Session Objectives Amity School of Business

• Classification of retail outlets by strategic mix (Food

& Groceries and Gen. Merchandise)
• Non-store retailing
• Characteristics of these different outlet types
• Their advantages and drawbacks
• Overview of these retail stores types in the Indian
context
 Amity School of Business

-FOOD ORIENTED RETAILERS-

 CONVENIENCE Amity School of Business

STORE
• Relatively small stores – 3000 – 8000 sq foot
• Limited variety and assortment
• High turnover convenience products
• Prices above average
• Long hours and 24/7
• ‘Convenience’ – location, traffic flow, billing
CONVENTIONAL Amity School of Business

SUPERMARKET

• Self-service
• Groceries, Meat/ produce & house hold
maintenance
•
 FOOD BASED Amity School of Business

SUPERMARKET
• Larger + more diversified than a conventional
supermarket
• 25 – 50,000 sq feet
• 2 0 – 25% revenue from general merchandise
• Carry full range of grocery
 COMBINATION Amity School of Business

STORE
• Supermarket + general merchandise
• General merchandise >= 40% of sales
• Identity of food + drug store: one stop shopping
• 30 – 100,000 sq ft
 BOX Amity School of Business

(LIMITED LINE) STORE

• Food based discount store
• Limited variety, services, stock
• Limited no. of national brands, more of private labels prices
20 – 30% below MRP
• Refrigerated perishables not available

Bargains in A
Box –
Wheeling,
USA
 Amity School of Business

Aldi Stores
Australia, US, UK, Europe
 WAREHOUSE Amity School of Business

STORES
• Warehouse showrooms
• Catalog showrooms
• Hypermarket
• Warehouse clubs
 HYPERMARKET Amity School of Business

• Scale is critical to their price model

• Supply chain plays a major role in this
• Wide assortment and depth of food products
• Stock fresh fruit and vegetables as well as staples
• Significant non-food product range as well, the
extent of which differs among retailers
• Focus on quality products and standards
• Prices discounted below market rates due bulk
sourcing and SCM
WAREHOUSE CLUB Amity School of Business

• Limited assortment of food and general

merchandise
• Often sell only large pack sizes
• Low prices
•
 Amity School of Business

THE INDIAN EXPERIENCE

• Convenience store
• Supermarket
 CONVENIENCE STORE Amity School of Business

• Refurbished neighbourhood stores/ petrol pump

outlets
• Average assortment
• 500-2500 SKUs
• Packaged staples
• Major FMCG brands
• Home delivery, STD/PCO
• Cash/Credit, but unlikely to accept Credit cards
• Uniform lookSUPERMARKET
and feel
Amity School of Business

• Wide assortment and depth

• Staples, limited fresh vegetables, and FMCG
products
• Offer both packaged as well as conventional options
for staples
• Lower prices due centralized procurement
• IT enabled
• Offer full credit facilities
 Amity School of Business

-GENERAL MERCHANDISE RETAILERS-

 Classification Amity School of Business

• Department Stores
• Discount Stores
• Specialty Stores
• Category Killers
• Off Price Retailers
– Close Outlet Store
– Outlet Store
– Single Price Retailers
• Flea Market
 Non Store Retailers
Amity School of Business

• Traditional Non – Store

• Traditional Non – Store
– Video Kiosks
– Video Catalog
– E-Commerce/ E-tailers
 DEPARTMENT STORES Amity School of Business

• Departmentalized operations
• Broad variety & Deep assortment
• Full range of services
• Emphasis on displays and layout
• Special Promotions
• Often the Anchor store
• Store size between 15,000 and 60,000 sq ft
• Stock between 20,000 and 50,000 SKUs
• Merchandise assortment and depth much less than
for international stores
 DEPT STORE Amity School of Business
DEFINITION (US)
• Must employ at least 50 people
• At least 20% of sales from apparel and soft goods
• Assortment must include furniture, home furnishings,
appliances, TV sets, family apparel, household linen,
dry goods
• If annual sales <US$10 million, upto 80% of sales
can be from any one line
 DEPT STORE Amity School of Business

Classification (US)
• US Bureau of Census
• Traditional Dept. Store
– Merchandise of avg. quality, above avg. price, minimum
customer service
• Full line discount Dept. Store
– Broad assortment, high volume, low cost, fast turnover
– Well known brands at competitive prices; usually pvt. labels for
non durables and well known for durables
– Centralized checkout, self service
– low cost model: low rent area, modes layout, equipment/
fixtures etc.
 DEPT STORE
Amity School of Business
LAYOUT

• Each department within the store has

– A specific selling space allocated to it
– A point-of-sale (POS) terminal to record a sales
transaction
– Specific sales personnel assigned to assist customers
• A department store is thus akin to a collection of
specialty stores
 Department Stores
Amity School of Business
- India

