Retail Research Introduction

Retail Research Introduction:

The word retail has its origin in French word retaillier and means ―to cut a piece‘‘ or ―to break bulk‘.

“Retailing is the sale of goods and services to the ultimate consumer for personal, family or household use.”

According to Kotler: “Retailing includes all the activities involved in selling goods or

services to the final consumers for personal, non business use”

Retailing may be understood as the final step in the distribution of merchandise for consumption by the end consumers.

Retailing is responsible for matching final consumer demand with supplies of different marketers.

Retailing is high intensity competition industry, The reasons for its popularity lie in its ability to provide easier access to variety of products, freedom of choice and many services to consumers.

The Indian retail is dotted by traditionally market place called bazaars or haats comprises of numerous small and large shops, selling different or similar merchandise

“’Wheel of Retailing”

A better known theory of retailing ―wheel of retailing‖ proposed by Maclcomb McNair says,

1.                 New retailers often enter the market place with low prices, margins, and status. The low prices are usually the result of some innovative cost-cutting procedures and soon attract competitors.

2.                 With the passage of time, these businesses strive to broaden their customer base and increase sales. Their operations and facilities increase and become more expensive.

3.                 They may move to better up market locations, start carrying higher quality products or add services and ultimately emerge as a high cost price service retailer.

4.                 By this time newer competitors as low price, low margin, low status emerge and these competitors too follow the same evolutionary process.

1.             The wheel keeps on turning and department stories, supermarkets, and mass merchandise went through this cycles.

1.Functions of a retailer

1.                 Form: First is utility regarding the form of a product that is acceptable to the customer.

The retailer does not supply raw material, but rather offers finished goods and services in a form that the customers want.

The retailer performs the function of sorting the goods and providing us with an assortment of product in various categories.

2.                 Time: He cerates Time utility by keeping the store open when the consumers prefer to shop.

preferable shopping hours.

3.                 Place: By being available at a convenient location, he creates place utility.

4.                 Ownership: Finally, when the product is sold, ownership utility is created. Apart from these functions retailer also performs like:

5.                 Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Final consumers, in contrast prefer a large variety of goods and services to choose from and usually buy them in small units.

Functions of a retailer

1. Form: First is utility regarding the form of a product that is acceptable to the customer.

The retailer does not supply raw material, but rather offers finished goods and services in a form that the customers want.

The retailer performs the function of sorting the goods and providing us with an assortment of product in various categories.

1.                 Time: He cerates Time utility by keeping the store open when the consumers prefer to shop. preferable shopping hours.

2.                 Place: By being available at a convenient location, he creates place utility.

3.                 Ownership: Finally, when the product is sold, ownership utility is created. Apart from these functions retailer also performs like:

4.                 Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Final consumers, in contrast prefer a large variety of goods and services to choose from and usually buy them in small units.

I Amount of Services:

Self service retailer:

Customers who are willing to perform their own ―locate-compare-select‖ process to save money

Ltd service retailer:

Retailer provides more sales assistance because they carry more shopping goods. They fix higher price due to higher operation cost

Full service retailer:

1.Product Line:

1.                 Specialty stores: A retail stores that carries a narrow product line with a deep asswortment within that line. Ex. Apparel stores, Sporting goods stores, Furniture stores, books stores

2.                 Department stores: A retail organization that carries a wide variety of product lines – typically clothing, home furnishing, and house hold goods: each line is operated as a separate department managed by specialist buyers or merchandisers.

Supermarkers: A supermarket is a large self service retail store that carries a wide variety of consumer products under one roof , such as complete line of food products , laundry requirement, household maintenance items. Here large, low – cost, low margin, high volume

1.                 Convenience stores: A relatively small store located near residential areas, open long hours 7 days a week, and carries a limited line of high turnover convenience goods at slightly higher price.

2.                 Super stores: A store much larger than a regular supermarket that carries a large assortment of routinely purchased food and nonfood it4ems and offers services such as dry cleaning, post offices, photo finishing, check

cashing, bill paying, lunch counters, car cares, and pet care.

6) Category killer: Giant specialty store that carriers a very deep assortment of a particular line and is staffed by knowledgeable employees. Ex. Book, Baby gear, toys, home improvement products.

1.   Relative Price:

1.                 Discount stores: these stores are self service, standard general merchandise retailers regularly offering brand name and private brand items at low price, earn lower margins and push for high sales turnover. The characteristics of true discount stores include

Selling products at discounted price

Carry standard international , national, or store brand toi build image Self service stores to minimize operational costs

Preferred store locations are low rent areas.

Like best known discount store is Wal-Mart. In India almost all retail stores offer discounts, subhiksha

2) Off – price retailers: Retailer that buys at less than regular whole sale

prices and sells at less than retail. Examples are factory outlets, independents and warehouse club

Independent off – price retailers: Off-price retailer that is either owned and run by entrepreneurs or is a division of a larger retail corporation.

Factory Outlet: Off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturer‗s surplus, discontinued, or irregular goods.

Warehouse club: Off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and hodgepodge of other goods at deep discounts to members who pay annual membership fees.

IV Organisational Approach:

Chain stores: Two or more outlets that are owned and controlled in

common, have central buying and merchandising, and sell similar lines of merchandise.

Franchise: A contractual association between a manufacturer, wholesaler, or service organization (a franchiser)and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system.

2.Factors Influencing the retail Shoppers

1.     Range of Merchandise:

The range of merchandise is one of the most important reasons for customers to patronize a particular outlet.

Initial curiosity about the store draw a consumer to retail store.

