Description
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit.
Retailing Basics
Retailing : Definition
Retailing
Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.
Retailing : Definition
Retailing
Retailing is the set of business activities that adds value to the products and services sold to consumer for their personal or family use.
Retailing : Definition
Retailing
In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end user customers, usually in a shop, also called store. Retailers are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy.
Retailing : Functions of retailer
From Customer view: Retailer provides goods and services that he needs in •Required assortment •Required time •Required place Economic view Role of retailer is to provide real added value and utility to consumers
Retailing : Functions of retailer
Five Utilities Provided
1) Acceptable form (Mostly finished goods/ services) 2)Sorting of goods and assortment 3)Time ( when needed) 4) Place convenient location 5)Possession ( ownership transfer)
Issues in Retailing
? How
can we best serve our customers while earning a fair profit? ? How can we stand out in a highly competitive environment where consumers have too many choices? ? How can we grow our business, while retaining a core of loyal customers?
Retailing: An overview
?
Wal-Mart ? Topmost global Fortune 500 company(3 Consecutive Years) ? Annual Sales of over US$ 288 bn ? India’s two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop) Fortune 100 ? 9 Retailers ? Carrefour, Ahold, Home Depot, Kroger, Metro, KmartSears, Target, Albertsons’
?
Retailing: An overview
?
Retailing ? World’s largest private industry ?US$ 3.8 trillion sales annually Indian retailing ? Largest employer after agriculture - 8%* of population ? Highest outlet density in world ?Around 12 mn outlets ? Still evolving as an industry ?Long way to go
?
Retailing :
.
Retailing :
.
Retailing :
Retailing in India Total Consumer Spend in the Year 03-04 INR 9300 billion (USD 375 billion) growing over 5% annually Retail sales - 55% at INR 280 billion (USD 205 billion) Organized Retail - Only 3% but growing at 30% Organized retail to cross INR 1000 billion mark by 2010 INR 200 billion investment in the pipeline Top 6 cities account for 66% of total organized retailing Overwhelming acceptance of modern retail formats
? ? ? ? ? ?
Retailing : Changing Retail concept
Retailer are not dependent on manufacturers to sell what is available and have emerged as new leader in the marketing channel Reasons for changing retail landscape:
• Proximity to consumers
• Rise of consumerism • Private labels • Technology
Historic/R ural Reach
Retailing: Evolution of Indian retail Modern
Traditional/ Governmen t Supported Formats/ International
Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls
Convenience Stores Mom & Pop /Kiranas Weekly Markets Village Fairs Melas
PDS Outlets Khadi Stores Cooperatives
Source of Entertain ment
Neighborhood Stores/Conven ience
Availability/ Low Costs / Distribution
Shopping Experience/Ef ficiency
Retailing: Evolution of Indian retail
?
Informal retailing Sector ?Typically small retailers. ?Evasion of taxes No monitoring of labor laws Formal Retailing Sector ?Typically large retailers ?High level of labor usage monitoring
?
Retailing: Classifying Indian retail
?
Modern Format retailers ? Supermarkets (Foodworld) ? Hypermarkets (Big Bazaar) ? Department Stores (Shoppers Stop) ? Specialty Chains (Plug in) ? Company Owned Company Operated ( Bata, Wills lifestyle) Traditional Format Retailers ? Kiranas: Traditional Mom and Pop Stores ? Kiosks ? Street Markets ? Exclusive /Multiple Brand Outlets
?
Retailing: Categories of Indian retail
Corporate Houses ? Tatas: Tata Trent ? RPG group: Food World, Health and Glow, etc ? ITC: Wills Life Style ? Rahejas (ShoppersStop), ?Hiranandani(Haiko), DLF(DT cinemas) etc. ?Dedicated brand outlets ? Nike, Reebok, Zodiac etc ? Multi-brand outlets ? Vijay Sales, Viveks etc ?Manufacturers/ Exporters ? Pantaloons, Bata, Weekender
?
Retailing: Large Indian retailers
?
?
?
Hypermarket ? Big Bazaar ? Giants ,Shoprite, Star Department store ? Lifestyle ? Pantaloons ? Piramyds ? Shoppers Stop ? Trent Entertainment ? Fame Adlabs ? Fun Republic ? Inox, PVR
Retailing: The changing Indian consumer
Greater per capita income ?Increase in disposable income of middle class households ?20.9%* growth in real disposable income in ’99-’05. ?Growing high and middle income population ?Growing at a pace of over 10%* per annum over last decade ?Affordability growth ?Falling interest rates ?Easier consumer credit ?Greater variety and quality at all price points
?
Retailing: The changing Indian consumer
?
The urban consumer ? Getting exposed to ? International lifestyles ? Inclined to acquiring asset ? More discerning and demanding than ever ? More educated No longer need-based shopping ? Shopping is a family experience Changing Mindset ? Increasing tendency to spend ? Post Liberalization children coming of age ?100 mn 17-21 year olds*. Tend to spend freely. Greater levels of education
?
?
?
Retailing: Anticipated growth
?
