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Retail Marketing

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Everything you need to know about retail marketing. Retailing has become such an intrinsic part of our everyday lives that it is often taken for granted.

The nations that have enjoyed the greatest economic and social progress have been those with a strong retail sector. Why has retailing become such a popular method of conducting business?

The answer lies in the benefits that a vibrant retailing sector offers—an easy access to a variety of products, freedom of choice, and high levels of customer service.

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Retailing encompasses selling through the mail, the Internet, door- to-door visits—any channel that could be used to approach the consumer.

When manufacturers like Dell Computers sell directly to the consumer, they too become retailers.

Learn about:- 1. Definition of Retail Marketing 2. Scope 3. Characteristics 4. Nature  5. Types 6. Factors Affecting 7. Infrastructure Constraints 8. Changing Structure 9. Security Issues.

Retail Marketing: Definition, Scope, Characteristics, Nature, Types, Factors Affecting and Security Issues


Content:

  1. Definition of Retail Marketing
  2. Scope of Retailing
  3. Characteristics of Retailing
  4. Nature of Retailing
  5. Types of Retailing
  6. Factors Affecting Retailing
  7. Infrastructure Constraints in Retailing
  8. Changing Structure of Retailing
  9. Security Issues in Retailing

Retail Marketing – Definition: According to the American Definition Committee and William J. Stanton

Retail marketing involves managing marketing activity in the retail sector. Retailing is where the purchase is intended to be consumed by customers through personal, family or household use, and involves – 1) retail stores or 2) non-store retailing. Retail stores include the large mixed retailing department and variety stores – hypermarkets, superstores and supermarkets, discount sheds, traditional speciality shops, etc.

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Non-store retailing is the selling of goods or services outside the confines of a retail facility through mail order, in-home retailing or increasingly via e-commerce. The growth of the Internet and dot(dot)com businesses has increased the use of direct marketing by retailers, many of which do not require retail stores.

According to the report of the Definition Committee, America, “Retailing includes all activities incidental to selling to the ultimate consumer”.

In the words of William J. Stanton, “A retailer or a retail store is a business enterprise which sells primarily to the ultimate consumers for non-business use”.

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Retailers purchase products for the purposes of reselling them to consumers in order to make a profit. Mail order and automatic vending are also classified as a part of retailing. Retailers provide – 1) place utility, by having products where consumers want to buy them; 2) time utility, by trading at times when consumers want to buy; 3) possession utility, by facilitating transfer of ownership or use of products to consumers; and 4) form utility, retail services such as hairdressers, dry cleaners or restaurants, etc.

Retail stores tend to cluster together in order to attract sufficient customer traffic, in traditional town centres (central business district) locations, suburban shopping centre, edge- of-town, on retail parks or in retail villages.

Retailing includes all the activities involved in selling goods or services directly to final consumes for their personal non-business use.

The word ‘retail’ has come from the French expression retailer which means to cut again. A retail store is viewed as one that cuts off small portions from big lump of goods. In this sense, ‘retailing’ is just the opposite of ‘wholesaling’ which comprises sale in bulk. But retailing is also the last link in the chain of distribution of products from the manufacturers to the consumers.

The words ‘retailer’ and ‘retailing’ have been aptly described by Stanton as follows:

Retailing includes all activities directly related to the sale of goods or services to the ultimate consumers for personal and non-business uses. While most retailing is done through retail stores, it may be done by any institutions. A manufacturer selling cosmetics door-to-door is engaged in retailing as much as a farmer selling vegetables at a roadside stand.

Any firm —manufacturer, wholesale or retail store —which sells something to ultimate consumers for non-business use, regardless of how it is sold (by person, telephone, mail or vending machine) or where it is sold (in a store or at the consumer’s home) is making a retail sale.


Retail Marketing – Scope

Retailing has a very wide scope. It is one of the fastest growing industries in India and is providing employment opportunities to many people. Retailing provides employment in two ways. Firstly, it provides entrepreneurship opportunities to the people and secondly, it provides employment to so many people who cannot own the retail stores.

With the increase in the purchasing power of the people and the rural reach of the retailers, the scope of retailing has increased manifold. The scope of retailing can be viewed from the two viewpoints. One from the retailer’s, i.e., the entrepreneur’s perspective and the other from the employee’s perspective.

1. Retailer’s Perspective:

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From the retailer’s perspective, retailing can include anything that the retailer wishes to sell. It may be goods or services. These may include goods such as mobiles, computers, electronics, readymade garments, textiles and clothing, jewellery, books, paintings, medicines, stationery, watches, or may include services such as catering, hospitality, hospitals etc.

However, in certain cases permission in form of license is required to be obtained from the government. In such cases the retailer will have to comply with all the legal formalities before starting a business. For example, a license is required to operate a chemist’s shop. Hence, the retailer must possess the required qualifications and hence may apply for the license.

2. Employee’s Perspective:

Retailing has provided tremendous opportunities of employment. The retailers operating at a small level required small number of employees to help them in business. These employees were appointed as salesmen, cleaners, cashiers, etc. by the retailers. But with the increase in the scope of operations and the growth of retailing, there has been tremendous change in the industry.

Now the retailers operate at bigger levels having separate departments for everything such as finance, marketing, advertising and sales, human resource development, etc. Hence, the retailers provide enormous opportunities to the employees.

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The following are the areas where the scope of retailing can be seen from the point of view of the employee:

i. Purchase Department:

The purchase department is responsible for making all the purchases for the business. It includes the selection of the merchandise to be sold to the customers, their price range, the selection of the vendor from whom the purchases are to be made, etc.

This department requires vast amount of efforts and includes a lot of paper work, telephonic conversation and travelling. The employees working with this department should be well conversed having good amount of knowledge about the industry as well as the vendors. They must be able to take quick decisions.

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ii. Finance Department:

The finance is the life blood of any organization. The finance department performs the functions such as making and compiling the financial records, allocation of finance to various departments, management of finance, arrangement of finance, controlling the cash flow, managing the banking as well as investments, deciding the credit allocation, etc. Sometimes a retail audit may also be conducted by the finance department.

iii. Marketing and Sales:

The marketing department includes various activities such as sales promotion, advertising, public relations, etc. These activities are extremely important from the view point of reaching the customers. The marketing department is responsible for conducting extensive market research and understanding customer requirements.

The people required in marketing department should be well conversant, having proper knowledge about the product, any they must be able to convince the customer to buy the products. They should also be capable of understanding the customer’s requirements and act accordingly.

iv. Stores:

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The stores department is responsible for storing the goods. The store’s manager should ensure that at every time the inventory is maintained at proper levels so that there is no shortage of goods. At the same time the department should ensure that too much inventory may cause problems of storage, obsolescence, wear and tear, etc. So the store’s manager must always keep an up to date record of the inventory and ensure uninterrupted supply of materials.

v. Human Resource:

The human resource department is responsible for the recruitment, selection, training, induction etc. of the employees. Human resource is a human centric industry. The people required in this department must be able enough to understand the requirements of the people in the organization and must be able to stop the efficient employees from leaving the organization.

vi. Technology in Retailing:

Retail industry in India is in a mature stage and is a very confident user or information technology. The industry is using technologies such as Electronic Data Interchange (EDI) which is used to electronically transfer the information through computers. Database Management, Data Warehousing and Data Mining are the techniques that are used to gather information about the customers and store them for future use.

