Sales and Distribution Management

Retailing : Overview

Based on the extent of ownership, retailers are classified as independent retailers, chain stores, franchise retailers, leased department and consumer cooperatives. Based on the type of store strategy, retailers are primarily divided into food retailers and general merchandise retailers. Food retailers include convenience stores, conventional supermarkets, superstores, warehouses, combination and limited-line stores. General merchandisers include specialty stores, department stores, full-line discount stores, variety stores, off-price chains, membership clubs, thrift stores and "flea" markets.

In non-store retailing, traditional retail stores are not used to sell products. Non-store retailers use direct marketing (catalogue marketing and direct mail), direct selling (person-to-person selling, party plans, multi-level marketing) and automatic vending machines to sell products to consumers. Non-traditional retailers use new channels such as the Internet, video kiosks, and video catalogues to promote and sell products. Another type of classification divides retailers into goods-based and services-based retailers depending upon whether they sell merchandise or services to consumers.

Retailers must address certain strategic issues to succeed in the highly competitive retail sector. Store location, store image, store size, promotional aspects and private store branding can be the cause of success or failure.

Over the years, the retail industry has witnessed many trends linked to environmental changes. These include competitive, consumer, technological and economic trends. These in turn have led to other retail trends like micro-marketing, global retailing, ethnic retailing, retail diversification and the emergence of new retail formats. The future of retailing holds a lot of promise for the Indian economy. The Indian retail market is estimated at Rs 8,00,000 crores by 2005. Over the past decade, some retailers have successfully established their operations in India. Market observers predict that the Indian market can easily handle retailers worth $ 1 billion. Due to the enormous costs involved in developing the necessary infrastructure and logistics, the extent of future growth, especially the organized sector, which is only 2 percent of the total industry, depends on the measures and support offered by the government.

Chapter 25 : Overview