CHAPTER 1 - RETAIL MANAGEMENT
RETAIL
MANAGEMENT
[Explanation: This section (Page 1) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
LEARNING OBJECTIVES
Describe the actual meaning and scope of retailing;
Demonstrate the functions of retailing and retailer;
Derive an equation for marketing retail;
Trace the growth of the retailer;
Get a global retail market overview;
Understand the impact of retail to choose as a
career.
[Explanation: This section (Page 2) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
WHAT IS RETAILING?
“Selling products and services directly to customers is
referred to as retailing. Retailing is the practice of
selling goods and services to customers for their
personal use. Retailing covers all the acquired
information in selling products or services to the
ultimate consumers for their non-business
consumption”.
(Julkunen, 2016)
[Explanation: This section (Page 3) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
WHAT IS RETAILING?
Retailing refers to the sale of finished products and services to
consum ers for their personal use, such as eating, wearing, or
utilizing them . It plays a vital role in connecting producers or service
providers with the end custom ers by ensuring that goods are
properly transported and m ade accessible. As an essential part of a
m arketing plan, retailing helps in targeting specific consum er
groups and ensuring that products m eet their needs. To be
effective, the m arketing plan m ust align the product’s features,
benefits, and price with the environm ent in which it is sold.
(Litt, 1999)
[Explanation: This section (Page 4) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
RETAILING
FUNCTIONS
[Explanation: This section (Page 5) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Retailers are a critical link between producers and
consum ers. They not only sell products but also add value
by m aking goods accessible, affordable, and convenient
to purchase. Their functions include providing
assortm ents, breaking bulk, offering services, m anaging
risks, holding stock, prom oting products, and serving as a
com m unication channel between m anufacturers and
consum ers.
[Explanation: This section (Page 6) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Giving Assortments
Retailers bring together different brands, product types,
sizes, colors, and prices in one location.
This saves custom ers from the hassle of visiting m ultiple
shops for different products.
M anufacturers usually specialize in one type of product,
but retailers com bine them to create convenience.
Exam ple: Knorr m akes soups and Kellogg’s m akes cereals,
but superm arkets sell both together so custom ers can buy
all item s for a m eal in one place.
[Explanation: This section (Page 7) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Sorting
Producers prefer to sell large quantities to a few buyers to
reduce costs.
Consum ers, however, want a variety of products in sm all
quantities.
Retailers solve this m ism atch by purchasing bulk
quantities from m ultiple producers, then sorting and
reselling them in sm aller batches to individual buyers.
Exam ple: Big Bazaar offers 20,000 assortm ents from 900
m anufacturers, allowing custom ers to access a wide
variety in one store.
[Explanation: This section (Page 8) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Breaking Bulk
Large shipments from producers are divided into smaller,
consumer-friendly lots by retailers.
This reduces the cost of storage, transportation, and per-
unit prices for customers.
It ensures that products are available in convenient
quantities suited for household use.
[Explanation: This section (Page 9) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Rendering Services
Retailers offer several services that m ake shopping easier:
Credit and installm ent options for affordability.
Displays and dem onstrations to inform and attract
custom ers.
After-sales services like warranties, repairs, and com plaint
handling.
Hom e delivery and installation services for convenience.
These services not only encourage purchase but also build
custom er loyalty and satisfaction.
[Explanation: This section (Page 10) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Risk Bearing
Retailers take on risks such as unsold inventory, product
dam age, or custom er returns.
M any producers allow return and repurchase policies, but
retailers still face financial risks.
Retailers absorb m arket fluctuations, changes in
consum er dem and, and product obsolescence.
[Explanation: This section (Page 11) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Holding Inventory
By m aintaining stock, retailers ensure goods are readily
available when custom ers need them .
This reduces the need for households to store large
am ounts of products.
Retail inventory m anagem ent ensures steady supply and
im m ediate custom er satisfaction.
[Explanation: This section (Page 12) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Communication Channel
Retailers act as a two-way link between producers and
consum ers.
They collect consum er feedback on preferences,
satisfaction, and buying trends and pass it to
m anufacturers.