Data Mining helps in customer relationship management. Radio Frequency Identification System (RFID) is used for supply chain management. The concept of e-tailing is continuously gaining ground in retailing. It includes the use of internet for selling the goods.

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vii. Supply Chain Management:

Supply Chain Management means managing the supply of materials, services and information along the supply chain. Managing the resources efficiently and effectively increases profitability of the business. Supply chain is managed by using information systems.

Thus there are many areas where retailing can provide employment to the people. Therefore it can be concluded that the scope of retailing is very wide. One can engage himself as an entrepreneur or can join the sector as an employee depending upon his skills and finance, etc.


Retail Marketing – Characteristics

Retailing has a number of characteristics which are specific to it and make it a distinguished activity in the process of marketing. Retailing is a part of value chain and the process of marketing is not complete unless retailing takes place. Location is most important factor in retail business since it has to come into direct contact of innumerable consumers spread in the area.

The number of retail units are large enough since it has to ensure the accessibility of consumers in their close vicinity. The number depends upon the size and intensity of population along with the topography of the area. The identification of a proper location is difficult and establishing the store is costly business.

The decision of location depends largely from the consumer point of view as against the economics and other rational factors. The number and size of retail store is determined by the needs and convenience positioning of the customers, the potential demand of products, supply of merchandise and positioning and image of the retail unit.

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Direct contact with customers is another important feature of retailing. Retailer has a direct interaction with the ultimate customer of product. The producer of the product might be located far away even in other country but the retailer has to be near the customer by any means.

Retailer is in direct contact of the customer and has to communicate with him. Therefore the cultural factors, language, tone, style and mode of communication are to be devised in consideration of the customer. A retailer thereby serves both the customers and producer since he is the promoter and advertiser of the product and can influence the total sales in a big way.

Promotional activities are performed by the retailer to a vast number of customers. In spite of various promotional measures, advertisement, propaganda and publicity, a large number of customers are unaware and uninfluenced by the product. Ultimately they are guided by the retailer who provides information about features and quality of the product, convince them and persuades them to buy a particular product.

A number of customers are influenced by the display, presentation, posters in the retailer store, at the time they visit the shop store since they do not have any fixed shopping list, a fixed brand preference, a pre- determined need. The purchase in a number of cases is impulsive, unplanned and situational.

Here, the displays, lay out of the store, categorization and assortment, visibility and marketing tactics of the seller play critical role particularly in products which are purchased in a small quantity, low priced and quickly consumable. Fashion products are sold in the similar manner in a big way. The role of retailer is critical here.

The average quantity of sales of products is relatively small as compared to wholesaler or producer. Mostly retailer sales products for household consumption. Many products are bought on daily, weekly or monthly basis. Thus the numbers of transaction for retailer are high with a low volume. This is a tremendous task since every day a large number of customers are to be handled by the retailer and a number of products are sold. The retailer has to maintain a reasonable stock of various products and the inventory management is critical here.

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A number of activities are involved in the retailing. Besides behaviour of the seller, the packaging, timely service, credit verification, gift wrapping, convenient delivery, facility of buying back, prepare to change, various provision of guarantee and warrantee are involved in retailing. The customer orientation is critical factor in retailing.

The retailer’s service many times is more important than the brand, quality and loyalty of the product. It is the loyalty and trust of the retailer which is more important. The growing world of retail has many features, where merchandising behemoths are no longer confined by domestic boundaries.

According to the 2003, Global Powers of Retailing report by STORES magazine and Deloitte Touche Tohmatsu, four years ago more than half of the top 200 retailers in the world operated in only one country. That number has since dropped to 44 and by 2008 that has gone down to 30.


Retail Marketing – Nature: Part of Marketing, Customer Centric, Multi-Dimensional, Varying Geographical Locations, Transformational and a Few More

1. Part of Marketing:

Retailing is a part of marketing activity. It helps the product to reach the final customer. This is also the goal of marketing. Thus retailing facilitates marketing activities by targeting a wide variety of customers.

2. Customer Centric:

The whole concept of retailing revolves around the customer. Due to increased competition, all the retailers want to attract the customers. Retailers use various sales promotion methods such as discounts, etc., to lure the customers.

3. Multi-Dimensional:

Retailing has many dimensions. They vary from local kirana shops and kiosks to super malls selling multiple branded products. These days there is a manifold increase in the use of internet for buying and selling the goods.

4. Varying Geographical Locations:

The geographical area of reach of retailers varies widely. It may vary from a local area market selling goods to local customers only to super malls who have a large variety of customers from different areas and even different cities. These days due to the increased use of internet, the retailers have customers from all over the country and even from abroad.

5. Transformational:

Since the start of retailing as a full-fledged business, there have been huge transformations in it. These transformations generally are in the form of objectives of retailing (earlier profit driven, now customer focused), methods of retailing (from simple retail shops earlier to multi brand malls), the areas covered (earlier small areas now whole country or even other countries), the customers (from simple local customers to customers from all walks of life) etc.

6. Complex Management Process:

Retailing seems like a simple process. But in reality it is a complex management process. Retailing involves retail stores being located in convenient places, arranging goods according to different price bands, selling goods in the quantities convenient to the customers, proper after sale services and a wide range of sales promotion measures to attract the customers. Thereafter, there should also be proper Customer Relationship Management (CRM) programmes to maintain long healthy relationships with the customers.

7. Assortment of Products and Services:

Retailing involves a combination of goods and services. It is not at all possible for a retailer to survive in today’s world by offering just a single product. In order to be successful, a retailer needs to offer an assortment of goods and services. For example, a baker cannot survive just by selling a few cakes and biscuits. In order to survive in the competitive market, firstly, a baker needs a proper environment called ambience which is pleasing to the eyes of the customer.

Secondly, he needs a variety of cakes and biscuits and other products. Along with that he also needs to keep some confectionery items which people are likely to buy along with the main products such as chocolates, cookies, chips, cold drinks, patties, burgers, hot dogs, etc.

Apart from these items people may expect him to keep a few items such as birthday and anniversary candles, party poppers, decoration items etc. After these products, people may also expect him to take the orders on phone and home-deliver the items purchased. Thus it can be easily said that retailing is an assortment of various goods and services.

8. Studying Demand Pattern:

A retailer is required to study the current demand pattern of the products being offered by him in the market. By studying the demand pattern he can ascertain the quantity of goods he needs to buy in bulk from the wholesaler. In case he buys a huge quantity of goods without studying the demand pattern, he may have to face the risk of obsolescence of goods. Moreover, large stocks need large areas for storage. All these have to be arranged by the retailer.

