Retail Management PDF

Retail Management Prof. Disha Mehr | Prof. Runal Mehta Retail Management – Unit 1 Introduction to Retailing 01 Definition & Functions 04 Organized vs Unorganized Retail 02 Retail Sector in India 05...

Retail Management Prof. Disha Mehr | Prof. Runal Mehta Retail Management – Unit 1 Introduction to Retailing 01 Definition & Functions 04 Organized vs Unorganized Retail 02 Retail Sector in India 05 Modern Retail Formats Market Size | Drivers | Challenges of Brief - Ecommerce vs Quick Commerce 03 06 Retail Chain India sector in India Prof. Disha Mehr | Prof. Runal Mehta 2 Retail – Introduction  Retail Market – Introduction The Manufacturer and the End-consumer are a component of every channel. Consumer Marketing Channels 0 - level 1 - level 2 - level 3 - level Retailing includes all activities Manufacturer Manufacturer Manufacturer Manufacturer related to sale of goods and Wholesaler Wholesaler services to the ultimate (final) Distributors consumers for personal and non- Retailers Retailers Retailers business use. Consumer Consumer Consumer Consumer Prof. Disha Mehr | Prof. Runal Mehta 4  Retail Market – Introduction The Manufacturer and the End-consumer are a component of every channel. Consumer Marketing Channels 0 - level 1 - level 2 - level 3 - level The word “retail” is derived from Manufacturer Manufacturer Manufacturer Manufacturer an old French word “retailier” Wholesaler Wholesaler which translates to cutting off or to break bulk. So a trader selling Distributors goods in small quantities can be Retailers Retailers Retailers called a retailer. Consumer Consumer Consumer Consumer Prof. Disha Mehr | Prof. Runal Mehta 5 Prof. Disha Mehr | Prof. Runal Mehta 6 Quick Commerce Prof. Disha Mehr | Prof. Runal Mehta 7 Key Elements of Retail Prof. Disha Mehr | Prof. Runal Mehta 8  Significance of Retail as an Industry The key reasons for the growth in prominence of the retailer are: Proximity of the retailer to the end consumer: The retailer is the key link between the manufacturer and the consumer. He has access to substantial data that gives him insight to work closely to improvise a product. Proliferation of technology and the growth of the Internet: Technology has enabled the sharing of information between retail stores, warehouses, manufacturers and customers. E-commerce and e-retail has fuelled the rise of newer business models and multi-channel and omni channel retailing. Introduction of the private label: Retailers are no longer dependent on the manufacturers to sell and have emerged as the new leaders in the marketing channel. Private labels by the retailers are created to serve a niche market and earning high margins. Copyright © 2024 by McGraw Hill Education (India) Private Limited. 9  Significance of Retail as an Industry Changing business models: e-retailing and ecommerce, online shopping, auction sites, click and collect model that allows a customer to order online and pick up the products in a retail store, cloud kitchens, network of delivery- only chains are some successful examples of changing business models facilitated by technology. Increasing significance of sustainability: Retailers are moving to alternate sources of power, relooking at the packaging and moving towards alternate packaging. They are choosing circular business models to eliminate waste, drive positive impact across the value chain and improve competitiveness. Growth of the sharing economy: Sharing economy or collaborative consumption in the context of retail, includes pre-owned and pre-used products, and the transaction is between two consumers enabled by a platform. Copyright © 2024 by McGraw Hill Education (India) Private Limited. 10  Significance of Retail as an Industry Growth of outsourcing: Many retailers are outsourcing their Information Technology needs and the last mile logistics. Age of experience: Online retail and the convenience of shopping anytime, anywhere has had a major impact on overall retail. A knowledgeable consumer with respect to technology and adept at using the tools has also played a key role in gaining unique shopping experience. The changing dynamics of retail Copyright © 2024 by McGraw Hill Education (India) Private Limited. 11 Retail India – Market Size India fastest growing retail market, to cross $1.4 trn by 2026 The retail sector in India is expected to reach a whopping US$ 1.9 trillion in value by 2030. India has the third-highest number of e-retail shoppers (only behind China and the US). It accounts for over 10% of the country’s gross domestic product (GDP) and around 8% of the employment. Prof. Disha Mehr | Prof. Runal Mehta 12 China’s & US Retail Market Size Total Retail Sales in China* and the US, 2018-2024 ($ in trillions) 6.500 6.123 6.000 5.826 5.549 5.940 The US retail market being 5.500 5.465 5.743 the largest (for almost a 5.315 5.330 5.533 century), it was expected for 5.072 5.283 5.249 China to claim this mantle 5.000 4.896 4.894 from the US. 4.500 2018 2019 2020 2021 2022 2023 2024 US China* Source: eMarketer, May 2020 Note: Excludes travel and event tickets, payments such as bill pay, taxes or money transfers, food services and drinking place sales, gambling and other vice good sales * Excludes Hong Kong Prof. Disha Mehr | Prof. Runal Mehta 13 Retail India Market – Split The market is split between organized and unorganized retail 10% - 15% 85% - 90% Organised Unorganised Unorganised: Local bania, Kirana, Paanwala, Road side vendors, Mandis, Haats, Melas etc Prof. Disha Mehr | Prof. Runal Mehta 14 Reliance Retail Venture Ltd (RRVL), the retail arm of billionaire Mukesh Ambani-led RIL, which crossed the Rs 3 lakh crore revenue mark in FY24. Prof. Disha Mehr | Prof. Runal Mehta 15 Source: https://www.business-standard.com/companies/news/india-fastest-growing-retail- market-to-cross-1-4-trn-by-2027-ril-124080701229_1.html Reliance Retail had a record footfall of over 1 billion at its 18,836 stores and its registered customer base increased to 300 million. Prof. Disha Mehr | Prof. Runal Mehta 16 Source: https://www.business-standard.com/companies/news/india-fastest-growing-retail- market-to-cross-1-4-trn-by-2027-ril-124080701229_1.html Reliance is India's largest retailer and the only Indian retailer to feature among the top 100 global retailers. Prof. Disha Mehr | Prof. Runal Mehta 17 Source: https://www.business-standard.com/companies/news/india-fastest-growing-retail- market-to-cross-1-4-trn-by-2027-ril-124080701229_1.html Retail Footprint Examples – Parle-G Launched in 1939 and was called Parle Gluco until 1985, the brand rebranded its biscuits to Parle-G in the mid- 1980s. The “G” originally stood for “glucose”, but a later campaign referred to it as “G for genius”. 400 8.2 120 47 Million Million Parle-G Factories in Parle-G Biscuits are Sold across Retailers in India baked every day India Source: https://www.thenationalnews.com/lifestyle/2023/08/17/for-a-true-taste-of-india-look-no-further-than-a-parle-g-biscuit/ Prof. Disha Mehr | Prof. Runal Mehta 18 Retail Footprint Examples – Coca-Cola Group Sundeep Bajoria, Vice President, India Franchise, Coca-Cola Company, told businessline, “Our products are now available at more than 4 million stores compared to about 2.7 million stores in pre-pandemic times. Kirana stores have been one of the biggest contributors of this growth. We have been working closely with kirana stores to upgrade their capabilities in the form of optimal cooling solutions to sell beverages and help them capture new profit pools.” PC: https://www.thehindubusinessline.com/companies/coca-cola-india-ramps-up-distribution-footprint-with-focus-on-kirana-stores-rural-markets/article65997708.ece/amp/ Prof. Disha Mehr | Prof. Runal Mehta 19 Retail Footprint Examples – Nestle In line with its rurban growth strategy, Nestle India has expanded its direct distribution to 1.5 million outlets in 2022 and is also deepening its rural coverage. The FMCG major has increased its overall distribution network to 5.1 million outlets, which includes direct and indirect distribution in 2022, from 4 million outlets in 2016. https://www.thehindubusinessline.com/companies/nestle-india-expands-direct-distribution-deepens-rural-coverage/article66522240.ece Prof. Disha Mehr | Prof. Runal Mehta 20  Retail Footprint Examples – 7 Eleven Seven & i Holdings is a diversified retailing company that manages and operates various businesses through its subsidiaries and franchises. It operates convenience stores, supermarkets, departmental stores, specialty stores, e- commerce platforms, and restaurants in Japan and 18 countries and territories overseas. In FY2022, the company added 6,035 stores to its portfolio bringing the total store count to 78,541 globally. https://www.globaldata.com/data-insights/retail-amp-wholesale/number-of-seven-i-stores- globally/#:~:text=It%20operates%20convenience%20stores%2C%20supermarkets,store%20count%20to%2078%2C541%20globally. Prof. Disha Mehr | Prof. Runal Mehta 21 Top 10 Global Retailers Walmart Amazon (US) (US) With $469.8 Bn in revenue, Amazon is the biggest Walmart’s 2022 global revenue stood at a online retailer globally. whopping $572.7 billion. The higher market capitalization of the business Walmart though being mainly US focused, comes to its 5-year growth rate of 22% compared continues to expand internationally with 23% of to just 1% for Walmart. its revenue now coming from outside the US, 4% higher than Amazon. Due to its massively profitable cloud computing business, amazon made $10 billion in profit for the last financial year. Prof. Disha Mehr | Prof. Runal Mehta 22 Top 10 Global Retailers Costco Schwarz Group Kroger Walgreens Boot (US) (Germany) (US) Alliance (US) Costco proved that the Schwarz group from Kroger managed an With 13% of sales big store model can Germany is the highest exceptional feat of coming from international definitely initiate high non-US contender on the generating businesses, this largest volume. This value big- list. 63% of revenue $137.8 billion in pharmacy company in box retail generated coming from outside of revenues from just the world generated $141 billion in sales Germany, it saw a 2,800 stores only in the $134.9 billion in from just 833 sites. revenue of total $158 US. What’s exceptional revenues. billion. is that it managed to do so with 0 international presence. Prof. Disha Mehr | Prof. Runal Mehta 23 Top 10 Global Retailers Home Depot Aldi Carrefour JD.Com (US) (Germany) (France) (China) Home depot is the only An exemplary of how With the highest Despite Alibaba being home improvement popular the German volume of stores, a more famous company in the top 10. chain has become Carrefour is Europe’s competitor in western It did a sales of almost across Europe, 70% biggest supermarket countries, JD.com is $151.2 billion. of Aldi’s sales now chain with their sales twice its size, raking in occur outside of coming in at about $149.3 billion Germany. An $87.8 billion. dollars in sales. What’s estimated sale of interesting is that none $121 