Topic

Types of Retailers

PPT 2-1 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 •Evolution of Indian retail
•Modern Formats/
•Historic/Rural •Traditional/Pervasive •Government
Reach Reach Supported International

•Exclusive Brand Outlets

•Hyper/Super Markets
•Department Stores
•Shopping Malls
•PDS Outlets
•Khadi Stores
•Cooperatives

•Convenience Stores
•Mom and Pop/Kiranas

•Weekly Markets
•Village Fairs
•Melas

•Source of •Neighborhood •Availability/ Low •Shopping

Entertainment Stores/Convenience Costs / Distribution
Experience/Efficiency

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 Evolution of Retail formats

• SUPERMARKETS- 1930’s saw the emergence of

supermarkets- emergence of discount stores
• The first hypermarket that was developed , was Carrefour in
France , in 1963.
• It gave consumer a choice and picking up by making
comparison

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 Evolution of Retail formats

• SPECIALITY STORES , MALLS AND OTHER FORMATS-

• Specialty chains developed in the 80’s,as did the large
shopping malls – to provide consumer’s needs in single self
contained shopping area
• The Times Square , Kaula – Lumper, is world’s largest
complex and biggest shopping mall in Asia

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 Evolution of Retail formats

• RISE OF THE WEB – The world of retail changed again when

in 1995 , Amazon. COM opened its doors to a world wide
market on the web
• With the growth of the WWW, both retailers an consumers can
find suppliers and products from anywhere in the world

PPT 2-5 Video on Evolution of Retail

 Business Models In Retail

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 Major Store Based Retailer

• Convenience Store (500-

1500sq.ft)
 Small residential retailers or retail chains
consisting of small neighborhood stores
 Open long hours
 Carry limited lines of higher-turnover
necessities
 One-stop shopping
 Open in conjunction with Gas stations
• Ease of shopping , routine rapport
e.g Spencer’s (Daily , Express) , Bharati Retail
(Easy Day) , Tesco (Fresh and Easy) , Om
Daily Needs (Pratidin), Food world express –
mini marts, Reliance fresh

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 Convenience Store Strategy Mix

Prices:
Location:
Average to
Neighborhood
Above average

Atmosphere and
Merchandise: Services:
Medium width Average
and low depth
of assortment; Promotion:
average quality Moderate

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 Major Store Based Retailer

 Super Market :- (800-

5000sq.ft.)
• Relatively Large , low cost , low margin
, high volume , self service operation
designed to serve total needs for food,
laundry and household maintenance
products
• e.g., Asda, Kroger, Tesco , Nilgiri’s ,
Food Bazaar , food world Super Market
(Spencer & Co.), More , Spar Super
Markets, Namdhari’s fresh, Margin
Free (specialty supermarkets in south
India )

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 Supermarket Strategy Mix

Location: Prices:
Neighborhood Competitive

Atmosphere and
Merchandise: Services:
Extensive width and Average
depth of assortment;
average quality; Promotion:
manufacturer, private, Heavy use of
and generic brands newspapers, flyers,
and coupons

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 Major Store Based Retailer

• Department Store (500-

40,000sq.ft.)
• Several product lines – (Largely non-food)
Typically clothing, home furnishing , and
household goods - with each line operated
as a separate department managed by
specialist merchandisers.
• One stop shop
• E.g Marks and Spencer’s , Lifestyle,
Globus , Shopper’s Stop, Pantaloons,
Westside , Pyramid , Ebony.

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 Department Store Strategy Mix

Location: Prices:
Business district, shopping Average to
center or isolated store Above average

Atmosphere and
Merchandise: Services:
Extensive width and Good to excellent
depth of Promotion:
assortment; average to Heavy ad and catalog
good quality use; direct mail;
personal selling

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PPT 2-15
 Major Store Based Retailer

Hypermarkets:

• Range between 80,000 and 220,000 square feet and combine supermarket,
discount, and warehouse retailing.
• Full line of groceries and general Merchandise .
• Product assortment includes furniture, large and small appliances, clothing, and
many other items with discounts .
• Hypermarkets originated in France.
• E.g., Spencer’s Hyper , Reliance Mart , Big Bazaar , Star India bazaar, metro cash
and carry, Bharati -Wal-Mart,SPAR first Hypermarket in Mangalore(44000sqft.), Max
Hypermarket in Bangalore
At present Reliance Retail's largest hypermarket (1.65 lakh sq ft ), under the
brand name of Reliance Mart is operational in Ahmadabad

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 Major Store Based Retailer Types

Specialty store : (2000-5000Sqft.) (Category Killers)

• Focuses on brand of particular category
• Narrow product line with a deep assortment
• Level of service is high .
• Croma , Vivek’s – Multi line Specialty retailers
• Gili , Crossword , Planet M , Music world , Zara , Wills classic , Wills Clublife , Nik-Nish
(life style Gift chain)
• Toys ‘R’U , Home Depot in home improvement category , Best Buy in electronics ,
Staples in office supply , amazon.com in books , Ebay-online auction site

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 Specialty Store Strategy Mix

Location: Prices:
Business district or Competitive to
shopping center Above average

