 One of the world’s largest

industry exceeding US $ 9 trillion

 47 Global Fortune 500 companies
& 25 Asia's Top 200 companies
are retailers 3% 2% 9%
 Dominated by developed 8% 38%

countries.
13%
 US, EU & Japan constitutes 80% 27%
of world retail sales
 Biggest player in India, USA EU Japan China
Pantaloon’s total group sales is India Russia Others

about equal to 2 Wal-Mart super

centers annual revenues
 Percentage of Organized Retail

100 85 81
80
55
60
40 36
40 30
20 20
20 4.6
0
Malaysia

Indonesia
Taiwan

Thailand
USA

Brazil

Poland

China

India
USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn

 Highly evolved US market has Wal-Mart taking only 8%

market share

 UK market has Tesco with only 13.4% market share

 China market still does not have a clear leader

 Total retail contribution in World GDP is 27%

 Organized retail in US accounts for 22% of GDP

 Share of organized retail in developing markets ranges

between 20% to 55%

 Retail markets are organizing faster

 In developed markets, dominant player (Wal-Mart in US, Tesco

in UK) has a significantly higher share; enjoying up to 8-13%
market share

 Departmental stores growth is declining while ‘All-under-one-

roof’ & ‘neighborhood’ convenience is gaining strength
 Indian Retail - dominated by unorganized sector

 Approximately 2 million Mom and Pop Shops

 Share of organized retail sector is only 4.6%

 FDI in the retail sector not permitted to protect local

retailers (excepting for single brand & cash and carry
formats. In this FDI is 51%.)

 Indian retail sector is one of the least concentrated in

the world.

 The top five companies hold a combined market share

of less than 2%

 India is third largest market in Asia and Oceania,

behind Japan and China.
 In India, clothing retail accounts for 36% of organised retail business.

 According to a report global apparel, accessories & luxuries market is likely to

grow by 4.5% annually and Asia Pacific region is anticipated to acquire
leadership position by 2011.

 Apparel sector in India poses a lot of challenges to a marketer.

 So far India’s share in world apparel trade has been insignificant (less than 3%).

 World garment trade is estimated at around 195 Billion US$ annually.

 The Biggest manufacturer & supplier is China producing over 50 billion $,

followed by Mexico which produces over 8 billion and followed by many
countries like India, Sri Lanka and Bangladesh, being the third place countries
making and exporting garments worth 5 - 6 billion $ annually.
Describes how new types of retailers enter the
market as low-status, low-margin, low-price
operators;

As they meet with success, they gradually acquire

more sophisticated and elaborate facilities, and thus
become vulnerable to new types of low-margin retail
competitors who progress through the same patter.
 Trading-up Phase
-Moderate to high prices
-Elaborate facilities
-Increase in skills

Vulnerability Phase
Entry Phase -High prices
-Low prices -Excellent facilities
-Limited facilities -Excellent service
-Limited service -Declining ROI
 Wide Assortment

Time Narrow
Assortment

Wide Assortment
Describes how retail institutions evolve
from outlets that offer wide
assortments to specialized stores and
continue repeatedly through the
pattern.
 Describes four distinct stages that a
retail institution progresses through:

 Introduction
 Growth
 Maturity
 Decline
Begins with an aggressive, bold
entrepreneur who is willing and able to
develop a different approach to retailing of
certain products.

During this stage profits are low, despite

increasing sales levels.
Sales and profits explode, validating the
entrepreneur’s good idea.

New retailers enter the market and begin

to copy the retailers idea.

Late in this stage both market share and

profitability, approach their maximum
levels.
 Market share stabilizes and profits decline because:
• managers use to managing simple small retail
outlets must now manage large complex firms,

• industry has over expanded, and

• competitive assaults by new retail

formats.
The once promising idea is no longer
needed in the marketplace.

