dba 1742 retail outlet and brand managemen

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• DBA 1742 RETAIL OUTLET AND BRAND MANAGEMENT

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UNIT 1- INTRODUCTION TO RETAIL OUTLET

• 1.1 Introduction to the subject.

• Retailing occupies a very eminent position in the
  economies of all modern societies. The retail
  sector is changing at an ever increasing rate and
  this is leading to a greater competition
  activity. As a result of acute competitor
  activity companies have to improve upon the way
  in which they approach retail marketing.
• That is to say retail management has to be
  developed within the context of marketing
  approach. There are of course different ways of
  approaching retail market and learn retail
  marketing principles. Fundamentally you have to
  look retail marketing through customers eyes.
• It Retailers have a wider knowledge of markets
  (customers) and also the retail applications than
  the manufacturers. In fact they are in close
  contact with the customers for your companys
  products than the company itself.
• A retailer is also a middleman in the channel of
  distribution. In fact a retailer is the last link
  in the chain of distribution. But he is an
  important link. In the transaction if the buyer
  is the end-consumer or ultimate customer then the
  seller is a retailer.

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• Thus he is a merchant middleman between the
  wholesaler and the consumer. The basic feature of
  the retail trade is that the retailer purchases
  the goods from a wholesaler and resells them in
  small quantities to different consumers.
• The retailer studies the requirements of the
  consumers, their likes and dislikes and
  accordingly stocks or replenishes the goods in
  his shop. He pays personal attention to
  customers, pleases them in many respects and is
  also very polite relative to other members of the
  distribution channel. It is the retailers who
  have to stick to the principle of right goods,
  right quality, right quantity, etc with a prompt
  after-sales service. Prompt and proper service to
  customers is the meaning in brief to retailing

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1.1a Retailing

• Retailing consists of the sale of goods or
  merchandise from a fixed location, such as a
  department store or kiosk, or by post, in small
  or individual lots for direct consumption by the
  purchaser.1 Retailing may include subordinated
  services, such as delivery.
• Purchasers may be individuals or businesses. In
  commerce, a retailer buys goods or products in
  large quantities from manufacturers or importers,
  either directly or through a wholesaler, and then
  sells smaller quantities to the end-user.
• Retail establishments are often called shops or
  stores. Retailers are at the end of the supply
  chain. Manufacturing marketers see the process of
  retailing as a necessary part of their overall
  distribution strategy.
• Shops may be on residential streets, shopping
  streets with few or no houses, or in a shopping
  center or mall, but are mostly found in the
  central business district. Shopping streets may
  be for pedestrians only. Sometimes a shopping
  street has a partial or full roof to protect
  customers from precipitation. In the U.S.,
  retailers often provided boardwalks in front of
  their stores to protect customers from the mud.
  Online retailing, also known as e-commerce is the
  latest form of non-shop retailing (cf. mail
  order).
• Shopping generally refers to the act of buying
  products. Sometimes this is done to obtain
  necessities such as food and clothing sometimes
  it is done as a recreational activity.
  Recreational shopping often involves window
  shopping (just looking, not buying) and browsing
  and does not always result in a purchase.

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• 1.1b Retail pricing
• The pricing technique used by most retailers is
  cost-plus pricing. This involves adding a markup
  amount (or percentage) to the retailers cost.
  Another common technique is suggested retail
  pricing. This simply involves charging the amount
  suggested by the manufacturer and usually printed
  on the product by the manufacturer.
• 1.1c Retail Services
• Behind the scenes at retail there is another
  factor at work. Coporations and independent store
  owners alike are always trying to get the edge on
  their competitors. One way to do this is to hire
  a merchandising solutions company to design
  custom store displays that will attract more
  customers in a certain demographic. The nation's
  largest retailers spend millions every year on
  in-store marketing programs that correspond to
  season and promotional changes. As products
  change, so will a retail landscape.
• 1.1d Etymology
• Retail comes from the French word retaillier
  which refers to "cutting off, clip and divide" in
  terms of tailoring (1365). It first was recorded
  as a noun with the meaning of a "sale in small
  quantities" in 1433 (French). Its literal meaning
  for retail was to "cut off, shred, paring". Like
  the French, the word retail in both Dutch and
  German (detailhandel and Einzelhandel
  respectively) also refer to sale of small
  quantities of items.

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• 1.1e Retail types
• There are three major types of retailing. The
  first is the market, a physical location where
  buyers and sellers converge. Usually this is done
  in town squares, sidewalks or designated streets
  and may involve the construction of temporary
  structures (market stalls).
• The second form is shop or store trading. Some
  shops use counter-service, where goods are out of
  reach of buyers, and must be obtained from the
  seller. This type of retail is common for small
  expensive items (e.g. jewelry) and controlled
  items like medicine and liquor. Self-service,
  where goods may be handled and examined prior to
  purchase, has become more common since the 20th
  century.
• A third form of retail is virtual retail, where
  products are ordered via mail, telephone or
  online without having been examined physically
  but instead in a catalog, on television or on a
  website. Sometimes this kind of retailing
  replicates existing retail types such as online
  shops or virtual marketplaces such as Amazon.3
• In addition to the enclosed malls, there are also
  strip malls which are 'outside' malls (in Britain
  they are called retail parks. These are often
  comprised of one or more big-box stores or
  superstores

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• Non-traditional exterior of a super target store.
  Los Angels- USA.
• Local shops can be known as brick and mortar
  stores in the United States. Many shops are part
  of a chain a number of similar shops with the
  same name selling the same products in different
  locations. The shops may be owned by one company,
  or there may be a franchising company that has
  franchising agreements with the shop owners (see
  also restaurant chain)
• Some shops sell second-hand goods. In other
  cases, especially in the case of a nonprofit
  shop, the public donates goods to the shop to be
  sold (see also thrift store). In give-away shops
  goods can be taken for free.
• There are also 'consignment' shops, which are
  where a person can place an item in a store, and
  if it sells the person gives the shop owner a
  percentage of the sale price. The advantage of
  selling an item this way is that the established
  shop gives the item exposure to more potential
  buyers.
• The term retailer is also applied where a service
  provider services the needs of a large number of
  individuals, such as with telephone or electric
  power.