They prom ote products through in-store displays,
advertisem ents, and prom otions.
Custom ers also discover new products through retailers,
influencing buying behavior.
[Explanation: This section (Page 13) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Transportation & Promotion
Retailers play a role in the physical distribution of goods,
m oving them from suppliers to their own stores and
som etim es directly to custom ers.
They also support m arketing and prom otions by
showcasing new products, running sales cam paigns, and
educating buyers about product benefits.
The range of services provided by a retailer often
determ ines the share of profits they earn in the supply
chain.
[Explanation: This section (Page 14) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
MANUFACTURER
FINAL
CONSUMER
RET AILER
WHOLESALER
[Explanation: This section (Page 15) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
RETAILING
OPPORTUNITIES
[Explanation: This section (Page 16) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Management Opportunities
Retailers need people skilled in marketing, finance, HR, supply chain,
and IT.
Managers handle responsibilities like:
Financing, purchasing, and accounting
Distribution & storage operations
Marketing (research, branding, advertising, sales teams)
Career Growth & Salary
Fast promotions and financial rewards
Store managers earn $120,000–$160,000/year
Retail management offers high income potential with experience.
[Explanation: This section (Page 17) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Entrepreneurial Opportunities
Retail also provides chances to start your own business.
M any of the world’s richest people are retail entrepreneurs:
Sam W alton (W alm art)
Jeff Bezos (Am azon)
Ingvar Kam prad (IKEA)
Anita Roddick (The Body Shop)
Retail entrepreneurship can lead to global success and wealth.
[Explanation: This section (Page 18) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
RETAILING’S
ECON OMI C AND
SOCI AL
IMPOR TANCE
[Explanation: This section (Page 19) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
SOCIAL RESPONSIBILITY
Retailers do more than just sell products; they also try to be socially responsible.
This includes protecting the environment, treating workers fairly, and
supporting the community.
Many retailers practice corporate social responsibility (CSR) by making sure
their business activities have a positive effect on people and society.
RETAIL SALES
Retailing touches almost every part of daily life—buying food, clothes,
household items, or services like car repair.
In the U.S., retail sales (excluding auto sales) reached $3.6 trillion in 2012,
showing how important it is to the economy.
While big retailers like Walmart or Target dominate, the majority of retail
businesses are small stores—about 95% of U.S. retailers run only one store.
[Explanation: This section (Page 20) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
EMPLOYMENT
Retail is one of the largest employers in the world.
In the U.S. alone, retail employs over 25 million people, which is nearly 18% of all
non-farm workers.
Between 2004 and 2014, retail created about 1.6 million new jobs, making it
one of the fastest-growing job sectors.
GLOBAL RETAILERS
Retailing has become a global industry because many companies expand
internationally to find growth.
Brands like Amway, Ace Hardware, Avon, Zara, Carrefour, and Walmart operate
in 20+ countries.
These global retailers earn a large share of their revenue from international
markets.
For example, companies like Royal Ahold, Walmart, Metro, Schwarz, and
Carrefour each generate more than $25 billion annually from overseas sales.
[Explanation: This section (Page 21) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
RETAILING’S
ECON OMI C AND
SOCI AL
IMPOR TANCE
[Explanation: This section (Page 22) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
Retail is becom ing international. As econom ies grow and incom es rise, m ore
organized retail businesses (with m ultiple stores) expand globally.
Reason for expansion:
- Dom estic m arkets are becom ing crowded with com petition.
- Em erging m arkets offer new growth opportunities despite challenges.
Global Standards: Retailers now com pete worldwide, using the sam e system s
for procurem ent, operations, and supply chain, as trade barriers (tariffs and
quotas) are reduced.
Examples:
Foreign com panies entering new m arkets: IKEA, W al-M art, M arks & Spencer, Big
Bazaar.
Successful international retailers: Tesco, Carrefour, B&Q.
Discount chains expanding: Aldi, Lidl, Netto in the UK; Vishal M egam art, Big
Bazaar, Shoppers’ Stop in India.
