Unit 1 Retail Marketing Management BBA III Marketing

Unit 1 : Retail Marketing Management BBA III Marketing Elective paper II By Prof Prasanna Shembekar

Introduction to Retail What is retail ? The sale of goods or commodities in small quantities directly to end consumers, usually for non-business purpose. Who is a retailer ? A person who is engaged in a retail business is called a retailer.

Retail marketing is different Retail Marketing How to bring Customer to the shop ? How to make Him buy again and again ? ? How to make customer actually buy ? ? Retail marketing has three main challenges Pull Strategy

Factors responsible for changes in retailing • • • Proximity to the consumers. Introduction of private label Rise of consumerism Urban life and corporate culture Technology

Proximity to the consumer • Retailer is closest to the customer • Thus he can understand customer better and gets first hand response • Empowers consumers as well as producers

Introduction of private label • Retailers decide on their own, which brands to be stocked • Create own in-store brands to fill up demand gaps • These private labels give them power to negotiate with manufacturers.

Rise of consumerism • Consumers have become knowledgeable and demanding • They want choice & freedom to compare products • Continuous changing needs & higher expectations compel stores to change their retail formats

Urban life and corporate culture • Employed youth in high income bracket • Nuclear families where wives also work equally • Corporate lifestyle in major cities • Impact of modernization

Technology • Introduction of bar code systems, customer cards enhanced the consumer research • CRM • Internet for e-tailing

Retail : The Indsutry • The size of modern retail in India is expected to double to Rs 171, 800 crore (US$ 25. 7 billion) from Rs 87, 100 crore (US$ 13 billion) in three years span.

Market Size • India’s retail market is expected to grow at a Compound Annual Growth Rate (CAGR) of 10 per cent to US$ 1. 6 trillion by 2026 from US$ 641 billion in 2016. • While the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent. • Indian retail market is divided into “Organised Retail Market” which is valued at $60 billion which is only 9 per cent of the total sector and “Unorganised Retail Market constitutes the rest 91 per cent of the sector.

Growth of retail Industry • The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. • It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment. • India is the world’s fifth-largest global destination in the retail space.

Growth and its impact • Improvement of lifestyle and raised standard of living are the direct impact of retail developments on consumers. • Increasing international presence in India retail industry is increasing exposure of Indian consumers to international brands. • In a similar fashion, the industry has helped a lot to boost the general awareness of consumers.

Challenges to retail development in India • Retail not being recognized as industry in India ( Hampers availability of finance) • High cost of real estate. Good locations are at high cost. • Difficulty in standardization of merchandise due to changing trends and fashions • Lack of adequate infrastructure. Poor roads, warehouse problems, cold storage issues etc. • Challenges of GST and its complexities • Larger inventories , lower profit leverage ( display to store ratio) • Organized retail unable to stand up with unorganized retail

Opportunities for retail • Customers have increasing choice of products at the lowest rates. Disposable income of Indian customers is rising. • E-commerce is creating the biggest revolution in the retail industry, & this trend would continue in the years to come. • Retailers should leverage the digital retail channels (ecommerce), which would enable them to spend less money on real estate and inventory while reaching out to more customers in tier-2 and tier-3 cities. • Both organized and unorganized retail companies have to work together to ensure better prospects for the overall retail industry, while generating new benefits for their customers. • Long-term outlook for the industry is positive, supported by rising incomes, favorable demographics, entry of foreign players, and increasing urbanization.

Opportunities for retail • The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totaling US$1. 04 billion during April 2000–June 2017, according to the Department of Industrial Policies and Promotion • With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many companies have invested in the Indian retail space in the past few months