage data. User
interfaces (UIs) allows data to be created, read, updated and deleted
by authorized entities.
DBMS helps retail sector to store, manage, and retrieve dat a of the
retail store. This enables to get data whenever required and helps to
make timely decisions.
7.2.6 IMPORTANCE OF DATABASE MANAGEMENT
SYSTEM (DBMS) :
1) Generates accurate reports : DBMS does the job of humans by
doing the same task or many tasks wit hout any errors. These
programs can generate accurate reports at scale since they do not
need to take breaks or go on vacations like humans do. Automated
software is being used by retailers to generate reports in real -time.
It generates accurate reports an d statistical data. This saves time
and resources for the organizations.
2) Improves customer retention rates : Database management
software can help data owners to manage their data in an efficient
way. It gives out clear insights about what customers need a nd
want. These software tools can be used to tailor marketing
messages to specific customers, make better predictions about the
customer’s future behavior, and tailor offers that are more
relevant. The software can help businesses improve their customer
retention rates by identifying the most valuable customers and
investing in those who are more likely to purchase from the
company again.
3) Saves time on data entry : Data entry has been one of the most
time-consuming tasks in the workplace. From its earliest
days, data entry required humans to type in information by hand
on a keyboard. This process was tedious and used up all of the
time employees spent at work. Fortunately for employers, there is
hope for reducing or eliminating data entry errors. This can be
accomplished through ‘Database Management Software’ that runs
on computers and mobile devices. The software provides a user
interface that workers use when entering information into a
database without having to type it all by hand, which saves them
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103 4) Helps to get information in real -time : DBMS is a system that
collects information about stock and customers and then provides
the ability to store that information. It helps get access to
information about stock and customers in real -time. With the help
of these technologies, it’s possible for retailers to spend less time
collecting data on the contrary they can get information in real -
time.
5) Inventory Man agement : Controlling your inventory is essential
to the efficiency and profitability of the retail business. An
inventory database provides you with an accurate, up -to-date
picture of stock levels for each product so that you have sufficient
stock to meet customer demand without overstocking.
Overstocking incurs unnecessary costs and reduces profits, while
inadequate stocks could result in lost sales, again reducing
profitability.
6) Customer Research : DBMS is essentially storage of information
on computer. Retailers can store all sorts of information that can
help them better figure out who to market the product to. For
example, DBMS can provide accurate information on which type
of people are buying certain products, such as their age, gender,
ethnicity, et c. If the retailer uses the DBMS technology and finds
that 80 percent of people who buy their products are female, it
would be immensely beneficial for the retailer to come up with a
marketing strategy to try and target females. Being able to access
this i nformation is a huge game changer in the retail industry, and
makes it that much easier for you to market your product
efficiently and effectively.
7) Increases Business Revenue : The inevitable result of using
DBMS is the immediate increase in revenue for th e business. By
storing business information using DBMS, retailer can easily
figure out which products are selling well, and which aren't.
Retailer can then use that information to allocate your business's
resources accordingly.
7.3 E -RETAILING
The e -retailing includes selling of goods using electronic media, in
particular, the internet. It is the direct sale of products, information
and services through virtual stores on the web.
There are thousands of e -retailing sites on the internet that are
extensi on of existing retailers or start -ups. The online retailing
requires lots of displays and specification of products to make the
viewers have a personal feel of the product and its quality. E-Retailing refers to Electronic-Retailing. Penetration of computers
and spread of the Internet has given rise to E-Retailing. The
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104 Strong branding is needed for successful e -tailing as the website might
be easily navigable and updated regularly to satisfy consumers’ needs
and add value to the consumer’s life.
A strong distribution network is also needed for e -retailing, which
should be prompt and efficient as the consumers can not wait for the
deliv ery of goods and services for a long time.
