Module 2: Retailing

2.1 Concept of organized and unorganized retailing

Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its
GDP. The Indian retail market is estimated to be US$450 billion and one of the top five retail
markets in the world by economic value. India is one of the fastest growing retail markets in the
world, with 1.2 billion people. India's retailing industry is essentially owner manned small shops.
In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the
industry, and these were present only in large urban centers. India's retail and logistics industry
employs about 40 million Indians (3.3% of Indian population).
Organized retailing, in India, refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, etc. These include the publicly traded
supermarkets, corporate-backed hypermarkets and retail chains, and also the privately owned
large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats
of low-cost retailing, for example, the local corner shops, owner manned general stores,
paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.

2.2 Trends in retailing in India

Retailing today is the fastest growing sectors in the global economy and is under transition
phase; not only in South Asian countries like India and China but throughout the world. The
increased popularity of organized retailing is mainly because of the consumers‘ changing
behavior. This change has become possible due to double income families, breakup of joint
family concept, changing lifestyles and favorable demographic patterns. Today consumers prefer
to shop at places where they can get grocery, food, entertainment and others daily routine items
under one roof. This has made retailing the most attractive sector of the Indian economy.

Following are the recent trends that have stood out in recent years and continue to grow
further:
1. New retail formats and combinations are emerging and have opened a new world of
opportunities for Indian youth. Due to huge amounts of new investments and decreasing
charm for ‗kirana‘ stores, the retail sector is expected to grow. Bank branches, bill counters,
saloons, internet cafe have opened in the malls. The ‗cash and carry‘ activities are expected
to grab majority of attention.

2. Internet age, increased computer awareness and shrinking usage charges have made people
enabled buy things online resulting in growth of non-store retailing. Retailers are informing
about new arrivals/fresh stock through e-mails, television, SMS and telephones to which
anyone can respond to through toll-free 16 digit numbers.
3. Specialty stores like ‗Reliance Digital‘, ‗Music World‘ ‗Metal Junctions‘, ‗Nokia World‘
and ‗Pantaloons‘ have their presence in most of the malls in the country. Departmental
stores have given way to malls, having a mixture of large and small retailers offering varied
brands for each and every section of the society.

4. Sales promotion channels are increasingly becoming professional and targeting differently
to different lifestyle groups. Newer and newer promotional techniques are emerging. Event
managers are hired and visual merchandising professionals are consulted.
Today retailers are not sticking to traditional methods of promoting a sale but personal
selling door-to-door selling, free home delivery and payment through plastic money have
emerged and is being widely used. Use of advanced technology is not the matter of
affordability but is the reason for survival. Retailers are using computers, electronic devices,
check out scanning systems, tag guns, vending machines, money counters and digital
signage to enhance store‘s productivity. CCTVs, cameras, sensors and theft alarms are being
used to prevent store theft.

5. Today retail organizations are not only targeting big cities but are considering tier II and tier
III cities like Jaipur, Pune, Shimla, Karnal, Panipat, Coimbatore, Baroda, Chandigarh etc
also. The South Indian states are one step ahead when it comes to shopping in the
supermarkets for day-to-day needs and also have been influencing other states where
supermarkets are being established.

However, the main center of organized retailing is undeniably Chennai, which once was
considered as a ‗conservative‘, ‗traditional‘ and cost-sensitive‘ market. The success of
Chennai as retail hub has surprised all but list of factors contributed to its success.
Reasonable real estate prices, double household income, increased presence of MNCs and
industrial boom has led to the emergence of new residential societies resulting in increased
purchasing power and demands for day- to-day goods under one roof.

6. Use of Plastic Money:

Use of credit and debit cards for buying merchandise is relatively a new phenomenon but is
gaining popularity immensely. Credit and debit cards are commonly known as ‗plastic
money‘. Today, especially in metros, retail spending is mainly done by plastic cards,
accounting for over 45 percent and is likely to touch 65 percent over the next five years.

7. Distance – No bar:
Thanks to increased public transportation, better roads, highways and an overall
improvement in the transportation infrastructure that has enabled customers to visit from
one place to another smoothly than ever before. Now for want of quality goods, a customer
can travel several kilometers to reach a particular store.
 8. Partnerships and tie-ups among retailers, real estate developers, brands, franchisees, and
financers have become the fashion of the day to spread risk related to huge investments and
uncertainty.

9. The government infrastructure support, relaxation on foreign direct investments further has
accelerated the growth of Indian organized retail sector. Consequently, the shopping malls
are coming up throughout the country in a big way.

10. Sophisticated customers:

Due to Internet revolution, customers are becoming conversant about the products they are
interested in buying. For example, over thirty percent of Indian consumers collect
information from the Internet about prices, features, guarantee/warranty options before
visiting any store for the actual purchase.

This is particularly true in case of automobiles, cell phones, consumer electronics, hotel
bookings, travel packages etc. This suggested the retailers that they need to respond to
varying consumer needs and growing assortment.

11. The gap between organized and unorganized (traditional ‗kirana‘ shopping) retailing is
coming close due to mall revolution and increasing Indian middle class in terms of size and
income. According to a study conducted by ‗Deloitte Haskins and Sells‘, one of the four
largest accounting firms in the world, Indian retailing is growing at a faster pace as was
expected from it and could constitute 25% of the total retail sector by 2011.

