Foreword vii Preface ix Acknowledgements xi List of Retail Snapshots xxv List of Figures xxvii List of Tables xxix

Chapter 1 Introduction to Retail 3

What is Retail? 3
Retail—The Industry 3
Functions of a Retailer 6
The Changing Retail Landscape 7
Reasons for the Changing Retail Landscape 7
The Marketing–Retail Equation 9
Manufacturer’s Perspective 9
Retail Industry Perspective 10
Retail in India 11
The Growth of Retail in India 13
Classification of the Retail Sector 14
Roadblocks to Retail Development 18
Future Prospects 19
The Approach of this Text 20
Summary 21
Review Questions 21

Chapter 2 Retail Formats and Theories 22

Evolution of Retail Formats 22
Social Developments and their Impact 22
Industrial Revolution 23
Emergence of Self-service 23
Supermarkets 23
Speciality Stores, Malls and Other Formats 24
Rise of the Web 24
Theories of Retail Development 25
Environmental Theory 25
Cyclical Theory 26
Conflict Theory 27
The Retail Life Cycle 28
A: Innovation 28
B: Accelerated Growth 28
C Maturity 29
D. Decline 29
Phases of Growth of Retail Markets 29
Classification of Retail Stores 31
1. Classification on the Basis of Ownership 32
2. Classification on the Basis of the Merchandise Offered 34
3. Non-Store Retailing 38
Emerging Trends 40
Airport Retailing 40
Franchising—A Dynamic Retail Opportunity 43
Types of Franchising 44
Franchising in India 45
Summary 46
Review Questions 46

Chapter 3 Retail Strategy 49

Strategy—TheRetail Perspective 49
Step I. Define the Mission or the Purpose of the Organisation 50
Step II. Conduct a Situation Analysis 51
Step III. Identifying Options/Strategic Alternatives 51
Step IV. Set Objectives 54
Step V. Obtain and Allocate the Resources Needed to Compete 55
Step VI. Develop the Strategic Plan 55
Step VII. Implement the Strategy, Evaluate and Control 56
International Expansion—A Growth Strategy 57
Methods of Entering a New Market 58
Retail Branding 59
Building the Retail Value Chain 61
Retail Strategy Models 61
Summary 62
Review Questions 63

Chapter 4 Understanding the Retail Consumer 64

Factors Influencing the Retail Shopper 64
1. Range of Merchandise 65
2. Convenience of Shopping at a Particular Outlet 66
3. Time to Travel 66
4. Socio-economic Background and Culture 66
5. The Stage of the Family Life Cycle 66
The Customer Decision Making Process 66
The Indian Reality 68
Some Reasons for the Change in the Indian Consumer 68
Market Research—A Tool for Understanding Retail Markets and Consumers 70
Research Prior to the Setting up of a Retail Store 71
Research after the Setting up of a Retail Store 77
Summary 78
Review Questions 78

Chapter 5 Store Locations 80

Importance of Store Locations 80
Types of Locations 80
1. Isolated Store or a Freestanding Location 81
2. Part of a Business District 82
3. Part of a Shopping Center 82
Steps Involved in Choosing a Retail Location 84
Step 1: Market Identification 84
Step 2: Determining the Market Potential 84
Steps 3 & 4: Identify Alternate Sites and Select the Site 87
Trends in Retail Property Development in India 90
Mumbai 90
New Delhi 91
Summary 92
Review Questions 93
Appendix I 94

Chapter 6 Retail Merchandising 99

What is Merchandising? 99
Analysis 99
Planning 99
Acquisition 99
Handling 100
Control 100
Evolution of Merchandising 100
Factors Affecting the Merchandising Function 100
Functions of a Merchandise Manager 101
Planning 102
Directing 102
Co-ordinating 102
Controlling 102
Functions of a Buyer 102
Merchandise Planning 104
Stage I: Developing a Sales Forecast 104
Stage II: Determining the Merchandise Requirements 105
Stage III: Merchandise Control—The Open-to-Buy 111
Stage IV: Assortment Planning 112
Summary 116
Review Questions 116

Chapter 7 Merchandise Buying 117

Merchandise Buying 117
Step 1: Identifying and Contacting Sources of Supply 118
Step 2: Evaluating Sources of Supply 119
Step 3: Establishing Relationships with Vendors 120
Step 4: Analysing Vendor Performance 122
Branding Strategies 122
Manufacturer’s Brands 122
Licensed Brands 123
Private Label Brands 123
Category Management 125
Definition 125
Components of Category Management 126
Role of the Category Captain 128
Does Category Management Really Work? 128
Summary 132
Review Questions 132

Chapter 8 Retail Pricing and Merchandise Performance 133

The Concept of Retail Price 133
Elements of Retail Price 134
Developing a Pricing Strategy 136
Various Approaches to a Pricing Strategy 136
Adjustments to Retail Price 138
A Comparison of Mark ups and Markdowns 138
Merchandise Allocation 139
Analysing Merchandise Performance 139
1. ABC Analysis 139
2. Sell Through Analysis 140
3. Multiple Attribute Method 140
Gross Margin Return On Investment (GMROI) 141
GMROI is Calculated as Gross Margin/Average Inventory at Cost 141
Summary 142
Review Questions 142

