Retailing Business

Retailing consists of the sale of goods from a fixed location such as a departmental store, hypermarket, supermarket or kiosk to the customers either in large or small quantities. A retailer buys products in large quantities from manufacturers or from wholesaler and in turn sells to the end-user. It is a vital part of any manufacturer’s distribution strategy and retailers are at the end of the supply chain process.

Types of retailing

There are three major types of retailing as follows:


A standard physical location where buyers and sellers meet near corner of the streets or some common designated places to sell the goods.

Shop or store trading

The goods or products are sold in a big mall, which has a huge place and wide options for the end – users to choose the products at their own convenience and comfort. Examples

Virtual retailing

The goods or products are ordered via telephone, mail or Internet without having any physical presence using the online products catalogue to choose the required items. Examples are eBay, Amazon etc.

In the year 1920, the first supermarket opened in the United States, heralding in a new era of retail world wide.

Evolving dynamics of shopping experience(Retailing)

In modern business world, customers are highly knowledgeable and expect something new and innovative ways of shopping.

Evolving expectations from shopping are as follows:

  • Choice
  • Value
  • Service
  • Experience
  • Convenience

The KSA consumer outlook study (2000) in India established that 75% of consumers look out for attractive display in a store. The other important attributes are:

  • Polite and courteous people
  • Quality of products
  • Product ranges
  • Exchange/return policy
  • Non-intrusive sales people
  • Attractive displays
  • Schemes and promotions
  • Value for money
  • Acceptance of credit cards
  • A trial room
  • An entertainment center for children

Consumer purchase decision factors include price, brand name, displays, advertising, promotional schemes and retailer suggestion.

Business Model – Retailing Sector

To be successful in any kind of retailing business, the following elements are important:

Store design:
  • Every Element in the store design starting from fixtures, shelves, well decorations, colors, window displays and other design elements should address specific business needs.
  • An efficient store plan will help us to meet and enhance the marketing .


  • It is a process of planning, buying, presenting, controllinjg and managing the stores inventory which represents a part of supply chain.
  • As a retailer, it is vital to have good merchanding plan in order to have right place at the right time to meet the strategic and operational objectives.
Retail Marketing:
  • Is very different from traditional marketing, essential elements of retail marketing including : customers service,word of mouth


  • Technology should be integarated to reval the retail identity of the store to the customer visting the oulet.Its used in point of scale(POS),Radio Frequency/identification

Customer satisfaction surveys play a vital role in any retailing venture to focus on priority improvements. The focus areas would be

  • Customer willingness to wait in a counter ie., maximum time duration
  • To introduce relationship marketing strategies to retain and acquire new customers also
  • Helps to devise a training on customer centricity for all the employees
  • To design an effective promotional/discount schemes on par with industry standards and customer’s preferences too
  • Set up customer grievance cell
  • Introduce loyalty programs and use pull-in strategies to increase market share to be successful in this competitive business

Retailing in India

It is one of the India’s largest industry accounts for more than 10% of the country’s GDP and around 8% of the employment. The market size as per the various estimates predicted somewhere between Rupees eight lakh crore and 1 million crore, with grocery accounting for 40% or Rs.400, 000 crore.

  • According to a survey conducted by a leading global management consulting firm A.T. Kearney, retailing in India is divided into 2 categories namely
  • Unorganized market accounts for Rs. 400,000 crore
  • Organized market accounts for Rs.20, 000 crore
  • There is no supply chain management perspective as far as retailing in India is considered

Organized retail industry in India has grown from a size of only Rs.20, 000 crore to Rs. 160,000 crore in the year 2005 and the retail market as a whole is growing at an annual rate of 20% contributing annually from Rs. 400,000 crore in 2000 to Rs. 800,000 crore in the year 2005

India has over 5 million retail outlets of all sizes and varieties, but it is not representing the modern retailing format as compared to international standards which is giving an edge for international retailers with a great opportunity.

Organized retail industry is facing competition from unorganized sector in the form of traditional retailing

“Crossroads” inaugurated in late 1999 in Mumbai, India's first true shopping mall with ample space and all amenities

International retail majors such as Gap, Zara, Timex, United Colors of Benetton, Dairy Farm and Levis have already entered the market due to lifestyles changes in India and the "value for money" concept is growing up.

Future of retailing

Tesco is planning to enter Indian retail market through a partnership agreement with Home Care Retail Mart Pvt. Ltd., and expects to open 50 stores by the year 2010

Reliance will be investing $3.4 billion to become the country’s largest modern retailer by establishing a chain of 1575 stores by March 2007.

Hypercity Retailing, a subsidiary of K Raheja Corp Group, is planning to open 55 hypermarkets by the year 2015

Wal-Mart is eagerly planning to open its doors in India and looking out its feasibility options

About Global Retail Development Index (GRDI)

The annual A.T.Kearney Global Retail Development Index-2006,ranks 30 emerging countries on a 100-point scale – the higher the ranking, the more urgency there is to enter a market. This survey is done every year by a global strategic management consulting firm, A.T.Kearney, well - known for helping clients to meet their strategic objectives through a unique combination of strategic insight and collaborative working style, with firm’s offices being located in 30 countries.

Survey Outcomes

On a regional level, Asia is in a leading position from the maturing markets of Eastern Europe.

  • The Middle East has recorded the highest retail sales growth globally, contributed by United Arab Emirates and Saudi Arabia among Middle East countries.
  • India is in a leading position and been more attractive than ever to global retailers due to its economic growth, forecasted at 8% GDP in 2006, continues to support the retail industry.
  • Asian countries occupied 40% of the top 20 GRDI in comparison to 30% last year, while Eastern European countries captured 35% in comparison to 55% last year.
  • Asia has always been the front-runner of emerging markets because it represents 26% of global GDP and 32% of global retail sales.
  • India ranked first position in 2006 GRDI index and Vietnam moved up to 3rd positions.
  • Malaysia, Thailand and South Korea named to be three other Asian tigers also occupied the top 15 position, but China is continuing to decline due to it market saturation.


  • ‘Pantaloons’ became a great success at the initial stage of its launch
  • It posted the revenues of Rs.100 Million at the end of its first year operation much beyond the expected revenues of Rs.70 Million
  • Identifying the scope of organized retailing market and rising consumers demand in India, it came out with innovative retailing formats
  • It started venturing into other retailing segments like Food, Grocery through ‘Big Bazaar’ & ‘Food Bazaar’, besides apparel

Pantaloons have gained a brand identity among the consumers and became a great success and many stores were setup in different parts of the country during the year 2004.

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In order to survive in today’s competitive retailing trade, companies has to redefine the format of retailing in a customer friendly way, which gives them a great shopping experience in terms of convenience, comfort and wide product ranges. Modern retail expansion contributes to economic growth also along with creating avenues for employment, education etc.