The study further reveals that new malls, increased disposable income and easy access to
credit facilities have led to organized retailing to record all time high rate of growth of 50%
per annum in 2007. The traditional ‗kirana‘ stores by introducing modern retailing concepts
such as self service, free home delivery system, credit facility and other value added
services have been trying to reshape themselves.

12. Need for retailing skills:

Undoubtedly, retailing in India is still in nascent stage. The success of organized retailing is
yet to be proved. The success will be felt once an equitable stage is achieved. This requires
enough store size, traffic flow, and revenue earned, but besides these factors, retailers have
started concentrating on recruiting qualified and trained retail staff.

Following are the areas where specialized skills are increasingly felt:
a) Managing Merchandise:
inventory management, vendor selection, presenting merchandise, pricing the
merchandise, planning and implementing merchandise assortments.
b) Store operations and management:
 Layout, inventory management, buying, store keeping, customer relationship, objections
handling, visual merchandising.
c) Strategic management:
Strategic planning, targeting, positioning marketing, site location, building and creating
sustainable advantage.
d) Administration:
Marketing, finance, human resource and so on.

2.3 Survival strategies for unorganized Retailers.

1. Right Positioning
The effectiveness of the retailer's communication of the offering to the target customers
determines how well the retailer gets positioned in their minds. At this stage, the communication
has to be more of relative nature. This implies that the message conveyed to the target customers
must be effective enough in differentiating the retailer's offering from that of the malls without
even naming them.
2. Effective Visual Communication
Retailer has to place more emphasis on visual display, merchandising, lighting, signage and
specialized props. The visual communication strategy might be planned and also be brand
positioned. Theme or lifestyle displays using stylized mannequins and props, which are based on
a season or an event, are used to promote collections and have to change to keep touch with the
trend. The merchandise presentation ought to be very creative and displays are often on non-
standard fixtures and forms to generate interest and add on attitude to the merchandise.
3. Strong Supply Chain
Critical components of supply chain planning applications can help manufacturers meet retailers'
service levels and maintain profit margins. Retailer has to develop innovative solution for
managing the supply chain problems. Innovative solutions like performance management,
frequent sales operation management, demand planning, inventory planning, production
planning, lean systems and staff should help retailers to get advantage over competitors.
4. Changing the Perception
Retailers benefit only if consumers perceive their store brands to have consistent and comparable
quality and availability in relation to branded products sold in malls. Retailer has to provide more
assortments for private level brands to compete with organized retailing. New product
development, aggressive retail mix as well as everyday low pricing strategy can be the strategy
to get edge over competitors' brand.
5. Electronic Cash Register (ECR)
ECR is a commonly used for billing by most retailers. An entry-level billing system can also
generate 11 types of stock reports; ECR is best suited for small retailers. It speeds up the billing
process and saves customers' time.
6. Pleasant Experience
The customer touch-points which involve the interaction of a customer with a store need to be
properly managed. These involve the interactions before he reaches the store, while at the store
and after leaving the store. Positive experience at the retail outlet will bring back the consumer
again & again.
7. People and Physical Evidence
Since a retail store is an integral part of the service industry, the people they employ and their
physical evidence should be such that the customer comes often. It shouldn't look like that the
customer is buying from the road. If he goes to a store, it should look at least like a store so
improve the ambience at retail outlet.
8. Loyalty programme
A loyalty programme is something which can attract a customer again and again to a store. It
encourages a customer to spend more to buy more. More loyalty programme should be
introduced by retail outlets.
9. Customization
Customization on the basis of their demographics and psychographics is becoming the name of
the game as all these retailers have databases of loyal customers. Customization makes consumer
feel important as the product or service is tailored to suit individual expectation.

2.4 Retail Format: Store format & Non-Store format

In a country like India, where the population and economy are growing, the retail business is
a booming one, and there are a number of retail formats.
Mom-and-pop Stores
These are small family-owned businesses, which sell a small collection of goods to the
customers. They are individually run and cater to small sections of the society. These stores are
known for their high standards of customer service.
Department stores
Department stores are general merchandisers. They offer to the customers mid- to high-quality
products. Though they sell general goods, some department stores sell only a select line of
products. Examples in India would include stores like Westside and Lifestyle--popular
department stores.
Category Killers
Specialty stores are called category killers. Category killers are specialized in their fields and
offer one category of products. Most popular examples of category killers include electronic
stores like Best Buy and sports accessories stores like Sports Authority.
Malls
One of the most popular and most visited retail formats in India is the mall. These are the
largest retail format in India. Malls provide everything that a person wants to buy, all under
one roof. From clothes and accessories to food or cinemas, malls provide all of this, and more.
Examples include Spencers Plaza in Chennai, India, or the Forum Mall in Bangalore,
Hypercity in Mumbai.
Discount Stores
Discount stores are those that offer their products at a discount, that is, at a lesser rate than the
maximum retail price. This is mainly done when there is additional stock left over towards the
end of any season. Discount stores sell their goods at a reduced rate with an aim of drawing
bargain shoppers.
Supermarkets
One of the other popular retail formats in India is the supermarkets. A supermarket is a grocery
store that sells food and household goods. They are large, most often self-service and offer a
huge variety of products. People head to supermarkets when they need to stock up on groceries
and other items. They provide products for reasonable prices, and of mid to high quality.
Street vendors
Street vendors, or hawkers who sell goods on the streets, are quite popular in India. Through
shouting out their wares, they draw the attention of customers. Street vendors are found in
almost every city in India, and the business capital of Mumbai has a number of shopping areas
comprised solely of street vendors. These hawkers sell not just clothes and accessories, but
also local food.
Hypermarkets
Similar to supermarkets, hypermarkets in India are a combination of supermarket and
department store. These are large retailers that provide all kinds of groceries and general
goods. Saravana Stores in Chennai, Big Bazaar and Reliance Fresh are hypermarkets that draw
enormous crowds.
Kiosks
Kiosks are box-like shops, which sell small and inexpensive items like cigarettes, toffees,
newspapers and magazines, water packets and sometimes, tea and coffee. These are most
commonly found on every street in a city, and cater primarily to local residents.

