RETAIL MANAGEMENT

KFA Business school

MBA IIIrd Semester
 VINOD JOSHI
Director
Renuka Marketing & Trading Pvt.Ltd
Chairman – Social Sustainable Youth Foundation (SSYF)
Chairman - PD Smart Learning Pvt.Ltd
Adjunct Faculty - Shanker Dev Campus, KFA Business School, IIMS College, Kathmandu Donbosco College,
Uniglobe College, Liberty College ,DAV, ICA.
 COURSE CONTENTS
1. Introduction to Retailing
2. Strategic Planning in Retailing
3. Retail Institutions by ownership
4. Retail Institutions by store based strategy mix
5. Identification and Understanding Consumers
6. Trading Area Analysis
7. Retail organization and Human Resource Management
8. Operations Management & its Dimensions
9. Developing Merchandise Plans
10. Pricing in Retailing
11. Promotional Strategy
12. Integrating and controlling the Retail strategy
 UNIT I

Introduction to Retailing
• Objective, Framework of Retailing, Retailing strategy,
Importance of Retailing
 What is difference between
RETAIL / RETAILER / RETAILING / SUPPLY CHAIN
 RETAIL RETAILER RETALING SUPPLY CHAIN

• Retail is the sale • A Retailer is a • Retailing is the • A Supply chain is

of goods or person or distribution a process the
service from a business that you process of a occurs between
business to a purchase goods retailer companies and
consumer for from. Retailers obtaining goods suppliers in order
typically don’t or services and to distribute
their own use.
manufacture selling them to products to end
their own items. customers for users. It’s how a
They purchase use. This good or service is
goods from a process is delivered to
manufacturer or explained consumers.
a wholesaler and through the
sell these goods supply chain.
to consumers in
small quantities.
 Origin of Retail
 The word 'Retail' is derived from a French word with the prefix re and
the verb tailer meaning "to cut again".
Evidently, retail trade is one that cuts off smaller portions from large lumps
of goods.
A Typical Channel of Distribution
Objectives OF
RETAILING
 ObjectiveS OF RETAILING
o The overall objective of retailing is creating and developing services and products that meet the
specific needs of customers and offering these products at competitive, reasonable prices that
will still yield profits.
o Businesses must realize that, in retail, the customer lies at the center of any organization's
marketing efforts, determining the overall success of the product or service.

Understand Your Customer

Make Connections
Improve Direct Marketing
Increase Customer Loyalty
Make the Product Known
• Understand Your Customer
• It is imperative that you understand your target customer. If you primarily sell children’s
clothing, you should be targeting females in their 20s and 30s. Your business should take the
time to know these women: what reaches them, what makes them tick, what they truly need
out of your product. Your understanding of your target customer will allow you to communicate
better with them, identify their market potential, customize product offers to them according
to various market segments and consider their needs during product changes and updates.
• Make Connections
• A primary goal of retail marketing is understanding the connections between the customer’s
lifestyle and spending characteristics and why he chooses one product over another. Using this
knowledge, businesses can develop their products with a competitive advantage. This requires
research and time as you delve into questions of brand loyalty, quality of product and pricing.
• Improve Direct Marketing
• Businesses must test to ensure that they are sending the appropriate message to the
appropriate households. They also must send this message at the appropriate time using the
appropriate media. Your communications must be spot-on, selling the benefits of your product
or service in such a way that a prospect becomes a paying customer.
• Increase Customer Loyalty
• To increase customer loyalty, businesses must develop relationships with customers,
continually selling the value of the product in their situation.
• Never over or under sell; instead, operate with integrity.
• Matching competitors’ prices, developing special rewards for loyal customers -- such as a
frequent purchase card with discounts, priority service or personalized offers -- and referral
programs are effective avenues to increasing customer loyalty.
• Make the Product Known
• If you know your target customers, understand their needs and have developed the perfect
product, you have to get the word out. Using your knowledge of your customers, you must
communicate using the right channel.
• Using the example of children’s clothing, you should advertise your business in parenting
and family magazines, on channels featuring children’s programming and in or near toy and
book stores.
Framework of Retailing
 The Retail Industry Framework combines the retail-specific extensions,

solution accelerators and best practices to helps the deploy solutions

faster and at lower cost and risk.

