Transcript for:
Retail Management Course: Introduction to Detailing (Session 2)

[Music] hello friends welcome back to the retail management course this is going to be session 2 introduction to detailing my name is dr pradeep salgankar founder director of sal dots academy i'm a professional facilitator and a corporate coach in this session we are going to see what is retailing what is retail management and what are the important aspects related to retail management in the first session we saw brief introduction to all the important concepts related to retail management and we saw in brief what retailing was so let's begin with this second session introduction to detailing what is detail the word retail is taken from french word retailer and it means to cut a piece or to break a bulk what does that mean in the olden days the retailers would go directly to the manufacturers and buy goods from the manufacturers and then they would break them into smaller pieces and then sell to the direct consumers at their convenience so the consumers had a very good convenience as far as getting goods from various parts and from various manufacturers so the retailer would buy goods in bulk for example they would they would buy sugar or rice or any other item in sacks and then they would break it into smaller pieces they would sell it in half kilo quarter kilo one kilo and they would give to the consumer so that was a very big convenience to the consumers so retailing precisely is getting things in bulk and then breaking it into smaller units and selling to the consumer to define retailing does is it is the sale of goods or services in small units to the ultimate customer for personal consumption or family consumption or for use as a whole household just keep in mind it is for personal consumption just imagine someone is consuming these goods purchased from the retailer for business purpose in other words the person is selling these goods in turn to somebody else for a higher rate and earning commission from that then that transaction is not a retail transaction that becomes a business transaction so for a transaction to be called as a retail transaction it has to be necessarily done by a retailer or end user and the product has to be consumed as either as a single person or as a family or as a household so the consumption of the product has to happen at that consumer's place now if somebody buys the goods and in turn sells for a commission to somebody else then that transaction doesn't become a retail transaction so in words of philip kotler retailing includes all those activities involved in selling goods and services to the final consumer and not for business purposes so even going by the definition of philip kotler we see that it is the transaction which is happening with the ultimate consumer the consumer has to consume and the consumer cannot sell in turn to somebody else the minute a consumer sells to somebody else it becomes a business transaction and that cannot be termed as a retail transaction so what is retail retailing is buying goods in bulk either from the manufacturer or from the wholesaler or from the distributor and selling in small quantities to the ultimate consumer that is retailing so the retailer necessarily breaks the bulk or he cuts the bulk into smaller pieces for the convenience of the customer and sells in smaller quantities now let's take an example let's take example of mr ramesh let's assume mr ramesh goes to a hyper market and buys one full sack of sugar from the hyper market of course provided the hyper market allows him to buy a sack full of sugar okay let's assume he buys five kilos of sugar from the hyper market and when he comes home in turn he sells that sugar to his neighbors as half kilo packets each and he charges a premium of one rupee for one kilo is that transaction a retail business is the transaction between the hyper market and mr ramesh is it a retail business or a retail transaction no it is a business transaction the transaction between the hyper market and mr ramesh is a business transaction whereas the transaction between mr ramesh and his neighbors is a retail transaction if the neighbors consume that sugar which mr ramesh has sold to them so mr ramesh is a link in the distribution channel of this sugar he is not a retail consumer he is a business channel partner so just keep in mind for a transaction to be called as a retail transaction the consumer or the end person who buys the goods has to necessarily consume it or his family has to consume or the product has to be used or consumed as a household then only you can call the transaction as a retail so retailing in short or in simple words is buying goods in bulk and making goods in single units or smaller quantities available to the consumer and then buying from different manufacturers or different suppliers and making different goods available to the consumer under one roof is retailing so retailing when we talk of it is the final step in distribution of merchandise for consumption by the end user so it is an end user and it is the final step there is no further transaction happening then only you can call that transaction as a retailing transaction retailing meets final consumer demand with supplies from different market years what the retailers do is they make goods available from various suppliers from various manufacturers from various distributors under one roof so that the consumer has a convenience of going to one shop one kirana store or a departmental store and buying all what he or she wants so products from different manufacturers from different suppliers are made available under one roof that is the retailer so retailing is making available goods in smaller quantities to the consumer from different manufacturers convenient access to variety of products and the consumers have the freedom of choice they have variety of products they have different types of chocolates available they have different types of biscuits available they have different types of atta available and the consumer has a freedom to choice freedom of choice the consumer can choose whichever brand whichever product whichever quantity he or she wants in addition to that a retailer gives multiple services to the consumer one he makes the products available in addition to that he gives multiple services to the consumer so retailing is in other words providing convenience to the consumer of getting product from various manufacturers from various suppliers under one roof