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• One of the theories is the Wheel of retailing.
  This theory states that new types of retailers
  appear /enter the market as low status, low
  margin and low price operators. This is the entry
  phase and allows the retailers to compete
  effectively and take market share away from more
  traditional retailers.
• These new retailers gradually acquire more
  sophisticated and elaborate facilities as they
  meet with success, thereby becoming less
  efficient in the trading phase. This results in
  higher operating costs and investments. Hence
  they will raise prices and margins as they are
  entering the vulnerable phase. In the process
  they become vulnerable to the new low price, low
  margin new retailers.
• This appears to be the case with many outlet
  malls. Also the imperfect merchandise of the
  manufacturers or excess merchandise of the
  manufacturers cause extra expenditure for the
  retailer to make things more attractive with
  fancy lighting and whatnotgenerous return
  policies, private dressing room etc.
• . Now as an intermediary the retailer has to
  forge his own marketing strategy. Some retailers
  exercise dominance on the manufactures while
  others employ strategic marketing plans and
  sophisticated tools for effective retail
  management. All depend on the nature of product,
  demand, consumers behavior, market segmentation
  etc. They even measure performance more on return
  on investment basis than on profit-margin basis.

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• The word retail is derived from the French word
  retaillier meaning cut a piece off or break the
  bulk. It simply means first hand transaction with
  the customer. It is actually a direct interface
  with the customer and coordination of activities
  right from the concept and design of a product
  till it is delivered to the end consumer followed
  by the post delivery services to the customer.
  The retail industry has contributed a lot to the
  economic progress of many countries and has
  created a large potential for employment.
  Retailing concept of course is undergoing fast
  changes today.
• Retailing is an important part of marketing and
  the marketing mix consists of elements like
  product, place, price, people, presentation and
  promotion. Place represents distribution and in
  retailing it is the different locations of the
  store where products are available. Normally for
  any manufacturer selling through intermediaries,
  it is the retailer who introduces the product to
  the customer. Organizations sell their services
  and products through the retail outlets and get
  feed back on the performance of the products and
  customers expectations and suggestions from or
  through the retailers only.

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1.2 RETAIL OUTLETDEVELOPMENT POLICY DECISIONS

• The importance of a policy for retail stores
  development can be felt from the following
  example of the retail set up in the downtown
  Washington. Strategy, Not Serendipity, Needed
  To Renew Downtown's Retail Core
• Development activity in downtown Washington's
  east end may be an encouraging sign for merchants
  at the Shops at National Place, among others, as
  local real estate experts suggest. But that kind
  of speculation is fairly typical of the whimsical
  notions that have contributed to the decline of
  merchandise-oriented retail in the downtown area.
  
• The existing convention center and the Shops at
  National Place opened in the early 1980s amid
  considerable fanfare and promises of great things
  to come. Neither, however, has lived up to those
  promises. The convention center proved to be too
  small soon after it opened and the Shops, an
  enclosed shopping center at 14th and F streets
  NW, continues to have trouble finding the right
  tenant mix.
• It was in a similar planning vacuum during the
  1980s that developers overbuilt the office market
  and forced dozens of struggling retailers out of
  the downtown area. But with the development
  slowing dramatically because of the commercial
  real estate bust in the early '90s, experts are
  now selling entertainment

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• General description
• EVEA (Estonian Association of SME-s) is a
  non-governmental, non-profit association of SME-s
  and self-employed performing a representative,
  advocacy and lobbying function for small and
  medium-sized businesses as a social group. The
  main goal of EVEA is to create a favourable
  entrepreneurial environment in Estonia as the
  basis for economic growth and social stability.
• Serving as an interface between the Estonian SME
  community from one side and the policy
  decision-makers, international organisations and
  various social partners from the other side, EVEA
  provides information about the situation in the
  SME sector, its problems, economic legislation,
  business opportunities and business-related
  infrastructure in Estonia.
• EVEA membership is open to any Estonian SME and
  currently includes 180 companies and
  self-employed. Most of the members are businesses
  with less than 50 employees.

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• 1.2b Retail specific information and data
• EVEA activities in the frames of the RENET
  project are focussed on the South-Estonian area,
  which covers five counties. This part of Estonia
  is chosen due to the fact that that area is
  problematic in the Estonian state equilibrated
  development model. Nevertheless the territory of
  Estonia has small enterprises and incomes differ
  in regions in industrial regions in North- and
  Northeast Estonia income and salaries are higher,
  purchase capacity is bigger, and population
  density is higher than in the agriculture and
  forestry regions in South-Estonia.
• The attraction centre for the people from
  South-Estonia is the city of Tartu with 100,000
  inhabitants, where the development model for the
  year 2030 is being worked out. The vision of
  Tartu 2030 The city of active, creative and
  happy people Tartu is the intellectual capital of
  Estonia and the centre for promoting development
  in the whole of Southern Estonia it is a
  university town with traditions, a city of youth
  where creativeness and open reasoning support
  development activity and innovation in
  enterpreneurship a city with modern urban
  environment, safe, developing sustainable way of
  life and an actively cooperating Estonian city.

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• 1.2d Planned RENET related activities
• The second aim after the study is carried through
  to involve councillors of all five counties in
  October 2007 into the retail network development
  prognostication development for planning together
  ways of retail development. They should take into
  consideration the presumed area specific problems
  of South-Estonia as a partitioned landscape,
  thinly populated area etc.
• Third aim was to form a representative
  organization with an own visual identity and
  Internet homepage for better solving problems
  standing between retailers of South-Estonia. That
  representative organisation, the Association of
  Small Retailers and Service Providers NGO (MTÜ
  VKTL) was established in 2006 and officially
  registered in March 2007. The development of the
  association will go on in three directions.

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• 1.2.e RETAIL INDUSTRY TRANSFORMATION
• India has emerged as the most attractive
  destination for retailers in 2007. According to
  the latest AT Kearney study, for the third year
  in a row, India leads the annual list of most
  attractive emerging markets for retail investment
  followed by Russia and China.
• Retail has proved to be one of India's largest
  industries, and has presently emerged as one of
  the most dynamic and fast paced industries with
  multitude of players entering the market.
  Accounting for over 10 of the country's GDP and
  around 8 of the employment retailing in India is
  gradually inching its way towards becoming the
  next boom industry.