9. Creation of Utilities:

A retailer helps in creation of time and place utilities. Time utility is created when goods are made available at a particular time. The retailer creates time utility by storing the goods with himself and makes them available to the customers as and when needed. Place utility means making the goods available at different places away from the place of manufacture. Retailers make the goods available to the customers at various locations away from their manufacturing locations.

10. Private Branding and Labeling:

The spurt in the retailing activity as resulted in creation of private brands. Private branding or labeling means buying products directly from the manufacturer and giving them own brand name by the retailer. With the increase in retailing there has been an increase in the exclusive retail stores selling products of particular brands only.

For example, Big Bazaar, Food Bazaar of Future Group; Reliance Trends, Reliance Footprints, Reliance Fresh, etc., are some of the divisions of Reliance Retail Ltd. which is a subsidiary of Reliance Industries. According to a Neilson study food continues to dominate the private label market at 76 per cent of total sales. Packaged grocery dominates this market with about 53 per cent share of total sales.

Many retailers have customized their products according to the local tastes and preferences of the masses. For example, seeing the large demand of lemon water and lemonade in the Indian masses, PepsiCo has developed Nimbooz by 7up.

11. Various Other Services:

Retailing also includes various other services.

These services include:

(i) Providing Finance to the Customers:

Many people cannot afford to buy costly products by paying a lump sum amount. In the absence of finance these people have to keep themselves deprived of the use of such things. Retailers solve this problem by providing easy finance terms such as zero interest payment to their customers. By doing so, they increase their customer base. Example, providing finance for refrigerators, cars, mobile phones, furniture etc.

(ii) Providing after Sale Services:

Retailers also provide various after sale services such as free home delivery of the goods, free gift wrapping, etc.

(iii) Installing the Products:

Retailers help their customers in installing the items they have purchased. For this purpose they keep technicians and specialists with them. Example, installing electric chimneys at customers’ place.

(iv) Display and Demonstration:

The display and demonstration of the goods also affect the buyers’ decisions. Thus, retailers specially display and demonstrate their products according to the customers. Example, decorating specially according to various festivals to attract the customers.

Thus it can be said that retailing is a complex, multi-dimensional, transformational activity involving a variety of activities such as targeting customers, studying their demand patterns, dividing the product into small segments, attracting customers by providing various discounts, redemption points, loyalty bonus, coupons, free gifts, etc.

Apart from these, retailing doesn’t end with the sale of goods. It also includes various after sale services like providing finance to customers, etc. Thus, it is very important to understand the nature of the retail market.


Retail Marketing – 3 Major Types: Store Based, Non- Store Based and Services Retailing

Type # 1. Store Based Retailing:

A store based retail model means there is a place where the retailing activity is carried out physically. It means there is a physical place where such activity is carried out.

Store based retailing can be further divided into two parts:

(1) On the Basis of Ownership; and

(2) On the Basis of Goods Offered.

(1) On the Basis of Ownership:

(i) Traditional Retailer:

This is the oldest form of retailing that existed in any economy. It has provided a base for all the other retail formats to develop. The traditional retailer owns a single retail outlet. He generally specialises in a single type of good. The business may vary from a local kirana shop to a paanwala shop, from a ready-made garments shop to a jewellery business.

The business is owned and managed by the proprietor himself or a group of family members. The business generally passes on from one generation to another. Generally, these businesses enjoy great amount of goodwill and have personal contact with the customers. On the contrary, these businesses cannot take advantage of mass production and enjoy economies of scale. They are very popularly known as ‘morn and pop shops’.

(ii) Chain Stores:

Chain stores are characterized by same brand name and same management, i.e., there is common ownership of one or more retail outlets. These stores are same in terms of goods offered for sale, the outlook of the store, the prices and the ambience. They enjoy the benefits of common sales promotion and advertising campaigns.

(iii) Franchise:

It is a contract between two parties, the franchiser and the franchisee, whereby the franchisor allows the franchisee to use his product, service, brand name or trademark to carry on the business, in return for some fees or compensation as defined by the agreement. The franchisee is given a specified geographical area for a pre-defined period of time.

(iv) Consumer Co-Operatives:

It is owned and managed by a group of customers generally who are dissatisfied with product offerings. The basic motive of such consumer cooperatives is mutual benefit. These retail outlets have limited capability of growth as the amount invested in it is very limited. A group of customers who manage this outlet contribute to its capital also.

(v) Leased Departments:

The leased department means, when one company or a retailer carries on the business within the premises of another company or retailer. Very popularly this concept is known as shops within shops.

The owner of the shop leases out or rents some portion of his shop to another person for money. It is very common practice for jewellery counters, opticals, cosmetics and perfumes. The benefit of such leased departments is that the person who wants to sell his products may do so without having to arrange very costly shops on rent.

(2) On the Basis of Goods Offered:

(i) Convenience Stores:

These stores provide a range of everyday items to the customers such as groceries, ready to eat snacks, milk, eggs, bread, biscuits, newspapers, etc. Generally the location of convenience stores is such that they are convenient for the customers to reach. Some convenience stores operate for twenty four hours also. 7-Eleven is a famous example of convenience stores.

(ii) Specialty Stores:

Specialty stores offer a particular type of product to the customer. They are exclusive stores that offer a particular type of product within a particular product line but within the same product line there is a wide variety of goods being offered. Specialty stores a suitable for the customers having some kind of brand preference. Specialty stores focus on jewellery, apparels, furniture, electronics, etc.

(iii) Departmental Stores:

A departmental store is a retail establishment that provides a range of products to the customers. The store is divided into various departments such as personal care and cosmetics, books and stationary, housewares goods, electronics, etc. The departmental store provides a wide range of goods to the customers under one roof. These stores are generally large in size and owned by large chains. Examples are Shoppers Stop, Ebony, etc.

(iv) Off Price Retailers:

These retailers provide high quality goods at cheap prices. This type of goods when sold by the manufacturer himself directly to customers is known as factory or seconds outlets. They sell second hand goods, off season products at cheap prices. The goods sometimes have minor defects or may be of odd sizes (very big or very small in size). Example- Bata Factory Outlet, Monte Carlo Factory Outlet, Nike Factory Outlet, etc.

(v) Catalogue Showrooms:

A catalogue showroom is one in which the goods are not displayed. There are various catalogues kept for products. The customer chooses the product from the catalogue and then fills in the order form and deposits it at the sales counter. At the sales counter, the sales clerk arranges for the product to be brought from the warehouse for inspection and purchase.

It is very common practice for jewellery, electronic items (housewares items such as washing machine, televisions, air conditioners, etc.). These days many designer clothes are also sold through catalogue showrooms.

(vi) Super Market:

Super markets are big self-service stores providing a wide range of products such as groceries, food items and some non-food items such as household goods, health and beauty related items, etc. Generally super markets provide cheap products to the customers. Examples- Easy Day, Nilgiris, Reliance/Fresh, etc.