7.3.1 FORMATS OF E -RETAILING
1) Business to Business (B2B) :
In this form the buyer and seller both are business entities. It is a
transaction or business conducted between two businessmen, such
as a wholesaler and retailer. B2B transactions tend to happen in
the supply chain, where one company will purchase raw
materials/spare parts from another to be used in the manufacturing
process. E.g. An automobile company purchases tire or seats or
glass from another business entity via internet. The websites are
India Mart and Ali Baba.
2) Business to Consumer (B2C) :
B2C refers to the process of businesses selling products and
services directly to consumers. Firms use their websites for a
range of marketing activities. These i nclude promotion, product
information, reviews about the product/ service and delivery of the
product at the doorstep. The cost of products and services is kept
low through this method and the speed of transaction is faster. The
websites are Flipkart and A mazon
7.3.2 CHALLENGES OF E -RETAILING :
1) Security Issue :
E- business sites record crucial and sensitive details of customers
such as name, phone number, address and bank details. Though
many e - business firms try to make transactions over their
websites s ecure through SSL (https) that encrypts the transferred
information, still many cases of online password hacking has
occurred. It has adversely affected the trust and confidence of
customers about online shopping.
2) Lack of personal touch :
Indian customers prefer to see, touch, smell or taste products
before making purchase decisions. However, e - business does not
facilitate this arrangement due to which its advantages are missing
in this shopping option. Customers also have the impression that
the products shown in pictures on website can be different from
what they actually turn out to be after delivery. However, these
days, many firms are adding real images and videos of models
using these products on their websites, and also adding all possible
informati on about products such as size, quantity, colours etc. for
the convenience of customers.
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105 3) Uncertainty about Quality :
One of the biggest problems of online buying is that customers
may have no guarantee of a product’s quality. Reviews provided
by other c ustomers are not always helpful. Return policy of e -
business firm is also not properly implemented, so customers face
problems in returning products and getting refund or replacement
for it.
4) Delay in Delivery :
E- business firms can face the problem of shortage of manpower.
This may result in delay in delivery of product to customers. In
many cases, customers do not get delivery of products on
promised date or time, which results in customer dissatisfaction.
5) Need for Internet Access :
Online shopping re quires Internet facility to work. Nowadays,
availability of internet connection is not a problem in metro cities.
However, internet connectivity is very poor in many villages.
Hence, these villages can be targeted only if they get better
internet connectiv ity.
6) Technical Problems :
E- business functions through the Internet due to which technical
problems such as slow speed of Internet can occur. Sometimes,
transactions are denied due to slow internet connectivity. There
may also be chances of double paym ent due to repetitive clicks by
users on the payment button.
7) Competitors :
Due to a variety of benefits offered by e - business such as global
reach, high profitability, less initial costs, etc. many firms are
encouraged to undertake e - business. This has led to increase in
competition among the e -businessmen, and in order to attract
customers, they have to reduce price of their products.
8) Unproven Business Models :
In the initial years of dot -com era, most of the businesses on the
internet were experiments in new areas and did not provide stable
sources of profit. This was the primary reason behind closing
down of 90 per cent of the purely e -commerce companies in the
beginning of this century. Today, dot -com businesses (E -
Business) have matured a little. Still some of the businesses are at
experimental level and do not guarantee regular revenue.

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106 7.4 SUMM ARY
The technology in the retail industry has touched nearly every aspect
of business for both e -commerce sites and brick -and-mortar
stores. From reduci ng shrinkage to better estimating inventory needs,
retail technology can streamline inventory management. Automation
of inventory processes ultimately creates efficiency across supply
chain, helping to free up capital for business growth. By creating a
superior technology experience in the retail stores, it could improve
customer satisfaction before, during and after the sale.
7.5 EXERCISE
Fill in the blanks
1) EDI stands for ____________
(Electronic Data Information, Electronic Data Interchange,
Electronic D evice Information)
2) _______ is a new tracking technology enables generating real -
time results for stock taking, transactions, inventory levels, or
individual customer purchase order history.
(Radio frequency identification [RFID], International
Organizatio n for Standardization [ISO], World Trade
Organization [WTO])
3) _________ is a computerized data -keeping system used in retail
stores.