Major formats of In-Store Retailing have been listed in Table given below:

Format Description The Value Proposition

Branded Exclusive showrooms either owned or Complete range available for a given
Stores franchised out by a manufacturer. brand, Certified product quality.
Specialty Focus on a specific consumer need; carry Greater choice to the consumer,
Stores most of the brands available. comparison between brands possible
Department Large stores having a wide variety of One stop shop catering to varied
Stores products, organized into different consumer needs.
departments, such as clothing, house
wares, furniture, appliances, toys, etc.
Supermarkets Extremely large self-services retail One stop shop catering to varied
outlets. consumer needs.
Discount Stores offering discounts on the retail Low prices.
Stores price through selling high volumes and
reaping the economies of scale.
Hyper-mart Larger than a Supermarket, sometimes Low prices, vast choice available
with a warehouse appearance, generally including services as cafeterias.
located in quieter parts of the city
Convenience Small self-service formats located in Convenient location and
Stores crowded urban areas. extended operating hours.
Shopping An enclosure having different formats of Variety of shops available close to
Malls in-store retailers, all under one roof. each other.

Non-store Retailing
It is another type of retail marketing. Different types of non-store retailing are given below:
Direct Selling
Direct selling which started centuries ago with itinerant peddlers has burgeoned into a $9 billion
industry, with over 600 companies selling door to door, office to office, or at home sales parties.
A variant of direct selling is called multilevel marketing, whereby companies such as Amway
recruit independent businesspeople who act as distributors for their products, who in turn recruit
and sell to sub distributors, who eventually recruit others to sell their products, usually in
customer homes.
Direct Marketing
Direct marketing has its roots in mail-order marketing but today includes reaching people in
other ways than visiting their homes or offices, including telemarketing, television direct
response marketing, and electronic shopping.
Automatic Vending
Automatic vending has been applied to a considerable variety of merchandise, including impulse
goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot beverages) and
other products (hosiery, cosmetics, food snacks, hot soups and food, paperbacks, record albums,
film, T-shirts, insurance policies, and even fishing worms).

2.5 Store Planning, design and layout

Store planning involves location of the store, store design and layout, the type of merchandise to
display and sell, etc. Store planning goes beyond the process of building the structure of the
store; it is a process which involves every aspect of designing the store. The store must be
planned from the view point of the customers who would patronize the store.
Guidelines for Store Planning (Design and Layout)
1. Location: A store's location should always be a part of store planning. The store should
be preferably in a prime location which is easily accessible to the customers. Avoid
locating the store at a secluded place. The store's decor and merchandise should also
reflect the store's location. It is always advisable to locate the store at a place where there
are other similar stores. There are chances that the customers who are loyal to
 neighbourhood stores may visit your store as well, especially, when they may not find
their product choice in the store which they regularly visit. Also, the ambience of your
store may attract them to your store.
2. Signage: The signage displaying the name and logo of the store must be inserted at a
place where it is visible even from a distance. The signage may be placed at different
sides of the store, especially, when the store has different sides facing the road/ street.
Too much information must be avoided.
3. Colour: The store must have the right colour on the walls both external and internal.
Generally dark shades may be avoided. Preferably, light and subtle shades may be used.
The colour sets the mood of the store, which in turn influences the mood of the customer
shopping in the store.
4. Entrance and Exit: There must be proper entrance and exit. In small stores, the entrance
and exit is normally one and the same. In large stores, there must be an emergency exit.
Do not stock anything at the entrance or exit of the store.
5. Flooring and Ceiling: The store need to have decent floor tiling, and the ceiling must be
properly done. The floor and the 203 ceiling must be kept clean. Stains must be avoided
on the floor and on the ceilings. In some stores, carpets may be laid.
6. Fixtures: Fixtures must be installed properly in the retail store. Fixtures inside the store
should have an aesthetic look and must be able to store and display the store's
merchandise. Customers may focus not only the merchandise but also on the fixtures of
the store. The fixtures should enable to display the products to their fullest extent, and
should provide easy access for customers. The shelves should not be too high and the
racks should not be too full.
7. Lighting and Music: The store should be adequately lighted so that the products are easily
visible to the customers. Also, light music may be played at the store. Loud music must
be avoided. During festival season, good lighting effect needs to be created within and
outside the store.
8. Arrangement of Merchandise: The merchandise must be well arranged and organized on
the racks. The shelves must carry necessary labels which would enable the customers to
locate the products. Avoid overloading in the racks. Products should be grouped
logically. For example, in a readymade garments shop, the gents clothing may be stocked
at one place and the ladies wear must be stocked at another place. Also, kids' wear may
be displayed separately. In a grocery store, cereals and breakfast food could be in one
aisle. Bread and biscuits should be near the payment counter.
9. Fragrance: The store may use light fragrance. Avoid bad odour inside the store, as it may
drive away the customers and the store would lose sales.
Although the retail industry is transforming as technology continues to shape the consumer
landscape, the primary goals of a sound retail strategy have not changed: Deliver value in the
supply chain and create a unique customer experience. The rebirth of retail stores — after years
of digital disruption and economic challenges — is possible if retailers can successfully contend
for their consumers‘ attention, and in return, earn their business. One way to do this is to design a
digital and physical retail environment that captures the overtaxed attention of consumers today.