(vii) Hyper Market:

A hyper market is a combination of a departmental store and a super market. Thus hyper market offers a huge variety of goods and services ranging from stationary items to groceries, from kitchen ware to electronic appliances, from furniture to jewellery, etc. It therefore provides a one stop shop to the customers.

A hyper market usually offers huge discounts to the customers. The structure of the hypermarket resembles that of a huge warehouse and has a lot of parking space. Example- Big Bazaar, Best Price, Savemax, Hyper City, Vishal Mega Mart, WAL-Mart, etc.

(viii) Shopping Mall:

A shopping mall is a retail establishment whereby there is a combination of branded stores, food court, entertainment zones including gaming zones, movies and parking facilities. This is the modern concept of retailing whereby the owners of the shops pay rent or lease to the developers of malls. They occupy the place in the mall as tenants. Examples of malls are Ambience Mall, Gurgaon, Elante Mall, Chandigarh, etc.

(xi) Kiosk:

A kiosk is a small shop generally seen at malls, airports, railway stations, bus stands, etc. They offer some specialised services or goods to the customers. A kiosk can be one side or two sides open. At some places, there are automatic vending machines, which are not operated by human beings. People have to just put in the money in the machine and request the desired item. The item comes out of the machine just like money comes out of the ATM.

(x) Discount Stores:

A discount store is a retail establishment that provides goods to the customers at discounted prices. Generally the merchandise offered by these stores is broad but these stores provide limited services to the customers. They operate as low price retailers.

Type # 2. Non-Store Based Retailing:

Non store based retailing means a retail format that is not confined to the walls of a particular area. Rather, due to non-store based retailing the companies are able to expand their customer base.

The non-store based retailing can be further divided into two parts:

a. Direct Selling:

Direct Selling is a retail format which as the name suggests is a form of selling which involves personal contact with the customer.

Further it can be divided into three types:

(i) Party plan in which the seller invites his friends, neighbors and other acquaintances to his home for a party and displays the goods there. People see the displayed goods and buy them,

(ii) Multi-level network where there is a network of people who further appoint other people to work with them for distribution of goods for a commission. Many cosmetics selling firms are largely using this multi-level networks to sell their products, and

(iii) Door to door selling where the salesmen are sent door to door to sell the goods to people. Sometimes this form of selling becomes a part of academic curriculum and helps to train students to sell their products.

Mainly the articles like books, housewares items, kitchenware items, cosmetics, imitation jewellery are sold by this method. Tupperware and Amway use this method of selling their products.

b. Distance Selling:

Distance selling involves use of electronic commerce very popularly known as e-commerce to sell the goods to the customers. These days due to the busy lives of people, this form of retailing is increasingly gaining ground. The people are informed about the product either through e-mail or telephones, or through internet sites or television.

Type # 3. Services Retailing:

Services retailing means selling various kinds of services to the customers such as banking, insurance, taxies, hospitality services, etc. The retailers of these services these days are increasingly making use of internet to reach the customers and broaden their customer base.

A customer in any part of the country or even in any part of the world may book his taxi in advance. A person sitting at home can book movie tickets and even select his seat by using internet. Banks and insurance companies are making use of internet technology to offer more innovative products to their customers.

Organised and Unorganised Retailing:

In the recent years the debate of organised as well as unorganised retailing has gained ground in India. This debate is in relation to the introduction of Foreign Direct Investment (FDI) in retailing. To understand all this, it is important to understand the concept of organised as well as unorganised retailing.

i. Organised Retailing:

In the past few years the concept of organised retailing has also gained ground in India. It is a sector which has tremendous growth potential due to the favourable business environment and government policies. The organised retail includes big shopping malls, big complexes offering huge variety of branded goods and services. They provide quality products and try to provide value for money and make shopping a memorable experience.

This type of retailing is known as organised retailing due to the fact that the trading activities in this sector are registered under some or the other act such as Sales Tax Act, etc. Due to this reason, the activities are guided by the provisions of the act under which a particular business is registered.

The scope of organised retailing is much wider as compared to unorganised retailing. It is more modern as well as customer centric in its approach. Such type of retail uses advanced technology for Management Information System (MIS), Supply Chain Management (SCM), as well as Customer Relationship Management (CRM).

ii. Unorganised Retailing:

As the name suggests the unorganised retailing is the kind of retailing that was traditionally prevalent in India. It is the kind of retailing which does not follow any statute or legal provisions and hence is not under the compulsion to maintain proper accounts.

The retailers in organised retailing are small business operators who lack technical and accounting standardisation. Generally the products sold by these retailers are unbranded and the materials are acquired locally by using personal contacts.

The types of retailers operating in unorganised sector are local kirana shops, pavement vendors, mobile vendors, etc. Therefore the products and services may be sold at fixed locations or the vendor may be mobile. The examples of the retailers operating in an unorganised sector are the local cloth merchants, the vegetable vendors, the grocers, the vendors selling clothes, toys, at the pavements, etc.

The maximum of the retailing business in India traditionally came from unorganised sector. Presently also the organised sector continues to dominate the retail landscape in India primarily in the small cities and towns.

The unorganised retailing provides employment to many people in the form of salesmen, helpers, etc. But as compared to the organised retailing, the employment generation capacity of the unorganised sector is much less. Moreover, the products and the services being sold by them may not be comparable to international products and services.


Retail Marketing – Factors Affecting: Store Location, Store Ambience, Variety, Store Layout, Demographic Factors, Add on Services, Behaviour with Customer and Few Others

A variety of factors have a bearing on the retail businesses. These factors irrespective of the geographical area affect the retailing business to a great extent.

These are:

Factor # 1. Store Location:

The location of the retail store has a great degree of influence on the success of the business. The retail store located in a busy market has much more chances of success than the ones located in isolated places. Since selection of the store is a kind of permanent and irreversible decision, great care must be taken while selecting it.

Factor # 2. Store Ambience:

Ambience means the atmosphere of a place. The ambience of the retail store must be such that it attracts the customers and soothes them. Generally the chain stores have same ambience irrespective of their locations.

Factor # 3. Variety:

The customer to a large extent is attracted by the variety of the articles kept in the retail store. Every customer expects a variety of goods of latest fashion from the retailer. The retail store having a large variety of articles is likely to attract a large number of customers.

Factor # 4. Store Layout:

The store layout means the management of the articles in the store by the retailer. It includes arranging of the goods properly, keeping the same goods at one place, keeping the store neat and tidy with clean surroundings, arranging for proper display of goods in show windows and shelves, etc.

The store layout is an impression of the store on the customer and it impacts the customers’ decision to enter the store. It also impacts the productivity of the employees positively since they are very clear about the location of the articles and hence find no difficulty in showing them to the customers. Thus a store which is properly managed attracts customers.

Factor # 5. Demographic Factors:

There are a number of demographic factors which affect the retail business.

