TYPES OF RETAILERS

Types/Classification of Retail Stores

Classification of Retail Stores

Store Based Retailing Non-Store Retailing

Form of Ownership Merchandise offered Direct selling

Independent retailer Convenience stores Direct response marketing
Chain retailer Supermarkets Automated Vending
Franchise Hypermarkets
Leased departments Specialty stores
Consumer co-operatives Departmental stores
Off price retailers
Catalogue showrooms
 Classification on the basis of Ownership
Independent Retailer
• An independent retailer is one who owns and operates only
one retail outlet.
• Such outlets features the owner & proprietor and a few
other local hands or family members working as assistants
in the shop.
• Many Independent stores are to be passed on from
generation to generation.
• Ease of entry is the biggest advantage.
• Bargaining power with the suppliers is limited.
• E.g. Kirana stores, Paanwala store
 Cont’d
A Chain Retailer or A Corporate Retail Chain
• When two or more outlets are under a common ownership, it is
called a retail chain.
• A retail chain is a company that operates multiple retail units
under common ownership and usually has a centralized decision
making for defining and implementing its strategy.
• Group of retail outlets owned by one firm and spread nationwide
or worldwide, such as Wal-Mart, Globus, Westside, reliance
fresh, osia etc.
• Chain stores usually have similar architecture, store design and
layout and choice of products.
• Stores have similar merchandise, ambience and advertising and
promotions.
 Cont’d
Advantage:
• It has the bargaining
power with suppliers
• Cost effectiveness in
advertising and
promotions.

Limitation:
• Regional, rural or urban
preferences may not be
considered.
 Cont’d
Franchise
• A franchise is a contractual agreement
between franchisor and a franchisee.
• Franchisor allows the franchisee to conduct a
business under an established name as per
the business format.
• In return the franchisee has to pay a fee to
the franchiser.
• Product or trade mark franchise (E.g. Soft
drink distributors and Automobile
distributors) and Business format franchise.
 Cont’d
Leased Departments
• These are also known as shop-in-shops.
• When a section or a department in a retail store is rented to
the outside party it is called leased department.
• A good method of expanding product offering to
customers.
• In India, many large department stores operate their
perfumes and cosmetic counters in this manner.
• Setting small retail outlets in high traffic areas like
malls, department stores, railway stations etc.
 Cont’d
Consumer Cooperatives
• Consumers' co-operatives are enterprises owned by
consumers and managed democratically which aim at
fulfilling the needs and aspirations of their members.
• These aim at providing essential commodities at reasonable
prices.
• E.g. Sahakari Bhandar’s, Apna Bazaar shops, Super Bazaar
in Delhi.
 Classification on the basis of Merchandise Offered