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• 1.2f The Spending Generation
• India's middle-classes, widely traveled and with
  deep pockets, are flocking to malls...India's
  organized retail industry...is poised to grow by
  97 per year in the next five years to a
  staggering 24bn....in two years there will be
  360 malls across the country....And it has only
  just begun. Developers and promoters of malls
  believe the face of the industry is about to
  dramatically change." Source BBC World Service,
• India retail industry is reflected in its
  sprawling shopping centers, multiplex- malls and
  huge complexes offer shopping, entertainment and
  food all under one roof, the concept of shopping
  has altered in terms of format and consumer
  buying behavior, ushering in a revolution in
  shopping in India.
• The new culture brought in by the Tech generation
  has not only changed the way Indians work but
  also how they play. This is preeminently
  reflected in the contemporary retail sector
  development. The tech generation not only bought
  in gadgets and gizmos but also big and deep
  pockets and an eye for all things expensive. They
  were willing to spend for comfort and pleasure.

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• 1.2g Shop till you Drop
• 27 million square feet of organized retail space
  is currently available. Another 90 million square
  feet is expected to be added by 2008 from 263
  mall projects. Of these, 18 million square feet
  is slated to come up in Delhi as well as in
  Mumbai, 9.5 million square feet in Ludhiana, 6
  million square feet in Chandigarh and 3.6 million
  square feet in Ahmedabad. Big cities or small
  towns to the obscure villages, retail shopping
  development is coming to all parts and corners of
  India.
• With the retail sector experiencing a boom, the
  country is witnessing a spurt in extremely large
  retail spaces. Shopping malls with over 1 million
  sq ft of are now common In the National Capital
  Region (NCR), Unitech's Great India Place has a
  million square feet (sq ft) of retail space. In
  Mumbai, at least eight malls are covering over 1
  million sq ft each In Bangalore, at least three
  malls with similar dimensions are under
  development. Ludhiana will soon have a
  1.6-million sq ft mall by Today Homes. The
  biggest mall of the world Mall of India will have
  32 acres spanning a huge entertainment area and
  large city town squares offering a total retail
  experience. The Mantra here seems bigger the
  better
• Specialized malls seems like another catching
  trend Gurgaon, on the suburbs of New Delhi, has a
  jewellery mall and will soon have an auto
  mallBangalore will get an exclusive furniture
  mall. Two malls targeting foreign tourists will
  come up at tourist hotspots--Goa and Udaipur. A
  furnishings mall is coming in Kolkata. And
  India's largest theme amusement park, Noida
  Entertainment City will be absolutely colossal
  standing upon 150 acres approximately.

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1.3 STRATEGIC IMPORTANCE OF RETAIL OUTLET
DECISIONS

• As retail is evolving, so are the relationships
  between marketers and the companies helping them
  to leverage the medium. Project based
  relationships are giving way to strategic
  relationships that are broader in scope, longer
  term in nature and evaluated on the basis of
  defined and measurable performance goals.
• These strategic relationships are helping
  marketers to respond to the pressure to more
  effectively create, manage and continuously
  improve their retail programs. To understand why,
  it is important to understand the factors that
  are necessitating the change to the
  client/supplier relationship (1) the growth and
  importance of the retail medium, and (2),
  incessant bottom line pressure.

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1.3 a THE GROWTH AND IMPORTANCE OF THE RETAIL
MEDIUM

• Never before has the importance of the in-store
  environment been so elevated in the minds of
  brand marketers and retailers. The proliferation
  of communications channels has diluted the
  ability of traditional media to hit the target,
  bringing increasing attention on the retail store
  as the surest point of contact.
• Growing recognition by retailers that they
  themselves are a brand has raised awareness of
  the need to manage and distinguish their
  environments and the experience of shopping
  within their stores.
• Brand companies are looking to the in-store
  environment as a more important and integral
  component in their marketing mix. Brand equity is
  becoming the last vestige of competitive
  advantage and brand marketers are recognizing the
  retail store as a point of tangible contact
  between their brand and their target consumer.
  There is increasing emphasis on the creation of
  in-store programs that deliver a more fulfilling
  brand experience.

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1.3 b BOTTOM LINE PRESSURE

• Few industries are free from the pressure to
  reduce costs and retail is no exception. Retail
  is a physical business and the scope and
  complexity of programs is growing. In turning
  over every stone to find cost saving
  opportunities, strategic purchasers have
  recognized that the end-to-end process for retail
  programs needs to be optimized from design and
  development activities, to production costs, to
  the wide range of logistical issues related to
  implementing three dimensional marketing programs
  to a multitude of store doors. Its understood
  that there are efficiencies to be gained across
  the total supply chain, and that manufactured
  costs are only part of the equation. It is also
  understood that there are economies of scale to
  be realized between the programs that comprise a
  total retail presence, and over time as programs
  evolve.

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• 1.3 c BENEFITS OF NEW RELATIONSHIP MODELS
• Traditional client/supplier relationships inhibit
  the ability to leverage the full potential of the
  retail medium. The use of multiple suppliers
  across multiple programs tends to undermine the
  coherency of a marketers total marketplace
  presence and impact, the effectiveness and
  efficiency of their processes, economies of
  scale, and ultimately the profitability of their
  retail effort. For this reason, marketers are
  moving toward strategic relationships with a
  single partner or a core group of agency/supplier
  partners, with an emphasis on tighter
  collaboration among the partners and defined
  end-to-end processes.
• Performance benefits, including increased sales
  and decreased costs, are being realized.
• Innovation is enabled, as a focused team armed
  with strategic information can create a stream of
  innovations that are more relevant and targeted
  than speculative efforts. Consistency of
  presentation, across channels and across
  geographic borders, is managed as is the
  synchronization of a marketers retail effort. A
  well-orchestrated retail plan assures that all
  programs are working in concert to maximize
  marketplace potential. These benefits, along with
  improved confidentiality of brand and retail
  strategies, ultimately impact sales and consumer
  loyalty. They are difficult to achieve without
  vested partners.

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• A long term strategic supplier is in a better
  position to identify cost saving opportunities
  than a one-program supplier. A partner with a
  view of the total supply chain can respond to the
  expectation to optimize efficiencies and to
  continuously improve processes, where a supplier
  given only a limited view of specific activities
  can not. Within the context of a defined
  partnership, speed to market is accelerated as
  the learning curve is diminished and the impact
  of awkward hand-offs is eliminated. Finally, a
  marketers internal capacity is improved, as a
  streamlined process allows them to focus on their
  core business while their partners focus on the
  creation and management of their retail presence.
  