These are:

(i) Consumption habits of the people- The consumption habits of the prospective customers must be studied properly before starting the retail business.

(ii) Family structure- The family structure also impacts the retail business. The family structure may be joint or nuclear.

(iii) Number of working women – The number of working women also affects the retail business. If the number of working women is more, they are likely to spend more than the housewives and vice versa.

(iv) Consumption habits – The consumption habits of the people affect the buying decisions of the people. If people are in a habit of buying branded goods, then a retail store selling a variety of branded products is more likely to succeed.

Factor # 6. Add on Services:

Add on services imply the extra services provided by the retailer to the customers in addition to the normal goods being offered for sale. These extra services may be in form of financing facilities on articles being purchased, free home delivery services, after sale services, free gift wrapping, loyalty programmes, etc.

Factor # 7. Behavior with Customers:

The behaviour of the retailer and his employees with the customers also affect their sales volume. A person who is very courteous towards his customers and is keen to listen to them is more likely to attract the customers than others.

Factor # 8. Socio Cultural Environment:

The socio cultural environment of any area affects the retail business. The retail business needs to follow the socio cultural and the moral values of the people in the area where it operates. Thus all these factors must be considered properly for the success of the retail business.


Retail Marketing – Infrastructure Constraint: Logistic Problems, Weak Supply Chain, Ever Increasing Fuel Price, Lack of Understanding and a Few Others

Inspite of reiteration of special focus on infrastructure in the country by policy makers, still the country is lagging much behind to developed countries. Currently, highway network of less than 2% bears 40% of the traffic. The State highway network is of limited length. The completion of “Golden quadrilateral” is still a distant goal Transport connectivity is a serious problem.

i. Logistic Problems:

Retailing has always facing this problem even in advanced countries. The lack of distribution channels linking towns other than Class I is a big constraint. Absence of linkage with local logistics centres is a major bottleneck. Due to increased rip-off the operational cost increases. The CMIE estimated that the total cost of logistics in the country is somewhere between 10% and 12% of the GDP.

ii. Weak Supply Chain:

Information Technology (IT) can help achieve great benefits in terms of the agility and visibility of the information flow. But increased systematic coordination across company borders alleges the greatest demand for the IT to be successful.

The problem is very crucial in India. India has 97% unorganized retail market.

Unorganized business means that the demand and supply is made on an ad-hoc basis by each player of the supply chain thereby creating uncertainties in demand. Almost 50% of the fruits and vegetables produced in India are lost in the supply chain.

In tonnage terms, this is almost the amount that is consumed in Great Britain. However, systematic implementation of Information Technology to improve the inventory management can make a very big difference in the present time.

Maintaining the desired level of inventory is the most critical task before a retailer. The diversity of Indian customers, cultural variations and lack of distributional channels are responsible for rise in cost of inventory. Most of the retailers in India have inventory turns level in the range of 4-10% turns and stock out level between 5% and 10% as against the average inventory turns level of 18% and stock out level of less than 5% in US. Globally supply chains are fairly mature and efficient. This gives the retailer opportunity to improve profit margins without charging high price.

iii. Ever Increasing Fuel Prices:

The frequent hike in fuel prices affect the price of retail goods since good transport is major factor in the pricing process. The wide geographical area of the country multiplier the effect of hikes in fuel prices. The organized retail is affected adversely because of this.

iv. Lack of Understanding:

In India, the supply chain is made up of the Supplier, Wholesaler, Distributor, Retailer and Consumer. The Supplier supplies the merchandise as per the orders received/ perceived. The Supplier also does the function of warehousing and dispatching of the finished products.

Distributors provides distribution service by processing, executing the orders and providing after-sales services. Clearing and Forwarding Agents (C&F) perform all the distribution functions. Distributors also function like C&F agents, with the only exception that they raise their own invoice and collect the dues.

It is common that the supply chain is plagued with buffer inventories adding to the cost IT infrastructure has developed rapidly, and it has the potential to bring the agility and visibility in the supply chain by passing on the information quickly between different players. Strategic implementation of IT can improve (though not eliminate) the demand and supply imbalance.

v. Lack of Supplier Integration:

In India, the retailers and suppliers operate distinctly without any integration. The retailers still are collecting information from their suppliers manually whereas in developed countries there is system of Vendor Managed Inventory. In this system, suppliers have access to the sales data of the retailers and thereby they plan automatic replenishments responding to the stocks available with the retailers. A Survey by KPMG confirmed that 100% retailers exchange such information manually.

vi. Lack of Vertical Co-Operation:

Contemporary retail business is chain oriented; therefore synchronization of demand and supply becomes a core question. The problems with the traditional vertical co­operation between organizations are manyfold. Instead of co-operating, actors dependent on each other have been seeking to achieve cost reductions or profit improvements at the expense of someone else in the supply chain.

Companies engaging in transferring costs upstream or downstream arguably do not realize that such strategies will not make them more competitive, as all costs will ultimately make their way to the market in the form of increased end consumer prices. This understanding has to be developed which will take time.

vii. The Demand Invisibility:

The demand invisibility, long lead time, poor synchronization of supply and demand, leads to the demand distortion. Supply chain in India is badly adapted to provide sufficient service even to the key segments of the product range. The other critical problem is that supply is discontinuous, even for some Fast Moving Consumer Goods (FMCG)!

The increase in variability throughout the supply chain is partly a result of delays in information flow and miscalculating changes in consumer demand. The accumulation or draught of buffer stocks affects the order levels in each echelon, thus further delaying and distorting the information on changes in demand.

viii. Supplier Maturity and Relations:

The problems from supplier side are many. The problem of on time delivery and in the required quantity is serious with Indian Suppliers. The services rendered by them are poor and need much improvement. The relationship between supplier and retailer also plays key role in this and Retailer finds regular supply a difficult task. Still suppliers are not mature and professional.

ix. Availability of Skilled Manpower:

This is a big problem before many sectors including retail. Retail sector is labour intensive and manpower with various skills are needed. In advanced countries such shortage is not witnessed and a large number of people are engaged in it e.g., in US 10-11% of the workforce is engaged in Retail whereas in India this share is between 7-8% only and that too is not fully equipped to meet the needs of the sector. There is a dearth of expertise in both at store level and managerial level.

x. Real Estate Costs:

The cost of real estate in India is soaring high since last few years. It increases the fixed cost with small contribution per sale for retailers. Entry of retailers has further pushed the cost of real estate in metros and cities.

xi. Low Adoption and Use of Technology:

Information Technology (IT) can help achieve great benefits in terms of the agility and visibility of the information flow. The problem is very crucial in India. India has 97% unorganized retail market. Unorganized business means that the demand and supply is made on an ad-hoc basis by each player of the supply chain thereby creating uncertainties in demand. Almost 50% of the fruits and vegetables produced in India are lost in the supply chain. In tonnage terms, this is almost the amount that is consumed in Great Britain.

