Retail Management Concepts

Foreign Direct Investment (FDI) in Indian Retail

Introduction to Foreign Direct Investment (FDI) in Indian Retail

The recent clamor about opening up the retail sector to Foreign Direct Investment (FDI) becomes a very sensitive issue, the most important factor against FDI driven “modern retailing” is that it is labour displacing to the extent that it can only expand by destroying the traditional retail sector. This is because the primary task of government in India is still to provide livelihoods and not create so called efficiencies of scale by creating redundancies. As per present regulations, no FDI is permitted in retail trade in India. Allowing 49% or 26% FDI (which have been the proposed figures till date) will have immediate and direct consequences.… Read the rest

Abey Francis

Retail Formats or Classification of Retail Firms

Regardless of the particular type of retailer (such as a supermarket or a department store), retailers can be categorized by (a) Ownership, (b) Store strategy mix, and (c) Non store operations.

1. Form of Ownership

A retail business like any other type of business, can be owned by a sole proprietor, partners or a corporation. A majority of retail business in India are sole proprietorships and partnerships.

  1. Independent Retailer: Generally operates one outlet and offers personalized service, a convenient location and close customer contact. Roughly 98% of all the retail businesses in India, are managed and run by independents, including barber shops, drycleaners, furniture stores, bookshops, LPG Gas Agencies and neighbourhood stores.
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Retailing Decisions: Factors To Consider

There are many factors for retailers to consider while developing and implementing their marketing plans. Among the major retailing decisions are these related to (a) Target markets (b) Merchandise management (c) Store location (d) Store image (e) Store personnel (f) Store design (g) Promotion, and (h) Credit and collections.

  • Target Markets: Although retailers normally aim at the mass market, a growing number are engaging in marketing research and market segmentation, because they are finding it increasingly difficult to satisfy everyone. Through a careful definition of target markets, retailers can use their resources and capabilities to position themselves more effectively and achieve differential advantage.
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Margin Turnover Model of Retail

Successful retail operations depend largely on two main dimensions: margin and turnover. How far a retail enterprise can reach in margin and turnover depends essentially on the type of business (product lines) and the style and scale of the operations. In addition the turnover ,also depends upon the professional competence of the enterprise. In a given business two retail companies may choose two different margin levels, and yet both may be successful, provided the strategy and style of management are appropriate.

Margin Turnover Model

Ronald R. Gist “Suggested a conceptual frame work, using margin and turnover, for understanding the retail structure and evolving a retail strategy.”… Read the rest

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Retail Investment in India – Retail as an Investment Option

Despite the huge presence of the unorganized sector, the Indian retail industry is attractive for international players (Read: Unorganized Retail in India). It is favored over China’s among the developing countries due to a slew of laws in the communist country at various levels. Though the market hasn’t seen big time players of the developed nations yet, the fact that Indian per capita retail space is among the lowest, is expected to provoke people to look at retail as a potential business arena.

The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behavior being favorable to the growing organized segment of the business.… Read the rest

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Impact of Technology in Retail Industry

Technology in the retailing industry has provided a new dimension. The introduction of point of sale equipment, bar codes and huge storage capacity for billing and payment database has facilitated the management of large set-ups with ease. Operations can be recorded in a structured and systematic manner, providing detailed analysis of the sales and volume of transactions. Electronic transactions have increased the volume of sales in the country. Flexibility in the mode of payment and cashless transactions has helped in driving sales. Communication assists in maintaining a competitive advantage in retaining and attracting customers. The introduction of new technology may be intricate for retailers, but the convenience and cost effectiveness create the need for new advancements.… Read the rest

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