• Retail is changing for the better. One shot deals
  no longer make economic sense, and activities can
  no longer be viewed in isolation. Building a
  retail presence requires planning and
  collaboration, and managing profitability
  requires a long term view. As the relationships
  between marketers and their agencies improve, so
  will the potential of retail as a high
  performance marketing tool.
• The retail environment offers a great deal of
  customer convenience in so far as it tries to
  provide for consumer needs precisely and on time
  throughout the country. It is a vital element in
  triggering consumer spends. The growth in
  retailing will generate tremendous employment
  opportunities for both professionals and
  non-professionals- say in different levels. In
  fact maximum number of people with most minimum
  qualifications can be employed in the front line
  operations. Of course a bit of training will be
  an added advantage

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• 1.3 d IMPACT ON GDP AND ECONOMY
• A many fold effect on GDP is possible because of
  retailing. It first of all generates employment
  directly and indirectly through supply chain. The
  outsourcing by retailers can contribute to the
  growth of many small and medium industries. The
  contribution of retailers to tiny and cottage
  industries along with huge industries is
  astonishing.Organised retailing can bring about a
  telling change in the supply chain of agriculture
  and other rural products. Retailing can remove
  inefficiencies in the distribution of consumer
  goods. A well organized retail store can give
  better products, variety of products, better
  ambience and convenience, better prices or
  competitive prices-all at the same time. It gives
  an overall satisfaction to the customer or his
  family and friends who visit the store.
• While we attach so much importance to organized
  retailing, opening the doors to international
  giants directly or indirectly, it should not be
  at the cost of local family run small retail
  set-ups or the kirana shops. However we have to
  adopt to the new system for providing convenience
  and economy to customers and also to meet their
  changing needs and behaviors.

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1.3 E IMPACT ON EMPLOYMENT AND OTHER SERVICES

• Retailers play another important role in society
  when they employ different levels of people and
  with status today. In US, UK, FRANCE etc the
  retail industry employs around 20 t0 27 of the
  workforce. Two thirds of the labour employed by
  retail is female force, a considerable portion of
  employees in US, CANADA, UK etc are part time
  employees, including students. In unorganized
  retail sector, especially in India, the employees
  were paid far less and worked for longer hours.
  Conditions are far better with Spencers,
  Nilgiries, Food world (now Spencers), Reliance
  fresh, More, Stop and shop, Pantaloons, Odyssey
  etc. in India itself.
• A retailer does not simply sell what the supplier
  can give him nowadays. A retailer acts as a
  gatekeeper within the channel of distribution.
  The retailer today exerts pressure on the
  suppliers on wanted brands and need based stocks
  only. The consumers stand to benefit as they get
  what is needed at relatively economical cost.
  Some retailers have left lasting impression and
  image in the minds of consumers by their
  ambience, service and display of social
  responsibility that many consumers are not only
  retail-brand loyal but also are ready to buy
  their other non-related products like financial
  services etc. Further today retailers have
  started moving internationally and have even
  joint ventures.

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1.4 Retail outlets mapping and performance
management

• 1.4.1 The Need for a Retail Outlets Mapping
• Retail marketing has undergone a sea change in
  the last couple of years. In a market where
  brands are proliferating, shelf space getting
  rare and the customers multiplying, it has become
  imperative to assess whether the sales team and
  distribution network cover all the outlets in the
  city in an effective manner. Are you certain that
  the territories covered are by hunch or fully
  supported by scientific survey and ststistics?
  Did you consider the demographic factors while
  allowing the different retail outlets to perform?
  Please do not be impressed either by the
  largeness of the area or by the hugeness of the
  population. A territory with smaller population
  with needs and purchasing power supported by its
  behaviourial characteristics can be a better one
  than the one with large, price sensitive
  territory with a huge population, less purchasing
  power, not ready for challenging cultural
  advancement etc.It therefore becomes necessary
  for any supplier to prepare a map, geographical
  map, of the retail outlets referring to roadmaps,
  atlas, government records, census graphs etc. The
  management of the performance of these outlets
  will carry and justification only with the help
  of thoughtfully prepared maps that are result
  oriented. That can help you to analyze the data
  for performance management.

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RETAILOUTLETS IN DIFFERENT CULTURAL STANDINGS

• Almost every research report on media, marketing
  and consumer economics refers to SEC categories.
  These categories are important because they help
  in effectively segmenting markets and targeting
  relevant communication to core consumers for
  products and services.
• Words like SEC A and SEC B are freely tossed
  around without realising that, barring a few
  experts, there is little, if any, knowledge about
  their real meaning. Very few, for example, may be
  aware that shopkeepers/ traders though affluent
  and, therefore, having more spending power than
  most executives would fail to make the high
  grade, if they are not well educated.
• Although, MRUC Hansa Research have come up with
  a new concept of Household Potential Index
  (HPI), based on the data being regularly
  collected by IRS, to reclassify consumers, SEC
  continues to remain universally referenced
  classification of consuming classes. While, a
  detailed postings on HPI will soon follow, we
  explain below the basis of classification of
  different SEC categories and their relative
  importance in relation to marketing/ retailing
  potential

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1.6 ORGANIZED AND UNORGANIZED RETAIL OUTLETS

• 1.6.1 ORGANIZED SECTOR
• The pace of development of retailing varied
  between developed and developing countries. You
  can find that retailing is very much organized in
  developing countries and are still very much
  disorganized in developing and under developed
  countries. Thus in India retailing is organized
  only to the extend of 4 while it is around 60 to
  80 organized in US ,UK, Canada, Germany and
  even in France. According to a report of Meckency
  co 80 of retail business is organized in US.
  It accounts for high figure of US7.5 trillion.
  The other countries like Western Europe, Malasia,
  Thailand, Brazil and Argentina have 70,50,
  50,40and 40 respectively. It is 35 in
  Philippines, 25 in Indonesia, 15 in South Korea
  and only 10 in China.
• A large share of GDP is from service sector in
  developed countries and retail sector is a major
  component in this. As a result the employment
  opportunity offered by retail industry is very
  large. According to US department of labour about
  23 million people are employed in retail industry
  in US, in more than 2.1 million retail outlets.