However, systematic implementation of Information Technology to improve the inventory management can make a very big difference in the present time Inspite of globalization and availability of high level technology in India, the Indian retailers are not tech savy as compared to their counterparts in advanced markets. The big retailers like Wal Mart are using Radio Frequency Identification (RFID) which helps in providing inventory visibility of higher magnitude and hence, makes the inventory management easy and efficient.

As against this, the Indian retailers have not even completely adopted the bar code system. The technology is big challenge before the Indian retailers. Indian retailer with millions – or hundreds of millions of transactions per period face significant technological difficulties in performing activity-based costing and other forms of profit analysis essential to understanding the details of what drives the business, to focus on continuous profits and performance improvement.

xii. Lack of Information:

In India, the enterprises are helped more with information about input supply like finance, skills and technology and less, as compared, with information about output demand like new and existing customer’s needs. It is at this point of retail that a customer demand gets converted into a sale.

By virtue of the location in the distribution chain, retailer is the most informed and qualified person to give information about the products. Retailer is very important for ensuring product availability and pre-call research and is also important for drawing up a good brand matrix.

xiii. Chaos in Supply Chain:

The existence of chaos in a supply chain also means that it is impossible to make the right decisions for every player in a supply chain. The risk of making the wrong or ineffective decisions becomes the inevitable consequence and the supply chain is exposed to market risks.

Thus, missing the market opportunities, a, supply chain cannot be responsive to changing market trends and customer preferences if the right market signals cannot be obtained. Finally, market opportunities can be missed when customer orders with short order lead times cannot be met.

xiv. Regulatory Provision:

Indian economy despite liberalization and globalization is still under several controls and regulations. The retail sector is witnessing facing several problems from regulation side. A number of Acts and provisions obstruct the smooth functioning and operation of retailing.

A number of provisions such as FDI restrictions, entry of foreign players, application of Agricultural Produce Marketing Committee Act which presupposes that even small quantity purchases have to qualify like a wholesale deal, etc. are the challenges before retail sector.

xv. Disparities in Culture and Taste:

This is perhaps the most critical factor since India is a country of diversity. There are differences in cultural preferences and tastes of people, festivals and ceremonies. There is no match with global culture. All these put a great challenge before a retailer since it requires inventory of various types of things. The MNCs face various problems and they have to come up with customized products.

xvi. Concerns over Indian Retailers:

The organized sector faces stiff opposition from unorganized sector. Similarly foreign retailers are looked from suspicion. The smaller ones are scared that big retailer will capture their market share. There is another apprehension that the organized retailing will affect the general mass adversely. It will lead to unemployment to traditional retailers and will destroy the social fabric. There are about 15 million small shops serving the customers of the country.

The Indian retail sector is required to take on challenges from global retail players such as Wal-Mart and Carrefour. Indian retailers have an advantage since unlike global retailers; they have a better understanding of the Indian consumer’s psyche. Ultimately, a successful retailer is one who understands his customer.

xvii. Globalisation a Challenge:

Globalization of the market and India considering the opening of the Foreign Direct Investment (FDI) in the field of retail, has increased suppliers, manufacturers, brands, distribution and logistics partners. This has resulted in complex international supply network relationships. Mistrust and distorted information throughout the supply chain. This increased links lead to higher costs and inefficiencies through over-ordering inventory and then ordering too little.

xviii. Psychology of Indian Consumer:

The Indian customer is different from customer of advanced countries. He is looking for an emotional connection, a sense of belonging. Hence, to be successful any retail outlet has to be localised. The customer should feel that it is a part of his culture, his perceived values, and does not try to impose alien values or concepts on him.

Indian customer is not keen to buy something just because it is sold by an international company. Ultimately, it depends upon the degree to which a global retailer goes for localisation and adapt Indian psyche. Other than tremendous size, global companies have nothing extra or special that the Indian retail business does not have.

Indian Retailers today face various and complex challenges and barriers to success, they must compete globally and sell products locally, catering to the distinct and fast-changing tastes of local consumers while meeting competition that can come from global players. Retailers need to provide a differentiated shopping experience, while striving for growth and profitability. Adding to these many hurdles, operating in an environment of high transaction volume makes analyzing and reporting on crucial data a very challenging prospect.


Retail Marketing – Changing Structure of Retailing with Theories of Structural Change

All dynamic developments in retailing—from the birth of department stores in the last century to the recent emergence of warehouse clubs and hypermarkets—have been in response to a changing environment. Changing customer demands, new technologies, intense competition, and social changes create new opportunities even as they shake up existing businesses.

In the future, the turbulent environment in which retailers operate will most likely accelerate the pace of change. Technological advances, changing demographics, and shifts in consumer preferences and shopping expectations are expected to bring about undreamt of changes in the structure of the retail industry.

In fact, the retail business formats have been changing very rapidly, mainly as a result of technological influences. The Web and Internet technologies have created a plethora of opportunities for the Web-based business model of retailing. This has triggered a competition of sorts among many a retailer with their own selves. Besides, the challenge for the retailers now is to keep abreast of the latest formats to maintain and grow their market share and compete within their respective bands.

A key impact of technology has been availability of vast information to the customer. This has left the retailers with few or no opportunities for price differentiation. Hence, a big challenge for the retailer in this information savvy world is differentiation either qualitatively by superior customer services, or better value for money to the customer.

With the wealth of information that the present-day customer now has, it becomes imperative for retailers to constantly improvise their customer services or re-design its value pack to stay ahead of competition. Simultaneously, technology is also propelling efforts towards product and service differentiation. This throws up a major challenge to retailer service or store experience- re-design and realign with the support of latest available technologies and, thus, make the overall customer experience more satisfying and fruitful.

Towards this end, it is seen in Western economies that there is a sharp focus on customer convenience and services in the retail stores.

In India too, banks, airlines, and hotels are enabling customers to pay bills and plan their vacations from home through cable TV and videotext systems. It is now possible to buy a variety of products and services without even entering a store. Electronic inventory systems have spawned discount stores that offer the same merchandise as traditional department stores at much lower prices.

Speciality stores have carved out a niche for themselves by offering greater selection and better services than those offered by department stores with limited merchandise lines. Off-price retailers have made a year round business out of leftover merchandise and factory overruns. Retailing firms that once occupied a unique position, such as traditional department and discount stores, are now being squeezed by more innovative firms.

To understand the changes in retailing business in a better way, we will now examine the theories of change in retailing.

Theories of Structural Change in Retailing:

Retailing has always been a dynamic industry. New firms introduce innovative approaches to retailing, and trans­form the sector as they enter, develop, and grow. ‘Village malls’ are an example of how new retailers can introduce new business formats. Village malls are an extension of the fair price shops that have been revamped to cater to the larger needs of the local population.

Though many states have introduced this retail format spearheaded by the Gujarat government, where it has been successfully running for the last two three years, these retailers are still in an entry stage called development and introduction. It, however, remains to be seen how successful this format proves in the long run.