at the convenience of the consumer so retailing nowadays is going change uh there is a changeover which is happening that is retailing has become a high competition industry this is simply because if we take a look around in the market every nook and corner you will find a retailer everywhere you go you will find a retailer and more or less the same products are being are being sold by these retailers so number of retailers has increased the number of products and the type of products sold by all these retailers have remained same so the consumer is having a big choice today he can go to any of these retailers and buy whatever he or she wants so the competition among retailers is increasing it's a high intensity competition industry simply because to survive the retailers will have to do something different and that different could be only in terms of the service which the retailer gives to the consumer the customer service what we call about so retailing is very very high competition it's a high intensity competition industry retailing is present today in variety of formats in the earlier days we only had the mom and pop stores or the kirana stores this friendly neighborhood kirana store what we call even today whereas today you will find different formats you have a departmental store you have a hyper market you have a supermarket you have the malls different formats of retail have evolved online retail is another format which has emerged in the last 10 10 12 years and it has taken the market by storm online retail is growing at a very fast pace so online retail is yet another uh format in the indian retail uh industry so retailing comes in variety of formats so there's a wide choice wide choice of formats there's a wide choice of goods the wide choice of retailers it's all convenience to the customer let's take a look at the indian retailing scenario in india predominantly there are three categories of retailing we had organized retail we had the unorganized retail and the third category is the online retail which are very predominant or which is very fast growing in indian market so if you look at the indian retail market we have three categories unorganized retail organized retail and the online retail of these the unorganized retail or the unorganized players in the retail industry dominate the retail industry they account to about 90 to 92 percent of the entire retail industry in india whereas if we talk of the organized retail it accounts only for about 8 to 10 percent of the retail industry of course online retail does come in the organized retail it becomes a part of the organized retail so if we divide the indian retail industry into organized and unorganized we see even today the organized retail is very small just about eight to ten percent though it is growing whereas the unorganized retail comprises the majority part of the retail industry in india that's about 90 to 92 percent the kirana stores the roadside uh retailers the hawkers all these come in unorganized retail so indian traditional retail is dominant in form of market places called as bazaars or the weekly bazaars or the hats the huts what do you call these are very predominant in the northern part of india the northern states of india the hearts what we call and the kirana stores which are present all over india you go to any part of india you'll find kirana stores whereas the concept of bazaars is very dominant in goa specially we have what is called as weekly bazaars you go to any city the smaller cities of goa they have what is called as the weekly bazaars in maps we have the friday market or the friday bazaar which is very dominant in maps so the indian the unorganized retail is dominant dominant uh or dominated by this format of retailing which is bazaars or weekly bazaars or the huds what you call or the kirana stores the roadside vendors and the hawkers selling different merchandise including local produce and manufactured items is very common is very common all over india you go to any part of india you'll find the roadside vendors and the roadside hawkers it's very very dominant they will sell all the local produce or they will even sell the manufactured goods functions of a retailer a retailer performs various functions he gives services to the manufacturer he gives services to the suppliers he gives services to the consumer but the major functions of a retailer involved the services and the convenience which is given to the consumer so let's see those functions so retailer is the connect between the manufacturer the wholesalers suppliers and the ultimate consumer the ultimate end user so retailer is the one who makes the products available from the manufacturer various manufacturers from various wholesalers and various suppliers under one roof so that the consumer gets them at a very con at his convenience so the consumer gets these products conveniently without any difficulty so it is a retailer who buys in bulk from the manufacturer from the wholesalers from the suppliers and makes the goods available to the consumer in smaller quantities so consumer has the freedom of going and picking up one kilo of sugar or one kilo of atta or maybe half a kilo of water and who makes it possible it is the retailer so retailer has a major role over here to give products to the consumer as per his convenience so this is one major function which the retailer does a retailer has of connecting between the manufacturer the wholesaler the supplier and the consumer the end user buying and assembling of goods sorting breaking bulk and holding the stock this is yet another important function of the retailer he buys in bulk he assembles the goods for the benefit of the consumer he does sorting he does breaking of the bulk from a sack of sugar he packs sugar into smaller quantities of one kilo half kilo quarter kilo as a as as the consumer may want it and the most important thing the retailer is holding the staff he has paid for that stock in advance his money is blocked over there and is holding that stock so that the consumer will come and buy at his convenience so assembling sorting breaking the bulk and holding of the stock for the convenience of the consumer that is another important function of the retailer warehousing and storing this is one very very important function he buys goods he buys products and he stores them he holds them he he gives the function of warehousing to the company there is a benefit for the company the companies which manufacture they