Chapter 9 Organisation Structure and Human Resource
Management in Retail 147

Creating Organisation Structures 147
Organisation Structure in Retail 148
Organisation Structure for Small Stores/Single Stores/
Independent Retailers 148
Organisation Structure of a Retail Store Chain/Department Store 149
Human Resource Management in Retail 151
Identifying the Various Roles in the Organisation 151
Recruitment and Selection 152
Training 152
Motivation 153
Evaluation of Performance 154
Ethics in Retailing 155
Customers 155
Community and the General Public 156
Employees 156
Business Partners (Suppliers, Logistics Organisations, Banks, Other Professional Organisations) 156
Shareholders 156
Summary 157
Review Questions 158

Chapter 10 Retail Operations 159

Elements/Components of Retail Operations 159
1. Store Administration and Management of the Premises 160
2. Managing Inventory and Display 162
3. Managing Receipts 163
4. Customer Service 164
5. Managing Promotions, Events, Alliances and Partnerships 164
Summary 165
Review Questions 165

Chapter 11 Measuring Financial Performance 166

Measures of Financial Performance 166
Income Statement 167
Strategic Profit Model 169
Measures of Performance 170
Measuring Merchandise Performance 171
Measuring Retail Store and Space Performance 171
Measuring Employee Productivity 172
Summary 174
Review Questions 174

Chapter 12 Retail Management Information Systems 175

Need for Product Identification 175
What is the UPC? 176
Role of Information Technology in Retail 177
Efficient Stocking of Merchandise 178
Collection of Data 178
Efficiency in Operations 178
Helps in Communication 178
Factors Affecting the Use of Technology 179
Scale and Scope of Operations 180
Financial Resources Available to the Organisation 180
Nature of the Business 180
Human Resources Available 181
Applications of Technology 181
Electronic Data Interchange (EDI) 181
Database Management, Data Warehousing, Data Mining 181
Electronic Retailing 182
E-Commerce Market in India 182
Summary 186
Review Questions 186

Chapter 13 Retail Marketing and Communication 189

The Retail Marketing Mix 189
1. Product 189
2. Price 191
3. Place 191
4. Promotion 191
5. Presentation 191
6. Customer Service 191
7. People 191
The STP Approach 192
Segmentation 192
Target Market 193
Positioning 193
The Retail Image 195
The Retail Communication Mix 196
Advertising 196
Sales Promotion 200
Public Relations and Publicity 202
Personal Selling 203
Point of Purchase (POP) Displays 203
Concept of Integrated Marketing Communications 204
Summary 206
Review Questions 206

Chapter 14 Servicing the Retail Customer 207

Concept of Customer Service 207
Importance of Service in Retail 208
Customer Service as a part of the Retail Strategy 209
Step1: Identifying the Key Customers, Listening and
Responding to Them 210
Step 2: Defining Superior Service and Establishing a Service Strategy 211
Step 3: Setting Standards and Measuring Performance 211
Step 4: Selecting, Training and Empowering Employees to Work for the Customer 211
Step 5: Recognising and Rewarding Accomplishment 212
Measuring the Gaps in Service 213
The Knowledge Gap 213
The Standards Gap 214
The Delivery Gap 215
The Communications Gap 215
Gathering Customer Information and Enhancing Loyalty 215
Encouraging Loyalty—Loyalty Cards 215
Customer Relationship Management 217
CRM in Retail 217
The Role of Personal Selling 219
The Retail Selling Process 220
1. Acquiring Product/Merchandise Knowledge 220
2. Studying the Customer 220
3. Approaching the Customer 220
4. Presenting the Merchandise 221
5. Overcoming Resistance 221
6. Suggestive Selling 221
7. Closing the Sale 222
Summary 222
Review Questions 223

Chapter 15 Retail Store Design and Visual Merchandising 224

Importance of Store Design 224
Exterior Store Design 225
Interior Store Design 227
Store Layouts 229
Types of Layouts 230
Directing the Flow of Traffic or the Circulation Plan 233
Layout Selection—Chief Considerations 234
Space Planning 234
The Planogram 235
Visual Merchandising 237
Methods of Display 237
Summary 239
Review Questions 240

Chapter 16 Supply Chain Management 241

Concept of Supply Chain Management 242
Need for Supply Chain Management 243
Evolution of Supply Chain Management 244
Issues involved in Developing the Supply Chain Framework 245
Supply Chain Integration 246
Time-to-Market 247
Time-to-Serve 247
Time-to-React 247
The Lead Time Gap 248
Innovations in Supply Chain Management 250
Cross Docking 250
Collaborative Planning, Forecasting and Replenishment (CPFR) 250
Retail Logistics 252
Reverse Logistics—An Emerging Trend 253
Summary 253
Review Questions 253

CASE STUDIES 257

Case 1 Gili—The Making of a Super Brand 259
Case 2 Nanz—A Lesson to Learn From 267
Case 3 A Lot Can Happen Over Coffee! 270
Case 4 Big Bazaar—The Route to the Indian
Mass Market 274
Case 5 Shopper’s Stop—Building a Retail Brand 280
Case 6 Fast Food Retailing in India—Raising the
Quality and Service Bar 287
Subject Index 299
Company/Brand Index 303