billion is of its revenue comes generated in 11,235 from outside of China. stores. Prof. Disha Mehr | Prof. Runal Mehta 24 Retailing – Functions Retailing – Functions 01 Providing Assortments 02 Breaking Bulk It is cost effective to package and ship products in bulk Retailers curate a collection of products and services quantities as it reduces transportation cost. Hence from a wide variety of sources. manufacturers prefer larger quantities over small ones. This curated collection when offered, enables the Retailers on the other hand buy massive quantities and customers to choose from varied brands, designs, then offer the customer their desired amount of colors, sizes, etc. at just one accessible location. product. This practice is called breaking bulk. Prof. Disha Mehr | Prof. Runal Mehta 26 Retailing – Functions 03 Holding Inventory 04 Providing Convenient Locations and Timings Bulk quantities are broken down to user-friendly sizes To make it easier and convenient for customers to fulfil to make smaller quantities accessible to consumers. their requirements at any given point of time, retailers This results in big inventories. choose accessible locations One of the main function of retailers is to keep a tab on These entail longer operating hours and quickly the inventory. accessible locations. Prof. Disha Mehr | Prof. Runal Mehta 27 Retailing – Functions 05 Recording and Providing Feedback 06 Creating Time, Place and Ownership Utility The feedback; in the form of sales forecast, defective Time Utility ensures a product is available when the items, delays, complaints & inventory turnover; is customer wants it by providing favorable store timings relayed to the wholesaler or an online store. Place Utility ensures that the consumer finds what they Retailers document transactions and gather feedback. need at a convenient location. Ownership Utility ensures customer pays for and owns the product. Prof. Disha Mehr | Prof. Runal Mehta 28 Significance of Retail as an Industry Prof. Disha Mehr | Prof. Runal Mehta 29 Retail – Formats Retail Formats Retail formats are classified into 2 types Store-Based Retailing Non -Store Retailing A. Form of Ownership B. Merchandise Offered Non-Store Based Retailing 1. Independent Retailer 1. Convenience Stores 1. Direct Selling 2. Chain Retailer 2. Supermarkets 2. Television Shopping 3. Franchise Stores 3. Departmental Stores 3. Automated Vending Kiosks 4. Hypermarkets 4. E-tailing, also known as 5. Speciality Stores the Click and Mortar model 6. Factory Outlets Prof. Disha Mehr | Prof. Runal Mehta 31 Store-Based Retailing: Store-Based Retailing A. Form of Ownership B. Merchandise Offered 1. Independent Retailer 1. Convenience Stores 2. Chain Retailer 2. Supermarkets Stores based retailing is when the customers 3. Franchise Stores 3. Departmental Stores  purchase products after their practically seeing it in stores. Tangibility plays a major role here. 4. Hypermarkets Customers often like to understand, feel, and  touch the offering before procurement. 5. Speciality Stores Store-based retailing is additionally classified 6. Factory Outlets  based on two parameters: Prof. Disha Mehr | Prof. Runal Mehta 32 Store-Based Retailing: A. Form of Ownership 1) Independent Retailer ▪ An Independent retailer possesses and administers only one retail outlet. Example ▪ The members of a family tend to operate such stores and are passed from one generation to the other. ▪ Retailers in this category have healthy relations with their customers and have restricted bargaining power with the supplier. Advantages: Easy market Good customer Individually determine penetration. relations. the product mix and Mom & Pop Store retail strategy. Prof. Disha Mehr | Prof. Runal Mehta 33 Store-Based Retailing: A. Form of Ownership 2) Chain Retailer ▪ Chain retailers are people who own and manage two or more outlets where they retail the same products or brands and typically have standardized business processes and practices. ▪ They have influential bargaining power with the supplier. Example Prof. Disha Mehr | Prof. Runal Mehta 34 Store-Based Retailing: A. Form of Ownership 3) Franchise Stores When one party grants permission to another party to use Example its trademark or trade-name to produce and market a  commodity or service according to some stipulations is called franchising. In this arrangement, the party that grants permission is  called a franchisor, and the other is called a franchisee. P.C. : www.flickr.com The franchisee normally gives a one-time payment  McDonald's franchises and manages its restaurants which including a certain percentage of sales income as royalty. offer a locally-relevant menu of quality food and beverages  Franchisor - the proprietor of the brand. in 119 countries. 