Fundamentals of Retail Management

Retail entails to the process of selling goods to consumers in small quantities either for consumption or for further sale through assorted channels with an aim to gain high returns. The process of planning, implementing, monitoring and controlling different retail activities is termed as retail management. Since the retail sector is ever-rising, so every retail firm seeks a manager who can effectively handle all the retail activities. In such a scenario, pursuing MBA in retail management can promise a lucrative career.

MIT School of Distance Education (MIT-SDE) offers distance MBA-equivalent PGDM courses in Retail Management to train the aspirants and make them industry-ready. The institute aims at enhancing the employability of candidates. So, if you wish to capitalize on the retail sector, then apply for the course right away.

During the course, candidates gain knowledge about core concepts of retail management and its fundamentals. Here’s a look at some of the fundamentals of retail management.

Channels of Distribution in Retailing

In present times, the connection between the consumers and the manufacturers has become complex than before. This is due to the multi-faceted channel of distribution which is complex because of the involvement of intermediaries. This leads to a hike in the value of goods and services until the time they reach the end-user in the cycle.

There are different channels of distribution. Some channels involve the function of both wholesalers and retailers, while some involve only retailers. Furthermore, there are certain goods that are transported directly from the manufacturer to the consumer.

Basics of Retailing

There are different ways through which retailing is carried out:

  • Independent Retailers: Businessmen such as grocers, booksellers, confectioners, etc, who handle their single shop/store fall under the category of self-regulating or independent retailers. Independent retailers have auxiliary benefits of creating their own policies and maintaining personal contact with the customers. The businesses of independent retailers can be carried forward by their upcoming generations.
  • Franchises: Some businessmen open a store and carry their business under the name of big brands. This is termed asa franchisee. There are various stores which are undertaken by different franchisee following an agreement stating that brand will be represented by the franchiser. These include players like Titan, Tanishq Jewellers, JW Marriot, etc, whose franchises are spread across different regions.
  • Chain Stores: Two or more retail stores of a single owner in a single region form a chain of stores. Chain stores keep selected merchandise in accordance with the customers’ preferences.
  • Supermarkets: Supermarkets are constructed with the basic aim of providing high-level customer satisfaction along with earning marginal profits. The supermarkets are located in areas with large space and they mainly house daily household items such as groceries, cosmetics or toiletries. At supermarkets, almost 70 percent of the total area is reserved for daily grocery items.
  • Departmental Stores: Departmental stores are retail stores offering myriads of basic and daily use products such as household items, food as well as clothing.
  • Catalogue Showrooms: These showrooms do not have products on the display but are occupied with varied catalogues. The interested customers can pick a product by browsing through different catalogues and select a product. Then, the customers have to provide product code at the counter and the desired product would be sent to the customer.
  • Hypermarkets: The retail stores which offer every kind of product and are have the occupancy for thousands of customers are termed as hypermarkets. Usually, malls or shopping stores such as big bazaar are counted under this category. In addition to shopping, hypermarkets even have spaces for coffee shops and restaurants.