(Database Management System [DBMS], International
Organization for Standardization [ISO], World Trade
Organization [WTO])
4) ________includes selling of goods using electronic media, in
particular, the internet.
(Mall, Supermarket, e -retailing)
5) E-retailing faces ________ challenge.
(Personal touch, No competition, Security Issue)
True or False
1) EDI is a paper -based exchange of doc uments such as purchase
orders or invoices. FALSE
2) EDI helps in stock management. TRUE
3) Radio frequency identification (RFID) is used for inventory
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107 4) A Database Management System ( DBMS) saves time on data
entry. TRUE
5) E-retailing involves sellin g goods in the physical shop. FALSE
Match the pairs
Group - A Group – B
1) Electronic Data
Interchange (EDI) a) Tracking technology
2) Radio frequency
identification (RFID) b) Technical problem of internet
3) Database Management
System (DBMS) c) computer -to-computer
exch ange of business
documents
4) B2B e -retailing d) Computerized data -keeping
system
5) Challenge of e -retailing e) Business to Business

(1-c, 2 -a, 3 -d, 4 -e, 5 -b)
Answer in brief
1) Write a note on Electronic Data Interchange (EDI) in retailing.
2) Explain th e concept of Radio Frequency Identification (RFID) in
retailing.
3) How Data Base Management System (DBMS) is useful in
retailing. Explain.
4) Discuss the formats of e -retailing with suitable examples.
5) What are the challenges faced by e -retailing?
References :
https://www.edibasics.com/what -is-edi/
https://www.ibm.com/in -en/topics/edi -electronic -data-interchange
https://home.messagexchange.com/blog/edi -in-the-retail -
industry/#:~:text=EDI%20in%20the%20retail%20industry%20allows
%20companies%20to%20electronically%20exchange,and%20other%
20ways%20of%20communication .
https://jbrmr.com/cdn/article_file/i -5_c-36.pdf
https://www.godaddy.com/garage/retailers -edi-system/ munotes.in

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108 https://www.lobster -world.com/en/ten -advantages -of-using -edi-in-the-
transport -and-logistics -sector/
https://smallbusiness.chron.com/benefits -rfid-retail -marketing -
57549.html
https://www.riotinsight.com/article -rfid-in-
retail#:~:text=RFID%20in%20retail%20can%20be,way%20to%20the
%20sales%20floor .
https://www.techtarget.com/iotagenda/blog/IoT -Agenda/Use -cases -of-
RFID -in-retail
https://www.business.com/ar ticles/rfid -for-retail/
https://www.detego.com/retail_insights_en/retail -en/6-benefits -of-
rfid-in-retail/
https://www.secondcrm.com/blogs/the -benefits -of-customer -database -
management -software -for-your-business
https://retailnext.net/blog/the -influence -of-database -in-the-retail -
industry
https://www.marketing91.com/electronic -retailing -e-tailing/
https://www.indiaretailing.com/2017/04/06/fashion/6 -brands -making -
a-fashion -statement -by-going -green/2/
https://okcredit.in/blog/advantages -and-disadvantages -of-starting -an-
eco-friendly -business/
https://www.hhrc.ac.in/ePortal/Commerce/I%20M.Com.%20 -
%2018PCO3%20 -
%20Dr.%20M.%20Sridevi%20&%20Dr.%20S.%20Veerapandiyan.p
df
https://www.marketing91.com/responsibilities -of-a-store -manager/



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109 8
GREEN RETAILING AND
CAREER OPTIONS IN
RETAILING
8.0. OBJECTIVES
After studying this unit the student will be able to -
 Explain the concept and importance of green retailing
 Describe various career options in retailing
 Know the responsibilities of store manager in retailing
 Discuss the functions of merchandising manager
8.1. INTRODUCTION
Retail industry is a labour intensive industry. Today retail industry is
not just expanding but also getting more organized. This shift has
attracted many to make career in this industry. Retailing has created
job opportunities for skilled as well as unskilled labour. The Indian
retail sector is likely to generate 2.5 crore ne w jobs by 2030.