36,059 restaurants out of 38,695 were Franchisee - the one that buys a brand outlet for a fee franchised by the end of 2019, which is about 93% of  [Royalty]. McDonald's restaurants. Prof. Disha Mehr | Prof. Runal Mehta 35 Store-Based Retailing: B. Merchandise Offered 1 Convenience Stores Example These are small stores generally found near residential areas. The Food Marketing Association defines them as “small local store selling mainly groceries open until late night or even 24 hours per day”. The size of convenience stores ranges from 500 to 1,500 sq. feet and targets at customers who require to make a quick purchase. Stores at Gas Stations Prof. Disha Mehr | Prof. Runal Mehta 36 Store-Based Retailing: B. Merchandise Offered 2 Supermarkets Example Supermarkets are huge, low cost, low margin and large volume stores. Having self-service processes, they are intended to meet the needs for groceries and items apart from food. Their store size ranges from 800 to 5,000 sq. feet. 70% of the goods that are stocked are food-related. Prof. Disha Mehr | Prof. Runal Mehta 37 Store-Based Retailing: B. Merchandise Offered 3 Department Stores Example Huge stores that sell several product lines with each serving as a separate department is called as a department store. The product mix is mostly non-edible items such as apparels, accessories, books, footwear etc. They have a high service level. Size of such stores ranges from 5,000 to 40,000 sq. feet. Prof. Disha Mehr | Prof. Runal Mehta 38 Store-Based Retailing: B. Merchandise Offered 4 Hypermarkets Example A combination of a supermarket and a departmental store is known as a hypermarket. Size of such stores ranges from 40,000 to 1,00,000 sq. feet. They provide with different types of food items and non-food related products. Products here normally are at discounted prices and can also be termed as one-stop shopping. Prof. Disha Mehr | Prof. Runal Mehta 39 Store-Based Retailing: B. Merchandise Offered 5 Specialty Stores Example These type of stores concentrate on one particular brand or a specific category. Specialty stores provide a restricted product line but have good depth in the lines they provide. It has a high service level. Their store size ranges from 2,000 to 5,000 sq. feet Prof. Disha Mehr | Prof. Runal Mehta 40 Store-Based Retailing: B. Merchandise Offered 6 Factory Outlets In Factory Outlets, the products are invariably sold at a rate lesser than retail prices. Off-Price retailers generally obtain manufacturer's seconds, overruns and off seasons at deep discounts. Manufacturers could also own such retail stores. Such outlets are normally seen by the parent company to improve business. Prof. Disha Mehr | Prof. Runal Mehta 41 Non-Store Based Retailing: 01 Direct Selling 02 Television Shopping ▪ In direct selling, retailers make personal contact with the ▪ Specifications of the product are given through television. customers either at home or place of work. ▪ In this medium health-related products, kitchen appliances, ▪ Commodities such as cosmetics, accessories, food, artificial jewellery etc. are sold. nutritional products and educational materials are some of ▪ After purchase, the products are delivered at the customer's the products sold in such a format. doorstep. ▪ The salespeople or consultants require training for such a Example type of selling. Example Prof. Disha Mehr | Prof. Runal Mehta 42 Non-Store Based Retailing: 03 Automated Vending Kiosks 04 E-tailing, also known as the Click and Mortar model ▪ Automated vending kiosks offer convenience to the ▪ E-tailing is when products are offered to the customers online customers due to its accessibility. with the use of the internet. ▪ This popular form of retailing is used to sell items like ▪ The model proves to be successful depending on the range chocolates, soft drinks, tea, coffee, cigarettes of the products offered and the retailer's ability to deliver them on time. Example ▪ Several retailers follow this model simultaneously with the brick and mortar strategy. Example ATM by banks Gold ATM in Dubai Vending Machines Prof. Disha Mehr | Prof. Runal Mehta 43 FDI in Retail  Policy Frameworks in Indian Retail Foreign Direct Investment (FDI): The Department for Promotion of Industry and Internal Trade (DPIIT) is responsible for formulating the Government's FDI policy. The objective is to attract FDI to bolster domestic capital, technology, and skills, thereby fostering accelerated economic growth. Definition of FDI: As per the Government of India, FDI refers to investment by non- resident entities or persons outside India in Indian companies' capital, as outlined in Schedule 1 of FEM Regulations 2000. Entry Routes: The FDI policy delineates two entry routes: the automatic route and the government/approval route. The latter necessitates prior approval from the Government of India through the Foreign Investment Promotion Board (FIPB). Copyright © 2024 by McGraw Hill Education (India) Private Limited. 45  Policy Frameworks in Indian Retail Evolution of FDI Policy: Over time, India's FDI policy has evolved, with notable milestones such as the liberalization of 100% FDI in cash and carry wholesale trading in 1997, subsequently shifted to the automatic route in 2006. In 2006, 51% FDI was permitted in single-brand retailing, later amended in 2012 to allow 100% FDI under the government approval route, with conditions. Recent Amendments: Press Note 4 of 2019 amended the consolidated FDI policy, emphasizing self-certification by companies regarding sourcing requirements from MSMEs and cottage industries. Additionally, it allowed single-brand retail entities operating brick-and-mortar stores to engage in e-commerce retailing. Multi-brand retail policies largely remained unchanged, with emphasis on company self- certification for compliance. Copyright © 2024 by McGraw Hill Education (India) Private Limited. 