The Process Of Retailing Commerce Essay

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Retailing consists of the sale of merchandise or goods from a fixed location, such as a department store, kiosk or boutique, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses.

The term "retailer" is also applied where a service provider caters to the needs of a large number of individuals, such as a public utility, like electric power.

As opposed to wholesale, it is the sale of commodities in small quantities and not for resale.

In commerce, a "retailer" buys goods or products in large quantities from manufacturer or importer, either directly or through a whole seller, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy.


The distribution of consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middleman-the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word 'retail' is derived from the French word "Retailer", meaning 'to cut a piece off' or 'to break bulk'.

The retail industry faces challenges similar to those in other industries. With a fast-paced society and faster-paced technological changes, customers want new, different, and customized goods now, and they're not willing to wait. Main critical processes are human resources, general ledger, inventory, supply chain management and merchandising. The company will miss business opportunities if these processes were not streamlined and well-aligned with each other and offer the flexibility necessary for creating a much-needed effective supply chain process.

There is a huge demand for trained man power as well as talent. Retailers are facing increasing competitive pressure to implement innovative in-store solutions that create differentiation through an enhanced customer experience. They also face a need to cut down on the investment made in the technology infrastructure required within the store. Today's retailers are under pressure to provide a more seamless customer experience across multiple channels. Fragmented customer interactions result in a high cost of sales and service. Some other obstacles are poor employee productivity, limited flexibility, duplication in maintenance of processes and systems.

Retail sector forms a very strong component of the service sector. It is one of the largest sectors in the global economy and is going through a transition phase. The fast changing retail environment demands that professionals learn new skills, improve their efficiency, learn to compete and think out of the box. Since retailers work directly with customers and there is a need for good managerial talent to interpret and satisfy the needs and desires of customers. All this requires an education that is thorough, wide-ranging and closely linked to the retail business world. The need is to have a program which has all the inherent features of a business management program and includes experiential learning throughout the program.

Retailing has become such an intrinsic part of our everyday lives that it is often taken for granted. The nations that have enjoyed the greatest economic and social progress have been those with a strong retail sector. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer-an easier access to a variety of products, freedom of choice and higher levels of customer service.


Retailing is a massive and passive beast that pervades all our lives. All of us shop, sometimes as pleasure and sometimes as a chore. But the question to be asked at this point is, when, where and how did it all begin? The answer is probably to do with surpluses. As we started mastering the art of cultivating the land, some people realised that even after feeding their families and animals and storing some food for future consumption, there was some left over. It was at this point people started thinking of how to make productive use of these surpluses. Instead of wasting these surpluses, they started trading this for other surpluses or perhaps tools or other objects.

Those who had enough land and were good at producing food from it would have realized that they were on to a good thing by deliberately producing surpluses. Eventually the informal trade in goods would have become more organized, with central markets being formed where these producers could get together on a regular basis for exchange of goods.

Trading goods for other goods is all well until you have just about everything you are likely to ever need, or the product you want has yet to be produced. In order to get around this, people started to owe goods to other people. Early forms of credit may have been just verbal agreements. As time passed, some traders and producers decided to keep a record of what was owed. One way this was done was by the debtor leaving some collateral with the creditor - some object or an animal that was held by the creditor until the debt was paid. This was ok until the debtor needed the tool or animal in order to produce the very goods that were owed. An alternative way of denoting credit was to use a symbolic object, such as small animal. Since small animals are not very portable, it became more normal to use small inanimate objects such as pebbles. Over time these small object became more decorated and valued and eventually metal coins and paper notes became more and more familiar. So early trading gave rise to money.

As some more time passed, producers found they were better at selling the goods than growing them. Others preferred to stick to growing. So there was a gradual separation of the producers and the traders.

And it was not just food that was sold. Tools, jewellery, trinkets, plates, cups and many other objects would have been traded as well. The informal markets would have perhaps, over time, become more formal and more permanent. So shops began. Other traders would prefer to travel around selling their goods. These became known as peddlers. Selling from a regular market, from a permanent shop or peddling goods are known collectively as retailing.