 A framework approach helps the migrate to a more strategic and flexible

technology architecture that is aligned with the needs of your business,

one project at a time.

 Examples of framework projects
Store and Channels
•Store and Channels Planning and Performance
•Retail Store Integration and Management
•POS and Self-Service
•Loss Prevention
•On-line Customer Experience and Selling
•Cross-channel Integration, Order Management &Fulfillment
•Promotion Planning and Execution
 The IBM Retail Industry Framework
The IBM Retail Industry Framework combines the power of IBM software with retail-specific software extensions, solution
accelerators and best practices to help you deploy solutions faster and at lower cost and risk

Store and
Channels

Marketing and
IT Systems and Customer
Operations Management

Business and
Supply
Finance
Networks
Administration
Merchandising
and Product
Management
Ex- The IBM Retail Industry Framework
• Store and Channels : Supports your cross-channel strategy, enabling your customers to
have a consistent experience with a retailer across all channels
• Marketing and Customer Management: Provides solutions to create a consistent and
intelligent view of your customers to greatly improve sales, marketing and service, and
drive effective multichannel delivery.
• Supply Networks: Enables you to optimize existing supply chain systems with solutions
for determining strategic network design, inventory positioning and safety stock setup.
You can also weigh the costs or benefits to sustainability initiatives. Finally, you can
streamline vendor and trade-fund management with IBM solutions in this domain.
• Merchandising and Product Management: Helps you create an integrated
merchandising plan based on analytics of previous purchase patterns, and provides
tools to create and manage product information needed to run the business
• Business and Finance Administration: Provides analytical tools
and dashboards to manage your financial planning, metrics
and consolidations, in addition to key performance indicators
(KPIs) for improved human capital management.
• IT Systems and Operations: Provides a smarter infrastructure
for managing and securing mission-critical information across
the retail enterprise.
 Marketing Strategy in Retailing

Analyze Develop a
Identify market
competitors’ competitive retail
segments, select
strengths and marketing mix that
target market
weaknesses fits the target market

Retail Marketing Mix

• Goods and services Strategy
Target Market • Location and Distribution Strategy
• Pricing Strategy
• Retail Image and Promotional Strategy

16-5
RETAIL FACTS
WORLD GDP
$86 Trillion
2 Types of Retail-Globally
 In 2020, total retail sales across the globe will reach $27.73
trillion, up 6.0% from the previous year.

FACTS Ecommerce eclipses $1.3 trillion, led by China and US

Consumers spent $601.75 billion online in the U.S. in 2019, a

14.9% jump compared with 2018.

In 2019, retail e-commerce sales worldwide amounted to 3.53

trillion US dollars and GMV are projected to grow to 6.54
trillion US dollars in 2022
Biggest retail Sales countries of the world

•U.S U.S $ 4 tn
•E.U U.S $ 2 tn
•JAPAN U.S $ 1 tn
•CHINA U.S $ 750 bn
•U.K U.S $ 444 bn
•INDIA U.S $ 300 bn
•RUSSIA U.S $ 200 bn
Biggest Retail Sales Stores of the world

U.S.A US $ 514 Bn (11,503 locations)

(12,300 locations)
FRANCE US $110.62 Bn

U.S.A US$ 124 Bn (3,037 locations)

U.S.A US $ 83.18 Bn (2,274 locations)

U.K US $ 67.92 Bn (6,902 locations)

 10 Biggest Retailers In The World
Name Country Revenue Number of Locations
Wal-Mart USA $517 billion 11503

Amazon USA $280.52 billion offices in more than 30 countries

around the world.
Costco USA $152.7 billion 785

Schwarz Group GERMANY $130 billion 11,800

Kroger USA $124 billion 3,037

Walgreens Boots Alliance USA $144 billion 25

Home Depot USA $108 billion 2,285

Aldi GERMANY $109 billion 11922

Carrefour FRANCE $101 billion 12,300

JD.Com CHINA $94 billion

Malaysia Retail Market
The Malaysia Retail Chain Association (MRCA), retail
sales growth to come in at 6.7% for 2020 (jan).
Retail Group Malaysia has raised its
2020 growth forecast for the
country's retail sales to 4.9% from
6.7% after considering the
industry's better-than-expected
performance in the first quarter
and in anticipation of stronger
expansion for the second quarter.
“Higher public expenditure and
sustainable private
consumption contributed to the
latest economic growth,”
- Amazon Go is a chain of convenience stores in the United States operated by the online
retailer Amazon, with 17 open and announced store locations in Seattle, Chicago, San
Francisco and New York City as of 2019.
- The stores are partly automated, with customers able to purchase products without being
checked out by a cashier or using a self-checkout station.
-The store requires customers to scan their Smartphone on the way in, tracks them with
cameras and other sensors as they browse, and, when they take an item off the shelf, adds it to
a virtual cart.
- Groceries are charged to the customer’s Amazon account when they leave with their goods.
NEPAL’S Retail Market