Those retailers who are successful enough to survive the development and introduction stage enter the growth stage. The rapidly growing off-price retailer T.J. Maxx is an example of a retailer in the second stage of development.

As the business grows further, it moves gradually into the maturity stage, wherein the competition intensifies and strategies have to be developed to maintain the existing market share. Most department stores today are in this stage of development. Stores that cannot compete effectively pass into the decline stage and eventually run out of business. Traditional variety stores like Ben Franklin are now in decline.

In India too, traditional apparel stores are on the decline. The entire process can take just a few years or decades, depending on the conditions of competition. Understanding how and why this process occurs is essential for success in the sector. We will examine three theories of how firms evolve and change the industry in the process. Although the theories differ, they speak about the same problem. In retailing, change is not a matter of chance; it is a certainty.

Wheel of Retailing:

The wheel of retailing is one of the better known theories of structural change in retailing. It was proposed by Malcomb McNair at Harvard University. It is basically a theory of cyclical or circular development. The wheel of retailing concept describes how retail institutions transform during their evolutionary life cycles.

New retailing institutions enter the market as low-status, low-margin, and low-price operations. As these retailers achieve success, attempts are made to increase their customer base and sales. Products are upgraded, facilities are improved, and new services are added. Prices and margins are increased to support these higher costs.

Then the cycle begins again. New retailers enter the market to fill the low-status, low-margin, and low- price niche. A retail store type emerges, enjoys a period of accelerated growth, reaches maturity, and declines. The retail store types pass through stages of growth and decline. However, the wheel of retailing theory has been criticized because it does not explain all changes in retailing. In fact, many stores do not begin as low-price, low-service outlets.

Dialectic Process:

A second theory holds that retailing evolves through a dialectic process—the blending of two opposing store types into a superior form. For example, speciality stores offer specialized merchandise, a wide array of services, and attractive surroundings to a large and diverse market.

The blending of two formats produces the speciality store. For example, Fabindia and Nalli offer both a wide array of customer services and a broad assortment of specialized merchandise in the apparel category in a conducive ambience.

Natural Selection:

According to the theory of natural selection, retail stores evolve to meet changes in the micro-environment. The retailers that successfully adapt to technological, social, demographic, economic, and political/legal changes are most likely to grow and prosper.

The variety store is often cited as an example of a retail format that failed to adapt to changing times. Today, these once successful retailers have almost died out. In contrast, television home shopping networks are likely to expand and grow because they are responding to changes in the lifestyles of the consumers.

The theory of natural selection is more inclusive than those of the wheel of retailing and the dialectic process, which are based solely on a profit-cost analysis, because it takes into account macro-environmental forces. Yet all the three theories suffer from a lack of emphasis on customer taste, wants, desires, and expectations.

By gravitating to those stores that best meet their desires and needs, and shunning those that do not, consumers exert a powerful force on the evolution of retailing as does any other part of the macro-environment.

The retailers will succeed only by knowing their customers well. Consumers expect retailers to provide timely and fashionable merchandise at a convenient location for a reasonable price. They expect value not only in the goods they buy but also in the total shopping experience, which includes pleasant atmospherics, well- trained and courteous salespersons, and special touches like live entertainment.


Retail Marketing – Security Issues in Retailing

Everything comes with a price. This is a very common saying. The retailer earns huge amount of profits, but he has to pay something for such profits. Also to earn these profits the retailer has to face many troubles and problems. The word ‘woes’ means the common problems, troubles, difficulties causing distress and anxiety in the mind of the retailer.

Thus woes are the common problems faced by the retailers in carrying out the retail operations. These common woes are in the form of shop lifting, employee theft, parking space problems, employee turnover, large amount of credit sales, etc. The retailers over the years have started realizing their security needs and have started deploying sophisticated technology and information systems in order to deal with the customers.

The major woes that are faced by the retailers are as follows:

A. Shop Lifting:

Shop lifting is a very common problem that is faced by the retailers. It refers to the theft of goods by the intended customers. It involves hiding the goods and taking them out of the store without paying for them. Also included in shop lifting are eating of food items at the store without paying for them or swapping the price lists of the goods like
changing the price list of the costly items with cheap ones, etc.

Generally the items that are shop lifted are the ones that are relatively small in size but high in value. Examples of such items are cigarette packets, blades, razors, small items from jewelry shops, etc. Shop Lifting is also known as five finger discount.

Over the time, the losses to the retailers due to shop lifting have increased considerably. The retailers have deployed so many information systems and sophisticated technology in order to protect themselves from shop lifting losses. Also by taking few precautions shop lifting can be avoided.

The following are the major ways in which shop lifting can be avoided:

(i) Keeping the items that are of high value at safe places or in the custody of the salesmen.

(ii) Using cameras and mirrors at different areas in the shop. This creates the fear of being watched in the mind of the customer.

(iii) Displaying the warnings and consequences of shop lifting at different areas in retail outlet.

(iv) Not letting the customers enter the store with their shopping bags and other such things in which the customer can hide the articles and take them out of the store. Generally the shopping bags and other such items are kept at the entry in the custody of a guard.

(v) Making proper display arrangement of the goods at the retail store. Also proper lighting arrangements should be made at the retail store.

(vi) The design of the store must be made in consultation with the security personnel so that the security features can be incorporated in the store design itself.

(vii) There should be a single entrance to the retail store. This helps in monitoring the customers especially during the peak seasons.

Apart from these there can be many innovative measures that can be taken by the retailer in order to reduce shop lifting.

B. Employee Theft:

Employees are the most valuable resources of any organization. These valuable resources have access to the firm’s almost every resource. These resources are in form of cash, cash registers, other important accounting books, stock of merchandise, etc. Therefore there are greater chances of the employees stealing the goods. There can be a number of ways by which the employees can embezzle the goods.

The following are the major ways in which the employees can steal the goods or cash, etc.:

(i) The employees have a better access to cash and the inventory. Therefore, they can easily misappropriate or steal the goods as well as the cash. Also they have an improved access to the books to accounts. So, they can easily show fraudulent transactions, false transfers, refunds, gifts, etc. Since, this type of fraud is committed within the organization and by the employees; it becomes difficult for the retailer to find out such frauds.

(ii) Another fraud that can be committed by the employees is refund fraud. In refund fraud, the employee shows fake sales of the goods using fake or incomplete customer information and then returns the goods to the store and takes away the cash. Such returns generally miss important customer information or contain fake customer information.

(iii) Discount Fraud is another kind of fraud that is committed by the employees. In discount fraud, employees purchase the articles from the store by using the special employee discount that the retailer offers to them. Then such employees sell these less cost items at other stores or to their friends and acquaintances at a price lesser than the retail price but higher than their purchase price.

The following are the main ways by which the retailer can prevent the losses caused by the employee theft:

(i) Recruiting employees after thoroughly verifying their background.

(ii) Imposing some limits on the employees beyond which they cannot buy the discounted goods at the store.