Traditional /Pervasive reach reachreach

Historic/Rural Reach

Rural reach

Modern and International formats

Government Supported

Exclusive brand outlets

Super Markets

Department stores

Shopping malls

PDS outlets

Khadi Stores


Convenience stores/


Weekly markets

Village fairs/melas

Shopping Experience/Efficiency

Availability/low cost distribution

Convenience stores

Source of entertainment

Graph 1.1 - Evolution of retail companies

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The retail industry is mainly divided into: - 1) Organised (Modern) Retail and 2) Unorganised (Traditional) Retail

Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. In India, a shopkeeper of such kind of shops is usually known as a dukandar.

The Indian retail sector is highly fragmented with 97 per cent of its business being run by the unorganized retailers. The organized retail however is at a very nascent stage. The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10 per cent of India's GDP.


The Indian retail market, the fifth largest retail destination globally, has been ranked as the most attractive emerging market for investment in the retail sector by AT Kearney's latest annual Global Retail Development Index (GRDI).

Currently (as of 2012), the retail industry in India contributes approximately 33-35% of the GDP with a growth rate of 46% in the last three years. The sector also provides employment to 7% of the total workforce in the country, this percentage is going to exponentially grow in the coming years owing to the governmental reforms being made in the sector.


After substantial amount of politicking, the government recently allowed the opening up of FDI (foreign direct investment) in multi-brand retailing in India. It increased FDI in retail to 51 per cent from 49 per cent. Corporate India is happy, the sensex has gone up & intelligentsia is talking about it. Some say that it will work & some are skeptical. There has been a lot of discussion & debate going around about its benefits & disadvantages (more advantages than disadvantages). The opposition parties & some of the UPA's allies want the government to take back its decision of opening FDI in retail as they fear that global retailers will wipe out the local kirana stores, also known as, mom & pop shop. Well, it's a custom in India that whenever any so called reform is implemented, lots of meaningless discussion takes place before it. But the main problem is that neither the government nor the opposition parties ever make any effort to give a clear picture of the consequences of reforms. Let's have a look at the FDI in multi-brand & its impact on the Indian economy.

FDI in multi-brand: In 1991, when the liberalisation process first started, there were substantial doubts as to what it would do to the country. While it is arguable whether the process has paid rich dividends to the masses that make India, but there is little doubt that today, the country looks at the world with far greater power and confidence than it did in the 1990s. The consequences of the opening of FDI in multi-brand retail may be a matter of political debate, but it seems clear that the retail scenario may be due for a facelift soon. The FDI policy does not define single-brand retailing and multi-brand retailing. Single-brand retailing means the sale of products of single brands to retail customers for personal consumption, example, Zara, Mark & Spencer, Espirit, Nokia, etc. whereas multi-brand retailing means sale of products of multiple brands to retail customers for personal consumption, for example, Wal-Mart, IKEA, Carrefour, etc. The government has imposed certain conditions on the global retailers. Those conditions are as follow:

1) Minimum investment by foreign investors has been limited to $100 million, half of which will be invested in back-end infrastructure (processing, manufacturing, distribution) within three years of first installment of FDI.

2) At least 30 per cent of the procurement of products will be sourced from small industries/village and cottage industries & artisans.

3) Retail outlets are allowed in cities which have a population of more than one million

Advantages of FDI in multi-brand: Industry experts feel that the reservations against the introduction of Multi-Brand retail are mostly misplaced. It is expected to transform the retail landscape of India in a significant way. Firstly, investments will spur the growth of the sector, which is important for domestic retailers such as Vishal Subhiksha and Koutons, which couldn't arrange for funds to sustain their growth during economic downturn. Technology know-how, competitiveness will be brought forth through FDI. India has also been crippled by rising inflation rates that have refused to come within accepted levels. A key reason for this has been attributed to the vastly avoidable supply chain costs in the Indian food and grocery sales which has been estimated to be a whopping US$ 24 bn (₨ 1272 bn). The infrastructure support extended to improve the backend processes of the supply chain would enable the elimination of such wastages and enhance operational efficiency. The middlemen would be restricted and therefore, the farmers would get to enjoy a bigger share of the pie.

