Retail Management

Retail Organization

The term retail organization refers to the basic format or structure of a retail business designed to cater to the needs of the end customer. Recently, some scholars have started referring to India as a nation of shopkeepers. This epithet has its roots in the huge number of retail enterprises in India, which were over 12 million in 2003. About 78% of these are small family businesses utilizing only household labor.

Retail firms may be independently owned, parts of a retail chain, operated as a franchisee, leased departments, owned by manufacturers or wholesalers, consumers owned or co-operative society.

A retail unit could be owned by:

• Manufacturer (e.g.,

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Categorizing retailers helps in understanding the competition and the frequent changes that occur in retailing. There is no universally accepted method of classifying a retail outlet, although many categorization schemes have been proposed. Some of these include classifying on the basis of

• Number of outlets
• Margin Vs Turnover
• Location
• Size.

The number of outlets operated by a retailer can have a significant impact on the competitiveness of a retail firm. Generally, a greater number of outlets add strength to the firm because it is able to spread fixed costs, such as advertising and managers’ salaries, over a greater number of stores in addition to acquiring economies of purchase.… Read the rest

Retailers undertake various business activities and perform functions that add value to the offerings they make to their target segments. Retailers provide convenient location, stock and appropriate mix of merchandise in suitable packages in accordance with the needs of customers. The four major activities carried out by retailers are:

1. Arrange for assortment of offerings
2. Breaking quantity
3. Holding stock
4. Extending services

Arranging Assortment

An assortment is a retailer’s selection of merchandise. It includes both the depth and breadth of products carried. Retailers have to select the combination of assortments from various categories. The assortments must include substitutable items of multiple brands and price points.… Read the rest

Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services.

Sorting

Manufacturers usually make one or a variety of products and would like to sell their entire inventory to a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the demands of both sides, by collection an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units.… Read the rest

Retailing can be distinguished in various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the following ways:

• There is direct end-user interaction in retailing.
• In is the only point in the value chain to provide a platform for promotions.
• Sales at the retail level are generally in smaller unit sizes.
• Location is a critical factor in retail business.
• In most retail businesses services are as important as core products.
• There are a larger number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density.

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