(Business Standard, October, 28 2022).
For the youth to avail the upcoming opportunities and pursue a
promising career in retail industry, it is important they equip
themselves with the right training as different lines of retail business
require distinct skill -sets.
8.2 GREEN RETAILING
Green retailing is a modern concept of retailing in which a retail
business is managed by taking the benefits of eco -friendly processes.
Nowadays consumers are becoming aware and they prefer to purchase
only eco -friendly products . Therefore, it is important for a retailer to Unit Structure:
8.0 Objective
8.1 Introduction
8.2 Green Retailing
8.3 Summary
8.4 Exercise
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110 opt for the current trend and convert their retail business into a green
retail business.
In the beginning years of green retailing, retailers focused on selling
organic products but nowadays retailers are emphasizing not only on
selling green products but also on adopting green practices in the
store.
More and more retailers are opting green retailing to increase their
business as more and more consumers dem and eco - friendly products.
Many retailers use Green Retailing as a
business strategy to differentiate their products from their competitors
opting green practices in stores.
Examples of Green Retailing
1) Levi’s - Levi’s is known for its eco -friendly measures and different
initiatives and efforts. The company earlier came up with an entire
sustainable garment line titled Levi’s Eco in the US, which is widely
popular and is currently in us e in India.
The denims under this label are manufactured using 100 per cent
cotton, coconut shell buttons, and sport an indigo finish produced
using the mimosa flower, potato starch as well as Marseille soap.
The brand has also introduced Levi’s Waterless, a line of clothing that
promotes water conservation. The jeans manufactured under the
Waterless collection need 96 per cent less water as compared to the
manufacturing of regular jeans.
Levi’s also advocates re -cycle and re -use to create better awareness
about the environment among masses. (www.indiaretailing.com )
2) Starbucks - Starbucks has been certified by LEED since 2005,
but it has move beyond that by planning to eliminate all plastic straws
by 2020 and ope n 10,000 environmentally friendly stores by 2025.
Starbucks tries hard to engage its community in sustainable issues. It
uses green materials for producing, packaging, and delivering its
product to customers. As part of its Green Store initiative, the
brand also plans to reduce waste and use 30 percent less water and 25
percent less power during production processes.
The brand designs disposable coffee cups, is involved in recycl ing and
green building, supports farmers and the environmentally sustainable
community, and has been hard at work on communicating this
message to its target audience.
3) IKEA - This brand uses many tactics and sources to manage waste
and renew energy. Nin ety percent of its buildings have solar panels, it
uses wind farms to generate energy, and it has planted millions of
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111 I kea has developed a strategy known as People & Planet Positive ,
encouraging consumers to be environmentally conscious. It
manufactures products through eco -friendly practices, which relieves
us from the necessity to choose between sty lish design and
sustainability.
8.2.1 IMPORTANCE OF GREEN RETAILING
1) Increased Revenue:
Many customers have realised the benefits of eco -friendly living.
Therefore they prefer to buy green products. So, businesses
producing green product or undertaking eco -friendly processes can
attract more customers. This will increase the revenue.
More and more customers are concerned about environmental
problems and they would pay more for products and services
offered by environment -friendly companies. Some government
firms and non -profit institutions also prefer giving contracts to
companies that run in an eco -friendly manner.
2) Tax Credit:
The government of many countries offer incentives such as tax
credits to companies that run in an eco -friendly manner. Several
grants and tax incentives are available to green companies and
entrepreneurs who aspire to start a business in an eco -friendly
way. The government has set some regulations and conditions that
have to be met by the companies for getting such incentives. New
businesses and start -ups can also receive these grants if they
follow the criteria from the beginning. It also helps in making the
process of getting a business license hassle -free.
3) Improved Public Image:
One of the best advantages of going green is that the image of the
organization will improve in the eyes of the general public. They
will not only like but also respect the business . Companies can use
the green retailing to generate positive public relations. The
marketing strategies should focus on all the green changes made
by the company. Using these tactics businessman can attract like -
minded customers.