46  Draft Policy on E-Commerce The National e-Commerce policy aims to foster growth in the e-commerce sector while safeguarding consumer interests and supporting domestic small manufacturers. It addresses infrastructure, regulatory, and ecosystem issues to create a facilitative environment. E-commerce websites/apps must ensure all product shipments to India go through Customs. Integration of Customs, RBI, and India Post systems enhances import tracking. Registered Indian business entities must serve as importers or transaction intermediaries for sales in India. The policy prevents distortionary effects like price, inventory, or vendor control, ensuring fair competition among all participants. Mandates include displaying Maximum Retail Price (MRP) for products and invoices in Indian rupees. India's retail sector has evolved rapidly over decades, transitioning from post- colonial catering to becoming the world's third-largest economy by PPP. Rapid urbanization reflects changing consumer lifestyles and habits, signaling an exciting phase ahead for Indian retail. Copyright © 2024 by McGraw Hill Education (India) Private Limited. 47 E-Commerce E-Commerce – Introduction E-commerce implies any form of a trade of goods and services done over the internet. More informally, it pertains to acquiring a product or service online with a computerised payment gateway via a credit or debit card or a digital wallet service. A wide variety of companies get involved in making online stores work such as; Online stores to connect buyers and sellers Payment gateway Digital wallet services Shipping and logistics Prof. Disha Mehr | Prof. Runal Mehta 49 E-Commerce – Categories Prof. Disha Mehr | Prof. Runal Mehta 50 E-Commerce – Categories BUSINESS-TO- BUSINESS-TO- CONSUMER-TO- CONSUMER-TO- CONSUMER (B2C) BUSINESS (B2B) CONSUMER (C2C) BUSINESS (C2B) When a business sells a This type of e-commerce is Consumer-to-Consumer This category of e-commerce product or service to a when a business sells any (C2C): This type of e- is when a consumer sells an consumer online, it is called product or service to another commerce companies build a offering to a business. as B2C e-commerce. business. This could even marketplace to bridge buyers possibly be businesses that Example and multiple sellers online. Food bloggers sharing their offer software as a service to recipes to big restaurants other companies to assist in managing their companies. Example Example – Alibaba.com and Example Amazon.com and JD.com Amazon Web Services (AWS) eBay Prof. Disha Mehr | Prof. Runal Mehta 51 E-Commerce – Categories BUSINESS TO GOVERNMENT TO GOVERNMENT TO CONSUMER TO GOVERNMENT (B2G) BUSINESS (G2B) CONSUMER (G2C) GOVERNMENT (C2G) This type is often determined This type is when the In G2C, the Government Here an individual transacts as trade between companies government extends an carries out transactions with the Government. and the government. It points offering to businesses. directly with individual to the usage of the Internet for consumers. the licensing process and other government-related transactions. Example Example Example Example Business pay taxes Government Tenders Passport Verification Embassy Prof. Disha Mehr | Prof. Runal Mehta 52 E-Commerce – Types Prof. Disha Mehr | Prof. Runal Mehta 53 Pure Click Model Companies that solely use the pure-click model only carry their business operations online and do not indulge in offline business. Such firms launch themselves only on the Internet without any prior presence as a firm. Companies that use this model are Commerce sites, Search engines, Internet Service Providers (ISPs), Transaction sites, Content sites, and Enabler sites. Example Prof. Disha Mehr | Prof. Runal Mehta 54 Brick and Click Model Example In this business model, a firm manages both an online store and physical store, combining the two into a single retail strategy. The arrival of mobile-web has made the use of bricks and clicks model in businesses popular as it allows shoppers to carry out tasks like shopping at their own pace and time without being dependent on a computer. One of the first recognized purchases from a company that used bricks and clicks business model was Pizza Hut pizza which placed their order over the internet in 1994. This method is recognized as "Click and Collect" in the UK, and the British retailer Argos came up with the term. He was the one who provided "Ring and Reserve" and "Text and Take Home" offerings for telephone and SMS ordering respectively, where products were held so that the customer would pay in-store. Prof. Disha Mehr | Prof. Runal Mehta 55 E-Commerce – Examples Prof. Disha Mehr | Prof. Runal Mehta 56 Worlds Largest E-Commerce Company – Amazon AMAZON, INC. – THE KING OF ECOMMERCE Based in Seattle, Washington, Amazon.com was founded in 1994. It is an American multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon is the largest Internet company by revenue in the world. Established by Jeff Bezos, Amazon has become a well-celebrated brand and has a good brand value ever since. Revenue - $469.8 Bn (2022) Prof. Disha Mehr | Prof. Runal Mehta 57 Jingdong – Chinese eCommerce Company JD.com also known as Jingdong and 360buy is a Chinese e-commerce firm that is headquartered in Beijing. It is one of the two most extensive B2C online retailers in China by selling volume and making revenue and is a significant competitor to Alibaba-run Tmall. It is also a member of the Fortune Global 500. The firm invested in advanced technology and AI delivery through drones, autonomous technology and robots, and controls the largest drone delivery system, infrastructure and capability in the world. The company in associations with scientists aims to design drones that could lift freights weighing up to one metric ton! Revenue - $149.3 Bn (2021) Prof. Disha Mehr | Prof. Runal Mehta 58 Alibaba