Conclusion: Well, the debate on FDI in multi-brand is endless. If we need to see its advantage we will have to wait & watch. We have the case of China, which allowed FDI in multi brand, 20 years ago. By partially allowing FDI, it was able to track its impact on the local market. Today, China's retail sector is the second largest in the world. Indian manufacturing sector is not in a commanding position today to produce & fulfill the requirements of the global retailers. Therefore, it is imperative for the government to work towards the improvement of the manufacturing sector. The step at the moment looks good; to make sure that it delivers is entirely dependent on the government.



Contributor to GDP: India's retail sector contributes to about 35% of the total GDP as against its US counterpart which contributes only a total of about 20%.

Extremely high growth rate: Indian retail has shown a tremendous improvement in the past three years and has grown by an overwhelming 46%.

Great future potential: Currently organised retail in India is only about 2-3% , which only means there is a lot of potential for future players.

High employment generating industry


Lack of competitiveness: According to a study on global retailing trends, by AT Kearney's India lags on the competitive front and also was found to be the least saturated markets of the world.

Unorganised to a large extent: India's unorganised portion of the retail market is about 97% as against 20% in the US.

Low productivity: India scores very low on productivity as compared to its international competitors.

Lack of talented professionals: In India retail trade is not seen as a reputed profession as is hence dominated by family run businesses who are not academically or professionally qualified.


Organisation in the sector: More organisation in the sector would mean creation of jobs and a higher demand for labour which would result in surge in the employment.

Healthy competition : FDI in mutli-brand retail will trigger price war and healthy competition among retail giants which would ultimately benefit the consumers

Transparency in the system: Most of the middle men and intermediaries operating in the sector do not have transparency in their pricing policy. According to a recent report an average Indian farmer only receives one third of the amount a consumer pays for his produce.

Quality and wastage control: Due to unorganisation in the sector 40% of food produce does not reach the final consumers. Food often gets rotten in the fields, in transit and in the state run ware houses. Now, as organisation sets in cost cautious and highly competitive players will try and minimise such wastages and ensure that food is available to the weakest and poorest segments on the society.

Foreign capital inflow will further strengthen infrastructure


Current kirana shops and mom n pop stores will be forced to shut down leading to huge job and financial losses to the local independent players.

History may repeat itself: just as what happened with the BPO industry, all the toil and hard work will be don't by the Indians and the benefits will be reaped by the foreign players.

Economic issue may manifest into a political issue


India's apparel market has been undergoing a revolutionary change. Rapid growth in population and rising urbanization have spawned a new class of consumers with more money to spend, and a growing passion for fashion. In India's high-growth, fast-changing retail clothing market, we see significant new growth opportunities for both foreign as well as domestic players. Indian apparel industry is estimated to reach USD 115 billion by the year end with an annual growth projection of 16 per cent.

This growth is being driven by a number of factors:

Increase in disposable income of Indian families.

New occasions. As the lifestyles of India's prospering urban consumers have evolved, their clothing needs have also broadened, reflecting a more varied usage, suiting the occasion.

Fashion increasingly becoming a form of self-expression.

Further urbanization and the comparative youth of India's population:  A large percentage of new city dwellers will be in their twenties, and they would be making first-time choices from whole new categories of clothing items including denims, shirts, and even shoes.

 Continued rise of "organized retail."

Multi brand apparel retail players in Bangalore :

Shopper's Stop


Bangalore Central



Reliance Trends


Brand factory

Fashion at big bazaar





For long, analysts have been laying a bet on strong retail and financial services sector performances to facilitate and empower India - Asia's third-largest economy. Such expectations further get a boost as more and more Indians move towards western-style consumer spending patterns. India's retail sector will become a USD 1.3 trillion prospect by 2020. By that time, there will be approximately to 200 cities with population of over 0.5 million that will fuel retail growth.

The estimated value of the Indian retail sector is about USD 500 billion currently. Further, modern retail, which presently stands at 5 percent, will grow about six times from the present USD 27 billion to USD 220 Billion in the next 8 years. Integrated multi-channel retailing will steer consumption in India. Modern retailers have in the past tried to benefit from this opportunity by increasing their store presence across major cities. Fast moving consumer goods (FMCG) majors, have on the other hand, have tried to augment distribution reach.