4) Attracts more investors:
Business which undertakes green initiatives and adopt eco -friendly
business practices gain more credibility in the business worl d. Due
to credibility they can attract more investors to invest into their
eco-friendly companies. Investors like to associate with the
companies undertaking green businesses rather than companies
which create ecological disasters.
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112 5) Increase in sales:
Statistics have shown that an eco -friendly business can attract
more customers and also increase sales volume because these days
more customers are demanding green products. More and more
consumers are looking at product labeling to see if what they’re
buying has been manufactured according to eco -friendly practices
or is recyclable.
6) Conservation of Natural Resources:
The primary goal of an eco -friendly business model is to protect
the planet. By going green, business owners can save natural
resources such as water and fossil fuels. Going green also helps in
reducing air pollution, water pollution and soil pollution. Business
owners can also save money by using alternative means of
travelling and alternative energy sources like solar energy.
Harmful activities , such as deforestation and mining, can be
reduced. One of the advantages of running a sustainable or green
business is that it helps in slowing down climate change. All these
factors ensure that our planet is left in good shape for our future
generations.
7) Employee Health:
Going green attracts employees with a similar mindset. A green
business model also helps in maintaining the health of your
employees. Business owners can start to provide healthy and
organic food in the cafeteria. They can also use organi c cleaning
products which are plant -based and do not contain toxic
chemicals. It ensures that the business owners are not putting their
employees’ health at risk. It results in a decrease in the number of
sick leaves and an increase in productivity.
8.2.2 VARIOUS CAREER OPTIONS IN RETAILING :
Retail industry is one of the fastest evolving industries. The Indian
retail industry is undergone drastic changes with the consumers
looking at convenience with multiplicity of choices under one roof. It
generates hug e 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.

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Green Retailing and
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Retailing
113 Some of the career options in retailing are discussed below:
1) Sales and related job:
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 (welcome customers on arrival in the
stores), cashier for receiving payments 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.
2) Store manager:
A store manager is the person ultimately responsible for the day -
to-day operations or manag ement 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, providing
training and development programmes, managing profit and loss
of the store, banking, a nd handling customer complaints.
3) Visual merchandiser:
Visual merchandising refers to displaying merchandise in such a
manner that appeals to the eyes of the customer. Visual
merchandising includes window displays, signs, interior displays
etc. It helps i n promoting the sale of goods. It is a tool to achieve
sales target. Visual merchandiser is responsible for merchandising
(promote and sale the product). Creativity is essential to be a good
visual merchandiser.. A combination of colour and theme plays an
important role in visual merchandising.
4) Regional Sales Manager:
A regional sales manager is responsible for a group of retail stores
in the particular region. They visit stores (which falls under their
region) to observe performance and to help solve prob lems of the
stores. Regional managers report store performance to national
sales manager. A regional sales manager requires excellent
interpersonal and communication skill. They also must have
computer skills and be patient with both employees and
customer s. They must be able to motivate and organize their
employees in the different stores located in their region.
5) Finance and Accounting:
A retail store requires well run financial department. A financial
manager is responsible for keeping the records of acc ounts of
income, paying expenses, maintaining financial records, cash flow
control, banking etc. The financial manager must be efficient
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114 6) Human resource Manager:
Retail industry is a labour intensive industry. Human Reso urce
Management is one of the most important aspects in retail
industry. HR manager has to recruit right people for a particular
job, because the success of retail depends upon right sales force.
The HR manager is responsible for recruitment &selection,
training and development programmes, compensation and
benefits, retention of sales force / employees etc. HR manager has
to also deal with grievances and any disciplinary matters of sales
force.
7) Logistic:
Logistics refers to the overall process of managing how resources
are acquired, stored, and transported to their final destination. It is
very fast growing area in retailing. Logistic manager is responsible
to organize the storage and distribution of goods. They ensure that
the right products are delivered to the right location on time and at
a proper cost.