(iii) Establish proper accountability of the employees by clearly dividing their duties.

(iv) Keep checks on the employees.

(v) Inspecting books of accounts at regular intervals and find and investigate any irregularities.

(vi) Train the employees and make them realize their moral responsibility towards the business.

(vii) Keep a track of the refunds every month and thoroughly investigate any large value returns made to the store.

(viii) The refund form must be signed by the employee as well as the senior employee.

(ix) Ascertaining if there are cash shortages over a longer period of time and investigating the reasons thereof.

C. Inventory Shrinkages:

Inventory shrinkages mean reduction in the stock of inventory. Inventory shrinkage is caused by a number of reasons such as employee theft, shop lifting, vendor fraud or administrative errors. Handing inventory shrinkages is a difficult task and poses a challenge for the retailer.

The retailer needs to take proper care of the inventory shrinkages. The value of the inventory shrinkage can be determined as a difference between the physical stock of goods and the recorded stock of goods.

The retailer can take the following measures in order to reduce inventory shrinkages:

(i) Keeping regular checks on the inventory by continuous stock taking.

(ii) Fixing the values at which the employees can buy the goods at cheaper rates from the retailer. This will limit the discount fraud.

(iii) Also the retailer should keep a check on any large refunds made by the business. This would help him in keeping a check on the refund fraud.

(iv) Some of the inventory shrinkage is caused as a result of shop lifting. The retailer should install the cameras and mirrors all around the retail outlet in order to keep a check on the shoplifters.

(v) The employees should be appointed after properly checking their background.

D. Cash Shrinkages:

Cash shrinkages mean decrease in the cash balance. Cash shrinkage normally occurs due to the embezzlement caused by the people who have an easy access to the cash or books of accounts such as cashiers, accountants, etc.

The retailer must be very careful and keep a vigilant eye on the employees who are in charge of the books of accounts and the cash. Also in order to avoid any situation of cash shrinkage, the retailer must take periodic balances of cash himself. Also he should compare the cash shrinkages in the past with the current ones and find out the reasons thereof.

Over the years, the concerns about the store security have increased. Now the retailers try to identify the potential threats and design the systems in such a manner so that they can fight those threats. The retailers are increasingly relying on the information technology in order to minimize these threats.

Minimizing the Retail Threats by Using Information Technology:

The retailers have now become aware about the potential security threats to their business and are now taking steps to minimize these threats by using information technology.

The following are the main forms of information technology being used by the retailers in order to minimize the retail threats:

Use of information technology by retailers:

1. Biometric System:

Biometric system makes use of sophisticated technology which identifies special human characteristics such as finger prints, retina and iris, face recognition, voice recognition, size and shape of hand, etc. All these characteristics are specific to each individual and hence are very authentic proof of somebody’s identity.

By using biometrics, the retailers have been able to reduce the credit card losses, etc. Hence it has increased customer confidence. Also the retailers are using biometric systems in order to record the entry and exit time of their employees. This has proved to be extremely useful as it has improved the attendance of the workforce and has also reduced so many frauds committed in the name of others.

2. Wireless Technology:

By using the wireless technology, the retailers are able to monitor the in-store operations very effectively. The retailers can have the knowledge about any area of the retail store. An effective medium by which the retailer can communicate with anybody around the store is walkie talkie.

3. Integrated Electronic Security Management Solution (Close Circuit Television Cameras):

These types of systems are being increasingly used by the retailers these days. It includes the use of camera surveillance to notice the activities taking place in and around the retail store. It also involves creating a video recording of the activities taking place in and around the store. It provides immediate accessibility to these recorded videos in order to use them at any time in future such as for evidences, investigations, etc.

Also included in this is the remote viewing of the retailer’s shop. By using this feature, the retailer can view his shop live from any corner around the world by using internet. Also there is a system of alarms. The alarm will automatically ring and an e-mail will be sent to the retailer on the happening of a pre-defined event.

For example, if the retailer has fed in the system that on someone trying to open the lock of the retail outlet illegitimately, the alarm should ring. If someone tries to open the retail outlet illegitimately, the alarm will ring and an e-mail will be automatically sent to the retailer. This system has proved to be extremely useful for the retailer against any possible thefts or shop lifting, etc.

4. Bar Code Technology:

This is a very common technology that is used by the retailers. Every product is assigned a unique bar code. Typically a bar code is a symbol consisting of many bars with some specific distance between them. A bar code contains information about the country code, the company code, the product code, the check digit, etc.

When the bill is made, these bar codes are read by the bar code scanners and the details of the product are automatically loaded in the computer. This is a very effective technology that helps in saving time while billing. Also if any article goes missing in the bar code series, it becomes easy to know the product details as all the information is already loaded in the computer. Also bar codes are useful in stock taking and therefore any inventory shrinkages can be known.

5. Radio Frequency Identification (RFID):

RFID is a technology that is increasingly being used by the retailers these days. It is replacing the bar code technology. RFID includes retrieving and storing information from the tags attached to the products through frequency modulated radio wave transmission.

RFID technology helps in tracking the goods anywhere in the world as long as the RFID reader is within the range. This is an extremely useful technology and if used properly can help in tracking even the stolen products. But sometimes this technology is viewed as a disadvantage because it may sometimes be viewed as an interference in individual’s privacy and can be used to track the movements of the customer inside and outside the store.

6. Electronic Article Surveillance:

The electronic article surveillance is another form of technology that is being used by the retailers. Under this technology, all the articles are attached with specific tags. When the customer buys the articles, these tags are removed properly by the sales clerks.

But if the articles are stolen by somebody or he tries to move out of the store with the same stolen articles, the alarm rings at the exit of the store and therefore the retailer is alarmed about the shoplifting. Also various articles of inventory can be tracked by using this electronic article surveillance. All these have helped the retailer being prevented from the threat of goods being shoplifted.

Some additional issues are described below:

1. The use of franchising – Many brands are franchised to other businesses that run stores or retail merchandise carrying the well-known franchised brand.

2. The type of locations – Expensive city centre prime pitches, secondary sites, edge-of-town retail parks or free-standing super stores.

3. Property portfolio ownership – Whether to acquire (own) or rent sites, with the associated financial implications.

4. Product assortment (Mix) decisions – How far to extend or diversify.

5. Retail brand positioning, store image and in-store atmospherics – Retailers devote significant attention and resources to develop differentiated and desirable brand identities.

6. Scrambled merchandising – The addition of unrelated products to the product mix.

7. The use of retail technology – It includes inventory management tools, CRM systems and loyalty schemes and in-store displays.

8. Channel coordination – How to harness the possibilities of e-commerce alongside more traditional channels.

9. Regulation – Increasing government regulation over monopoly ownership.

10. Supply chain power – The balance of power and cooperation between retailers and their suppliers.

11. Global retailing – more and more retail companies are acquiring businesses in other countries or spreading their brands into new territories through organic growth.


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