Nevertheless, achieving these robust growth projections requires the industry to look beyond the traditional brick-and-mortar stores, and consider other options like digital and mobile sales. This is because high real estate costs are already playing killjoy for retailers. Real estate costs, especially, high rentals that are in range of 10 - 15% of revenue, render breaking even a daunting task. Retailers need to rethink their business plans and shift a portion of their sales from stores to alternate low-cost channels. Digital sales points are growingly becoming a preferred option for retailers. Sales through digital channels, notably websites and mobile applications, which at current are miniscule, will increase to 6-8 % of the total modern retail, by amounting to about USD 13.3-17.6 Billion by 2020.

Time has also come for a more healthy and symbiotic relationship between retailers and FMCG companies. FMCG firms have a lot to gain with the advent of multi-channel retailing. However, the depth of retail FMCG collaboration will be one of the key success factors for multi-channel retailing. It is vital for retailers and FMCG majors to collaborate for group planning, replenishment, space planning and promotion as they have a lot to gain.


There is no established definition of work-life balance but it does appear that the implication of 'right' balance for one person may differ from another. Balance is obtained in different ways for different individuals and has a different purpose for individuals. Some individuals do it to balance their responsibilities for children with work, while a few others want more time to themselves, engaging in fun activities. Work-life balance for any someone is having the 'right' mix of involvement in paid work (defined by hours and working conditions) and other spheres of their lives. This combination will change as individuals move through life and have changing roles and commitments in their work and personal lives.

Work-life balance policies assist employees in achieving a balance between their work and personal commitments that is suitable for them. Nonetheless, availability of policies is not essentially enough for these policies to be effective. The policies need to be supported by the workplace culture, which reflects the beliefs, values and norms of the whole of the organisation from the CEO to staff members. Other vital factors in the success of work life balance policies consist of appropriate communication of the policies to existing and future employees, increasing awareness of the policies, educating of managers about the importance of policies, and training of managers on 'how to' execute these policies.

Work-life balance policies and practices can aid all people, not just those with young children. They support people who are responsible for the care of elderly parents, people who have study commitments, those older employees who simply want to opt for retirement or people with other personal and daily life commitments. Our work and personal lives change across the life span with coupled responsibilities, and thus the need for work-life balance policies, also keeps changing all the time.


Work/life balance, in its broadest sense, is defined as "A satisfactory level of involvement or 'fit' between the multiple roles in a person's life" (Hudson, 2005).

Although work/life balance has traditionally been assumed to involve the devotion of equal

amounts of time to paid work and non-work roles, more recently the concept has been recognised as more complex and has been developed to incorporate additional components:

1. Time balance, which concerns the amount of time given to work and non-work roles

2. Involvement balance, meaning the level of psychological involvement in, or commitment to, work and non-work roles.

3. Satisfaction balance or the level of satisfaction with work and non-work roles.

This model of work/life balance, with time, involvement and satisfaction components, provides a broader and more comprehensive picture to surface. For example, for an individual who works two days per week and spends the other days with his/her family may be unbalanced in terms of time (i.e. equal measures of work and life), but may be equally dedicated to the work and non-work roles (balanced involvement) and may also be highly satisfied with the level of involvement in both work and family (balanced satisfaction).An individual who works 60 hours per week might be professed as not having work/life balance in terms of time. Nevertheless, like the individual who works only a few hours per week, this person would also be unbalanced in terms of time, but may be quite content with this greater contribution to paid work (balanced satisfaction). On the other hand, a person who works 36 hours per week doesn't enjoy his/ her job and spends the rest of the time pursuing preferred outdoor activities may be balanced in terms of time but unbalanced in terms of satisfaction and involvement. Therefore, achieving balance needs to be looked at from several perspectives.


Two groups of variables are known to impact work life balance:

Environmental Factors

Moderating Variables

The Environmental Factors impacting WLB

Technological Environment

Technological advancement has led to effort and time - saving devices in several of the activities connected with handling family and household responsibilities, ranging from washing to cooking and housekeeping to name a few. It has also contributed to evolution of virtual workplaces and flexi work patterns which to some extent help deal with work - life demands better. Tele work and telecommunicating are becoming progressively more common. While this advancement can augment Work - Life Balance, it could have a differential impact that reduces Work Family Conflict but adds to Family Work Conflict.

