Project on Organized Retail

PROJECT ON ORGANIZED RETAIL

Retail

Introduction

The word retailing is derived from the French word 'retailer', meaning 'to cut a piece off' or 'to break a bulk'. In simple terms, it implies a first-hand transaction with the customer.

The world first saw the emergence of retailing in the pre 1850s when the Yankee Peddlers, Bartering, Trading Posts and General stores were in place.

The first departmental store was established in 1851 by the name of F & R Lazarus Company in the U.S. Between 1860 and 1910, chain stores and early general stores dominated the scene.

Supermarkets started in the United States in 1930s, the first being established in 1932 in New Jersey (Big Bear).These super markets became dominant in the late 1950s.

The industry has contributed to the economic growth of many countries & is undoubtedly one of the fastest changing & dynamic industries in the world today.

TYPES OF RETAIL

a. Organized

b. Unorganized

Organized Retail

Organized retail or modern retail is usually chain stores, all owned or franchised by a central entity, or a single store that is larger than some cut-off point.

Types

Supermarkets - Self service food store offering groceries, meat and produce with limited

Sales of non-food items, such as health and beauty aids and general merchandise.

Supercenters - large stores (150.000 - 200,000 square feet) that combine a super market with

a full line discount store.

Hypermarkets - large (100,000 - 300,000 square feet) combination food (60-70 percent) and

general merchandise (30-40 percent) stores, keeps fewer stock keeping units

than super centers ranging from groceries, hardware and sports equipment to furniture and

appliances to computers and electronics.

Convenience Stores - provide a limited variety and assortment of merchandise at a

convenient location in 2000 - 3000 square foot stores with speedy check out. They are modern version of mom and pop stores.

Departmental Stores - carry a broad variety and deep assortment, offer customer services

and organize their stores into distinctly separate departments for displaying merchandise. They offer pleasing ambience, attentive services and a wide variety of merchandise under one roof and sell both soft and hard goods.

Full-line Discount Stores - Retailers that offer a broad variety of merchandise, limited

service and low prices. They offer both private as well as national labels but these brands are typical less fashion oriented than the brands in departmental stores.

Expected growth - 45-50%

Market share - 3-4% share of total market. (in INDIA)

In the developed economies, organized retail is in the range of 75-80 per cent of total retail, The share of organized retail varies widely from just one per cent in Pakistan and 4 per cent in India to 36 per cent in Brazil and 55 per cent in Malaysia.

Unorganized Retail

The traditional or unorganized food retail system consists of

 wet markets (many small stalls) for fresh products, fish, and meats;

 tiny "mom and pop" stores (man taking orders, wife pulling down products from little shelves and measuring out and packing orders) with no self-service by customers;

 street hawkers with pushcarts or shoulder or head burdens; and

 home delivery of milk and mobile (cart) delivery of dry goods

Expected growth - 13%

Evolution of Modern Retail in Developing countries

It occurred in three successive steps

The first wave - mid-1990s in South America, East Asia outside China

North-Central Europe and South Africa.

The second wave - late 1990s in Mexico, Central America, Southeast Asian Countries, Southern-Central Europe.

The third wave - Early 2000s in parts of Africa, some countries in Central and South America, Southeast Asia, China, India, and Russia.

IN CONTEXT OF INDIA

Retailing has been one of the prominent driving forces in business in India. Traditionally it has been dominated to a large extent by the unorganized sector

Unorganized Retail - With market share of 95-96% of total market, revenues from unorganized retail in 2011-12 are estimated to be US$ 496 billion generating from local kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops, paan and beedi shops, hand-cart hawkers, pavement vendors, etc. which together make up the so-called "unorganized retail" or traditional retail.

Organized Retail

Beginning - The process started with the establishment of the Shopper's Stop outlet at Andheri, Mumbai in 1991.Then, other organized retailing stores like Kids Kemp, Crossroads, RPG's Music world, Pyramids etc followed the trend.

2P's-Property and Personnel are the biggest problems to venture into retailing.

Huge marketing required after setting up an organized retailing shop (full-line stores) since competition is with local retailers (unorganized) who are well acquainted with local