UNIT II
RETAIL FORMATS
• ORGANIZED AND UNORGANIZED FORMATS
• DIFFERENT ORGANIZED RETAIL FORMATS
• CHARACTERISTICS OF EACH FORMAT
• EMERGING TRENDS IN RETAIL FORMATS
• MNC’S ROLE IN ORGANIZED RETAIL
FORMATS
RETAIL BUSINESS MODEL
• Retailer buys products and services from
wholesalers
• Puts profit margin
• Sells to customers at retail outlet
• Provide after sales service
RETAIL FORMATS
• UNORGANISED RETAIL
– Outlet run locally by owner that lacks technical
and accounting standardization
• ORGANISED RETAIL
– Trading activities undertaken by licensed retailer.
i.e. those who are registered for sales tax, income
tax, etc.
UNORGANISED RETAIL
• Hand vendors cart and pavement and mobile
vendors
• Local kirana shops (or) Mom and Pop stores
• Owner manned general stores
• Paan / Beedi shops
• Convenience stores
CHARACTERISTICS OF UNORGANISED
RETAIL
• Lack of inventory control and supply chain
management
• Labour intensity
• Family run stores
• Lack of standardisation
• Crowded format
• Absence of real competition
• Low productivity
• Unique operation
ADVANTAGES OF UNORGANISED
RETAIL
• Credit sales
• CRM
• Flexible unitization
• Door delivery
• Flexible timings
• Employment impact
• Location advantage for unorganised retailers
• Purchase of small quantities
DISADVANTAGES OF UNORGANISED
RETAIL
• Price
• Lack of hygiene
• Space and variety constraints
• Generation next, looking for new avenues
CHARACTERISTICS OF ORGANISED
RETAIL
• Direct interaction with customers
• Employment generation
• Boost to exports
• Improvement of government revenues
• Dominant in food, grocery and apparel
• Provide ideal shopping
• Expose shoppers
• Expanded business opportunities
ADVANTAGES OF ORGANISED RETAIL
• Price advantage
• Merchandise
• Dearth of time
• Employment opportunities
• Better social infrastructure
• Benefit to tourism
• Better realization of taxes
EMERGING TRENDS IN RETAIL
FORMATS
• Trial and error
• Emergence of wholesale clubs
• Increasing acceptance of rural markets
• Government is also promoting the
development of modern retail formats
• Efficient buying – increasing importance of
supermarkets and discount stores
EMERGING TRENDS IN RETAIL
FORMATS
• Hypermarkets – the biggest crowd puller
• Customers still rely on traditional concepts
• Emergence of private-label brands
• Ease of shopping and customized services
• Category killer
• Dollar stores
• Retail development in rural India – A market with
silver lining
• e-retailing
ROLE OF MNC IN ORGANISED RETAIL
FORMAT
• Capital
• Technology
• Skill
• Exports
• FDI through MNC is far easier
DIFFERENT ORGANIZED RETAIL
FORMATS
Classification based on
1. Types of ownership
2. Channel used
3. Pricing strategy
4. Location
5. Customer service/service retailing
1. Types of ownership
i. Independent retailer
ii.Retail chains
iii.
Franchising
iv.Leased departments (shop in shop/store in
store)
v. Cooperatives
2. Channel used
1. Store retailing
1. General merchandise
2. Food merchandise
2. Non store retailing
3. Multi channel retailing
2. Channel used
1. General merchandise
– Departmental store
– Discount store
– Specialty store
– Membership club
– Airport retailing
– Drugstores
2. Food merchandise
– Convenience store
– Conventional super market
– Food based super stores
– Combination stores
– Super centers and hyper market
– Limited line stores
2. Channel used
2.Non store retailing
– Electronic retailing
– Direct marketing
– Direct selling
– Vending machines
– Video kiosks
– Catalog and direct mail retailing
– TV home shopping
3. Based on Pricing
i. Category killer format
ii. Factory outlet format
iii.Warehouse format
iv. Single price denomination format / Dollar
stores
v. EDLP format / Off price retailiers
vi. Discount format
4. Based on Location
i. Destination stores
ii. Parasite stores
iii. Convenience stores
5. Based on Customer service/ Service
retailing
i. Retail banking
ii. Personal care services retailers
iii. Hospitality retailer
iv. Restaurants
v. Other utility service retailers