Market size ? Current market size is roughly US$ 286 bn* ? 96% of the 12 Million stores are less than 500 Sq. ft. ? Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008 ? Sales from large format stores would rise by 2449% ? Formal and modern format retailing would enjoy rapid growth
Retailing: Industry dynamics
?
Low domestic competition ? Because of fragmented nature of industry Lack of exposure to global best practices ? Low entry barriers for unorganized retailing ? Moderate entry barriers for organized retailing Wholesale wastage system under-invested leading to 20-40%
?
?
?
Non level playing field issues ? Wide differences in treatment of small and large retailers
Retailing: Real estate issues
?
Highly distorted real estate market ?Pro-tenant laws ?Zoning laws ? Zoning laws also vary from state to state ?Non-availability of government land, and fragmented private holdings makes it difficult for retailers to acquire land ? Government is largest property owner in country ? Urban Land Ceiling act is archaic ?Stamp Duty and registration charges at high levels. Also vary from state to state
Retailing: The Indian advantage
?
India ranked 5th in the Global A.T Kearney Retail Development Index ? Second only to China in Asia ? Least saturated of all global markets studied ? The least competitive of all global markets studied ? Implies lower barriers of entry for global players ? Considering tremendous market size, excellent potential for foreign players India ranked 3rd in the Global A T Kearney FDI Confidence Index in 2004 ? Improved from Rank 6 in Year 2003
?
Retailing :
2004 figures
? ?
?
?
?
?
?
?
?
?
?
?
Organized retail : Rs. 280 billion Clothing, Textiles & Fashion accessories: 39% Footwear 9% Jewellery & watches 7% Mobile hand sets & accessories 3% Health & Beauty (including services) 2% Food & Grocery 18% Durables 13% Books, Music & Gifts 3% Home 3% Pharma 2% Entertainment 1%
?
2005 Projection Organized Retail - Rs. 350 Bln
Retailing : INDIA RETAIL BY 2006-07 50 million sq ft of quality space under development 7 major cities to account for 41 million sq ft development 300 malls, shopping centers and multiplexes under construction To open 35 hypermarkets, 325 large department stores, 1500 supermarkets and over 10,000 new outlets To add US $ 10 billion of business to organized retail.
Retailing :
Five Reasons why Indian Organized Retail is at the brink of Revolution
?
?
?
?
?
Scalable and Profitable Retail Models are well established for most of the categories Rapid Evolution of New-age Young Indian Consumers Retail Space is no more a constraint for growth Partnering among Brands, retailers, franchisees, investors and malls India is on the radar of Global Retailers Suppliers
?
doc_998798130.ppt
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit.
Retailing Basics
Retailing : Definition
Retailing
Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.
Retailing : Definition
Retailing
Retailing is the set of business activities that adds value to the products and services sold to consumer for their personal or family use.
Retailing : Definition
Retailing
In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end user customers, usually in a shop, also called store. Retailers are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy.
Retailing : Functions of retailer
From Customer view: Retailer provides goods and services that he needs in •Required assortment •Required time •Required place Economic view Role of retailer is to provide real added value and utility to consumers
Retailing : Functions of retailer
Five Utilities Provided
1) Acceptable form (Mostly finished goods/ services) 2)Sorting of goods and assortment 3)Time ( when needed) 4) Place convenient location 5)Possession ( ownership transfer)
Issues in Retailing
? How
can we best serve our customers while earning a fair profit? ? How can we stand out in a highly competitive environment where consumers have too many choices? ? How can we grow our business, while retaining a core of loyal customers?
Retailing: An overview
?
Wal-Mart ? Topmost global Fortune 500 company(3 Consecutive Years) ? Annual Sales of over US$ 288 bn ? India’s two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop) Fortune 100 ? 9 Retailers ? Carrefour, Ahold, Home Depot, Kroger, Metro, KmartSears, Target, Albertsons’
?
Retailing: An overview
?
Retailing ? World’s largest private industry ?US$ 3.8 trillion sales annually Indian retailing ? Largest employer after agriculture - 8%* of population ? Highest outlet density in world ?Around 12 mn outlets ? Still evolving as an industry ?Long way to go
?
Retailing :
.
Retailing :
.
Retailing :
Retailing in India Total Consumer Spend in the Year 03-04 INR 9300 billion (USD 375 billion) growing over 5% annually Retail sales - 55% at INR 280 billion (USD 205 billion) Organized Retail - Only 3% but growing at 30% Organized retail to cross INR 1000 billion mark by 2010 INR 200 billion investment in the pipeline Top 6 cities account for 66% of total organized retailing Overwhelming acceptance of modern retail formats
? ? ? ? ? ?
Retailing : Changing Retail concept
Retailer are not dependent on manufacturers to sell what is available and have emerged as new leader in the marketing channel Reasons for changing retail landscape:
• Proximity to consumers
• Rise of consumerism • Private labels • Technology
Historic/R ural Reach
Retailing: Evolution of Indian retail Modern
Traditional/ Governmen t Supported Formats/ International
Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls
Convenience Stores Mom & Pop /Kiranas Weekly Markets Village Fairs Melas
PDS Outlets Khadi Stores Cooperatives
Source of Entertain ment
Neighborhood Stores/Conven ience
Availability/ Low Costs / Distribution
Shopping Experience/Ef ficiency
Retailing: Evolution of Indian retail
?