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• In organized sector retailing is very highly
  customer centric, with continuous thrust on
  innovations in products, designs, services,
  benefits, processes, store planning
  modifications, categorizations, displacement and
  replacement to break monotony, pleasant ambience,
  better and more beneficial application of IT,
  more convenient methods and processes for
  customer retention as well as relations etc
  Organized retailing strongly believes that
  customer is the king and hence the necessity for
  user friendly application of internet, intranet,
  web ,erp, tracking, data ware housing etc. all
  professionalized. The nuclear families are on the
  increase, working women are on the increase,
  increased pressure of work for men and women
  inadequacy of time for commuting, backlog or
  overload of work etc has all forced priority to
  convenience and speed for consumers in developing
  countries including India. People wanted an easy
  access to goods and also to get everything under
  one roof. This has offered an excellent
  opportunity for retail business to become more
  and more organized. Inspite of the huge potential
  for growth, the Indian retail business in
  organized sector forms around 2 only. In fact a
  recent survey shows that most modern stores
  account for only about 0.6
• There are at least two major factors that the
  growth of organized Indian retail market- lower
  prices and the benefits hitherto not obtained.
  Economies of scale are the major contributor for
  this. The retail business in India in 2000 is
  around Rs. 400,000 crores .But it is around
  10,000 crores in 2007. This pace of growth is
  phenomenal supported by a one billion population
  consisting of 30 of BPL and 70 0f paltry income
  holders. The contribution of organized sector was
  Rs 20,000 crores in the year 2000 and it is
  Rs.200000 crore in 2007.( report of CMIE). The
  organized sector has attracted many gigantic
  foreign retailers like Marks and Spencer,
  Samsonite, Wallmart, KFC, Macdonalds, Campell,
  Dominos. Goenkas, Swarovsky etc. Also TATA,
  BIRLA, RELIANCE, PIRAMAL etc have greatly
  invested in most professional retailing. The
  Indian mind is fast catching the value for money
  concept and this is an impetus to retail growth
  in an organized way. Big bazaar, Subhikha, Margin
  free, more etc is the evidence for such
  expansion.

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• 1.6.2. UNORGANIZED SECTOR
• India is an example for unorganized sector of
  retail trade. It is estimated that there are
  about 14 million retail outlets of various sizes
  and formats in India. About 96 of the retail
  outlets have less than 500 sq.ft. size. The per
  capita retail space in India is 2 sq.ft. whereas
  it is 18 sq.ft. in US. It can be commented that
  India has the lowest per capita retail space in
  the world. (Kurt salmon associates). India has an
  average 10 outlets for every 1000 people. Thus
  India has the largest number of retail outlets
  and they contribute to 96 of the retail sales.
  These retail outlets are all independent. Most of
  the stores are kirana shops, family owned shops,
  single man shop, portable shops on carts or
  bicycles, door to door manual carriers etc. not
  providing much values and benefits to customers.
  Most of the shops sold whatever they had than
  marketing what the consumers wanted at a
  reasonable price, place and time. Retail and
  whole sale took place weekly or bimonthly both in
  rural and urban areas even today, that too at
  particular places only earmarked for that
  purpose. Limited choice was a big hurdle in
  unorganized retailing. The quality, durability,
  value for money, replacement, buys back
  arrangement, modifications, goods return etc were
  simply impossible in unorganized retailing.

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2. RETAIL OUTLET SURVEY

• 2.1a Retailing AS AN ACTIVITY
• Retailing consists of the sale of goods or
  merchandise from a fixed location, such as a
  department store or kiosk, or by post, in small
  or individual lots for direct consumption by the
  purchaser.1 Retailing may include subordinated
  services, such as delivery. Purchasers may be
  individuals or businesses. In commerce, a
  retailer buys goods or products in large
  quantities from manufacturers or importers,
  either directly or through a wholesaler, and then
  sells smaller quantities to the end-user. Retail
  establishments are often called shops or stores.
  Retailers are at the end of the supply chain.
  Manufacturing marketers see the process of
  retailing as a necessary part of their overall
  distribution strategy.
• Shops may be on residential streets, shopping
  streets with few or no houses, or in a shopping
  center or mall, but are mostly found in the
  central business district. Shopping streets may
  be for pedestrians only. Sometimes a shopping
  street has a partial or full roof to protect
  customers from precipitation. In the U.S.,
  retailers often provided boardwalks in front of
  their stores to protect customers from the mud.
  Online retailing, also known as e-commerce is the
  latest form of non-shop retailing (cf. mail
  order).

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Non-traditional exterior of a Super Target,
Jacksonville

• Local shops can be known as brick and mortar
  stores in the United States. Many shops are part
  of a chain a number of similar shops with the
  same name selling the same products in different
  locations. The shops may be owned by one company,
  or there may be a franchising company that has
  franchising agreements with the shop owners (see
  also restaurant chain)
• Some shops sell second-hand goods. In other
  cases, especially in the case of a nonprofit
  shop, the public donates goods to the shop to be
  sold (see also thrift store). In give-away shops
  goods can be taken for free.
• There are also 'consignment' shops, which are
  where a person can place an item in a store, and
  if it sells the person gives the shop owner a
  percentage of the sale price. The advantage of
  selling an item this way is that the established
  shop gives the item exposure to more potential
  buyers.
• The term retailer is also applied where a service
  provider services the needs of a large number of
  individuals, such as with telephone or electric
  power.
• Retailers may use facing to create the look of a
  perfectly-stocked store even when it is not.

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2.2 EMERGING TRENDS IN RETAIL OUTLETS

• India tops the AT Kearney's annual Global Retail
  Development Index (GRDI) for the third
  consecutive year, maintaining its position as the
  most attractive market for retail investment.
  Furthermore a report by PricewaterhouseCoopers
  foresees India and China to continue as the top
  sourcing hubs in retail and consumer sector in
  the coming years.
• The Indian retail market, which is the fifth
  largest retail destination globally, according to
  industry estimates is estimated to grow from the
  US 330 billion in 2007 to US 427 billion by
  2010 and US 637 billion by 2015. Simultaneously,
  modern retail is likely to increase its share in
  the total retail market to 22 per cent by 2010.
• Continuing the robust growth of the organised
  retail in India, according to the Credit Rating
  and Information Services of India, the industry
  raked in US 25.44 billion turnover in 2007-08 as
  against US 16.99 billion in 2006-07, a whopping
  growth rate of 49.73 per cent.