A retail store layout (whether physical or digital) is the strategic use of space to influence the
customer experience. How customers interact with the merchandise affects their purchase
behavior. The interior retail store layout has two important components:

 Store Design: The use of strategic floor plans and space management, including
furniture, displays, fixtures, lighting, and signage. Website designers and user experience
(UX) researchers use space management techniques and web design principles to
optimize e-commerce websites. We‘ll further discuss a variety of popular retail floor
plans later in this article.
 Customer Flow: This is the pattern of behavior and way that a customer navigates
through a store. Understanding customer flow and the common patterns that emerge
when customers interact with merchandise based on the store layout is critical to retail
management strategy. Physical retailers are able to track this using analytics software and
data from in-store video and the wifi signal from smartphones. For example, solution
providers like Retail Next provide shopper analytics software for retailers to understand
flow and optimize the customer experience based on in-store video recordings. The
technology also exists to track the digital customer flow and online shopping behavior.
Using ―cookies‖ and other software, online retailers can track customer behavior,
including how customers interact with their website.

While the exterior retail store layout includes exterior store design and customer flow, it also
includes the following factors:

 Geographic location of the retail store (real estate)

 Size of the building and length of the walkways accessible from the entrance and exit
 Use of furniture and exterior space for people to gather and interact
 Style of architecture of the retail building
 Color of paint and choice of exterior building materials
 Design of the physical entrance and exterior window displays

Retail store design is a branch of marketing and considered part of the overall brand of
the store. Retail store design factors into window displays, furnishings, lighting, flooring, music
and store layout to create a brand or specific appeal. The objective of retail store design is to
positively impact customer experience and create value, which is the primary goal of retailers in
the supply chain.
Floor Layout
The layout of the store should be easy to move and should lead the customers to the merchandise
with ease.

The retailer must plan out each and everything well, the location of the shelves or racks to
display the merchandise, the position of the mannequins or the cash counter and so on. There are
various forms of floor plans:

1. Straight Floor Plan

The straight floor plan makes optimum use of the walls, and utilizes the space in the most
judicious manner. The straight floor plan creates spaces within the retail store for the
customers to move and shop freely. It is one of the commonly implemented store designs.

2. Diagonal Floor Plan

According to the diagonal floor plan, the shelves or racks are kept diagonal to each other
for the owner or the store manager to have a watch on the customers. Diagonal floor plan
works well in stores where customers have the liberty to walk in and pick up merchandise
on their own.

3. Angular Floor Plan

The fixtures and walls are given a curved look to add to the style of the store. Angular
floor plan gives a more sophisticated look to the store. Such layouts are often seen in high
end stores.
 4. Geometric Floor Plan

The racks and fixtures are given a geometric shape in such a floor plan. The geometric
floor plan gives a trendy and unique look to the store.

5. Mixed Floor Plan

The mixed floor plan takes into consideration angular, diagonal and straight layout to
give rise to the most functional store lay out.

2.6 IT in retailing
Over the years as the consumer demand increased and the retailers geared up to meetthis
increase, technology evolved rapidly to support this growth. The hardware and software tools
that have now become almost essential for retailing can be divided into 3 broad categories:

Customer interfacing systems

Bar coding and scanners

Point of sale systems use scanners and bar coding to identify an item, use pre-stored data to
calculate the cost and generate the total bill for a client. Tunnel Scanning is a new concept where
the consumer pushes the full shopping cart through an electronic gate to the point of sale. In a
matter of seconds, the items in the cart are hit with laser beams and scanned. All that the
consumer has to do is to pay for the goods.

Payment
Payment through credit cards has become quite widespread and this enables a fast and easy
payment process. Electronic cheque conversion, a recent development in this area, processes a
cheque electronically by transmitting transaction information to the retailer and consumer bank.
Rather than manually process a cheque, the retailer voids it and hands it back to the consumer
along with a receipt, having digitally captured and stored and image of the cheque, which makes
the process very fast.

Internet
Internet is also rapidly evolving as a customer interface, removing the need of a consumer
physically visiting the store.

Operation support systems

ERP System
Various ERP vendors have developed retail-specific systems which help in integrating all the
functions from warehousing to distribution, front and back office store systems and
merchandising. An integrated supply chain helps the retailer in maintaining his stocks, getting
his supplies on time, preventing stock-outs and thus reducing his costs, while servicing the
customer better.