Informal retailing Sector ?Typically small retailers. ?Evasion of taxes No monitoring of labor laws Formal Retailing Sector ?Typically large retailers ?High level of labor usage monitoring
?
Retailing: Classifying Indian retail
?
Modern Format retailers ? Supermarkets (Foodworld) ? Hypermarkets (Big Bazaar) ? Department Stores (Shoppers Stop) ? Specialty Chains (Plug in) ? Company Owned Company Operated ( Bata, Wills lifestyle) Traditional Format Retailers ? Kiranas: Traditional Mom and Pop Stores ? Kiosks ? Street Markets ? Exclusive /Multiple Brand Outlets
?
Retailing: Categories of Indian retail
Corporate Houses ? Tatas: Tata Trent ? RPG group: Food World, Health and Glow, etc ? ITC: Wills Life Style ? Rahejas (ShoppersStop), ?Hiranandani(Haiko), DLF(DT cinemas) etc. ?Dedicated brand outlets ? Nike, Reebok, Zodiac etc ? Multi-brand outlets ? Vijay Sales, Viveks etc ?Manufacturers/ Exporters ? Pantaloons, Bata, Weekender
?
Retailing: Large Indian retailers
?
?
?
Hypermarket ? Big Bazaar ? Giants ,Shoprite, Star Department store ? Lifestyle ? Pantaloons ? Piramyds ? Shoppers Stop ? Trent Entertainment ? Fame Adlabs ? Fun Republic ? Inox, PVR
Retailing: The changing Indian consumer
Greater per capita income ?Increase in disposable income of middle class households ?20.9%* growth in real disposable income in ’99-’05. ?Growing high and middle income population ?Growing at a pace of over 10%* per annum over last decade ?Affordability growth ?Falling interest rates ?Easier consumer credit ?Greater variety and quality at all price points
?
Retailing: The changing Indian consumer
?
The urban consumer ? Getting exposed to ? International lifestyles ? Inclined to acquiring asset ? More discerning and demanding than ever ? More educated No longer need-based shopping ? Shopping is a family experience Changing Mindset ? Increasing tendency to spend ? Post Liberalization children coming of age ?100 mn 17-21 year olds*. Tend to spend freely. Greater levels of education
?
?
?
Retailing: Anticipated growth
?
Market size ? Current market size is roughly US$ 286 bn* ? 96% of the 12 Million stores are less than 500 Sq. ft. ? Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008 ? Sales from large format stores would rise by 2449% ? Formal and modern format retailing would enjoy rapid growth
Retailing: Industry dynamics
?
Low domestic competition ? Because of fragmented nature of industry Lack of exposure to global best practices ? Low entry barriers for unorganized retailing ? Moderate entry barriers for organized retailing Wholesale wastage system under-invested leading to 20-40%
?
?
?
Non level playing field issues ? Wide differences in treatment of small and large retailers
Retailing: Real estate issues
?
Highly distorted real estate market ?Pro-tenant laws ?Zoning laws ? Zoning laws also vary from state to state ?Non-availability of government land, and fragmented private holdings makes it difficult for retailers to acquire land ? Government is largest property owner in country ? Urban Land Ceiling act is archaic ?Stamp Duty and registration charges at high levels. Also vary from state to state
Retailing: The Indian advantage
?
India ranked 5th in the Global A.T Kearney Retail Development Index ? Second only to China in Asia ? Least saturated of all global markets studied ? The least competitive of all global markets studied ? Implies lower barriers of entry for global players ? Considering tremendous market size, excellent potential for foreign players India ranked 3rd in the Global A T Kearney FDI Confidence Index in 2004 ? Improved from Rank 6 in Year 2003
?
Retailing :
2004 figures
? ?
?
?
?
?
?
?
?
?
?
?
Organized retail : Rs. 280 billion Clothing, Textiles & Fashion accessories: 39% Footwear 9% Jewellery & watches 7% Mobile hand sets & accessories 3% Health & Beauty (including services) 2% Food & Grocery 18% Durables 13% Books, Music & Gifts 3% Home 3% Pharma 2% Entertainment 1%
?
2005 Projection Organized Retail - Rs. 350 Bln
Retailing : INDIA RETAIL BY 2006-07 50 million sq ft of quality space under development 7 major cities to account for 41 million sq ft development 300 malls, shopping centers and multiplexes under construction To open 35 hypermarkets, 325 large department stores, 1500 supermarkets and over 10,000 new outlets To add US $ 10 billion of business to organized retail.
Retailing :
Five Reasons why Indian Organized Retail is at the brink of Revolution
?
?
?
?
?
Scalable and Profitable Retail Models are well established for most of the categories Rapid Evolution of New-age Young Indian Consumers Retail Space is no more a constraint for growth Partnering among Brands, retailers, franchisees, investors and malls India is on the radar of Global Retailers Suppliers
?
doc_998798130.ppt