Modern Trends in Retailing

Self Service

• Products are displayed on open shelves.
• Customers have to select them put them into trolley, take it to cash counter, make payment and arrange for their transportation.
• Generally used in large scale retailing especially supermarkets.

Advantages

To Retailers

1. Lesser requirement of shop staff.
2. More sales in given time.
3. More sales due to impulse buying. More turnover.
4. Attraction to the customers.

To Customers

1. Shopping can be done in free environment.
2. Freedom of choice.
3. Quicker shopping.
4. Low price.

Disadvantages

To Retailers

1. More capital required (for space, shelves and variety).
2. Shop lifting.
3. Security expenses increases.

To Customers

1. Impersonalized way of sales.
2. Impulse buying.
3. No delivery is provided.

Branding and Packing

• Branding means the selling of goods under the trade mark or brand name of manufacturer.
• Branding is done to differentiate products from competition.
• Brand Name = Name and Brand Mark = Symbol.
• Packing is the wrapper of product done to provide convenience to customers.
• Branding is only possible if packing is done.

Advantages

To Retailers

1. Products can be differentiated.
2. Market share can be created.
3. Adds value to the product.
4. Assists in handling of products.
5. Information about the product can be written.
6. Attracts customers.
7. Some packing can be reused.
8. Advertisement can be done.
9. Easy to handle. (Arrangement in self service retailing)

To Customers

1. Brand assures uniform quality.
2. With packing awareness is created.
3. Customer is well informed about the product by advertisement.
4. Some wrappers can be reused.
5. Shopping has become easier.

Disadvantages

To Retailers

1. Brands needs to be advertise and advertisement can be burden on resources.
2. Sometimes branding increases competition and competition puts pressure on firms profit.
3. Imitation brands reduce profit.

To Customers

1. Customers get confused as what brand to buy.
2. Cost of packing an advertisement is added to the price of product.
3. Customer may be misled by the advertisement of a certain brand.
4. Imitation brands.

After Sale Service

• All the services provided by the retailer, manufacturer, or the agent to support customers after the sale has been made.
• After sale services include: Installation, training, repairing and warranty.
• Warranty is provided by the produced as a guarantee of quality of a product.
• Warranty is valid within a specific period of usage or specific period after purchase.
• In warranty items with faulty performance will be repaired or replaced free of charge within warranty period.

Advantages

To Retailers

1. Better image.
2. More revenue with more sales.

To Customers

1. Support.
2. Spare parts are available.
3. Warranty.

Disadvantages

To Retailers

1. Capital requirement.
2. Management problems.
3. Parts repaired in warranty are a loss to the business.

To Customers

1. Warranty is added to the cost from customers.
2. Warranty is available only for limiter period.

Automatic Vending Machines (AUMs)

• These machines can sell cold bottled drinks, hot drinks, cigarettes and sweets.
• Often placed at cinemas, parks and supermarkets.
• Customers enter the money into the machine, presses a button and desired item comes out.

Advantages

To Retailers

1. Requires minimum space so rental cost is low.
2. 24 hours sale.
3. No sale staff required.

To Customers

1. Adds convenience.
2. Available all the time.
3. Self service. Less time required.

Disadvantages

To Retailers

1. Available only for the sale of limited range of products.
2. High capital cost.
3. Requires maintenance.
4. Total loss of sales when out of order or out of stock.
5. Machine can easily be broken and money inside can be stolen.

To Customers

1. Only limited range of products are available.
2. Inconvenience if machine out or order.

Shopping Complex

• One multistory building, with many different shops, each belonging to different owners.
• Wide range of goods and services are available.

Advantages

To Retailers

1. Common platform for achieving common goal.
2. Minimum expense on advertising.
3. Labour is available.

To Customers

1. Variety.
2. Other services like, ATM and post office are there.
3. One stop shopping.
4. Located in main commercial area.

Disadvantages

To Retailers

1. High rents.
2. High competition.
3. Low profit margin.

To Customers

1. Traffic, inconvenience.
2. Pollution.
3. Not located close to homes.

Barcodes

Advantages

To Retailers

1. Accurate billing.
2. Quick billing.
3. Better business control.
4. Integrated software can be used.
5. Labour cost is saved through automatic billing.
6. Security against shop lifting.

To Customers

1. Accuracy in bills. Not charged extra.
2. Quick billing.

Disadvantages

To Retailers

1. High capital cost.
2. Skilled labor required.
3. Computer software can malfunction.

To Customers

1. Impersonalized shopping.
2. Software malfunction.

E-commerce

Also known as Electronic Commerce, Internet Commerce and Web commerce. It is a branch of commerce in which commercial activities are carried out electronically. Advantages To Retailers Wide market. Low competition. No requirement of retail outlet. More chances of involving potential customers into sales. Products can be displayed and specified on web. Low labor cost. Computer can help keeping a variety of information regarding customers and employees.

To Customers

1. More variety.
2. Benefit of arm chair shopping.

Disadvantages

To Retailers

1. Capital cost increases.
2. Expenses of developing and operating websites.
3. Danger of hacking.
4. Dependence on skilled labor.
5. Market is limited. (only computer literate people)

To Customers

1. Fraud.
2. Customers can check product only after it is delivered to them.
3. Impersonalized way of buying.

Franchising

• A successful business (franchiser) lets another business (franchisee) use its name under an agreement.
• All franchises are decorated in the same style.

Advantages

To Franchisor

1. Name is spread without much investment.
2. Gets franchising fee from the franchisee.
3. Has right to control certain activities of franchisee.

To Franchisee

1. Training by the franchisor.
2. Less advertisement is required.

To Customers

1. Convenience, easily located.
2. Guarantee of quality.

Disadvantages

To Franchisor

1. Any bad business practice of franchisee can damage franchisor’s image.
2. Responsibilities of training and educating franchisee.

To Franchisee

1. Heavy amount is to be paid to franchisors as franchising fee.
2. Loss of some business controls.
3. Agreement is valid upto certain period.
4. No separate identification of franchisee.
5. Franchising is not determinant of success.

To Customers

1. Limited choice of product.

Store Cards

1. A plastic card which can be charged by the customer only with one retailer.

Advantages

To Retailers

1. More sales.
2. Brand loyalty.
3. Customer profile can be maintained.
4. Additional revenue through sales of cards.

To Customers

1. Discounts.
2. Gifts.
3. Extra value added facilities.

Disadvantages

To Retailers

1. Discounts and gifts are Burdon on profits.
2. A whole system is required before issuing store cards.

To Customers

1. Have to purchase from those outlets which offer gifts and discounts.
2. Some times customers are not interested by gifts.

Electronic Point of Sale (EPOS)
Electronic Funds Transfer System (EFTS)

EPOS or EFTS refers to the computer-based systems used to perform financial transactions electronically.

Advantages

To Retailers

1. Accuracy in billing.
2. Minimum cash handling in case of EFTS.
3. Increased sales in case of EFTS.
4. Security of cash.

To Customers

1. Purchasing power increases.
2. Minimum cash handling.
3. Get itemized bill.

Disadvantages

To Retailers

1. More capital.
2. Skilled labor required.
3. In case of EFTS, retailer has to pay bank charges.

To Customers

1. Irrational buying.

 

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