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2.2a Retail space

• Driven by changing lifestyles, strong income
  growth and favourable demographic patterns,
  Indian retail is expanding at a rapid pace. Mall
  space, from a meagre one million square feet in
  2002, is expected to touch 40 million square feet
  by end-2007 and an estimated 60 million square
  feet by end-2008, says Jones Lang LaSalle's third
  annual Retailer Sentiment Survey-Asia.
• Alongside, Indian cities are witnessing a
  paradigm shift from traditional forms of
  retailing into a modern organized sector. A
  report by Images Retail estimates the number of
  operational malls to more than double to over 412
  with 205 million square feet by 2010 and further
  715 malls by 2015, on the back of major retail
  developments even in tier II and tier III cities
  in India.

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2.2 b The Indian Retail Scenario The Charm of
Novelty battles it out with the Charm of
Simplicity

• So now our metros are definitely getting
  overcrowded with new retail formats. If all of
  India has a 3-4 organized retail percentage
  figure in metros, its probably close to 30-40
  (or more).
• Grocery, Apparel, Books Music, now even
  Medicines, are now all seeing huge sales via the
  spanking new stores (they used to be called
  shops when they were mom and pop now you
  cant call them anything but stores J ). But I
  think the phenomenon that has overwhelmed us
  Indians is the mallification of our metros.
• In fact, when Crossroads, one of the very first
  malls in Mumbai, India was opened, the crowds
  became so unmanageable that they had to restrict
  entry --- only people with cell phones (in those
  days, mobile penetration was much lower than it
  is now) were allowed in
• I actually love these malls I like to window
  shop as much as the next person, I think the
  lesser crowded malls make for nice weekend jaunts
  for the kids where you combine your necessity
  shopping with fun and food.Every major
  retailer is gunning for a scale that gives them
  sleepless nights

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2.2.c FUTURE TRENDS

• IT has already had a tremendous effect on the
  retail sector. A number of new IT innovations lie
  in store for shops. The new IT products are being
  used along with the internet that is exciting
  adding value and new experiences to consumers.
  Internet is used for selling, advertising,
  distributing and even for designing and modifying
  the design etc by retailers and of course by
  suppliers/manufacturers. Internet is an
  attractive and more able substitute for
  traditional functions of the intermediaries.
  Because of its ability to transform information
  inexpensively and quickly, internet has a
  significant effect on sales transactions,
  communications and logistics. Some of the trends
  for the IT in retailing are 1) Smart
  cardEquipped with a silicon chip, these cards
  replace other forms of transaction, retailers
  have to invest in equipments only. The Smart
  cards are more secured and carry a lot more
  information than conventional cards. It has
  already revolutionized the banking industry which
  20 years ago enjoyed got reshaped by ATMs.
  Avoiding the long ques in the bank. Smart cards
  enable consumers transfer money quickly and
  provide accurate and secure cash free
  transactions. The technology is well developed
  that smart tags are there /bar codes etc that can
  tell full information about the supplier, monitor
  the supply chain, provide stock control etc. Even
  theft and unauthorized use can be detected by
  these cards.

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• The important trend today is that retailers
  decide the type of products, categorization,
  services to be rendered, differentiation of
  services, the very format etc. These are the
  super markets, departmental stores and specialty
  stores.
• The next important trend is the retailers carve a
  niche for themselves, become a specialist product
  category, unusual services followed by strategic
  pricing. This differentiation results in
  intensified competition for products and
  services. The offer becomes standardized and
  price becomes the most significant selling point.
  This ends up in the formation of the so called
  discount stores.
• The next trend is the formation of hyper markets
  when a wide variety of goods and services are
  offered at the most competitive prices. Of course
  they normally lack product depth and extra
  services.
• Apart from the above consumers are also
  influenced by factors like migration of formats,
  cross-border movement and mergers and
  acquisitions of firms.
• By migration of formats what is meant is that
  many retailers are adopting formats of super
  markets, hyper markets, departmental stores, mail
  order stores, telemarketers, web-enabled
  marketers etc. Thus Tesco in Briton operates
  super markets, hyper markets, neighbourhood
  stores, convenient stores, departmental stores,
  mail order stores etc. These are applicable to
  many retailers like Bata stores, Spencers, More,
  Reliance etc.

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2.2.2 Frequent Leisure Time Shoppers Spend More
per Trip

• 2.2.2 a Shoppers Focus on Wants over Needs
• Frequent leisure time shoppers are a retailers
  dream comes true according to BIG research and
  MARS Advertising. Their semi-annual Shopper
  Mindset survey revealed that frequent leisure
  time shoppers, those who take a leisure shopping
  trip once a month or more, spend considerably
  more per leisure trip than other adults over 18
• 2.2.2 b Frequent Leisure Time Shoppers Focus
  on Wants, Not Needs
• Frequent leisure time shoppers spend an average
  of 113.33 per shopping trip, making this segment
  of consumers one of most profitable and informed.
  According to Anne Howe, SVP, Market Intelligence
  Insights at MARS, frequent leisure time
  shoppers, "are more relaxed and have either
  researched their planned purchases online or rely
  on in-store personnel or point-of-sale material
  as information sources before purchasing."

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• 2.2.2 c Whats In the Leisure Time Shoppers'
  Shopping Bag?
• Apparel -- 40.2 Health and Beauty Aids --
  26.6 Entertainment, Leisure Items and
  Electronics -- 22.5
• 2.2.2 d Frequent Leisure Time Shoppers
  Statistics
• Female -- 54.0 Average Age -- 31 Want
  to relax and get away from the house -- 61.3
  Bought apparel on last leisure shopping trip --
  40.2 Made Purchases at Discount Stores --
  32.0 Have cell phones -- 86.0 Have text
  messaging on their cell phone -- 56.0 Wander
  up and down aisles when leisure shopping -- 38.0
  
• Providing an informative and engaging in-store
  environment could result in incremental sales
  from this shopper segment," Howe suggested. "This
  shopper is way more likely to respond to a myriad
  of in-store influencers, and not as likely to say
  that traditional media messages are influencing
  their purchase behavior. This is good news for
  marketers who have been using effective in-store
  messaging as part of promotion programs. And it
  reinforces the message to retailers that
  consumers are looking at more than price while in
  the aisles." The following references are given
  so that you may go to those web-sites and get
  more information on latest retail trends

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2.2.3. Strengthening and Evolving
Consumer Trends

