Presentation from the book of Swapna Pradhan

1. THEORIES OF RETAIL
Lecture 4

2. Classification of the Theories
 Environmental Theory
 Where a change in retail is attributed to the change in the
environment in which the retailers operate
 Cyclical Theory
 Where change follows a pattern and phases can have definite
identifiable attributes associated with them
 Conflictual Theory
 The competition or conflict between two opposite types of
retailers leads to a new format being developed

3. Attributes of Environmental Theory
 Ability to adapt to change successfully is the core of the theory
 Works on Darwin’s theory of ‘Survival of the Fittest’
 Retailers are Economic Entities
 Confront Environment made up of customers, competitors and
changing technology
 Alters Profitability
 High Susceptibility to environmental change can spell death in the
competition
 Identification of the Point of Precipice

4. Attributes of Cyclical Theory
 Also known as the Wheel of Retailing
 From Innovators to Traditional Retailers to Mature Retailer
 Creates Cyclical Trends in due course of time
 Constant evolution of the retailers as they start adding products
unto confused state thus entailing a negative cycle
 i.e. from Niche retailing to general retailing to moving away from
the tenets of its own niche business (e.g. IBM)

5. Attributes of Cyclical Theory

6. Attributes of Conflict Theory
 Thesis: Individual Retailers as corner shops all across the
country
 Antithesis: A position opposed to the thesis which challeges
thesis i.e. department stores
 Synthesis: Blending of Thesis and Antithesis resulting into
supermarkets, hypermarkets etc.
 Synthesis is the basis for the next evolution.

7. Life Cycle in Retail

8. Life Cycle in Retail

9. Business Models in Retail
 Format adopted by retailers to reach the customer
 Challenges to Business Models
 New Information
 Communication Technologies
 Shorter PLCs
 Global markets
 Tougher Competition
 What Business Model in retail means:
 Product & Services offered by the retailer
 Pricing policy
 Reaching to the customer using various means of communication
 Size, look and location of the store

10. Critical Success Factors
 Trends in market positioning
 Competition
 The Organizational capabilities

11. Classification of Retail Formats

12. Classification Based on Ownership
 Independent Retailer (Standalone Kirana Stores)
 Operated by single person
 Passed on generation to generation
 Ease of Entry and Exit
 Good CRM
 No Economies of scale
 Limited Bargaining Power
 A Chain Retailer or a Corporate Retail Chain (Westside)
 Two or more outlets under a common ownership
 Similarity in merchandise, ambience, advertising and promotions
 Good bargaining power
 Cost effective advertising and promotions
 No accommodation of local preferences
 Loss of control on greater scale of operations

13. Classification Based on Ownership
 Franchising
 Product or trademark franchise (Archie’s)
 A business format Franchise (McDonald’s, Domino’s)
 Franchising can be for one store or multiple stores within the region
 Leased Departments (Stores for Perfumes, jewellery, watches)
 Shop-in-shops
 Good method of expanding product offerings
 Presence in the form of small express outlets in malls, multiplexes, airports,
railway stations
 Consumer Co-operatives (Apna Bazar, Khadi Gramodyog)
 Essential commodities at reasonable prices
 Encouraged in the interest of the common man
 A significant employment provider

14. Questions???