[Explanation: This section (Page 23) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
SELECTING A
RETAIL CAREER
[Explanation: This section (Page 24) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
The retail industry is one of the largest and fastest-
growing sectors in India and across the globe. W ith an
ever-increasing population and constant consum er
dem and, retailing continues to expand in both urban and
rural areas. Choosing a career in retail offers exciting
possibilities, financial stability, and professional growth,
m aking it an attractive option for today’s youth and
professionals alike.
[Explanation: This section (Page 25) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
RETAIL AS A G RO W IN G IN D USTRY
The retail sector in India is boom ing because consum ers
are always present— as long as people continue to buy
goods and services, retail will thrive.
Rising purchasing power due to higher salaries and
im proved living standards has fueled this growth.
People today spend m ore on fashion, cosm etics, gadgets,
and lifestyle products because of self-awareness and
desire for com fort.
This leads to a continuous dem and for retail professionals
in m alls, superm arkets, specialty stores, and online
platform s.
[Explanation: This section (Page 26) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
W H Y CH O O SE A CAREER IN RETAIL?
Dynam ic W ork Environm ent – Retail is fast-paced, interactive, and
custom er-driven. Em ployees m eet hundreds of people daily, m aking
it engaging and never m onotonous.
Attractive Pay and Growth – Retail offers com petitive salaries. Entry-
level staff m ay start m odestly, but there is scope for rapid prom otions
and salary hikes.
Diverse Opportunities – Retail careers span across sales, store
m anagem ent, m arketing, supply chain, custom er service, and
m erchandising.
Accessibility – Both full-tim e professionals and part-tim e job seekers
(students, hom em akers, fresh graduates) can find jobs in retail.
Career Security – Since retail is linked to consum er dem and, it
rem ains stable even when other industries slow down.
[Explanation: This section (Page 27) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
ESSENTIAL SKILLS FOR RETAIL PROFESSIONALS
To succeed in retail, certain qualities and skills are considered crucial:
Excellent Com m unication Skills – Ability to speak confidently in Hindi and
English helps in custom er interaction.
Custom er-Friendly Attitude – A polite, approachable, and positive personality
ensures custom er satisfaction.
Problem -Solving Ability – Handling dissatisfied or angry custom ers effectively.
Team Spirit – W orking well with colleagues and respecting senior staff.
Product Knowledge – Deep understanding of m erchandise to guide
custom ers properly.
Presentation & Groom ing – A professional appearance is im portant in retail
roles.
Honesty and Reliability – Since theft and loss are challenges in retail,
em ployers value trustworthy staff.
[Explanation: This section (Page 28) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
CH ALLEN G ES IN RETAIL CAREERS
Customer Handling Issues – Employees often face situations
where customers are unhappy with a product, service, or
pricing. This requires patience and diplomacy.
Skill Gap – There is a shortage of trained and experienced staff,
which forces companies to invest heavily in employee training.
Choosing the Wrong Sector – Working in a product line one is
not passionate about (e.g., cosmetics vs. electronics) may
cause frustration in the long run.
High Pressure – Meeting sales targets and handling large
crowds, especially during festivals and sales, can be stressful.
[Explanation: This section (Page 29) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
YO UTH AN D RETAIL CAREERS
A growing num ber of students and young professionals are
attracted to retail jobs.
M any take up part-tim e retail roles to support their studies,
especially in cities where living costs are high.
Retail jobs offer them :
Good pay com pared to other part-tim e work.
Valuable exposure to professional custom er service.
Training ground for future careers in m anagem ent,
m arketing, or business.
[Explanation: This section (Page 30) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
KEY CONSIDERATIONS IN RETAIL EMPLOYMENT
When companies hire retail staff, they look at:
Educational Background – At least basic qualifications; higher
degrees for m anagerial roles.
Fam ily and Personal Background – Ensuring trustworthiness.
Security Checks – Since theft is com m on, identity docum ents
and address proof are necessary.
[Explanation: This section (Page 31) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
THANK YOU
[Explanation: This section (Page 32) explains key ideas in retail
management, highlighting definitions, functions, opportunities, and
challenges. It provides context to understand how retailing impacts
both economy and career prospects.]