8) Promotional activities:
Promotion Manager is responsible for promotional activities such
as advertising, sales promotion and public relation. People with
specialized knowledge, creativity etc. are require d for the
promotion of the products of the retail store..Promotion managers
direct a firm’s advertising and promotional campaign. to promote
the firm’s products and services.
8.2.3 RESPONSIBILITIES OF STORE MANAGER :
A store manager is the person ultimatel y 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, providing
training and development programm es, managing profit and loss of
the store, banking, and handling customer complaints
1) Arrangement of the store: Store manager has to see to it that, in
the store everything is arranged in proper manner so that
customers can find everything they need easily. Also the manager
has to make sure that offers such as special discount are properly
displayed so as to attract the customers to purchase the goods. For
example, if there is an offer on soft drink, the manager should
make sure to display that offer at fron t or place cane of soft drinks
near the cash counter so that customers can buy them while
making the payment. In addition to this, visual
merchandising tasks, replenishment (replace) of stock, and also
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Green Retailing and
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115 2) Recruitment, training, compensation and motivation of sales
force:
Recruitment of staff is also one of the most important
responsibilities of a store manager. A store manager invites job
applications and conduct interviews to hire the right sales fo rce /
employees. After recruitment, the sales force / employeesare
provided training to make them familiar with the store’s policies
and working environment. The manager has to see to it that sales
force / employees are paid fair salary and other incentive s that too
on time. He/she should maintain the record of leave of the sales
force / employee. A role of a store manager is to keep his team
motivated and provide solutions to their problems. He should also
make sure that all his team members are getting a long with one
another and working as a team.
The success of the store depends on its employees; therefore, a
store manager hires employees with right qualification and skills.
In his day -to-day jobs, he has to make sure that all employees are
working hones tly and are not causing any problems in the store.
3) Cost Minimization:
Cost minimization means controlling day -to-day expenses to run a
store successfully. A manager is responsible to apply effective
policies so that total expenses for running a store can be
minimized and hence, profit can be maximized. This can be done
by eliminating errors, waste, and accidents. Cost minimization is
crucial for stores who work on low price policy such as D mart.
4) Implementing Marketing Plans:
Every commercial store has it s own marketing plans. The
marketing plan includes which product to sell, decide price of the
products and its promotional activities to increase the sales of the
store. The success of the store relies on the effective
implementation of those marketing pla ns. It is one of the most
important responsibilities of a store manager is to implement
marketing plan effectively. At the same time manager has to make
the staff of the store understand the marketing plan so that they
assist in successful implementation o f the marketing plan. A
manager is also required to take training to staff to understand the
work process of a marketing plan.
5) Managing budgets:
The store manager has to prepare and manage budget of the store.
A store manager is responsible to make unders tand each
department’s head about their target and funds allotted to them.
Also to collect daily, weekly, and monthly performance report and
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116 6) Managing and holding inventory:
Keeping the track of inventory is also a job of the store’s manager.
A manager makes sure to keep an appropriate level of inventory in
the store so that there will be no shortage or surplus of the stock.
This is because surplus stock blocks working capital of the
business and shortage of stock disrupts the supply of the go ods.
Mostly, big stores keep inventory stored in nearby storage house
so that they can get it quickly whenever it goes out of stock in the
store. To do this, he has to maintain a record of the number of
goods sold every day and if he finds the shortage of any goods, he
places an order to get it back in stock soon.
7) Keep running store peacefully:
A store manager makes sure that there is always harmony at
different levels of a store. Employees of different departments are
getting along with one another and ar e not causing any issue or
disturbance in the work of others.
It also includes a healthy relationship between different staff
members, store and government, store and other competitor stores,
staff and store management, as well as staff and customers. He i s
required to have soft skills and patience to keep a healthy
relationship with everyone.
8) Providing Customer services:
Keeping customers happy and satisfied is one of the most
important responsibilities of a store manager. Stores provide
services to custo mers like assistance with products, free home
delivery, credit facility, discounts for bulk shopping, sharing
information about offers and sales, and after -sale services. It is
also a duty of a store manager to take special care of loyal
customers of the s tore and make sure that they are getting best of
the service and ensure their satisfaction with the services of the
store.
