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Retail Business Environment

Notes predictive suggestions relating to the likely pattern of development of retailer types rather than
specific retail companies.

1.6 Evolution of Retail Format

The format of a retailer is the overall appearance and feels that it presents to customers, primarily
its look and layout, the sort of range it stocks and the approach taken to pricing.
The format, together with range, pricing and marketing, is one of the key determinants of a
retailer’s success. Of these, the format is very often the hardest to get right. A good format will
both draw in customers (generating footfall) and help present products well to generate sales.
Because the format is so important, growth investors can often benefit by identifying smaller
retailers who have recently developed formats that are good enough to provide a platform for
sustained growth.

There are numerous types of retailers all over the world. From the small, independent grocery
store to the highly sophisticated multi-level department store, the number of retailer is absolutely
unlimited. In the business retailing, however, the type of retailer is identified and classified on
the basis of the “Store Format” that the respective retailer adopts.
A retailer format is the type of retail mix that the retailer adopts, which includes the following
factors:
The nature of merchandise and service offered by the retailer
The pricing policy of the merchandise by the retailer

The retailer’s approach to advertising and promotional programmes
The retailer’s approach to the design of the store as well as to visual merchandising
The choice of location preferred by the retailer for the above, and

The size of the store
!

Caution Deciding on a retail format is the most essential component of a retail strategy.
While some of the most popular retailing formats adopted in organized retailing the
world over are:
Convenience stores

Specialty stores
Supermarkets
Hyper markets
Shopping malls
Time has changed radically since the house wife slipped her shopping bag over her arm and set
out her daily food supply. The origins of retails are as old as traditional itself. Barter was the
oldest form of trade. For centuries, most merchandise was sold in market places or by peddlers
medieval markets were dependent on local sources for supplies of perishable foods because
journeys were for too slow to allow for long distance transportation. However, customers did
travel considerable distances for specialty items. The peddler, who provided people with the
basic goods and necessities that they could not be self sufficient in, followed one of the earliest
forms of retails trade. Even in prehistoric times, the peddler traveled long distances to bring

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