RETAIL BUSINESS ENVIRONMENT Edited by Dr

' 5 Edited by: Dr. Pavitar Parkash Singh RETAIL BUSINESS ENVIRONMENT Edited By Dr. Pavitar Parkash Singh Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for Lovely Professional University Phagwara SYLLABUS Retail Business Environment Objectives: The objective of the course is to: Provide an inclusive perspective on new developing organizational retail formats Develop and acquire a conceptualized framework to understand and analyze the turbulent retail business environment Make students learn designing principles to create retail organizations capable of performing in uncertain and unstable environment Sr. No. Description 1. Introduction to Retail Environment: The functions of retailing, Retail formats, Successful Retailing. 2. Structural change in retail environment: Various types of changes, Sociodemographic change, Technology and economic change, socio-economic changes, Impact of changes on retail industry. 3. International Retailing: Internationalization and Globalization: Shopping at World Stores, Internationalization and Globalization, Going International, The Internationalization Process, Culture, Business and International Management. 4. Retailing Structure: Environment & competition, Competitive Environment in different Retail Sectors, Govt. Policies in Retail Sectors, Retail Development and Competition. 5. Managing retailing in good times and bad: Changes in consumer spending, Impact of economic fluctuation on Retailing industry, Maintaining the balance in the economy, Govt. macroeconomics policy in retail industry, Managing Fluctuations in Retail Industry, Dealing with recession in retail industry 6. Retail planning and environment: Strategic planning process, SWOT analyses of retail sector, Integrated marketing system forging Relationship for success in retail, Role of retail formats and merchandise 7. The Customer and the Retail Business: Knowing Your Customers: Focusing on the consumer, Mapping out society: Psychographics, Postmodern Consumers, Learning Attitudes, Motivation and Perception, Modeling Consumer Behavior. 8. Logistics and Distribution: Shipping the Goods to Market: The Distribution Process, The stages of distribution, Trends in supply chain management, Physical Distribution and Inventory Management, Warehouse Management. 9. People in Retailing: Making People Matter: Retail Employment, Planning the Workforce, Management and Organizational Culture, Personnel Management and Administration, Health and Safety. 10. A Review of Retailing: Environment and Operations: Retail Change: A Review, Cultural Transformation and Retailing, New Approaches in Retailing, Emerging Themes and Niches, Building for the future: Learning from the past. CONTENT Unit 1: Introduction to Retail Environment 1 Pavitar Parkash Singh, Lovely Professional University Unit 2: Structural Change in Retail Environment 26 Pavitar Parkash Singh, Lovely Professional University Unit 3: International Retailing Internationalization and Globalization 50 Pavitar Parkash Singh, Lovely Professional University Unit 4: Retailing Structure 76 Pavitar Parkash Singh, Lovely Professional University Unit 5: Managing Retailing in Good Times and Bad 97 Pavitar Parkash Singh, Lovely Professional University Unit 6: Retail Planning and Environment 110 Pavitar Parkash Singh, Lovely Professional University Unit 7: The Customers and the Retail Business Knowing Your Customers 128 Anand Thakur, Lovely Professional University Unit 8: Learning and Attitude 145 Anand Thakur, Lovely Professional University Unit 9: Motivation and Perception 163 Anand Thakur, Lovely Professional University Unit 10: Logistics and Distribution 186 Anand Thakur, Lovely Professional University Unit 11: Physical Distribution and Inventory Management 202 Anand Thakur, Lovely Professional University Unit 12: Warehouse Management 220 Anand Thakur, Lovely Professional University Unit 13: People in Retailing Making People Matter 251 Pavitar Parkash Singh, Lovely Professional University Unit 14: A Review of Retailing Environment and Operations 273 Pavitar Parkash Singh, Lovely Professional University Pavitar Parkash Singh, Lovely Professional University Unit 1: Introduction to Retail Environment Unit 1: Introduction to Retail Environment Notes CONTENTS Objectives Introduction 1.1 Definition and Scope 1.2 Functions of Retailing 1.3 Retailer 1.4 Rise of the Retailer 1.5 Evolution of Retailing Industry 1.6 Evolution of Retail Format 1.7 Successful Retailing 1.8 Career in Retail 1.9 Summary 1.10 Keywords 1.11 Review Questions 1.12 Further Readings Objectives After studying this unit, you will be able to: Discuss the Concept and Scope of Retailing Explain Functions of Retailing Discuss Retail Formats Explain Successful Retailing Discuss Careers in Retailing Introduction Retailing comes at the end of the marketing distributive channel. The word ‘retail’ has been derived from the French word “retaillier” and means ‘to cut a piece’ or ‘to break bulk’. It covers all the activities involved in the sale of product and services. Retailing is a high-intensity competition industry and second largest globally. The reason for its popularity lies in its ability to provide easier access to a variety of products, freedom of choice, and many services to consumers. The size of an average retail store varies across countries depending largely on the level of a particular country’s economic development. The largest retail store in the world is Wal-Mart of USA. Retailing is the world’s largest private sector contributing to 8% of the GDP and it employs one sixth of the labor force. The estimated retail trade is expected to be 7 trillion US $. Many countries have developed only due to retailing and presently we see there is a vast change in the retail industry. As far as India is concerned it contributes to 14% of our GDP and it is the second largest sector next to agriculture which provides employment to more number of persons. LOVELY PROFESSIONAL UNIVERSITY 1 Retail Business Environment Notes Now according to a survey, India is classified in to the fifth most attractive retail destination and second among the countries in Asia. Worldwide it is ranked as fifth most attractive retail destination. 1.1 Definition and Scope Retailing is the business activity of selling goods and services to the final consumer. Retailing can be defined as the business products and services to consumers for their own 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 is the activity of selling goods and services to last level consumers for their use. It is concerned with getting goods in their finished state into the hands of customers who are prepared to pay for the pleasure of eating, wearing or experiencing particular product items. Retailing is all about the distribution of goods and services because retailers play a key role in the route that products take after originating from a manufacturer, grower or service-provider to reach the person who consumes. Retailing is also one of the key elements of a marketing strategy facilitating the targeting process, making sure that a product reaches particular groups of consumers. It is important in a marketing strategy to match the arena in which a product is purchased to the benefits and characteristics of the product itself and its price. Retailers provide a collection of service benefits to their customers such as being located in convenient places, editing product ranges according to shopping tasks, and selling goods in quantities that match personal consumption levels. Ensuring that this process runs smoothly presents a host of managerial challenges. Retailing is therefore a deceptively simple management process – yet fascinatingly complex in its detail. ! Caution The term retailing applies not only to the selling of tangible products like loaves of bread or pairs of shoes, but also to the selling of service products. Companies who provide meals out, haircuts and aromatherapy sessions are all essentially retailers, as they sell to the final consumer, and yet customers do not take goods away from these retailers in a carrier bag. The consumption of the service product coincides with the retailing activity itself. From a traditional marketing viewpoint, the retailer is one of a number possible organization through which goods produced by manufacture flow on their way to their consumer destiny. These organizations perform various roles by being a member of a distribution channel. Example: Chocolate producer like Cadbury’s will use a number of distribution channels for its confectionery, which involve members such as agents, wholesalers, supermarkets, convenience stores, petrol stations, vending machine operators and so on. Channel members, or marketing intermediaries as they are sometimes referred to, take on activities that a manufacturer doesn’t have the resources to perform, such as displaying the product alongside related or alternative items in a location that is convenient for consumer to access for shopping. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or

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