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Unit 1: Introduction to Retail Environment

developments have used the three-dimensional visual representation abilities of a screen image Notes
to provide dynamism to print-based retail offerings, first in the form of videos, and soon after
in the form of a shopping channel, QVC, which was launched in 1983.
One of the difficulties of programmed retail offerings is the need to provide the consumer with
the opportunity to skip through unwanted product categories, and so interactive screen-based
retailing is the most likely retailing format to offer the potential customer everything that is
necessary to emulate the ‘usual shopping experience’. The conversion to digital TV and broadband
internet services will greatly facilitate the adoption of interactive TV shopping.

1.7 Successful Retailing

The following sub-points affirm the success of retailing in any nation.

Contribution to the Economy

Moving away from the role of retailing in the marketing activity of an individual producer,
retailing activity can also be viewed as a significant contributor to the economy in general. In
the last two decades of the twentieth century, the UK and many other developed nations have
seen their economies change from being manufacturing-led to being service-led, in terms of
wealth creation, employment and investment. Around one-third of consumer expenditure takes
place through retail outlets (Verdict, 2001), and the retail industry employs one in nine workers
(BRC, British Retail Consortium, 2001).

The retail price index is a frequently referred to economic indicator. It is a measure that is based
on a ‘basket’ of products across all retail sectors and compares prices over time in order to reveal
the changes in the cost to households of typical purchase needs (Hart, 1996). In recent years the
retail price index in the UK has been relatively stable, indicating stability in the economy. When
the retail price index starts to rise, a government might introduce an interest rate rise to curb
inflation, and if the price index looks like it might fall, an interest rate cut could help to prevent
stagnation in the economy.
A Global Viewpoint

Retailing is increasingly a global business. A more structured retail industry with more multiple
retailers (those with more than one outlet) is a sign that an economy is developing, as
organizations specialize and gain economies of scale. Additionally, when disposable incomes
rise, retailers play an active part in distributing increasingly discretionary goods to centres of
population. Emerging markets are a real (although highly complex) opportunity for experienced
retailers, especially if they are faced with high levels of retail provision and therefore competition
in their traditional markets.
As the artificial barriers to trade, such as import duty and quota restrictions, are removed from
the global economy, many retailers will view the world as their marketplace and make sourcing
and outlet operation decisions on a set of criteria that are relevant across the globe.

Example: In the UK some of the strongest recent entrants to the retail market are non-
domestic players, such as Wal-Mart, IKEA, Marks and Spencers, Big Bazar and some modern age
retailers are having considerable success on a global basis, such as Tesco, B&Q, Carrefour, etc.
However, long distances, political and cultural complexities are huge challenges to retailers,
which can only be overcome by the strongest contenders. International retailing activities have
often stemmed from retailers seeing opportunities for formats that are under represented in

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