Government statistics show that the retail and wholesale sectors

contribute 14.37 % to the national economy.

As per Nepal Retailers Association, there are more than 200,000 retail
shops in Kathmandu, Lalitpur & Bhaktpur valley, of whom less than 20 %
have acquired PAN and registered at VAT
The e-commerce market in Nepal is worth $25 million: Daraz Nepal
There are 50+ Big Mart outlets across Kathmandu, Lalitpur and Bhaktapur.
There are 11 Daily Grocery outlets across Kathmandu, Lalitpur and
Bhaktapur.
There are 7 Sales berry outlets across Kathmandu, Lalitpur and Bhaktapur.
 About BBSM
• Bhat-Bhateni Super Market was established in 1984 by Mr. Min
Bahadur Gurung, the company’s Owner and Chairman, as a ‘single
shutter’ 120 sq. ft. cold store.
• Today, Bhat-Bhateni has a combined 1,000,000+ sq. ft. sales area
across its 18 locations ( Naxal, Maharajgunj,Patan,Balaju,Chuchepati,
Anamnagar, Satdobato, Koteshwor, Kalanki,Bhaktpur, Pokhara, Biratnagar, Dharan,
Bhairawaha, Teku,Nepalgunj, Butwal,Chitwan) and employs 4,500+ full-time
employees 95 % of who are women.
• With daily sales exceeding NRs. 5.5 Crore+ (USD 550,000.00), Bhat-
Bhateni is also the largest taxpayer in the retail sector in Nepal.
• 2 Lakhs products in full range
• A daily footfall of over 100,000 patrons.
Retailing Strategy
 Retail Strategy
A retail strategy is a statement identifying…
• 1. The retailer’s Target Market.
• 2. Retail Format the retailer plans to use to satisfy the target
market’s needs.
• 3. The bases on which the retailer plans to build A sustainable
Competitive Advantage
Target Market
the market segment(s) toward which the retailer
plans to focus its resources and retail mix
A Retail format describes the
nature of the retailer’s
operations—that is, its retail mix Retail
(type of merchandise and
services offered, pricing policy,
Format
advertising and promotion
program, approach to store
design and visual merchandising,
typical locations, and customer
services)—that is designed to
satisfy the needs of its target
market.
 Retail / Formats
• Hypermarkets : A hypermarket is biggest of all that sell a full range of grocery items. It is also the
place where more than 200,000 brands are available. Hypermarkets have a sales area of 60,000 –
161,000 sq ft +.
• Superstores : are very large supermarkets or shops selling household goods and equipment.
Superstores are usually built outside city centres away from other shops. Sales area are normally
25,000-60,000 sq ft.
• Supermarkets: Defined as food-focused stores with sales area of 3000-25,000 sq ft.
• Departmental store is the extended version of general stores offering multiple categories
(apparel, durables, cosmetics, electronics etc.) under one roof managing to offer wide variety of
products in competitive pricing which would be definitely better than a general store because of
economies of scale. Sales area of less than 3,000 sq ft +
• Convenience Stores: Stores with a sales area of less than 3,000 sq ft, which are open for long
hours and sell products from at least eight different grocery categories.
• Discounters: Includes all sales through food discounters and the grocery sales of the main high
street discounters.
Sustainable
competitive
advantage
Establishing a competitive
advantage means that the
retailer, in effect, builds a
wall around its position in
a retail market, that is,
around its present and
potential customers and
its competitors
 Importance of Retailing

1.Retailing shapes the lifestyle of people

2.Retailing contributes to the economy
3.Retailing dominates the supply chain
4.Retailing is interdisciplinary
5.Retailers have status as employers.
6.Retailers have scope for expanding internationally.
THANK YOU