9) Keeping safety of store, employees, and inventory in -check :
A store manager is also responsible to make sure that his
employees and inventory is safe. Manager has to perform this duty
on an everyday basis. It is his job to keep in -check the safety of
store’s building and let management know if any changes are
required to keep building, its employees, and customers are safe as
long as t hey are within the premises of the store.
In addition to this, he makes sure that all safety provisions are
being met as per the guidelines of government (both central and
state) and Municipal Corporation. The main safety provisions
include emergency fire exit and firefighting system.
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Green Retailing and
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Retailing
117 10) Preparing promotional materials and display:
Setting promotional displays during festival seasons or when a
sale is going on is a part and parcel of a store manager’s job. It
requires innovative and creative skills to get th e maximum
attention of customers and lure them to buy those things.
8.2.4 FUNCTIONS OF MERCHANDISING MANAGER :
Merchandising Managers use the creativity and plan product displays
that will attract the attention of the customers and entice them to buy
products. The various functions of the merchandising manager are as
follows:
1) Conducting Demographic Research:
Merchandising managers have to gather demographic data that are
based on the income, average age and sell -through data of the
customer who visit to the store. Merchandising managers analyze
this data and use it to assist marketing personnel in purchasing and
presenting items that are likely to sell well in stores
2) Identifying Vendors and Making Wise Purchasing Decisions:
Merchandising Managers are oft en responsible for identifying and
working with reliable vendors who can supply quality products at
the best price. Once the vendors are identified, purchases need to
be made at the right time and in the correct amounts to best fit the
store’s needs.
3) Forec asting and Negotiating:
One of the roles of a Merchandising Manager is to collaborate
with the finance department to forecast or determine whether the
costs of raw materials will increase or decrease. Once these
forecasts are made, negotiate with vendors is done to fix the price
on products.
4) Visual Merchandising:
For Merchandising Managers, creating pan ograms is a regular
duty. A panorama is a diagram that shows how and where specific
retail products should be placed on retail shelves or displays in
order to increase customer.
8.3 SUMMARY
Today, the retail industry is considered amongst the largest in India,
and is ever -growing. This is because as long as there are buyers, this
industry will prosper. In the last couple of years, the buying capacity
of an average Indian citizen has increased. This is because of various
factors; prime amongst them is the large pay packets. Apart from that
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Retail Management
118 additional rupees to feel good and look good. And all this h as positive
impact for job seekers – full time and part time. Thus, today a career
in retail is not a difficult one to enter to. It is exciting because of the
number of people one gets to interact with. Apart from that one also
needs to be aware of the cha nging trends in order to increase sales.
8.4 EXERCISE
Fill in the blanks
1) __________ retailing is managed by taking the benefits of eco -
friendly processes.
(Organized, Unorganized, Green Retailing)
2) ___________ retailing business is known for its eco -friendl y
measures.
(Levi’s, Chemical Factory, Mining Industry)
3) _________ is one of the career options in retailing.
(Architect, Medical Representative, Visual Merchandiser)
4) The store manager has to look after _________ activity.
(Managing activities at the store , Raise the capital, Registration of
company)
5) _________ use the creativity and plan product displays that will
attract the attention of the customers and entice them to buy
products.
(Merchandising Managers, Finance Manager, Production
Manager)
True or Fal se
1) Starbucks undertake green retailing practices. TRUE
2) Green retailing conserves the nature resources. TRUE
3) Visual Merchandiser is one of the career options in the retailing.
TRUE
4) Store managers are responsible for raising finance from the
market. FALSE
5) Merchandising Manager is responsible for recruitment of sales
staff. FALSE

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Green Retailing and
Career Options in
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119 Match the pairs

(1-c, 2 -a, 3 -d, 4 -e, 5 -b)
Answer i n brief
1) Explain the concept of Green Retailing. Discuss its Importance.