As a result, market share and profits

fall.
The Retail Life Cycle

Introductio Growth Maturity Decline

n Food Courts Warehouse Variety
E-tailing (1980’s) clubs(1970’s) Stores
(1990’s) Airport- Department stores (1890’s)
Recyclers based (1860’s) Factory
(2000’s) retailers Supermarkets outlet malls
(1980’s) (1930’s) (1970’s)
Supercenter Convenience stores Department
s (2000’s) (1960’s) stores
 Established Emerging
Traditional formats Formats
Formats Kirana shops Exclusive retail outlets
Itinerant Salesman Convenience/ Hypermarket
Haats department stores Internal retail
Melas PDS/ Malls / Specialty Malls
Mandis etc. fair price shops Multiplexes
Pan/ Beedi shops Fast food outlets
Service galleries
There is no universally accepted method of classifying
retailer.

Various schemes have been proposed to categories

retailers based on

 Number of outlets
 Margin vs. turnover
 Location
 Size
 A
retail unit could be owned by:
 M
anufacturer (e.g., company owned retail outlets)
 W
holesaler (e.g., Vastra outlet in Rajouri in New Delhi)
 In
dependent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow)
 C
onsumer (consumer owned grocery stores in man y residential societies)
 C
o-operative society (e.g., Mother Dairy milk booths in Delhi)
 G
overnment (e.g., Cottage Emporia)
 O
wnership shared among franchiser and franchisee (e.g., Archies Gallery)
 Ownership
Ownership

Operational
OperationalStructure
Structure

Classification
Classification Retail
RetailLocation
Location
of
of
Retailers
Retailers
 Ownership
Ownership

Sole
SoleProprietorship
Proprietorship Joint venture

Partnership
Partnership
Limited
LimitedLiability
LiabilityCompany
Company
Sole proprietorship: –

 The vast majority of small businesses start out as sole

proprietorships.

 These firms are owned by one person, usually the individual who
has the day-to-day responsibility for running the business.

Partnership: -
 A partnership is a common format in India for carrying out business
activities (particularly trading) on a small or medium scale

 Two or more people share ownership of a single business.

Joint venture: –
• A joint venture is not well defined in the law.
• Unless incorporated or established as a firm as evidenced by a deed, joint ventures may be
taxed like association of persons, sometimes at maximum marginal rates.
• It acts like a general partnership, but is clearly for a limited period of time or a single project.

Limited liability Company (public and private):-

• The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that
is now permissible in most states.

• The owners are members, and the duration of the LLC is usually determined when the
organization papers are filed.
 are classified on the basis of their operational and
organizational structure

 Operational structure defines the key strategic

decision of retail entity,

› whether to hire employees and manage the distributed sales

function internally or

› to reach customers though franchised outlets owned and

operated by local entrepreneurs.
etail firms can be classified into five
heads on the basis of their respective
operational structures:
• Independent retail unit

• Retail Chain

• Franchising

• Leased Department or Shop-in-shop

•
Independent retail unit: –
• The total number of retailers in India is estimated to be over 5
million in 2003.
• About 78% of these are small family businesses utilizing only
household labour.
• An independent retailer owns one retail unit.

•
Retail Chain: –
• A chain retailer operates multiple outlets (store units) under
common ownership;
• it usually engages in some level of centralized (or coordinated)
purchasing and decision making.
•
Franchising: –
• involves a contractual arrangement between a franchiser
(which may be a manufacturer, a wholesaler, or a service
sponsor) and a retail franchisee, which allows the franchisee to
conduct a given form of business under and establishments
name and according to a given pattern of business.

•
Leased Department or Shop-in-shop:-
• It refers to department in a retail store that are rented to an
outside party.
• Usually this is done in case of department and specialty stores
and also at times, in discount stores.
 Co-operative Outlets: –

› Co-operative outlets are generally owned and

managed by co-operative societies.

› In this context the detailed example of Kendriya

Bhandar in India.
 Retailers can locate their stores in an
isolated place and attract the
customers to the store on their own
strength—such as a small grocery store
or paan shop in a colony, which
attracts the customers staying close by
 Retailers in a free-standing location

 Retailers in a Business-associated Location

 Retailers in Specialized Markets

 Airport Retailing:
•
Retailers in a free-standing location: –
•
Retailers located at a site which is not connected to other
retailers depend entirely on their sore’s drawing power and
on the various promotional tools to attract customers.