• Ebony
• Lifestyle
• Globus
• Pantaloon
• Pyramid
• Shoppers Stop
• Westside
 DISCOUNT Amity School of Business

STORE
• High-vol, low-cost, fast turnover outlet selling a broad
assortment for lower prices
• Full product range of dept stores
• Self-service, minimal assistance
• Pvt brands for non-durables
• Manufacturers brands for durables
• Less fashion-sensitive merchandise
• Functional layout
• Centralized checkout
• Vishal Megamart is an example of a general
merchandise discount store
 SPECIALTY Amity School of Business

STORE
• Concentrates on one goods or service line
• Carries a narrow but deep assortment
• Tailors strategy to selective mkt segments
• Enables dominance in chosen category
• Vulnerable to seasonality, or decline in category popularity
– APPAREL
– PERSONAL CARE
– AUTO SUPPLY
– HOME IMPROVEMENT
– ELECTRONICS
– BOOKS
– TOYS
– JEWELRY
– SPORTING GOODS
 CATEGORY
Amity School of Business
KILLERS

• These are very large specialty stores

• Enormous selection in chosen category
• Relatively low prices
• Self-service approach
• Wide geographic network of consumers
• Ikea is a global example of a category killer
Amity School of Business
 OFF-PRICE Amity School of Business

RETAILERS
• Low pricing for brand-name products – excess
inventory
• Inconsistent assortment, High inventory turnover
• Opportunistic merchandising: procurement during off
season/ deep discount/ less successful – not many
promotional offers
• Classification
– Outlet stores
– Close outlet retailers
– Single-price retailers
 OUTLET STORES Amity School of Business

Factory outlets – manufacturer owned

• Irregulars
• Production overruns
• Returned/ Canceled merchandise
• Liquidate excess inventory – quick cash flow
• Some examples in India are Raymonds, Indigo Nation,
Reebok, Nike factory outlet stores
Store outlets
• Excess merchandise
• Example is Pantaloon store outlet, Lindsay Street
Amity School of Business
 CLOSE OUTLET Amity School of Business

STORES

• Not restricted to any particular manufacturer or

store
• Have broad but inconsistent assortment of general
Amity School of Business
 Amity School of Business

SINGLE-PRICE
• Close outlet stores that
sell all merchandise at a
single price-point
• Typical price is $1!
• The Indian equivalent
are stores selling
products at Rs 99
 MEMBERSHIP CLUB/ WAREHOUSE
Amity School of Business

CLUB
• Whole sale centers – ‘Cash and Carry’
• Large stores, little/no advertising, wide aisle, plain fixtures
• Members –
annual fee,
large purchases

Costco, Sam’s
Club
 FLEA MARKET Amity School of Business

• Literal translation of French – marche aux puces

• Outdoor/ indoor facilities renting space to vendors offering
merchandise, services and other goods which satisfy the
legitimate needs of the customers
• Low investment, good assortment, discount prices, high
concentration of people, specific market days
Amity School of Business

Flea
Markets
 Service vs Goods Amity School of Business

Retail Mix
• Service Retail – Sale of an intangible activity which usually
cannot be stored/transported but fulfills the needs of the
customer
 Services without goods – hospitals, salons
 Services with goods
• Rental goods service (rent of consumer durables)
• Owned goods services (restaurant)
• Non – goods services (services provided by retailers to
customers shopping at stores, non – essential)
 Non Store Retailer Amity School of Business

• Traditional
– Direct Marketing
– Direct Selling
• Party Plan ( sales ppt to groups rather than individuals)
• Person to Person ( Eureka Forbes)
• Multilevel/ Network Marketing (Oriflame/ Amway)
– Vending Machines
– Catalog Marketing
– Telemarketing
– TV home shopping
– Airport Stores
 Non Store Retailer Amity School of Business

• Non traditional non store

– E- commerce (Web Based)
– M-commerce
– Video Kiosks: free
standing interactive
computer terminals
– Video Catalog: Catalog on
CDs
 Multi Channel Amity School of Business

Retailing
• Multi-channel retailing entails the parallel use by retailing
enterprises of several sales channels.
• Several store formats/ distribution channels used at the same
time
• Clicks/ Bricks & Mortar/ Sheets (mail)
– Wal-Mart
– Café Coffee Day
– Oriflame
 Rural Retailing Amity School of Business

• Rural Consumers - Concept of ‘Bottom of the Pyramid’

– Differences in Urban and Rural Consumers (in terms of Market
infrastructure, Demographics, Psychographics and Behavioristics -
usage patterns)
• Kashyap’s – 4A model for Rural Markets
– Availability, Affordability, Adaptability, Awareness
– Their impact on marketing mix strategies – especially promotion and
product development
• Initiatives by organizations – E-Choupal (ITC), Project Shakti
(HUL), Chotukool (Godrej)