don't have to hold the goods they will pass it on to the distributors and to the retailer the retailer will hold the goods so that the consumer gets it on time and is storing of course there are disadvantages of warehousing and storing there may be pilferages there may be damages there may be rodents issue and things like that but then who is doing that it is the retailer he is paying for the goods in advance he is buying the goods and holding them in his warehouse so he's holding his warehousing and he's storing the goods so that the goods are made available to the consumer as and when they want so that there are no shortages as far as the consumers are concerned selling the products to consumers retailer does the function of selling the goods to the consumer directly buying from the manufacturer directly from the wholesalers from different suppliers and selling it to the customer as as for the requirement of the customer maximizing customer satisfaction the retailer also gives various services to the customer so that the customer is satisfied he keeps the customer happy sometimes the customers come back saying that okay i don't want this exchange this product with this the retailer allows that to do sometimes the customers come back no i don't want this please give my money back the retailer also does that he maximizes the customers satisfaction retailer is the channel of communication and advertising this is one major function which the retailer does as far as the manufacturers are concerned what the retailer does is he gives all the information that is required by the consumer about the product especially new products then retailer is more important in selling the newer products for the companies it is the retailer who convenience convinces the customer about the new product if a retailer doesn't want he may not stock goods of a particular company or a particular manufacturer and thus there won't be sales for that particular company for those goods so a retailer is a channel of communication he advertises for the products of the manufacturer so he's a channel he's an important nerve end for the company as a channel of communication and advertising as far as the customers are concerned so the retailer sells more goods newer goods different goods to the consumer so retailer acts as a marketeer for the manufacturer or for the wholesaler or for the suppliers and increases the sales of the manufacturers a retailer gives credit facilities to the customers many a times the retailer says okay you buy today your account is with me you pay whenever you want that is one way how the retailer gives credit facilities certain way the retailer buys the goods in advance from the manufacturer and stores them the retailer doesn't pay retailer pays only when he goes to pick the items from the store so the retailer gives a credit facility to the customer in two ways one by buying the goods in advance from the manufacturer and storing them second he gives a credit facility maybe of a week or two weeks or a month maybe he may maintain a monthly account and then the customer can settle the monthly accounts or the weekly accounts or the fortnightly account so he extends a credit facility to the customer customer uses the product but who has paid for that it is the retailer who has paid in advance so that is a very important service which is given by the retailer to the customer prepayment of merchandise the retailer has to pay in advance to the suppliers to the manufacturer and get the goods so it is not the customer who pays directly to the manufacturer it is the retailer who pays directly to the manufacturer on behalf of the customer he takes a risk he is involved in risk management he buys in bulk he stores the goods so that the customers can use it as and when they want so there is a big risk involved there is a risk of fire there's a risk of theft there's a risk of ruddens there's a risk of pilferages happening there's a risk of wastages there's a risk of breakages all this risk is borne by the retailer he takes a big risk on behalf of the manufacturer and on behalf of the customer the manufacturer has sold the supplier has sold the supplier has got his money the supplier has nothing to do if there is a pilferage happening or if there is breakage happening it is a retailer who will have to bear that so the retailer bears a big risk as far as the goods are stored he does the function of inventory management he has to manage the inventory he has to ensure that he does not stop too much nor his stocks too less because if he stocks too much his money will be blocked his earnings will be less his profitability will be lower and if he stocks less then there are chances of stock outs he will lose on the sales the customer will come ask for a particular product and the product is not there in the store so it's a loss to the retailer so he has to keep optimum inventory so he does a fantastic job of inventory management many times he may buy goods because there are schemes but then the retailer has to be very careful he does not buy too much which he cannot sell so the purchases have to be optimum the inventory holding should be opting and he gives information and feedback to the company he gives information to the customer and he gives feedback to the company whatever the feedback that the customers give is transferred to the supplier from supplier to the wholesaler to the distributors and to the manufacturers and that is how the companies get customer feedback from retailers useful feedback is given by the retailers to the manufacturers and most of it is very useful to the manufacturers especially if they want to innovate their products come out with new products or come out with product modifications or differentiation of products and a host of information is given by the retailer to the customer so customer if they want any information about any product maybe how to use the product or where to get the product serviced or uh what are the different variants about the product of course internet is there but then the best source is the retailer the first hand very easily available source is the retailer customers go and ask the retailers any information about the product and the retailer is ready to help the customers these are the functions of retailer in nutshell let's look at retail management retail management comprises of all the various processes which enable customers to procure desired merchandise from the retail stores conveniently for their ndos