CRM Systems
The rise of loyalty programs, mail order and the Internet has provided retailers with real access
to consumer data. Data warehousing & mining technologies offers retailers the tools they
need to make sense of their consumer data and apply it to business. This, along with the various
available CRM (Customer Relationship Management) Systems, allows the retailers to study the
purchase behavior of consumers in detail and grow the value of individual consumers to their
businesses.

Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way from raw
material suppliers right through to the retail shelf. These APS packages complement existing (but
often limited) ERP packages. They enable consolidation of activities such as long term
budgeting, monthly forecasting, weekly factory scheduling and daily distribution scheduling into
one overall planning process using a single set of data.
Strategic decision support systems

Store Site Location

Demographics and buying patterns of residents of an area can be used to compare various
possible sites for opening new stores. Today, software packages are helping retailers not only in
their locational decisions but in decisions regarding store sizing and floor-spaces as well.

Visual Merchandising
The decision on how to place & stack items in a store is no more taken on the gut feel of the
store manager. A larger number of visual merchandising tools are available to him to evaluate
the impact of his stacking options. The SPACEMAN Store Suit from AC Nielsen and Modacad
are example of products helping in modeling a retail store design.

2.7 Mall Management

Mall management is defined as an overall operation and maintenance of the entire building
infrastructure, including the services and utilities, ensuring that they are used in a way that are
consistent with the purpose for which it was acquired.
Mall management has been identified as an important factor for the success of malls and the
retail industry across the world. Till recently, mall management was restricted to facility
management by a majority of developers in India, leading to differences in mall management
culture. Given the high future supply of malls and increasing competitiveness within the Indian
retail market, developers must correctly address these gaps to ensure success. In order to
understand mall management, it is mandatory to have an overview of what malls are.
Globally, mall management broadly includes:
Positioning a mall
Positioning a mall refers to defining the category of services offered based on demographics,
psychographics, income levels, competition in neighbouring areas and extensive market research
of the catchment. For example, if the market research indicates that the average number of
households living in a particular area belongs to the upper middle class, then a high-end retail
mall would suit the location. Positioning also refers to the location of the shopping mall. A good
location defined in terms of factors like ease of access via roads, good visibility, etc. is
considered as one of the prime prerequisites for a mall. Although other activities such as
trade/tenant mix can be revisited or redefined, the location remains fixed, making it an
imperative factor for a mall.
Zoning – formulating the right tenant mix and its placement in a mall
Tenant mix refers to the combination of retail shops occupying space in a mall. A right tenant
mix would form an assemblage that produces optimum sales, rents, service to the community and
financial status of the shopping mall venture.
 Zoning refers to the division of mall space into zones for the placement of various retailers. A
mall is dependent on the success of its tenants, which translates to the financial feasibility of the
tenant in the mall.
Promotions and marketing
Promotional activities and events in a mall form an integral part of mall management. Activities
like food festivals, handicraft exhibitions and celebrity visits increase foot traffic and in turn
sales volumes. Organising cultural events has time and again proved vital in attracting consumers
to a mall. Such activities may also act as a differentiator for a mall.
Facility management
Facility management refers to the integration of people, place, process and technology in a
building. It also means optimal utilization of resources to meet organizational needs. It broadly
includes infrastructure, ambience and traffic management.
This is further divided into three types:
• Infrastructure management: Infrastructure management refers to the management of
facilities provided to the tenants within the mall. This includes provision of adequate
power supply, safety issues in case of emergency and miscellaneous issues related to
signage, water supply, sanitation, etc.
• Ambience management: The overall shopping experience provided for consumers
becomes an important factor for the success of any mall. Ambience management includes
management of parks, fountains and overall look of the mall. A mall is not just a place
for shopping but is also a place where people spend their leisure time. In favourable, lush
green landscaping with seating facilities and the presence of food and beverage inside or
outside the mall can increase foot traffic.
• Traffic management: Traffic management includes managing foot traffic into the mall
and parking facilities. Foot traffic management involves crowd management inside the
operational area of a mall. The flow of people is related to the design of the mall and the
spatial distribution of its tenants. For example, a star-shaped mall tends to have a problem
of crowding in the centre of the mall, as everyone has to pass through the centre while
moving from one side to the other. Circular malls, on the other hand, would not have this
problem. They tend to have better pedestrian flow and less congestion. Managing parking
facilities includes provision of ample parking
Finance management
Professional financial management of a mall as a business venture is a must. Mall management
also covers financial management, which involves monitoring and controlling of various issues
such as:
• cash receipts and collection of income including rentals, service charges, car park
receipts, electricity and other utility income
• developing accounting systems to track the ageing of debts, payment delay patterns, bad
debts and payment of all invoices and expenses
 • developing standard financial templates so that a detailed annual property budget is
prepared
• At times, organising resources to deliver an efficient and effective annual external audit

Retail Franchising,
A contractual agreement between a franchisor (a manufacturer, wholesaler, or service sponsor)
and a retail franchise, allowing the franchisee to conduct a certain form of business under an
establishment name and according to a specific set of rules.
Retail franchising is the method of opening a single store based on the name, branding,
trademark, and products of an existing business. Some well-known examples include
McDonald‘s, PetMobile, and Flip Flop Shops.