The evolution of "extreme jobs" has led to the development of workaholic symptoms such as increasingly blurred separation between work and home, to an extent that even at home; work seems to be the top priority. Work takes priority over family and leisure time, leading to no social life outside of work related dealings.

Economic Environment

Globalisation and competition in today's world has led to the adoption of new practices like outsourcing in an effort to cut costs and fill up the gap in available talent. Outsourcing can help focus on the main area of functioning and it can also bring in some aspect of work life balance by giving an individual some time for himself by letting the experts do the job for him. There has also been a surge in the number of dual income families, which again has contributed to a large extent to work-family conflicts.

Socio Cultural Environment

Issues of work-life balance faced by workers in the industrialised countries vary from that in the developing countries. To a large extent the issue may be a function of the ageing work force in the industrialized western countries which place greater demand on elderly care, in contrast to countries like India, where it is the younger population that demands greater family care and attention. Research has also indicated that the attitude of people towards work, as defined in terms of hours worked per year, also varies considerably across countries.


The relationship between the environmental factors discussed above and Work-Life Balance are moderated by several variables including gender, marital status, size of the family, age of children, social support, personality traits and industry.

With respect to gender, more men than women are involved in "extreme jobs"

More women than men were reported to exhibit Work Family Conflict, and Family Interference with Work (Lilly, Duffy and Virick, 2006)

Women were found to derive less benefit from social support from their supervisors/colleagues in comparison to their male counterparts (Van Daalen, Willemsen, Sanders, 2006)

With respect to marital status and family size, those who are single and those with smaller families and / or with grown children were found to experience less work-family life tensions than those who are married, have larger families and young children (Tung 1999)

As far as social support is concerned it is usually of two types:

Instrumental support comes from the employer and society in terms of the provision of family care facilities, long maternity/paternity leave etc.

Emotional support is derived from ones family, managers or colleagues. For e.g. if a women can depend on her parents or in-laws and/or servants to help her with child care and household errands then she tends to experience less Work-Family conflict.

The personality of an individual can also moderate the relationship between environmental variables and Work-Life Balance (Lilly, Duffy and Virick, 2006).

They found that those with a high need and achievement tend to experience more Work Interference with family as against Family Interference with work; while with those having a higher need for affiliation the vice versa holds true.


Work-life balance policies are often referred to in practice as "flexible working", and it involves "adjusting work patterns so that everyone, regardless of age, race or gender can find a rhythm that enables them more easily to combine work and their other responsibilities and aspirations" (Pillinger 2001: 1).

Some of the commonly adopted practices by organisations across the globe include:

• Part-time working: Where an employee works less than full-time working hours in their organisation

• Job sharing: An arrangement which divides one full-time job between two workers with the responsibilities and time divided between them

• Flexitime: An employee's starting and finishing time are made flexible within certain core hours

• Term-time working: this is when a parent is allowed to work only during school term

times, with all school holidays off. Payment can be calculated either by usual payment,

with no payment during holidays, or salaries can be spread out across the year.

• Annualised hours: An employee will have a defined number of hours per year. Working time can be scheduled around a number of core days or hours that must be worked. Working time can be adjusted to meet business demands

• Compressed hours: Standard amount of hours worked over fewer days

• Teleworking / e-working : the term used to describe flexible working that can be done from any location using technologies such as laptops, wireless internet connection and mobile/


• Zero hours contracts: a flexible contract that does not specify the amount of time a

worker will spend per year on their employment, leaving it open to meet demand.

• V-Time: This is voluntary overtime to meet production needs; extra hours are 'banked'

and taken as time off or as extra pay. It differs from flexitime where starting and

finishing times are staggered, and can mean reduced or increased weekly working hours

over a period of time.

Other options provided to employees include:

• Work from Home

• Career breaks

• Study leave

• Shift working


• Issues related to communicating with other workers

• Issues related to accessing the necessary equipment to work from home

• Fewer organisational benefits, including potential erosion of pensions

• Reduced earnings relative to some flexible options

• Fear of being negatively perceived by colleagues/supervisors

• Reduced recognition for a job well done

• Reduced involvement in decision-making

• Abuse of the flexi system by some co-workers