Atmosphere and
Merchandise: Services:
Very narrow width and Average to excellent
extensive depth of
assortment; average to Promotion:
good quality Heavy use of displays
Extensive sales force

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PPT 2-20
 Major Store Based Retailer

• Discount Stores : expected to grow 30-

40 per cent every year
• Value retailing
• Standard Merchandise sold at lower prices with
lower margins and higher volumes.
• Discount retailing has moved into specialty
merchandise stores, such as discount sporting-
goods stores, electronics stores, and bookstores.
• E.g., Ansal Plaza Discount Circuit, My Dollar
store, Target in USA , Future groups’s Brand
Factory, Arvind Mills Ltd’s Megamart, Vishal
Megamart, Provogue's Promart, The Loot
• Onlinedeals.in

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 Full-Line Discount Store
Strategy Mix

Location:
Prices:
Business district, shopping
Competitive
center or isolated store

Atmosphere/Services:
Merchandise: Slightly below
Extensive width and average to average
depth of
assortment; average to Promotion:
good quality Heavy on newspapers;
price-oriented; selling

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PPT 2-23
 Major Store Based Retailer

• Factory Outlets : (off price retailers )

• Merchandise bought at less than regular wholesale prices and sold at less than
retail:
• Often left over goods , overruns and irregulars.
• They focus on mass selling and reaching economies of scale or selling the stock
left after the season is over.
• Typically these are Franchise outlets located away from the main markets
• Bangalore’s malabar Market , Mehrauli Gurgaon Road
E.g. Factory Outlets – Levis , Reebok , Wrangler , Brand factory

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 Airport retailing

• In past airport retailers were fast food outlets, tiny gifts store, newspaper stands .
• Every large and medium airport are full blown shopping areas.
• Small airports also have atleast fast food retailer or vending machines.
• Airport stores are smaller, carry fewer items, and have higher prices.
• Longer shopping time as the airport is open 24 hrs.

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 Railway Retailing

• Railway Retailing – Metro railways, Shatabadi

• 3.5lakh- 4 lakh commuters
• Tata Group , Reliance , Future Group have shown keen
interest in retailing
e.g. Rail Bazar catalogue

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 Flea Market

• Flea Market – Traditional Marketplace

• Good Bargain
• Janpath in Delhi
• Crawford and Zaveri bazaar in Mumbai
• Weekly Flea Markets

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 Major Store Based Retailer.

• Malls:
• These are the largest form of retail
formats.
• They provide an ideal shopping
experience by providing a mix of all
kinds of products and services, food and
entertainment under one roof.
Examples are Sahara Mall, TDI Mall , Shipra
mall , EDM , Great India Place , Cross
River mall

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 Class Activity

Think of different retail stores, and fill the information in the table given below

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 Nonstore Retailing

• Internet Retailing
- The Electronic Retailing also called as e-
tailing or internet retailing, is the process
of selling the goods and services through
electronic media, particularly the internet.
- Simply, the sale of retail goods and services
online is called as electronic retailing.
- Amazon.com is by far the largest online
retailer providing consumer products and
subscriptions through its website.

• Vending Machines
 Increasingly popular
 A vending machine is an automated
machine that provides items such
as snacks, beverages, ... When
using an automated retail machine,
consumers select products,
sometimes using a touchscreen
interface, pay for purchases using a
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 Nonstore Retailing

• Direct Selling
 A retailing venue whereby a salesperson, typically an independent
distributor, contacts a consumer, demonstrates product use and benefits,
takes orders and delivers the merchandise
 Direct selling firms are most active in the growth markets (in emerging
markets, in particular)
• Oriflame, Eureka Forbes

• Network Marketing
 Variation on direct selling
 Involves signing up sales representatives to go into business for
themselves with minimal start-up capital and sell more "distributorships"
and merchandise
 Network marketing is growing rapidly, especially in emerging markets
• Avon and Mary Kay (cosmetics) , Amway (household supplies)
• Tupperware (plastic containers)
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 Television shopping

• Television shopping allows consumer to make a direct purchase without

leaving their armchair.
• In this product is shown in TV. in detail and orders are received through
mail, telephone ,fax or internet.
• Product is often delivered free of cost.
e.g Naptol.com

• Cutting of middlemen. • Consumers usually want touch and feel

the products.
• Convenience
• In case of goods like clothing etc. which
• Full range of products from electronics to
consumer wants to try will suffer.
ayurveda is available.
• Consumers can see the products and its
features.

Sky digital, TV shopping network, Gem shopping network, Food TV,Skyshopping

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 Catalogue Marketing

• This shopping is similar to internet • Product cannot be physically

shopping. seen.
• In this type of retailing a consumer • Reach is not that large as of
can shop from home with the help of internet.
catalogue of products.
• Poor mail distribution system in
• Modern mail order customers are India.
called “reluctant shoppers” i.e. they
dislike going shopping out. • Unable to gain enough customer
confidence.

PPT 2-33
 Answer the following question
Think

• Which of the store based retail formats discussed are most

vulnerable to competition from Internet retailers? Why? Which is
least Vulnerable? Why?
• Discussion forum

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