With the popularity of Big Bazaar, More, Reliance and other top retail stores in the country,
there has been an increasing demand these top retail franchise in India by a large number of first
time and established entrepreneurs. Some of the diverse options that entrepreneurs can look for
ideas are bookstore franchise, coffee franchise, departmental store franchise, footwear store
franchise, furniture store franchise, top shops and many more. There are a lot of reputed brands
as well like - Raymond‘s, Nike, Titan, Archie‘s, Kurl-On, The Mobile Store, Peter England or
many other companies.

FDI in Retailing,.
FDI can be defined as a cross border investment, where foreign assets are invested into the
organizations of the domestic market excluding the investment in stock. It brings private funds
from overseas into products or services. The domestic company in which foreign currency is
invested is usually being controlled by the investing foreign company. Eg. An American
company taking major stake in a company in India, their ROI is based on the performance of the
project. In the past decades, FDI was concerned only with highly industrialized countries. US
was the world‘s largest recipient of FDI during 2006 with an investment of 184 million from
OECD (Organization for Economic Co-operation and Development) countries. France, Greece,
Iceland, Poland, Slovak Republic, Switzerland and Turkey also have a positive record in FDI
investments. Now, during the course of time, FDI has become a vital part in every country more
particularly with the developing countries. This is because of the following reasons:
 Availability of cheap labor.
 Uninterrupted availability of raw material.
 Less production cost compared with other developed countries.
 Quick and easy market penetration.

Careers in Retailing
The rapid growth of malls, supermarkets and other new retail formats is creating a need for
professionally trained human resource The total number of people employed in retail sectors is
doubling almost every year. The career opportunities in the retail sector are very large. The
various opportunities in retail industry are in the areas such as inventory management, supply
chain management, sales and marketing, public relations, human resource management, etc.
Food and beverages, electronics and apparels are few of the segments in the retail industry that
are experiencing higher growth
JOBS AVAILABLE IN THE RETAIL INDUSTRY:
⦿ Store Manager
⦿ Assistant Store Managers
⦿ Sales Executives
⦿ Retail Bagger: packaging customer‘s purchases to be transported safely and conveniently to
their homes
⦿ Junior Merchandiser
⦿ Visual Merchandiser
⦿ Supply Chain Distributors
⦿ Retail Buyers and Merchandisers
⦿ Merchandiser
⦿ Marketing Executive
⦿ Management Trainees
⦿ Logistics and Warehouse Managers
⦿ Inventory Monitoring Officer
⦿ Department Managers
⦿ Customer Service Associate
⦿ Retail Sales Associate

ENTRY LEVEL JOBS IN RETAIL OPERATIONS AND CUSTOMER SERVICE

A retailer owes his/her success to their frontline staff, which can also be said to be the face of the
company. Trained professionals are now being hired at various positions at an entry level in the
retail industry for the success of the retail organizations.

2.8 Legal and ethical aspects in retailing

Legal aspects in retailing

Retailers have realized the advantages of reflecting an ethical sense in business operations. The
organizational environment plays a major role in the kind of ethical sense the employees possess.
Retailers also need to be socially responsible & environmentally concerned. They often
undertake activities that are beneficial to the society. Retailers are also taking measures for waste
reduction, trying to recycle the materials used & are switching over to environment friendly
packaging materials. Legal compliances to be looked into by retail organizations can be
discussed from the perspectives of people & operations.
Ethical Issues in Retailing
Ethics is a branch of philosophy that deals with values relating to human conduct, with respect to
right or good & wrong or bad actions. Here ethics relates to retailers moral principles & values.

The unethical practices used by the retailers towards consumers are:

a. They charge full price for the product sold without the customer‘s knowledge.
b. They do not tell the complete truth to a customer about the characteristics of a product.

 Ethical practice towards consumers

The retailers should charge fair price for the products offered to them. The consumers have
the rights to get correct & precise knowledge about the products sold to them in respect of
warranty, guaranty, price, usage, ingredients etc.
 Ethical practice towards investors/shareholders
The shareholders are the owners of the business. Shareholders must be given fair returns on
their investment at regular intervals.
 Ethical practice towards employees
Ethical practices must also be followed towards the employees. The retail industry employs
large volume of retail staff. Therefore, proper policies & procedures must be framed for the
employees regarding recruitment, selection, training, promotion, welfare, etc.

Negative issues relating to employment relations in the work place can lead to loss of reputation
& customers. It leads to poor staff morale, low productivity & high labour turnover. To avoid
these confrontations the retail manager should follow ethical practices towards employees.

2.9 Case-studies: Successful Retailers in India & in the World- Walmart,

TESCO, D-Mart, Lulu International.