• While attitudes, perceptions and behavior
  continually evolve into trends, and as
  individuals, the nation and the world adjust to
  change, some trends become cultural
  characteristics, observes Hallmark's trends
  expert Marita Wesely-Clough.
• "A social trend becomes a component of a culture
  when it lasts five to eight years or more
  bargain hunting, for example," Wesely-Clough
  says. "Of course, countertrends can surface,
  strengthen and eventually supplant an established
  cultural trend.
• Other strengthening trends include the pursuit of
  happiness, the desire for more and more, Eastern
  influences, shifting boomer behavior, and
  polarization of attitudes.
• Understanding the consumer is the first step in
  creating products that are on target, and is
  essential in developing relevant products that
  help people express their emotions and strengthen
  relationships.
• "A number of trends are continuing and
  intensifying some that dramatically affect the
  way we think, live, and shop," Wesely-Clough
  says. "Of course, countertrends emerge,
  preventing society from becoming static, although
  a culture may share an overriding belief that
  directs its path democracy, for example, which
  carries with it freedoms to be, do, have and
  express. And those freedoms offer lots of
  opportunity for people to jump on bandwagons."

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2.2.4. Evolving Trends and Counter Trends for
2005 and Beyond

• 2.2.4 a THE PURSUIT OF HAPPINESS
• Recent studies in the realm of positive
  psychology, continuing research of "happy" or
  normal people rather than "abnormal" people, will
  increase the belief that happiness is attainable.
  Though points of view may vary on how happiness
  is achieved, or even what one considers the state
  of happiness to be, there will be broader
  acceptance that a true state of well being is
  accessible to everyone. Using new discoveries via
  the study of well being from "the cup is half
  full" perspective, efforts will be made to teach
  how to become happy.
• 2.2.4 b OSTENTATION NATION More is More
• Watch for the continuous and intensified drive
  for aspirational luxury. People will be searching
  for the most upscale and most fabulous handbag,
  suit, car, dog, vacation. There will be
  increasing pressure on the part of well-to-do
  consumers to distinguish themselves from the
  masses. Watch these consumers go for the high end
  on products, goods and services, as they search
  for the most unique in what they want to drive,
  where they travel, what they choose to wear.
  Handcrafted and customized, or rare, almost
  museum quality super luxe items will be in
  greater demand by high-end consumers.

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• 2.2.4 c Counter Trend Enough is Enough
• That the standard of living in the United States
  is far better than many other places fosters an
  understanding that we "have enough." Watch for
  people of all ages to scale down and simplify, to
  insure they have time to invest in what matters
  friends, family, giving back, their legacy.
  Boomers approaching retirement will lead this
  trend.
• 2.2.4 d PAST PERFECT
• Consumers insatiable desire for new, new, new
  will drive fashion, architecture, furniture,
  textiles in fact, all visual disciplines to
  mine past design practices. As companies become
  more focused on giving consumers something new,
  fresh, unique, they look to the past for
  reference. Lucky are those companies that can
  draw upon their own past product successes to
  generate present-day profits. Watch as companies
  draw upon days gone by to bring about the "new"
  longed for by retailers and shoppers alike.
• 2.2.4 e Counter Trend The Power of Now
• Those wanting to break away, find freedom from
  the common, the mundane will welcome a look to
  the future with new technologies, new uses and
  new materials light-emitting diodes (LED) and
  translucent cements, for example, to create new
  reality-altering atmospheres and sturdy
  structures.

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2.2.5 CONSUMER TRENDS

• Behold aCerno the only predictive targeting ad
  network that drives transactions, propels brand
  metrics, finds prospects who are in-market for
  your product or service, and predicts what they
  are interested in. Your best prospects are
  delivered flawlessly and efficiently to you.
• aCerno helps marketers motivate consumers by
  always putting the right message before their
  eyes when and where they're receptive to your
  message.
• aCerno understands and capitalizes on the
  symbiosis among brands, retailers and consumers.
  Our predictive modeling gleans vital data from
  this ecosystem to target messages that pique
  interest and prompt the consumer reaction you
  seek. With aCerno, online advertising unearths
  greater market potential by delivering
  predisposed prospects. It's more than ads, Web
  sites, surfing and shopping it's relevant,
  intuitive, smart, insightful targeting to
  consumers who are looking for what advertisers
  offer. And everyone benefits.
• By 2007, the overwhelming majority of apparel
  buyers and sellers had adjusted themselves to a
  world in which virtually all clothes sold in
  affluent countries were assembled in poorer
  countries. The relocation of manufacture had
  brought prices down over the previous 15 years
  and restrictions and taxes on international trade
  were generally headed for extinction. However,
  subtle differences between the ways each
  exporting country is treated has made
  understanding trade restrictions increasingly
  difficult. This briefing reviews apparel trade
  over the last 12 months and looks at how to deal
  with the major sourcing issues in 2008.

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ATMOSPHERIC FACTORS IN THE RETAIL ENVIRONMENT
SIGHTS, SOUNDS AND SMELLS

• Since the concept of "atmospherics" was
  introduced in the early 1970s, there has been a
  slow, but growing, interest in understanding and
  predicting the impact of the environment on
  consumer responses. The objective of this session
  was to showcase state-of-the-art research and
  practice in retail atmospherics, and to identify
  research opportunities in this emerging area.
• The term "retail atmospherics" refers to all of
  the physical and nonphysical elements of a store
  that can be controlled in order to enhance (or
  restrain) the behaviors of its occupants, both
  customers and employees. These elements present a
  multitude of possibilities including ambient cues
  such as color, smell, music, lighting, and
  textures, as well as architectural and
  artifactual elements. This session began with a
  detailed overview of how some of these
  environmental elements are being used by
  professional store designers and architects to
  create desired retail settings. This first
  presentation, "Theater of Retailing Selling
  Through the Senses" (Randall E. Gebhardt, Fitch
  Associates, Columbus, OH), included numerous
  examples of how retailers use sounds, scents, and
  visual elements of the store atmosphere to
  produce desired images and to increase sales. The
  examples included a tie store's use of leather
  and tobacco scents to create an atmosphere in
  which female gift buyers are comfortable in
  purchasing men's ties and a music store's use of
  audio engineering to create a store auditorially
  segmented by department