•
This type of location has several advantages including no
competition, low rent, better visibility from the road, easy
parking and lower property costs.
•
Retailers in a Business-associated Location:-

•
In this case, a retailer locates his store in a place where a group
o retail outlets, offering a variety of merchandise, work together
to attract customers to their retail area, and also compete
against each other for the same customers.
•
Retailers in Specialized Markets: -

•
in India-retailers who prefer specialized markets,
particularly traditional independent retailers or
chain stores.

•
Most of the cities have specialized markets
famous for a particular product category. For
example, in Chennai, Godown Street is famous for
clothes,
 Airport Retailing: –

 For quite some time, duty-free shops

and newsstands dominated the small
amount of commercial space
provided at airports.

 Lately, serious efforts are being made

to design new airport facilities in
order to incorporate substantial
amounts of retail space.
 Large groups of prospective shoppers
 Captive audience
 Strong sales per square foot of retail space
 Strong sales of gift and travel items
 Difficulty in replenishment
 Longer operating hours
 Duty-free shopping possible.
 Regardless of the particular type of
retailer (such as a supermarket or a
department store), retailers can be
categorized by
› (a) Ownership,
› (b) Store strategy mix, and
› (c) Non store operations.
 A retail business like any other type of
business, can be owned by

› a sole proprietor,
› partners or
› a corporation

 A majority of retail business in India are sole

proprietorships and partnerships
  Operates one outlet , offers personalized
service, a convenient location and close
customer contact.
 Independent
 Chain  Roughly 98% of all the retail businesses in
 Frachising India, are independents
 cooperative
 retailing is easy, requires low investment
and little technical knowledge

 high degree of competition

 Most fail because of the ease of entry,

poor management skills and inadequate
resources
Owned Stores / Exclusive Brand Outlets
•Advantages
–direct medium of selling apparel
–high realization for the garment sold
–end-user feedback and knowledge of their
preferences

•Disadvantages
–requires greater advertising expenditure
–greater fixed costs
•Some of the Players following this channel
»Provogue
»Raymonds
»Madura Garments
»Arvind Brands
»Zodiac Clothing
»Century Textiles
  It involves common ownership of multiple units
with centralized purchasing and decision making

 have been successful, due to the opportunity to

 Independent take advantage of “economies of scale” in
buying and selling goods
 Chain
 Frachising
 can maintain their prices, increasing their
 cooperative margins, or they can cut prices and attract
greater sales volume

 can also take advantage of computers and

information technology

 Examples in India are :Shoppers stop; West side

and IOC
  Is a contractual arrangement between a
“franchiser” (which may be a
manufacturer, wholesaler, or a service
sponsor) and a “franchisee” or
 Independent franchisees, which allows the latter to
 Chain conduct a certain form of business
 Frachising under an established name and
 cooperative according to a specific set of rules

 In exchange for fees, royalties and a

share of the profits, the franchiser offers
assistance and very often supplies as
well
 Is a group of independent retailers, that have
combined their financial resources and their
expertise in order to effectively control their
 Independent wholesaling needs
 Chain
 Frachising
 Retail
They share purchases, storage, shopping
cooperative
facilities, advertising planning and other
functions.

The individual retailers retain their

independence, but agree on broad common
policies.
store strategy mix, which is an integrated combination of hours, location, assortment,
service, advertising, and prices etc

 Convenience
store
 Conventional
supermarket
 Departmental stores
Is generally a well situated,
 Speciality store food oriented store with
 Combination store/ long operating house and a
Hyper market
limited number of items.
 Convenience store
 Conventional a diversified store that sells
supermarket

a broad range of food and
Departmental stores
 Speciality store non food items
 Combination store/
Hyper market
it typically carries small
some apparel items,
 Usually sells a general line
 Convenience store
 Conventional
of apparel for the family,
supermarket household linens, home
 Departmental stores furnishings and appliances.
 Speciality store
 Combination store/ Hyper
market Large format apparel
department stores include
Pantaloon
Shoppers Stop and
Westside
 Concentrates on the sale of a
single line of products or
services, -
 Convenience store Jewellery, Beauty and Health
 Conventional Care, etc.
supermarket
 Departmental stores
Consumers are not confronted
 Speciality store
with racks of unrelated
 Combination store/
Hyper market
merchandise.