it involves various processes which enable customers to procure whatever products they desire the processes could be anything the processors could be purchasing the process could be storing the process could be inventory management store management all these processes put together constitutes retail management retail management is managing various functions to ensure that the consumers get whatever they want conveniently all the goods whichever they want for day-to-day use are made available to them conveniently by retail management functions so retail management is managing those functions which enables the retailer make the goods available to the customer very very conveniently so retail management includes all the steps required to bring the customers into the store and fulfill their buying needs the retailer also has to ensure that there are footfalls there are customers coming in the store and this is possible made possible by using the retail management concepts so retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile so all those acts all those functions all those activities which the retailer takes or the retailer practices to make shopping a pleasurable experience and ensure that the customers click the store with a smile is called as retail management in simpler words retail management helps customers shop for whatever they need without any difficulty so that's retail management now let's see the various components of retail management what comprises retail management first it is the merchandise mix what products to be kept what merchandise is to be kept or carried by the retailer what goods to stock what goods to sell how much to sell what are the different combinations of the products which companies to sell all these decisions will come in merchandise makes decisions by the retailer so the most important or the first important component of retail management is the merchandise makes decisions and deciding what merchandise to carry what goods to carry that is the first important component the second important component of retail management is the store layout the store layout of any retailer has to be most convenient and easily accessible and negotiable to the customers the customer should be in position to move from one place to another very conveniently so the customer should be in position to find whatever goods he or she wants very conveniently so the store layout should be customer friendly customer should have no difficulty in finding whatever goods he or she wants so the retailer will have to design the store layout in a very meticulous manner so store layout is the second most important component of retail management the next component is inventory management the retailer has to be very careful as far as the managing the inventory is concerned too much of inventory is bad too less of inventory is also bad what is good for the retailer is optimum quantity so the retailer will have to be continuously monitoring the inventory he will have to be continuously replenishing the inventory the goods move he has to replenish the goods on the shelf if there are no goods on the shelf it is a lost sales it is a big loss to the retailer and sometimes it so happens if a customer doesn't find the goods on the shelf of the retailer two or three times the customer may not return back to this to the store and it's a permanent loss to the retailer so inventory management is a very important component of retailing the store management when they say store management all the aspects of this store the display the signages the accessibility of the goods to the customer uh which products to be displayed where the front of the store back of the store at uh goods being displayed at the eye level goods being displayed at the higher level higher point all these decisions would come in store management if there is a background music the background music within the store the hygiene the cleanliness within the store all these aspects would come under store management and then the most important aspect is customer management how the customer is managed what convenience is given to the customer what facilities are given to the customer what benefits what additional services are given by the retailer to the customer all these aspects will come in customer management and then we have the store promotion very very essential it is not enough only to have a good layout good merchandise makes and a good store management practices but it is also equally important to ensure the store is promoted the brand of the store is built so that people around know that this is a store selling this particular merchandise and yes we have to go there and shop out over there so the brand has to be built there has to be continuous effort to build the brand of the store so that's store management branding of the store yes the store brand has to be built this the brand image of the store has to be built uh anyone talking of retail management the customers should think of okay let's go to abc store because that is the store we know we will get the best service we will get everything that we want under one roof the merchandise mix is good the store is very clean and all those things so the brand of the store has to be very strong in minds of the customers so whenever customers think of retail shopping the first name that should come in their mind is your store so branding of the store is very important in retail management i'm not talking about branding of any particular product or any particular item i'm talking about branding of the store the store image has to be built sustainability and growth of the store very essential you have to ensure that the store is sustainable the business is sustainable the retail is happening continually the retail uh shoppers are coming and doing business with you and you have to think of growing the store you cannot expect to run the store in the same way in that same small area for years and years together of course there has to be sustainability there has to be continuous business happening but at the same time there has to be growth of the store growth in terms of expansion of the store or store network or the store chain or the moving into a bigger space of the store and second is growth in terms of profitability growth in terms of earnings growth in terms of getting higher higher and higher profitability to the retailer with this we come to the end of session 2 that is introduction to retailing thank you very much god bless you