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• The second presentation, "Olfaction and the
  Retailing Environment" (Terence A. Shimp, Pam
  Scholder Ellen and Paula Fitzgerald Bone), gave
  examples of how olfactory stimuli are being used
  in the retail environment, along with a
  discussion of the theoretical explanations for
  the observed effects of such stimuli. The primary
  response to olfactory stimuli was said to be
  approach/avoidance behavior. Evidence was
  presented that olfactory stimuli have the
  potential to attract attention and motivate
  processing, enhance mood states, and affect
  salesperson/customer interactions. Potential
  moderators and mediators of olfactory effects
  were also discussed.
• The final presentation, "The Impact of
  Atmospheric Music and Retail Density on Retail
  Crowding Perceptions and Their Consequences Does
  Song Augment the Throng?" (Karen A. Machleit,
  James J. Kellaris and Sevgin A. Eroglu),
  discussed the results of a laboratory experiment
  which manipulated both retail density and music
  loudness. The results indicated that both
  loudness of music and customer density increase
  subjects' perceptions of retail crowding
  however, these independent variables did not
  directly affect other customer responses. Rather,
  outcome responses such as the feelings
  experienced while shopping and store satisfaction
  are influenced by the level of crowding
  experienced by the shopper.

44

• The session discussant, Meryl P. Gardner,
  provided insightful comments with respect to all
  three presentations. Of particular note was her
  observation that retailers make store changes on
  a number of dimensions and then measure the
  impact on variables such as store traffic
  patterns and sales. To contrast, academic
  researchers study only one or two aspects of the
  environment at a time, often in artificial
  settings which, unfortunately, is the only
  realistic option available to most researchers.
• In conclusion, this session intended to
  contribute to consumer research by identifying
  opportunities for research in the area of
  person-environment relationships in marketing
  contexts. Although practitioners and
  environmental psychologists have long been aware
  of the impact of environmental stimuli on human
  behavior, consumer research has lagged behind in
  this field

45

• Shari Waters
• Shari Waters began her journey in retail more
  than 25 years ago when she agreed to work
  Saturdays in a sporting goods store for a family
  friend. Since then, she has worked her way up
  through the retail ranks from sales clerk to
  store manager, on to shop owner.
• Experience
• Shari's background includes working in various
  sectors of the retail industry and her roles have
  ranged from cashier to store manager. She has
  participated as a member of several retail
  round-table discussions with the National
  Association of College Stores and served as an
  officer of the Marketing/Management Advisory
  Committee at Ogeechee Technical College. Besides
  operating the specialty retail business she and
  her husband began, Shari also works as a
  freelance writer and consultant for other
  retailers and small-business startups.

46

• From Shari Waters
• I understand that being a shop owner/operator
  requires an extraordinary amount of skill. You
  have many hats to wear and must know when to wear
  which in order to be successful. From writing
  orders and managing employees to stocking new
  inventory, the job as a retailer is never done
  and there is always room for improvement. I hope
  this site offers the necessary tools, resources
  and support you need to successfully start and
  operate your retail business.

47
Top 10 Ways to Turn Off Customers

• customer service tips
• retail atmospherics
• As individuals, we all have our own little pet
  peeves. What may turn off one customer may not
  bother another. As retailers, we can't afford to
  turn off a single customer and image is
  everything. Keeping our stores neat and clean is
  not only easy to do it is generally an
  inexpensive way to attract customers and create a
  pleasant store atmosphere.
• Take a look around your retail store. Do any of
  the following situations exist? If not, look
  harder. Your store may be exhibiting some other
  offenses you haven't noticed until now. Here are
  ten ways your store may be turning off customers

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• 1. Dirty Bathrooms
• This customer pet peeve clearly deserves the
  number one spot on this list. Retail store
  restrooms should always be sparkling clean,
  whether they are open for public use or not. Make
  sure to stock the bathrooms with plenty of paper
  products, soap, trash receptacles and clean it
  daily.
• 2. Messy Dressing Rooms
• Keeping the dressing room area free of discarded
  hangers, tags and empty packaging goes beyond
  creating a neat store appearance, it is also a
  good step towards loss prevention. Take a quick
  look for out of place items after each customer
  uses the dressing room.
• 3. Loud Music
• Playing music in a retail store can help create a
  certain atmosphere for our shoppers. Music that
  is too loud, inappropriate or of poor quality can
  run a positive shopping experience.

49

• 4. Handwritten Signs
• In this era of technology, there is no excuse for
  displaying handwritten signage. It is too simple
  to print a sign from our computers or use
  pre-printed signs. Printed signs simply look more
  professional and signs with hard-to-read
  handwriting can be a customer turn-off.
• 5. Stained Floor or Ceiling Tiles
• It is true, accidents happen. However, our
  customers don't have to see them. Dirty carpet,
  stained flooring and ugly ceiling tiles can turn
  off many shoppers. Sweeping, vacuuming and
  mopping should be done on a regular basis.
  Consider hiring a professional cleaning crew to
  polish tile floors. Replace stained portions of
  carpet and ceiling tiles where possible.
• 6. Burned-out or Poor Lighting
• Replace any burned out light bulbs as soon as
  possible. Make sure all customer areas of the
  store have ample lighting and take into
  consideration shoppers with aging or less than
  perfect eyesight. Your store should be well
  illuminated for all customers
• 7. Offensive Odors
• Customers understand if they visit a lawn and
  garden center they will have to deal with the
  smell of fertilizer. The same goes for shoppers
  of a feed supply store. Certain odors are
  understandable and may even appeal to the
  customer's sense of smell. However, shoppers
  don't want to smell an employee's lunch drifting
  across the store. Use neutralizers to combat any
  offensive odors.

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• 8. Crowded Aisles
• Consumers like a selection but not if it means
  sacrificing comfort while shopping. Be sure your
  store is designed to allow adequate space between
  aisles and keep walkways free of merchandise.
  Cramped spaces can ruin a shopping experience and
  turn off a customer.
• 9. Disorganized Checkout Counters
• A stack of hangers, returned merchandise and
  sloppy work areas behind the checkout is a huge
  customer turn-off. This particular area where a
  customers financial transaction is taking place
  should not show any signs of disorganization.
  Like messy dressing rooms, a disorganized
  checkout counter can lead to theft. Keep those
  register areas neat and tidy.
• 10. Lack of Shopping Carts/Baskets
• Your type of retail shop may not require a
  shopping cart or y