RETAIL CLASSIFCATION

Classification ?
• All are pretty aware that classification is dividing population
into smaller wholes based on some base / characteristics
• Mankind has been doing this since time immemorial
• If the population is tree trunk and the characteristic is length /
mass, then the classification result is smaller sticks
• Reason is ease of handling
Classification ?
• Obviously this significant and ever valid law of nature
is extended to our living environment and history too
• British divided India based on cast, creed, religion etc. and
succeeded in ruling for 200 years
• Countries are divided based on language
spoken, common culture etc.
for better governance
Business Classification ?
• Organizations are classified into departments based on
common functionality, cost center / profit center, authority /
responsibility / accountability etc. for better governance
• Consumers are segmented based on demographics,
psychographics etc. for superior strategy formulation
Business Classification ?
• Hence, the ultimate objective of classification is to
appreciate the SWOT better and to prepare strategies
accordingly.
• Consequently academicians, consultants as well as
practitioners have researched continuously to develop
effective classification systems of business entities and
suggest strategies accordingly
 Classification of retail format
RETAIL

Store based Non Store Based Based on location

Ownership based Merchandise

based

• Departmental Store • Direct Marketing • High street

• Independent Retailer
• Super market • Telemarketing • Destination
• Chain retailer
• Hyper market • Ecom • Convenience
• Franchise
• Consumer Cooperative • Specialty Store
• Lease Department • Factory Outlet
Retail classification
• Merchandise based retail classification mix depends upon
• Assortment (Depth), variety (Breadth)
• Variety is the number of merchandise categories offered
• Assortment is the number of different items in a merchandise category (SKUs)
• Services offered
• Price
• Sq. Ft. area
 MERCHANDISE BASED
CLASSIFICATION
 FOOD-ORIENTED RETAILERS  GENERAL MERCHANDISE RETAILERS
• Convenience Store • Specialty Store
(Mom & Pop store) • Department Store
• Conventional Supermarket • Discount Store
• Hypermarket • Factory Outlet
• Warehouse Store /Club(Cash and carry) • Flea Market
 Food based Retailers
Formats Area Merchandise Price Service
Sq. Ft SKUs
Properties
Convenience 2000 – 3000 Low assortment High None
Low variety
Super Market 8,000 – Low assortment High ~ Low Low
20,000 90% food EDLP
Hypermarkets 80,000 – 40,000 – 60,000 SKU Low Medium
300,000 60% - 70% Food
Warehouse 100,000 – Low assortment Low Low
Stores 150,000 50% Food
 General Merchandiser
Formats Area Merchandise Price Service

Properties
Specialty Medium Low Variety High Assortment High High

Discount Large Medium Variety Low Low

Low Assortment

Department store Largest High Variety Medium Assortment High Medium

Factory outlet Small / Low Variety Medium Assortment Low Low

Medium
 Direct Marketing
• Direct marketing is a form of retailing in which a customer is first
exposed to a good or service through a non personal medium and
then orders by mail, phone, or fax – and increasingly by computer
• Sold Through Non personal Medium
• Direct selling includes both personal contact with consumers in their
homes (and other non store locations) and phone solicitations
initiated by a retailer
• Personal Contact in Homes
• Phone Solicitations
• Strategy Mix
• Convenient in Shopping
• Personal Touch
 Shopper’s Stop Formats
1. Shopper’s Stop : Apparel based department store
2. Homestop : Complete home solution based Specialty store
3. Crossword : Lifestyle bookstore Specialty store
4. Mothercare : Franchise of a UK based specialty store for the
“mother – to – be” to school going children
Trent Format
1. Westside : Apparel based department store
2. Landmark : Lifestyle based specialty store (book, music, gift
items etc.)
3. Star India Bazar : Super market
Future Group
1. Fashion based
• FBB: Specialty store
• Central : A seamless mall (Gen. Merchandise)
• Big Bazar : Hyper Market
• Food Bazar: Super Market
• Specialty stores
• aLL
• Brand Factory; Fashion Station etc.
Future Group
2. Futurebazaar.com : non-traditional format; e-tailing model
3. Food based stores
• Brew bar : Cafeteria
• Café Bollywood : Indian street food
• Chamosa : Local Indian snacks
• Sports bar : Bistro focused on world of sports
Future Group
5. Home and electronics based
• Electronics Bazaar : electronics based discount store
• E-Zone specialty store
• Furniture Bazaar : furniture based discount store
• Collection i : Specialty store
• Home Town; Got it : home based specialty store
 Product Patronage Matrix
Name Patronage Product Strategy

1. Convenience Convenience Buys most readily available brand from

2. Convenience Shopping Selects his purchase from among the assortments carried by
the most accessible
3. Convenience Specialty Purchases his favorite brand from the most accessible store
which has the item in stock
4. Shopping Convenience Indifferent to the brand of product, Shops among the
different stores for better service / price etc.
5. Shopping Shopping Compares among both retail controlled factors and the brand
related factors
6. Shopping Specialty Strong preference w.r.t brands, but shops among no. of stores

7. Specialty Convenience Consumer trades in a specific store; but indifferent to the

brands he purchases
8. Specialty Shopping Consumer trades in a particular store, compares brands with
store’s assortment

9. Specialty Specialty Preference for a particular store and brand

 RETAIL ENVIORENMENT
 Micro Environment
• Suppliers
• Intermediaries
• Customer
• Competitors

 Macro Environment
• Political/Legal Forces
• Demographic Environment
• Social/Culture Environment
• Economic Environment
• Technological Environment