Group Holding Ltd. – Chinese eCommerce Dragon Alibaba Group Holding Limited, also known as Alibaba Group and Alibaba.com it is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology. Established on 4 April 1999, in Hangzhou, Zhejiang, the business offers consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B) sales services through web portals, along with electronic payment services, shopping search engines and cloud computing services. Alibaba has the sixth-highest global brand valuation as of 2020. The company hosts the most extensive B2B named Alibaba.com, C2C named Taobao, and B2C named Tmall marketplaces in the world. Revenue - $109.4 Bn (2021) Prof. Disha Mehr | Prof. Runal Mehta 59 eBay Inc. eBay Inc., an American multinational e-commerce enterprise based in San Jose, California, promotes consumer-to- consumer(C2C) and business-to-consumer(B2C) sales through its website. Being a multibillion-dollar business, eBay carries out operations in nearly 32 countries, as of 2019. The business manages the eBay website, which is an online auction and shopping website where individuals and companies buy and sell a broad spectrum of offerings across the world. A lot of brands utilize the eBay marketplace and continues to be one of the biggest peer-to-peer marketplaces on the Internet. Revenue - $10.4 Bn (2021). Fun fact An entire town was auctioned and sold on eBay in 2012 when two Vietnamese buyers acquired the township of Buford in Wyoming for the sum of a little below one million dollars. Prof. Disha Mehr | Prof. Runal Mehta 60 Rakuten, Inc. – Japanese eCommerce Godzilla Rakuten in Japanese means “optimism” is the most extensive e-commerce website in Japan. The media referred to it as “The Amazon of Japan.” Hosting 40,000 diverse businesses, Rakuten has about 90% of Internet users registered on its website. It also manages Japan’s greatest online bank in addition to online shopping and credit card payments. Rakuten Group operates 70 companies that range from extensively used instant messaging app Viber as officially known as Rakuten Viber in 2017 to having placed their logo on FC Barcelona’s jerseys. Revenue - $15.3 Bn (2021). Prof. Disha Mehr | Prof. Runal Mehta 61 Prof. Disha Mehr | Prof. Runal Mehta 62 Sources & Reference www.marketing91.com www.shutterstock.com www.gwprime.geospatialworld.net www.axiomq.com www.magneticians.com www.alibaba.com www.jd.com www.amazon.com www.macrotrends.net www.storyblocks.com M-Commerce M-Commerce – Introduction M-Commerce is also known as Mobile Commerce It is the practice of using wireless handheld gadgets like smartphones and tablets to administer business activities online, which include procurement and trade of products, online banking and paying bills etc. Enabling people to purchase and sell offerings from any place by just using a mobile phone or tablet device, m-commerce is an advancement of e-commerce. Its definition will soon include wearable devices. Example Having 150.6 million mobile users recorded in September 2019 (Statista, 2019), Amazon app is recognized as the most popular shopping app in the United States. Prof. Disha Mehr | Prof. Runal Mehta 65 M-Commerce – Introduction M-Commerce transactions include…. Mobile banking Information services Mobile Money Transfers Location-based services Electronic tickets and Digital content purchases boarding pass and delivery Contactless payments and Mobile marketing, in-app payments coupons, and loyalty cards Prof. Disha Mehr | Prof. Runal Mehta 66 M-Commerce – Examples Prof. Disha Mehr | Prof. Runal Mehta 67 M-Commerce – Example “Black Friday Sale” Example – Black Friday Sale in 2019 In the 2019, Black Friday sale customers spent almost $7.4 billion purchasing items online via computers, tablets and smartphones according to the analytics from Adobe. Out of the total sale, $2.9 billion of Black Friday sales occurred on smartphones. M-commerce is growing faster than online shopping overall, and with this rate of growth, the tipping point where smartphones outrun web-based purchases through computers will come soon. Prof. Disha Mehr | Prof. Runal Mehta 68 M-Commerce – Example ‘eBay’ eBay is a leading online marketplace that cashed in on this spontaneous trend by organizing time-sensitive auctions and enabling users to bid on from anywhere, anytime as per their convenience. The brand streamlined its search and identification process in the app by allowing users to type in the name of the item, product category or any search word that is relevant to their search. eBay even offered personalized feeds in the app by letting users drag and reposition the products and control buttons on the Home screen based on their preference. Prof. Disha Mehr | Prof. Runal Mehta 69 M-Commerce – Example “Starbucks App” Starbucks App recently topped the charts as one of the most used digital payment apps in America, accounting more than 5 million transactions every week. Steps and Features of the App Register Customers to get started with simply needed to type-in their recorded Starbucks Rewards Card's information into the app to transfer the balance to their phone. Customers also have the liberty to set up auto reloads to make sure that their virtual card is never empty. Scan and pay Customers have to just hold the phone up to a digital scanner to make the transactions at the counter. Prof. Disha Mehr | Prof. Runal Mehta 70 M-Commerce – Example “Starbucks App” Shake to Pay The app additionally provides a 'Shake to Pay' option enabling customers to shake