Convenience Stores
• These are relatively small stores located near residential areas.
• Open for long hours, seven days a week.
• Offer a limited line of assortment of products like eggs, bread,
milk etc.
• It is a small local store selling mainly groceries, open for long
hours or 24 hours and also known as c-store. (Food Marketing
Institute)
• Store Size: 3000 sq. ft to 8000 sq. ft.
• They target customers who want to make purchase quickly.
• E.g. 7-Eleven, Spencer’s Retail Convenience Store in India, In
& Out Convenience stores (Bharat Petroleum), Reliance Fresh,
Tesco Express etc.
 Cont’d
Supermarkets
• These are large, low cost, low margin, high volume self-
service operations.
• They are designed to meet the needs for food, groceries and
other non-food items.
• Store with selling area of 400 sq. m and 2500 sq. m
• Internationally Size is 8000 sq. ft to 20,000 sq. ft
• 70% of its merchandise comprises of foodstuffs and
everyday commodities.
• Example: Food Bazaar and Reliance fresh, Subhiksha,
Tesco, Kroger, Safeway etc.
 Cont’d
Hypermarkets
• A hypermarket is a superstore which combines a supermarket and a
department store.
• It has been evolved since its invention by retailer Carrefour.
• A retail store with the sales area of over 2500 sq.m, with atleast
35% of selling spaced devoted to non-grocery product is termed as
hypermarket.
• Area of 80,000 to 2,20,000 sq. ft.
• Hyper markets are huge retail stores that offer various products
such as clothes, jeweler, stationery, electronic goods, books at
cheaper price.
• One stop shopping
• Example: Big Bazaar, Star Bazaar, Hypercity store, D-Mart etc.
• They focus on high volume, low price, unique range and offers.
 Cont’d
A store that satisfies the following characteristics has been
defined by the IGD as a hypermarket:
• A selling area between 5,000 sq. m and 15,000 sq. m
• A wide range of products including food and non-food
items.
• Discounted prices
• A destination offer
E.g. Tesco Extra Stores, Wal-Mart Super centers etc.
 Specialty Stores
• A store specializing in a particular type of merchandise or a
single product of durable products or a range of normally
complementary durable product categories is termed as
specialty store.
• It carries narrow product lines, with deep assortments in that
product line.
• Such stores usually concentrate on apparel, jewellery,
furniture etc.
• Target market is clearly defined.
• E.g. HOF, Bata Store, Tanishq Jewellery etc
 Department Stores
• It is a large scale retail outlet, often multi-levelled, with
different product categories.
• It has selling area of 7000 sq m selling at least fashion clothing,
cosmetics, household goods and much broader assortment etc.
• It has separate departments on several floors.
• These stores have atleast 50 employees and a self-service ratio
of less than 50%.
• Size: 20,000 sq. ft to 40,000 sq. ft.
• Stocks between 50,000 to 1,00,000 SKU’s.
• E.g. Shopper’s Stop, Globus, Westside and Lifestyle, Marks
and Spencer, Sears, J.C. Penny etc.
 Off price retailers
• The merchandise is sold at less than retail prices.
• Off-price retailers buy manufacturers’ overruns or off
seasons at a deep discount.
• Off price retail stores may be manufacturer owned or may
be owned by a specialty or departmental store.
• These outlets are usually seen by the parent company as a
means of increasing the business.
• Many time products are in unpopular colors or with minor
defects.
• E.g. Levis factory outlets, Pantaloon factory outlets etc.
 Catalogue showrooms
• Catalogue retailers usually specialize in goods such as
house ware, Jewelery and consumer electronics.
• A customer walks into retail showroom and goes through
the catalogue of the product/s that he would like to
purchase.
• A catalogue showroom (store) does not display all items.
• Some stores require the customer to write out the product
code number and hand it over to the clerk, who arranges for
the product from warehouse.
• E.g. Argos catalogue retailer (U.K), Hypercity Argos in
India offers over 4000 products.
 Non-Store Retailing
• The ultimate form of retailing directly to the consumer is
non-store retailing.
• A direct relationship with the consumer is the basis of non-
store retail format.
• Direct selling and Direct response marketing.
• Direct selling involves direct personal contact.
• In Direct response marketing, the customer becomes aware
of the product/service through a non-personal medium like
mail, catalogue, phone, television or the internet.
 Direct Selling
• Direct selling involves making a personal contact with the
end consumer at home or at the place of work.
• Food and nutritional products, jewellery, cosmetics etc are
sold in this manner.
• Direct selling may follow the party plan or the multi level
marketing.
• E.g. Amway, Herbal life, Tupperware etc.
 Direct response marketing
• Direct response marketing includes various non-personal
forms of communication like:
- Catalogue retailing or Mail Order
Mail order is the buying of goods or services by mail delivery. The
buyer places an order for the desired products with the merchant
through a telephone call or web site. Then, the products are delivered
to the customer.
- Television Retailing
- E-tailing
Electronic retailing is the sale of goods and services through the
internet.
 Automated vending/kiosks
• It provides convenience to the customers, as they have
access to the products round the clock.
• It is a popular form of retailing abroad and used for selling
soft drinks, candy, cigarettes and newspapers.
• Tea and coffee vending machines at the airports at India,
ATMs etc.