Successful specialty stores in

India include, Tanishq for
jewellery
 :Is a special kind of combination
store which integrates an
economy super market with a

discount department store.
Convenience store
 Conventional
supermarket
 Departmental stores has an ambience which attracts
 Speciality store the family as whole.
 Combination store/
Hyper market Pantaloon Retail India Ltd.
(PRIL) through its hypermarket
“Big Bazar”, offers products at
prices which are 25% – 30%
lower than the market price.

 In Home Retailing
 Telesales/Telephone
Retailing
 Catalog Retailing
 Direct Response
Retailing
 Automatic Vending
 Electronic Retailing/E-
Tailing
 customers do not go to a
store to buy
 This type of retailing is
growing very fast
 the ability to buy
merchandise not available
in local stores,
 the increasing number of
women workers,
 the presence of unskilled
retail sales persons
 In Home Retailing

 This involves contact
 Telesales/Telephone
Retailing between the prospect
 Catalog Retailing and the retailer over the
 Direct Response
Retailing
phone
 Automatic Vending
 Electronic Retailing/E-
Tailing  A large number of mobile
phone service providers
use this method
 basic attraction for shoppers is
convenience

 In Home Retailing retailers offers the merchandise in a

 Telesales/Telephon catalogue, which includes ordering
e Retailing

instructions and customer orders by
Catalog Retailing
 Direct Response
mail.
Retailing
 Automatic Vending
 Electronic lover operating costs, lower rents,
Retailing/E-Tailing
smaller sales staff and absence of
shop lifting.

 In Home Retailing
 Telesales/Telephone
Retailing
 Catalog Retailing
 Direct Response
Retailing
 Automatic Vending
 Electronic Retailing/E-
Tailing
marketers advertise products/
services in magazines,
newspapers, radio and/or
television
Offers an address or telephone
number to call or place an order
The goal is to induce the
customer to make an immediate
and direct response to the
advertisement to “order now
Telebrands is a classic example
 is the ultimate in non
 In Home Retailing personal, non store
 Telesales/Telephone retailing
Retailing
 Catalog Retailing Products are sold directly
 Direct Response
Retailing
to customers/buyers from
 Automatic Vending machines
 Electronic Retailing/E-
Tailing

 In Home Retailing
 Telesales/Telephone
Retailing
 Catalog Retailing
 Direct Response
Retailing
 Automatic Vending
 Electronic Retailing/E-
Tailing
retailers communicate with
customers and offer products
and services for sale, over the
internet
Amazon.com, E-bay .etc, are
some of the many e-tailers
operating today
Multi-Brands Outlets’ or Shopping Malls
•Organization sells apparels to multi-brand outlets, which in turn sell
them through large retail space
•MBO’s are located in prime locations of the various cities and towns
ensuring maximum reach
•MBO’s are chain of shopping malls having a presence in more than
one location
•Realization from this channel is lower than those earned by selling to
the retailers; as MBO’s keep

higher margins because their costs are higher

•Some of the major players in this channel of distribution:-
»Shopper’s Stop
»Pantaloon Retail
»Westside (Trent)
»Globus
»Pyramid Retail
»Reliance Retail
 TC’s Lifestyle retailing business division established a chain of exclusive
specialty stores, in July 2000

 Offering to the premium consumer with

› –Wills Classic – range of Formal Wear
 »Launched in 2002, provides the consumers a distinct product offering
› –Wills Clublife – range of Evening Wear & designer accessories

 »Launched in 2003,
› –Wills Sport – range of Relaxed Wear

 ITC launched its brand ‘John Player’ in December 2002

 –With this brand the company offers a complete wardrobe of Casuals, Party, Work wear and
Denims

 –The brand is available across the country through a nation-wide network of exclusive stores
and multi-brand outlets
Pantaloon Retail ?(India ) Limited