their phones while the app is opened to bring up the necessary barcode for mobile payment instantly. Location-Based Services Location-based service is about being informed about your potential customers that are around the store and inviting them inside in the best way possible. Starbucks, after storing the personal information of the consumers with their permission generates a personalized message to communicate with its customers. Prof. Disha Mehr | Prof. Runal Mehta 71 M-Commerce – Case Study Prof. Disha Mehr | Prof. Runal Mehta 72 M-Commerce – Case Study “Walmart’s App” According to research conducted by Xtreme Labs, 58 % of people who own a smartphone use mobile for in-store shopping. Scan and Go Walmart seized the opportunity by focusing their mobile efforts around delivering an improved in-store experience. The 'Scan and Go' self-checkout program allows shoppers to use the Walmart app on their phones to scan their desired products and add them to a virtual shopping cart as they proceed to walk through the store. The shoppers after selection rather than waiting in long queues to scan their items individually at the checkout lane can pay for their products at a self- checkout counter. Store Locator Moreover, the brand added another layer of convenience by incorporating a store locator feature. It enables the users to place an order of their groceries online and then collect it at a nearby store without actually setting a foot inside. Prof. Disha Mehr | Prof. Runal Mehta 73 M-Commerce – Case Study “Walmart’s App” Walmart in early March 2020 combined its flagship Walmart App with Walmart Grocery App to make it extra manageable for customers to buy products ranging from fresh groceries to garments, electronics, etc. The consolidated app is now live, presenting a one-stop app experience to buyers who look forward to purchasing consumables and general items. Initially, the retailer operated on two separate apps Walmart Grocery app (the orange one) & Flagship Walmart app (the blue one) Which indicated shoppers needed to download and shift between two separate apps depending on the item they wanted to purchase. Prof. Disha Mehr | Prof. Runal Mehta 74 M-Commerce – Case Study “Amazon Go” Amazon Go – Cashier Less Shopping built using a Mobile App. Amazon Go Amazon Go app is a new category of store offering Walk Out Shopping where customers don't have to wait in long checkout lines, and they can just grab their desired item and go. Amazon Go is a cashless, checkout-free brick and mortar store where customers can simply walk in, take what they want and leave. PC - https://edition.cnn.com/2018/12/12/tech/amazon-go-small-format/index.html Prof. Disha Mehr | Prof. Runal Mehta 75  M-Commerce – Case Study “Amazon Go” How does the app work? Customer's phone triggers a sensor turnstile at the arrival or as they walk through any of the Amazon Go stores. They then pick up the items they want just as they would in any boutique grocery store where products such as beverages, produce, meat, sandwiches, salads, etc. can be found. All the items are coded to support the in-store cameras, scanners and infrared sensors detect the choices PC - https://uxdesign.cc/just-walk-out-amazon-go-the-most-convincing-future-of-retail-469b5794d65c customers make. The customers after selection just walk out through the sensor turnstiles, and the Go app processes their transactions, generating digital receipts on their mobile phones. According to the Amazon Go website, "All you need is an Amazon account, the free Amazon Go app and a recent-generation iPhone or Android phone." Prof. Disha Mehr | Prof. Runal Mehta 76 M-Commerce – Starbucks Prof. Disha Mehr | Prof. Runal Mehta 77 M-Commerce – Example Prof. Disha Mehr | Prof. Runal Mehta 78 Sources & Reference www.marketing91.com www.shutterstock.com www.storyblocks.com www.supermarketnews.com www.techcrunch.com www.walmart.com www.mediapost.com www.amazon.com Multi-Channel Retailing Multi-Channel Retailing  Multi-channel retailers sell commodities or services via more than one channel.  Many retail companies have started to use multiple channels to reach customers. For instance, nearly all big stores and catalogue retailers sell  their offerings through both; their websites as well as in their stores. Prof. Disha Mehr | Prof. Runal Mehta 81 Multi-Channel Retailing – Examples Prof. Disha Mehr | Prof. Runal Mehta 82 Multi-Channel Retailing – Example ‘Amazon’ Amazon’s market share in the U.S. E-Commerce market Physical Outlets by Amazon reached an all time high of 56.7% in 2021 Amazon now manages all kinds of physical stores ranging from booksellers to convenience stores. Prof. Disha Mehr | Prof. Runal Mehta 83 Multi-Channel Retailing – Example “Home Depot” Home Depot, the world’s most comprehensive home advancement retail chain. Housing more than 2,200 stores across three different countries the brand employees approximately 400,000 associates. The company, just by bridging online sales and in-store visits, makes about $100 billion per year. Not only is it the biggest home improvement retail chain but also is the most-visited home improvement website that gets over 250,000,000 visits every six months. About 50% of buyers who place an order online wish to pick up their order at their local physical store, which is a practice that the company encourages. As a result, the footfall in their existing stores has increased and limited their need to build new ones. Prof. Disha Mehr | Prof. Runal Mehta 84 Multi-Channel Retailing – Example ‘Walmart’ Walmart Inc., an American The company functions The brand has an outlet multinational retail under many banners such named Walmart de México corporation, runs a chain as Walmart discount y Centroamérica in Mexico of hypermarkets, discount stores, Walmart and Central America, as department stores and Supercenters, Walmart Asda in the United supermarket stores that Neighborhood Markets, Kingdom, as the Seiyu have their headquarters in and Sam’s Club Group in Japan, and as Bentonville, Arkansas. warehouse membership Flipkart Wholesale in clubs in the US alone. India. Quick Snapshot US$572.75 10,566 46 24 billion (2022) Total Stores Total Banners Countries Total Revenue Prof. Disha Mehr | Prof. Runal Mehta 85 Multi-Channel Retailing – Types Prof. Disha Mehr | Prof. Runal Mehta 86 Types of Multi-Channel Retailing Store Channel Internet channel Catalogue Channel This type of channel grants many Internet retailing is a type of channel in A non-store retail channel where the advantages to customers which they which the products and services are information about the products offered is cannot avail while shopping online through marketed and offered to the customers communicated to the customers via a non-store channels like the catalogue or over the internet. It is also popularly known catalogue sent to customers on mail. the internet. Tangibility is one of the most as online retailing, electronic retailing and significant benefits of the store channel. e-tailing. Prof. Disha Mehr | Prof. Runal Mehta 87 Types of Multi-Channel Retailing (Cont’d…) Automated selling/ Direct selling Television home shopping automated vending machines When sales representatives Also known as teleshopping is a channel This type of retail channel dispenses communicate with customers physically type where the merchandise is displayed commodities in exchange for cash or the in a suitable location is called direct in a television program and their orders use of credit card. The products in this selling. These representatives are trained are then placed typically through a type of channel are pre-stored in a to communicate information about the telephone or the internet or the TV remote. machine and then handed out to product by demonstrating commodity customers post payment. Automated benefits or explaining a service, taking an retailing machines are popularly also order, etc. known as vending machines. P.C: www.homeworldbusiness.com/ P.C: www.healthyvending.com Prof. Disha Mehr | Prof. Runal Mehta 88 Ikea’s Iconic Catalogue Ikea’s catalog was first launched in 1951. Ikea last printed around 200 million copies a year, which were distributed in 69 different versions, 32 languages, and more than 50 markets. The catalog as we now know it is a After almost 70 years, Swedish massive affair for Ikea, taking around furniture giant Ikea scrapped its nine months to design each year. iconic catalog. https://www.businessinsider.in/retail/news/ikea-is-getting-rid-of-its-iconic-catalog-one-of-the-most-popular-books-in-the-world-ending-a-70-year-print-run/articleshow/79612183.cms Prof. Disha Mehr | Prof. Runal Mehta 89 Japan’s Vending Machine Culture About 4 million vending machines exist in Japan today, approximately 1 for every 31 people in Japan. These machines sell hot and cold drinks, snacks, toys, tobacco, and novelty items like canned cakes and edible insects. Japan is ahead of it curve when it comes to unattended commerce. They've found the sweet spot in using robotics and automation to serve their convenience-lover nation https://ingenico.com/apac/newsroom/blogs/japans-vending-machine-culture-glimpse-unattended-payments-future Prof. Disha Mehr | Prof. Runal Mehta 90 Multichannel Distribution System Example – IKEA In 2021, IKEA’s online channels witnessed more than 5 billion visitors and online sales increased by 73 percent. Online sales now account for 26 percent of IKEA’S total sales. Prof. Disha Mehr | Prof. Runal Mehta 91  Multichannel Distribution System Example – Zara  Zara is doubling down on its digital business. During 2020, Zara’s digital sales were up 77% and  represented a third of all sales. Inditex, Zara’s parent company, announced it is investing 2.7  billion euros to further integrate its online and offline operations. 1 billion euros will be assigned to improving their online  operations while 1.7 billion euros will be assigned to its store network to make it more in sync with its online business. PC - Shutterstock Prof. Disha Mehr | Prof. Runal Mehta 92 Multichannel Distribution System Examples PC - Shutterstock PC - Shutterstock PC - Shutterstock Walmart Amazon Gymshark PC - Shutterstock PC - Shutterstock PC - Shutterstock Apple Starbucks McDonald's Prof. Disha Mehr | Prof. Runal Mehta 93 Multi-Channel Retailing – Trends and Benefits Prof. Disha Mehr | Prof. Runal Mehta 94 Trends in Multi-Channel Retailing OFFLINE TO ONLINE CHANNEL ONLINE TO OFFLINE CHANNEL Here the seller starts the business with a traditional retail In this trend, usually, the seller begins with an online storefront which eventually extends to have an online presence and then expands by launching a brick and presence. mortar physical store. Prof. Disha Mehr | Prof. Runal Mehta 95 Benefits of Multi-Channel Retailing It assists in overcoming the limitations of store size. It helps in market penetration. More active inventory turnover. Efficiently uses assets. It offers a wide variety of commodities to buyers. Prof. Disha Mehr | Prof. Runal Mehta 96 Thank You