2) What are the various career options available in retailing?
3) Discuss the various responsibilities of Store Manager.
4) Write a note on functions of Merchandising Manager.
Refereces
https://okcredit.in /blog/advantages -and-disadvantages -of-starting -an-
eco-friendly -business/
https://www.marketing91.com/responsibilities -of-a-store -manager/






Group - A Group – B
1) Green Retailing a) Example of green retailing
business
2) IKEA b) Plans product displays
3) Regional sales manager c) Eco-friendly business process
4) Store ma nager d) Career option in retailing
5) Merchandising Manager e) Managing retail store activities
https://www.hhrc.ac.in/ePortal/Commerce/I%20M.Com.%20-
%2018PCO3%20-
%20Dr.%20M.%20Sridevi%20&%20Dr.%20S.%20Veerapandiyan.
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12/15/22, 3:45 PMTurnitin - Originality Report - M.Com Semester IV Retail Management English Version
https://www.turnitin.com/newreport_printview.asp?eq=1&eb=1&esm=-2&oid=1981895406&sid=0&n=0&m=2&svr=51&r=71.86537275316954&la…1/57Turnitin OriginalityReportProcessed on: 15-Dec-2022 15:09 ISTID: 1981895406Word Count: 37286Submitted: 1M.Com Semester IV RetailManagement English VersionBy Idol University Of Mumbai4% match (Internet from 21-Nov-2017)http://www.egyankosh.ac.in/bitstream/123456789/15033/1/Unit-6.pdf2% match (Internet from 12-Nov-2021)https://ebooks.lpude.in/management/mba/term_3/DMGT550_RETAIL_MANAGEMENT.pdf2% match (Internet from 23-Oct-2022)https://blog.ipleaders.in/fdi-in-retail-all-you-need-to-know/?amp=1MODULE 1 Unit 01 RETAIL MANAGEMENT - I Unit Structure 1.0 Objectives1.1 Introduction 1.2 Retailing 1.3 Summary 1.4 Exercise 1.0 OBJECTIVES ‣
Introduce students with the basic concepts of retail management and thelatest developments in retail industry in the Indian context ‣ Developknowledge of contemporary retail management issues at the strategic level‣ Establish an academic relationship to the above through the applicationof retailing theory and research
1.1 INTRODUCTION The final step in themarketing distribution chain is retailing. The French verb "retaillier," fromwhich the English word "retail" has been derived, implies "
to cut a piece"or "to break bulk." It
includes every step of the product and service salesprocess. Retailing is the second-largest industry in the world and is onewith intense competition. Its capacity to give customers more freedom ofchoice, accessibility to a wide range of goods, and access to numerousservices is what accounts for its appeal. The typical size of a retail storevaries significantly between nations, mostly dependent on the degree ofeconomic development of that nation. Retail management refers to themany procedures that enable customers to purchase the necessary goodsfrom retail establishments for their intended uses. All the steps necessaryto attract customers to the store and meet their shopping demands areincluded in retail management. Retail management guarantees that clientshave a pleasant shopping experience and that they leave the store smiling.Simply put, retail management makes it easier for people to shop. One-sixth of the labour force is employed by the largest private industry in theworld, retail, which accounts for 8% of the GDP. The retail commerce isanticipated to be worth 7 trillion US dollars. The retail industry has seen asignificant transformation recently, and many nations have only thrivedbecause of retailing.
As far as India is concerned, it contributes
14%
ofour GDP and is the second largest
industry in terms of the number ofpeople it employs, behind agriculture. India is currently ranked secondamong Asian nations and the fifth most desirable retail destinationworldwide, according to a poll. It is listed as the seventh most alluringretail location globally. 1.2 RETAILING MEANING AND DEFINITION It ismost typical way of conducting business It entails selling goods in modestquantities to customers directly from a fixed location (a retail store). These Similarity Index7%Internet Sources:7%Publications:0%Student Papers:0%Similarity by Sourcemunotes.in