1. A Case Study of Wal-Mart. https://www.academia.edu/7103937/A_Case_Study_of_Wal-

Mart
2. A Case study of Tesco

Introduction
Tesco was founded in 1919 by Jack Cohen from a market stall in London‘s East End. Today it is
one of the largest retailers in the world. Tesco‘s core business is retailing in the UK, which
provides 60% of all sales and profits. Tesco has the widest range of food of any retailer in the
UK. Its two main food brands are its Finest and Everyday Value ranges, each sell over £1 billion
per year.
The position of Tesco as a leading global brand is clearly illustrated by its expansion of
operations into 12 countries including China, Czech Republic, India, Malaysia, Ireland, Hungary
and Poland. In 2013 Tesco employed in excess of 530,000 colleagues. This level of success does
not happen by chance. Tesco‘s leaders have always set high standards and clear goals, never
settling for anything less than the best.
Tesco‘s ‗Every Little Helps‘ philosophy puts customers, communities and employees at the heart
of everything it does. It prides itself on providing a great shopping experience for every customer
it serves, whether in stores, online or in its many other service provisions.
Tesco‘s core values include a commitment to using its scale for good by being a responsible
retailer. In 2010, it opened the world's first zero-carbon supermarket in Ramsey, Cambridgeshire
and was awarded Green Retailer of the Year at the Annual Grocer Gold Awards 2012. Tesco
aims to be a zero-carbon business by 2050. Tesco‘s continuing success depends on it reassessing
and formulating clear business strategies. Tesco aims to improve customer loyalty and its core
UK business in order to help it develop the shopping experience for its customers. It committed
£1 billion to an investment programme to achieve this. Strategies to improve competitiveness
were then developed. The driving forces behind these strategies are price, quality, range and
innovation as well as delivering great multichannel customer service, for example, through its
‗Click & Collect‘ service.
This case study examines Tesco strategies, the reasons behind each component and how vision,
aims and cultural value interrelate to make the strategies successful.
Vision and Mission
Companies, like Tesco, that enjoy long-term success, are focused businesses. They have a core
vision that remains constant while the business strategies and practices continuously adapt to a
changing world. In an increasingly competitive global environment, without a clear vision a
business will lack direction and may not survive. Tesco has a seven part business strategy to help
it achieve its vision.
A vision is an aspirational view of where the business wants to be. It provides a benchmark for
what the business hopes to achieve. Tesco is a company built around customers and colleagues.
Its vision guides the direction of the organisation and the strategic decisions it makes. Tesco‘s
vision is: ‗To be the most highly valued business by: the customers we serve, the communities in
which we operate, our loyal and committed colleagues and of course, our shareholders.‘
Tesco‘s vision has five elements which describes the sort of company it aspires to be. These are
to be:
• wanted and needed around the world
• a growing business, full of opportunities
• modern, innovative and full of ideas
• winners locally whilst applying our skills globally
• inspiring, earning trust and loyalty from customers, our colleagues and communities.
The vision, mission statement and goals are interrelated and state what an organisation is seeking
to achieve whereas the strategies and tactics show how it will achieve them. Tesco‘s core
purpose (mission) is simple: ‗We make what matters better, together.‘
Once aims are established, functional areas within a business then devise department-based
strategies to ensure goals are achieved. The vision drives the business and the values are
embedded throughout the strategic planning process.
Whilst a vision outlines the aspirations of senior managers, a mission statement is a general
expression of the overall purpose of the business. It communicates the goals of a company to all
stakeholders. The vision should inspire all stakeholders and motivate employees towards
achieving its stated objectives. If well prepared, it should convince customers, suppliers and
external stakeholders of its sincerity and commitment to them.
Tesco‘s management recognise the key role that its mission, vision and strategies play in its
success and use a range of key performance indicators (KPIs) to monitor and evaluate its
performance.
. Values
Whilst a vision is important, without values a business such as Tesco would struggle to remain
competitive. Tesco‘s values are:
• No one tries harder for customers.
• We treat everyone how we like to be treated.
• We use our scale for good.
Tesco‘s values are vital to its success, as shown in the quote below from Group Chief Executive
Officer (CEO) Philip Clarke: ‗The Tesco values are embedded in the way we do business at
every level. Our values let our people know what kind of business they are working for and let
our customers know what they can expect from us.‘
Tesco is a community-focused global business. Corporate Social Responsibility (CSR) is at the
heart of its operations. This commitment is referred to as ‗Tesco in Society‘. In the competitive
retailing world Tesco‘s success relies on its values. They are not just a list of ‗good attitudes‘ but
the means to on-going success. Tesco‘s approach to working with communities helps it stand out
from its rivals. Its commitment to using its scale for good is demonstrated by Tesco‘s ‗Three Big
Ambitions‘:
• To create new opportunities for millions of young people around the world.
• To improve health and through this help tackle the global obesity crisis.
• To lead in reducing food waste globally.
These are underpinned by what Tesco calls ‗The Essentials‘:
• We trade responsibly.
• We are reducing our impact on the environment.
• We are a great employer.
• We support our local communities.
Philip Clarke summarises Tesco‘s commitment to ‗living‘ these values in the following
statements: ‗Tesco is an environment based on trust and respect...If customers like what we offer,
they are more likely to come back and shop with us again. If the Tesco team find what we do
rewarding, they are more likely to go that extra mile to help our customers. By living the values
we create a good place to work where great service is delivered.‘
These values drive everything Tesco does at every level and help make it different from its
competitors.
Strategy
A strategy is a plan which sets out how a business deploys its resources to achieve its goals. The
company‘s values set the tone for the decision-making process. In May 2011, Tesco committed
£1 billion capital and revenue investment to improve the shopping trip for customers. It set out a
seven part strategy designed to achieve its goals of being highly valued by customers and
enjoying strong long-term growth.
Monitoring and evaluating performance
Strategy, vision, values, aims and objectives are meaningless if their impact is not monitored and
evaluated. Tesco uses a range of methods to collect data and evaluate progress against targets. It
uses its Clubcard scheme, along with telephone based research and an online panel of customers,
to determine what customers want and how satisfied they are with Tesco‘s performance.
Its Executive Committee assess the progress of large-scale strategies. All of its business units
have ‗stretching targets‘ which are aspirational targets for certain KPIs. The performance of all
business units is monitored continually and reported monthly to the board of directors.
These KPIs are used to assess current performance, make comparisons with previous
performance and help managers respond when targets are not being met. For instance, following
investigation, an explanation for narrowly missing the staff training target was given: ‗Although
narrowly missing this target, Tesco have also heavily invested in our colleagues in the UK this
year through our ‗Building a Better Tesco‘ plan. More than 250,000 colleagues in-store have
received customer service training, with additional technical training for 36,000 colleagues.‘
Monitoring healthy options for customers and colleagues supports Tesco‘s commitment to
helping employees and customers make healthy choices and lead healthier lives. In a
revolutionary scheme, using data from its Tesco Clubcard, it has developed a 'healthy little
differences' tracker. This measures the health profile of a 'typical' shop by measuring the
nutritional value of what customers buy. This will be used to set targets to improve customers'
health by comparing how the profiles vary across different groups in society and how healthy
initiatives impact on customers' shopping over time.
Conclusion
Tesco is one of the largest retailers in the world. This success has not come about by chance but
is the result of effective leadership and management. The setting of a clear vision is central to
Tesco‘s success, supported by a commitment to establishing and monitoring specific objectives
and devising strategies to ensure these are achieved. All aspects of the business are regularly
monitored and, when necessary, plans are adapted to ensure targets are ultimately met. At the
heart of all Tesco does is a commitment to being a responsible retailer. This is demonstrated
through its focus on its ‗Three Big Ambitions‘ and ‗The Essentials‘ to show how it is using its
scale for good. Every decision taken considers these areas to ensure customers, communities,
suppliers and staff are treated fairly and with respect. Tesco‘s values underpin all that Tesco does
and, in turn, keeps customers satisfied with their shopping experience and loyal to the brand.