Business Strategy
•Targeting greater market share by entering into formats such as departmental
stores, supermarket, hypermarkets, malls etc.
•Developed a Dual Strategy
–Of opening smaller versions in its flagship stores like ‘BIG BAZAAR’
– Opening larger Independent Stores.
•Currently adopted retail format by the group:
–Lifestyle Segment -
» Pantaloon
» Central
–Value Segment
» Big Bazaar
» Food Bazaar
Shopper’s stop
Business strategy
–Primarily catering to the Lifestyle Retailing segment through Departmental
Stores
•Offers a gamut of products – apparels, accessories, footwear, cosmetics,
music, books, leather products, furnishing etc.
–Ventured to the Value Retailing segment with inception of‘HYPERCITY’
–Apart from these stores, the company also has presence in Niche
Retailing format With the brands such as:
–Crossword – a lifestyle bookstore; these are run in 3 formats – ‘
Corner Store’, ‘Brand Stores’and ‘Flagship Stores’.
–MAC – it’s atie-up with a cosmetic major, Estee Lauder
–HomeStop – it’s a specialty store, caters exclusively to home
furnishings and furniture
–Mother Care - it’s a franchise agreement with a UK-based
Mothercare marketing baby clothes, toys, baby
care products and maternity clothes
Tata Trent ltd
Background
•established in 1998 as a part of Tata Group

•started operations by acquiring the UK-based Littlewoods

departmental stores in Bangalore

•the company owns a chain of department stores across the country & is also
increasing its foothold in the high volume hypermarket sector

•The company has initiated a new retail venture called ‘Infinity Retail Limited’
dealing primarily in electronic consumer durables

Westside stores
–Primarily apparel stores comprising a mix of clothes, footwear, and
accessories for men, women and children
–Established its outlets in Mumbai, Pune, Bangalore, Hyderabad, Chennai,
New Delhi and Kolkata
•Westside stores
–Primarily apparel stores comprising a mix of clothes, footwear, and accessories for
men, women and children
–Established its outlets in Mumbai, Pune, Bangalore, Hyderabad, Chennai,
New Delhi and Kolkata
•Landmark
–Company acquired a 79 per cent stake in this Chennai based
books and music retail chain
–The chain has its presence in Bangalore, Mumbai, Vadodara and Chennai
•Star India Bazaar
–First store opened in Ahmedabad (Gujarat) with which company entered the Value
retailing
segment
–Store offers wide range of products like staples, perishables, health and beauty
products
–The company is planning to open such stores in Mumbai and Bangalore as well

•Infinity Retail Limited

–The company has set up a new store ‘Croma’ which sells electronic consumer
durables
–For this a sourcing agreement has been signed with the Australian retailer –
‘Woolworths‘
–Company plans to set up around 100 more such stores in comin
Murjani Group

Background:

• Founded in 1930, by Mr. B. K. Murjani, the group based its initial success on full
vertical integration in the apparel industry.

• In 1966, the group commenced its transition from manufacturing to designer

lifestyle brand development and marketing.

Strategy:

• The India strategy for Murjani, revolves around the creation of a unique Multi-
Brand Retail Platform, with world renowned, premier international brands.

• In the first phase, Murjani opened eight free standing Tommy Hilfiger stores,
across six cities

• In the second phase of its India strategy, in 2005, Murjani identified several major
international brands, to add to its brand portfolio and secured exclusive, long term
rights to India, for 6 world renowned, premier brands: Gucci, Jimmy Choo, Calvin
Klein, French Connection, Tumi & Build A Bear
Shoppers’s stop
Background
Established in 1991 by the K. Raheja Group -a Public Limited Company
Principal Fascia – Shopper’s Stop, Crossword, HomeStop, Mother Care,
MAC
Retail sector activity – Departmental Stores, Specialty Stores (books, home
products, cosmetics, F&B, Baby Care)
–Business Area
–The store offers a wide variety of international and Indian brands
–Stocks private labels like Stop, Kashish, Vettorio Fratini, Elliza Donatein
–The store also offer concessionaire space to brands, whereby the counters
are arranged by the employees of the concessionaire