Presented by

Manish Balpande

Type of merchandise sold

Variety and assortment of merchandise

Level of customer service

Price of the merchandise

Variety is the number of different merchandise categories a retailer offers (breadth).

Assortment is the number of different items in a merchandise category (depth)

Each different item of merchandise is called a stock keeping unit (SKU).

Customers expect retailers to provide some services--accepting credit cards, proving parking, and displaying merchandise.

Some retailers go beyond this and provide other services such as gift wrapping and home delivery, at a charge.

Offering more depth and breadth of merchandise is appealing to customers.

Offering services attracts customers.

To make a profit with more depth and breadth or services retailers must charge higher prices.

Conventional Supermarket

Limited Assortment Supermarket

Supercenter

Warehouse Club

Convenience Store

Self-service

Offer

Groceries

Meat

Produce Limited non-food items

Fastest growing sector of food retailer.

150,000 to 200,000 sq. ft. stores that combine a superstore and a full-line discount store.

Sell groceries at low prices to build store traffic.

One stop shopping

Large ( about 100,000 sq. ft.) and located in low rent districts.

Little service at low prices to ultimate consumers and small businesses.

Reduce costs by carrying a limited assortment of fast-selling items.

Members must pay an annual fee

Modern versions of the neighborhood mom-and pop stores.

Convenient location in a 2,000 to 3,000 sq. ft. store with a speedy checkout.

Limited variety and assortment of merchandise.

Department stores

Full-line discount stores

Specialty stores

Drug stores

Category specialists

Extreme Value Retailers

Off-price retailers

Home Improvement Centers

Type Variety Assortment Service Prices Size(000 sq. ft.)

Location

Department Stores

Broad Deep to average Average to low Average to low 100-200 Regional malls

Discount Stores Broad Average to shallow

Low Low 60-80 Stand alone, power strip centers

Specialty Stores Narrow Deep High High 4-12 Regional malls

Category Specialists

Narrow Very deep Low to high Low 50-120 Stand alone, power strip centers

HomeImprovement Centers

Narrow Very deep Low to high Low 80-120 Stand alone, power strip centers

Drugstores Narrow Very deep Average Average to high

3-15 Stand alone,strip centers

Off-price stores Average Deep but varying Low Low 20-30 Outlet malls

Extreme value retailers

Average Average and varying

Low Low 7-15 Urban, strip

Carry a broad variety and deep assortment

Organized stores into distinctly separate departments

Offer Customer services

It attracts consumers by offering a pleasing ambience, attentive service and wide variety of merchandise.

E.g. Big Bazaar

Offer a broad variety of merchandise

Limited services

Low prices

Offers both private as well as national labels

E.g. Wal-Mart, Brand Factory

Concentrate on a limited number of complementary merchandise

Provide high level of service

Offers deep but narrow assortment

E.g. Apparel- Wills Lifestyle, ZodiacElectronics- Croma, Bose

Concentrate on health and personal grooming merchandise.

E.g. Apollo Pharmacy(Apollo hospitals group), Dial for health(Zydus Cadilla)

Big box discount stores

Offer narrow but deep assortment

Low price

They are also called as category killers

E.g. Apparel – PantaloonsBooks – Odyssey

Small, full line discount stores

Offers limited merchandise assortment

Very low prices

One of the fastest growing segment in retailing

Target low-income consumers, whose shopping behavior differs from typical discounts stores

E.g. family Dollar and Dollar general

Offer an inconsistent assortment of brand name merchandise at low prices

Sell brand name and even designer label merchandise at low prices

E.g. Brand Factory

Combines the traditional hardware store and lumberyard.

Focuses on providing material and information.

Merchandise is displayed in a warehouse atmosphere.

Salespeople are available to assist customers in seeking merchandise and to tell them how to use it.

Electronic Retailers

Catalog and Direct-Mail Retailers

Direct Selling

Television Home Shopping

Vending Machine Retailing

Also called as e-tailing, online retailing and internet retailing

Retailers communicate with customers offers products and services for sale over the internet

E.g. Online retail banking, flipkart, eBay

Catalog is a non store retail format in which the retail offering is communicated to a customer through a catalog

Direct-Mail retailers communicate with their customer using letters and brochures

Most successful with rural consumers

19% of US population orders merchandise or services by mail

E.g. JCPenney – General merchandiseBrylane – Apparel, home

Direct selling is a retail format in which salespeople, independent businesspeople, contact customers directly in a convenient location, either at customer’s home or at work, demonstrate merchandise benefits and explain service, take an order, deliver the merchandise and perform the service

Highly interactive form of retailing

Face to face discussion with sale people

E.g. Cooking and Kitchen wareCosmetics and fragrances

Customers watch a TV program that demonstrate merchandise and then place orders for the merchandise by telephone

Three forms of electronic home shopping retailing-1. Cable channels dedicated to television shopping2. Infomercials3. Direct response advertising

Direct response advertising includes advertisement on TV and Radio that describe products an provide an opportunity for consumers to order them

Infomercials are TV programs, typically 30 mins long, that mix entertainment with product demonstrations and then solicit orders placed by the telephone

E.g. Home shop 18, Telebrands

It is a non store format in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use the credit card

Placed at convenient high traffic locations

E.g. vending machine for cold beverages, candy, snacks, coffee, ect

Type of Service Service Retail Firms

Airlines Air India, Indigo, Jet Airways

Automobile maintenance and repair

Reliance AutoZone

Automobile Rental Hertz India, Eco Rent A Car, Avis India

Banks HDFC, ICICI, SBI

Child Care Centers Angel Heart, Shemrock

Credit Cards America Express, ICICI, VISA

Education Sinhgad College

Entertainment Parks Appu Ghar, Essel World

Express package delivery Blue Dart, Gati

Financial Services Reliance Money, Airtel Money

Fitness FitnessOne, Gold’s Gym

Health Care Fortis, Max

Type of Service Service Retail Firms

Home maintenance Unicorn Services

Hotels and Motels Taj, ITC Maurya Sheraton

Income Tax Preparation Protax

Insurance LIC

Internet access/electronic information

Airtel, Vodafone, BSNL

Movie Theater ADLABS, PVR

Real Estate DLF, Unitech, Indiabulls

Restaurants Nirula’s, Kamat

Truck Rentals Asatguru Packers and Movers

Weight Loss VLCC

Video Rentals Movie Mart, Big Flix

Vision centers Centre for Sight, Venu Eye Institute

Independent, Single-Store Establishments

Corporate Retail Chains

Franchising

This type of retailing is owner managed, which means management has direct contact with customers and can respond quickly to their needs

They are very flexible

React to quickly to market changes and customers needs

E.g. local Kirana Shop

It is a company that operates multiple retail units under common ownership

Usually has centralized decision making for defining and implementing its strategy

E.g. Taj Hotels, Kamat restaurants

Franchising is a contractual agreement between a franchisor and a franchisee that allows a franchisee to operate a retail outlet using a name and format developed and supported by the franchisor

The franchisee pays a lump sum plus royalty on all sales for the right to operate the outlet in accordance with procedures prescribed by the franchisor

The franchisor provides assistance in locating and building the store, developing the products or services sold, training managers and advertising

To maintain each franchisee’s reputaion, the franchisor also makes sure that all outlets provide the same quality of services and products

E.g. KFC, Mc Donels, Haldiram, DominozPizza