But convert the customer into buyer and retain them over a period of time is dependent on the quality and the range of merchandise offered by the store.

Range of merchandise includes categories like Books & Music, apparel and other lifestyles products

2. Convenience of shopping at a particular outlet.

This element is fast gaining prominence in the world of organized retail.

Example patient prefer medicine shops, fresh juice and fruits shops near clinic or hospitals.

3. Time of Travel:

Time requires to reach a particular location is again become critical.

big cities where traveling takes too much time like Delhi, Mumbai because of this we can see many local areas developing in terms of shopping to facilitate buying

4. Socio economic background and culture:

Background of the consume largely determines his /her lifestyles. And this influences the

kind of store that he may be comfortable shopping in.

Consumer buying behavior varies largely market to market influence by culture and environment.

5. The stage of the family life cycles.

The stage of the family life cycle the customer belongs to also influences their needs.

Example Need for young bachelors differ from the requirements of the old age or senior citizen.

1.                 Retail Location

“A store is place , real or virtual , where the shoppers comes to buy goods & services. The

sales transaction occurs at this junction.‖

1.                 The location of retail store has for along time been considered the most important ‗P‗ in retailing.

2.                 Locating the retail store in the right place was considered to be adequate for success.

Types of Retail Location

Typically a store location may be:

1.                 Freestanding /Isolated store.

2.                 Part of Business District/Centers (unplanned Business Districts).

3.                 Part of a Shopping Center (Planned Shopping Centers)

Freestanding /Isolated store

1.                 Where there are no other outlets in the vicinity of the store and therefore store depends on its own pulling power and promotion to attract customers.

•   A biggest advantage for freestanding stores is that there is no competition around.

2.                 This type of location has several advantages including no competition, low rent, and often better visibility from the road, easy parking and lower property.

Part of Business District/Centers (unplanned Business Districts).

1.                 A retail store can also be located as a part of a business district. Or we can refer this as unplanned business centers

2.                 A business district is place of commerce in a city which developed historically as the center of trade and commerce in the city or town.

3.                 A business districts can be a central, secondary or a Neighborhood business district.

4.                 A Central business District CBD is the main center of commerce and trade in the city.

(high land rates , intense development)

• CBD served different sections of population for Examples of Cannaught place in Delhi, Colaba in Mumbai, Commercial Street and in Bangalore are up market CBD’s.

Part of a Shopping Center (Planned Shopping Centers)

• A shopping center has been defined as ― a group of retail and other commercial establishments that is planned , developed, owned and managed as a single property‖

1.                 The basic configuration of a shopping centre is a ―Mall ‖ or Strip centre.

2.                 A mall is typically enclosed and climate controlled. A walkway is provided in front of the stores.

3.                 A strip centre is a row of stores with parking provided in the front of the stores.

4.                 In India we can planned shopping centre can categorize in two category

Regional shopping centers or Mall: Regional shopping centers or mall are the largest planned shopping centers..

1.                 Often they are anchored by two or more major department stores have enclosed mall serve a large trading area and have high rents. (ansal plaza,spencers plaza crossroads, DLF city in Gurgaon)

2.                 Neighborhood/community/shopping centers: Neighborhood /community centers usually have a balanced mix of stores including a few grocery stores , a chemist, a verity store and a few other stores selling convenience goods to the residents of the neighborhood.

3.Step involved in choosing a Retail Location

1.           In order to arrive at the decision on where to locate the retail store a retailer needs to first on the region that he wants to locate the store.

2.           After identifying the region the following steps Have to be followed .

3.                 Identifying the market in which to locate the store.

4.                 Evaluate the demand and supply within that market. i.e. determine the market potential.

5.                 Identify the most attractive sites

4) Select the best site available.

1. Market Identification:

• The first step in arriving at a decision on retail location is to identify the market attractiveness to a retailer.

 This is important that retail needs to understand the market well.

2. Determining the market Potential::

 The retailer need to take into consideration various elements as shown in format. (features of population)

 Demographic features of the population

 The characteristics of the household in the area (average household income)

 Competition and compatibility (Need to know compatibility & competition in market)

1.                Laws & regulations:( good understanding of the laws

2.                Trade area analysis:

3.                 A trade area is the geographic area that generates the majority of the customers for the store.

4.                Primary trade area: primary trading covers between 50-80% of the store‗s customers.

5.                Secondary Trading Area: this area contains the additional 15- to 25% of the store’s customers.

6.                Tertiary trading area covers the balance customers

7.                These trading areas are dependent on distance and do not always have to be concentric in naturel

3 & 4 Identify Alternate sites and select the site:

After taking decision on the location and market potential the retailer has to select the site to locate the store based on these

·        Traffic

·        Accessibility of the market is also a key factor

·        The total number of stores and the type of store that exist in the area

·        Amenities

·        To buy or to lease

·        The product mix to be offered by the retailer

Research prior to setting up a retail store

Demographic Data.

Population

GDP

Customer Data.

Research after setting up a retail store

1.                 Merchandise and service offered.

2.                 New product development.

3.                 Acceptability of products.

4.                 Acceptability of pricing.

5.                 Understanding consumer profiles.

Seven        Secrets of Retail

1.                 STORE –Place – Business Development.

2.                 STOCK –Product –Visual Merchandising.

3.                 STAFF –People –Training & Development.

4.                 SERVICE –PersistenCe –CRM.

5.                 SALE –Priority –Sales & Marketing.

6.                 SUCCESS –Passion –Your Profession.

7.                 SMILE –Permanent –Pass it On…!