3. A Case study of D-Mart

D-Mart: A Retail Success Case By India Brand Review

No advertising. No loyalty programmes. No ‗Sale days‘ either – at least nothing equivalent

of ‘Sabse Saste Din‘ or ‗Big Billion Days‘. Yet, this is one retail chain whose market-cap is
higher than the combined market capitalisation of both Future Retail and Aditya Birla Fashion.
And in its 15 years of operations, it has never closed, moved or shut down a store.
In this case by India Brand Review, the factors that contributed to its marketing success are
looked for.
In the retailing business, it is famously said that success depends on 3 factors: Location,
Location, and Location. However, closer to reality are 3 alternative approaches to success:
Lowest Prices, Best Quality, and Widest Range. As markets grow, players tend to gravitate
towards one of these 3 options, because going after 2 or all 3 factors makes them vulnerable in
many ways.
Price is where D-Mart operates. Consumers are offered a minimum 3% discount on every
product off its shelf, and in some cases the discount is as much as 10% off MRP. As we will see,
it influences all decision-making for the chain.
Product:
Profitability in retail is driven by a combination of profit margins and inventory turnover. With
price as the differentiator, profit margins on individual items will be squeezed (its gross margin
is only about half of its competitors). Hence, D-Mart operates in limited product segments –
mainly food and groceries. Most other retail chains have expanded into high-end segments too,
but D-Mart has stayed away from them to keep inventories low and inventory turnover high
(during 2012-2016, inventory turnover was about 11.6 times in a year i.e. its stock was bought
and sold an average of 11.6 times every year).
Similarly, contrary to other chains, it does not have private labels, nor does it offer a wide choice
of brands in each segment. The focus is clear: daily consumption goods + known brands only +
limited options = ultra-fast turnover.
Behind the scenes, this fast turnover is what it uses to negotiate with wholesalers and companies
for better prices. This doesn‘t mean arm-twisting suppliers though. In fact, payment to most
suppliers are arranged fortnightly. This is among the shortest credit periods in any industry.
Promotion:
Like the neighbourhood grocery store rarely needs to advertise beyond just announcing its
presence, D-Mart advertises mainly about its store openings, and occasionally about the prices.
Also, because the combination of product lines and prices offered by the store will build habitual
visits, promotion has a limited role.
Distribution:
Since location is the most expensive and critical decision in retail, D-Mart ensures it doesn‘t burn
money by following 2 rules: a compact supply chain and staying away from malls.
The concentrated supply chain means not spreading their footprint far and wide. In fact, until
2014, it was present only in 4 states. It follows a policy of opening 75% of its new stores in
existing states or markets. In terms of formats too, it has limited itself just to 2 size formats, and
choosing between them is based on location and shopper density.
The second rule of not being in malls helps the chain to keep retail costs low. It also believes in
owning the retail space so that rental costs are low. In places where owning is not possible, the
store is on 30-year leases.
Results
So how has this strategy worked for D-Mart? Pretty well!
It continues to have a net profit margin of 3.5%. Its IPO was over-subscribed and then it got
listed at more than 100% premium of its subscription price. And it has also made its promoter
R.K. Damani the wealthiest retailer in India. According to Forbes, Damani‘s stake in D-Mart is
valued at $5.03 billion, much ahead of India‘s previous ‗rajah of retail‘ Kishore Biyani‘s net
wealth estimate of $1.7 billion.