Page 88 - DMGT550_RETAIL_MANAGEMENT

Unit 5: Retailing Strategy

Mom-and-Pop or Kirana Stores: is a retail outlet that is owned and operated by individuals. The Notes
range of products are very selective and few in numbers. These stores are seen in local community
often are family-run businesses. The square feet area of the store depends on the store holder.
Specialty Stores: A typical specialty store gives attention to a particular category and provides
high level of service to the customers. A pet store that specializes in selling dog food would be
regarded as a specialty store. However, branded stores also come under this format. For example
if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the
respective stores.
Department Stores often bear a resemblance to a collection of specialty stores. A retailer of such
store carries variety of categories and has broad assortment at average price. They offer
considerable customer service. For example: Food World in Bangalore.
Discount Stores offers extensive assortment of merchandise at affordable and cut-rate prices.
Normally retailers sell less fashion-oriented brands. However the service is inadequate.
Convenience Stores is essentially found in residential areas. They provide limited amount of
merchandise at more than average prices with a speedy checkout. This store is ideal for emergency
and immediate purchases.
Hypermarkets provides variety and huge volumes of exclusive merchandise at low margins.
The operating cost is comparatively less than other retail formats. A classic example is the
Metro™ in Bangalore.

Supermarkets is a self service store consisting mainly of grocery and limited products on
non-food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can
be anywhere between 20,000-40,000 square feet. Example: SPAR™ supermarket.
Malls has a range of retail shops at a single outlet. They endow with products, food and
entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore.

Category Killers or Category Specialist: By supplying wide assortment in a single category for
lower prices a retailer can “kill” that category for other retailers. For few categories, such as
electronics, the products are displayed at the center of the store and sales person will be available
to address customer queries and give suggestions when required. Other retail format stores are
forced to reduce the prices if a category specialist retail store is present in the vicinity. For
example: Pai Electronics™ store in Bangalore.
E-tailers: The customer can shop and order through internet and the merchandise are dropped at
the customer’s doorstep. Here the retailers use drop shipping technique. They accept the payment
for the product but the customer receives the product directly from the manufacturer or a
wholesaler. This format is ideal for customers who do not want to travel to retail stores and are
interested in home shopping. However it is important for the customer to be wary about
defective products and non-secure credit card transaction. Example: Amazon and Ebay.
Vending Machines: This is an automated piece of equipment wherein customers can drop in the
money in machine and acquire the products. This kind of system is currently not widely used in
India. For example: Soft drinks vending at Bangalore Airport.
Retailers can opt for a format as each provides different retail mix to its customers based on their
customer demographics, lifestyle and purchase behavior. A good format will lend a hand to
display products well and entice the target customers to spawn sales.

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