Session 1: Introduction to

Retailing

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Learning Objectives
1.1 To define retailing, consider it from different perspectives, demonstrate its
impact, and note its special characteristics
1.2 To introduce the concept of strategic planning and apply it
1.3 To show why the retailing concept is the foundation of a successful
business, with an emphasis on the total retail experience, customer
service, and relationship retailing

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Retailing
• Retailing encompasses the business activities involved in selling goods and
services to consumers for their personal, family, or household use. It
includes every sale to the final consumer.

• Last stage in the distribution process

• Walmart vs. Amazon

• Why study retailing?

• The largest 50 retailers in the world generate more than $1.13 trillion in
annual revenues.

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Retailing

No. Retailers Amount (Billions)

1 Walmart 101.2

2 Amazon.com 120.1

3 Schwarz Group 108.7

4 Aldi 97.9

5 Costco 55.1

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3

The largest 50 retailers in the world generate more than $1.13 trillion in annual revenues.

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Impact of Retailing on Economy

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Retailing
•
Importance Of Retailing
•
Retailing is important for the creators, customers, as well as the economy.
•
Retail stores are the places where most of the actual sales to the customers take
place. They act as both a marketing tool for the brands and a support tool for
the customers to exchange and communicate important information.
•
Besides this, retailing is a great asset to the economy. It provides jobs, adds to
the GDP, and acts as a preferred shopping channel during the holiday season.

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Issues in Retailing
• How can we best serve our customers while earning a fair profit?
• How can we stand out in a highly competitive environment where
consumers have so many choices?
• Low consumer confidence and high savings rates have reduced consumer
spending. At the same time retail competition has increased through
increased format blurring (e.g., sales of cameras at office supply stores,
carpeting and major appliances at home improvement centers).
• How can we grow our business while retaining a core of loyal customers?

• Can retailers flourish in today’s tough market place?

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The global retail industry

• As an economy develops, more retail structure and specialization

helps multiple retailers (those with more than one outlet) grow
• Emerging markets provide opportunities for global retailers
• As disposable income rises (China)
• Many retailers are huge global organizations (e.g. Walmart, Tesco,
Ikea, Zara)
• As trade barriers have lifted, world has become their market place.
Impact of Retailing on Economy
Retail Landscape in Pakistan

Pakistan is an emerging market where the size of the retail

market is estimated around $42 billion, growing faster than the
economy at a rate of 5.3%. The sector could possibly be a huge
job creator, and attracting foreign investment into Pakistan,
attracting global brands to the local market.

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Pakistan’s Unorganized Retailing market
• Around 8.4 % sales is generated by modern retail. This will be 9% by
2020
• Limited to largest cities, Karachi, Lahore, Rawalpindi/Islamabad &
Faisalabad
Future prospect 30/m in other 10 cities.
• Hypermarkets and superstores account for of national food retail
sales.
• Grocery include, Utility Store Corporation at retail, Metro at whole
sale, convenience retailing.
• Specialty retailers, K&N (almost 100 outlets in 24 cities), Foodservice
retailers
• Future Investment in Pakistan likely to focus on non-food and
foodservice

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Table 1.1 Selected retail occupations
A Typical Channel of Distribution

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The Retailer’s Role in the Sorting Process

1. Communicating
2. Small suppliers support
3. Complete transaction with customers

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Omnichannel Retailing (1 of 2)
• A retailer sells to consumers through multiple retail formats:
– Web sites
– Physical stores
– Smartphone apps
– Social media
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nichannel-brands
– Examples: Khaadi, Mc Donalds

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Omnichannel Retailing (2 of 2)
• Cross selling across channels (in-store product availability info on Web site)
• Consistent pricing in all channels (credibility)
• Can buy, and return product regardless of channel
• Role of each channel
– Store– try on, ease of return, fast availability (immediacy), compare
offerings
– Web– 24/7, product information, product reviews by customers,
personalization (tailored assortment based on past purchases), most
current pricing, closeout sales
– Catalog-permanency, true color

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The relationship among retailers and
suppliers
Distribution Types

• Exclusive: Suppliers make agreements with one or few retailers,

designating such retailers as the only ones to carry certain brands or
products within a specified geographic area (Neco’s Health store carrying
specific local brands, Bloom Agritech)
• Intensive: Suppliers sell through as many retailers as possible
• Selective: Suppliers sell through a moderate number of retailers (Karachi
Candle Co at Ensemble, Xanders etc)

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Comparing Distribution Types

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Special Characteristics Affecting
Retailers

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Consumer-led retailing
Over time the consumer has become a more powerful member of the
distribution channel.
Reasons:
• Abolition of laws that allowed producers to set prices of goods.
Consumers therefore free to go to retailer with lowest price
• Increased knowledge about consumer buying patterns and preferences
via computerized information systems (especially EPOS – electronic
point of sale)
• Consumer can now compare retailer offers easily and quickly on the
internet
Figure 1.9 Applying the Retailing Concept

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Figure 1.11 A Customer Respect Checklist
• Do we trust our customers?
• Do we stand behind what we sell?
• Is keeping commitments to customers important to our company?
• Do we value customer time?
• Do we communicate with customers respectfully?
• Do we treat all customers with respect?
• Do we thank customers for their business?
• Do we respect employees?

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Customer Service Lessons: Richard
Branson and Virgin Airlines

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The total retail experience
Store of the Future
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Figure 1.10 Creating a Unique Shopping
Experience

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