1. Small -Scale retailers
2. These Amy is divided into:-
(i) Street Stalls
(ii) Stalls in Markets or Bazaars
(iii) Co-operative Stores
(iv) Independent Shops
(v) Second-hand dealers
(vi) Hawkers & Pedlars
(i) Street Stalls-These are shops with very limited space as they are usually constructed on any available space on a busy street, They are usually of a permanent nature. They are owned by independent retailers or are small partnership firms.
(ii) Stalls in Markets or Bazaars-These are small shops in specially constructed markets such as the Crawford Market of Bombay or the New Market of Calcutta. The space is limited.
The great advantage of such a stall is that likely buyers are always passing by. Such stalls may be permanent or as in the case of weekly markets in villages, temporary. These are generally owned by the sole trader or by partnership firm.
(iii) Co-operative Stores —These may be run on a small or large-scale basis. We shall deal with them later.
(iv) Independent Retailers or Sole Traders-These include grocers, bakers, greengrocers, fishmongers, etc.; and those who deal in miscellaneous articles in universal demand; such as cloth shopkeepers, book-sellers, small stores stocking articles such as sticks, umbrellas, boots, shoes, hats, gloves, toys, etc.
These private shopkeepers play in important part on the retail market. Through their display and salesmanship and personal contact with the customer they create a demand, which demand is met by selling in small quantities as required by the customers. They even grant credit to their customers and receive the amount by instalments. These small retail shopkeepers are popular, and carry on a good trade in spite of large organizations, such as department stores, competing against them because they are in a position to give personal and detailed attention to the wants of their customers, as they are personally acquainted with the customers of the locality. These retail shops have to meet intense competition in proprietary and branded articles belonging to producers and manufacturers.
The retail shopkeeper frequently deals in perishable goods, and that is one other reason why he is anxious to see that his turnover is rapid, so that he may not suffer as loss through the stock getting stale.
(v) Second-hand Dealers-These usually sell books, clothes, furniture, motor-cars, etc. and do very good business as they cater to the needs of the majority of people who cannot afford to buy new goods. These are owned by sole- traders or -partnership firms.
(vi) Hawkers and Pedlars-They carry a very limited stock which they get from wholesalers or local retailers and move about from locality to locality. They are usually found on busy street corners. The goods they sell are generally of inferior quality and temptingly priced. As they are rarely found again in the same spot there is no question of any guarantee given or complaint made.
The price is seldom fixed. Fruit, toys, pens, handkerchiefs, hair-pins, combs, etc. are the type of articles applied to a person who has a handcart or animal for transporting and displaying his goods, while a pedlar is one who carries the goods himself. The pedlar is usually on his own but hawkers sometimes work in partnership.
2. Large-scale Retailers
These may be divided into:-
(i) Multiple or Chain Shops.
(ii) One price shops.
(iii) Co-operative Stores.
(iv) Departmental Stores.
(v) Mail Order Business.
(vi) Self-service & Supermarkets.
(vii) Auto market of the future.
(i) Multiple of Chain Shops
The multiple or chain shop system originally developed through the success of retail shopkeepers. A Shopkeepers opens one shop which, for example, becomes very successful, with the result that he opens a second shop, and with the success of the second opens a third, and so on; and thus with the increase of shops he naturally wants more capital which he obtains by converting his organization into a limited company.
Manufacturer has also opened shops to sell their goods which could not be marketed otherwise. In a departmental store the main idea is to concentrate the whole business in one centre and then attempt to draw the customers to it, but under the multiple or chain shop arrangement sin attempt is made to approach as near the customer as possible by opening a large number of smaller shops in different localities under a manager in charge, and by directing the working of it through the central office or depot. Another departure from the department stores’ practice is to specialize in a particular set of articles in which the firm has chosen to deal, instead of playing the part of universal providers.
An advantage of this type of organization is that as these shops concentrate on a certain line of goods dealt in on large lines purchases can be made from manufacturers on the most advantageous terms. The multiple shop system is the manufacturer’s answer to the increasing tendency of retailers who make either their purchases abroad, or who ignore certain factories in preference to others.
If a manufacturer in one particular line, say, boots and shoes, wishes to put forward his own products on retail lines, he adopts the multiple shop system and opens shops all over the town, where the gods are offered for sale. Here, an attempt is made to introduce personality in the shop fronts and name boards by adopting one particular design and seeing that the same design of shop fronts and name boards as used in the case of every shop in every locality. By special arrangement with the landlords, the frontal windows are also altered to the pattern selected. Thus, the manufacturer is entirely independent both of the wholesale middleman as well as the retail shopkeeper a deals with the consumer direct.
The consumer gets here a known quality of articles near his own home and when he is travelling through another part of the county he can recognise a chain shop belonging to the same organisation by the similarity of shop front-thus multiple shops have the advantage over retail shop keepers, inasmuch as one shop advertises the others.
The latest trend abroad is now for departmental stores to extend out their operations by opening similar departmental stores all over the country this result in a multiple departmental stores type of organisation or a chain of department stores. However, what is strictly mentioned as multiple or chain out by the manufacturer and specializing in a particular type of product like our Bata Shoe stores all over India.
(ii) One Price Shops
The one price shop varies from the hawker who sells cheap toys, pens, etc., all at the same price to the large centrally maned stores like Woolworths of England and America which has a store in nearly every city. In the case of a central organisation which runs a number of one price shops, the articles are bought at the centre on a large-scale and then distributed among its shops in various localities. In some cases the shops are permanent while in other cases a one price shop is opened temporarily in particular locality either to dispose of certain goods or to catch a particular market while the demand lasts.
Each shop is in charge of manager who has to report periodically to the central office as to daily sales and popularity or otherwise of the various articles at his particular shop.
(iii) Co-operative Retail Stores
Just as the chain as the chain stores and the department stores were set up to eliminate the profit of the middleman, so consumers have also set up their own stores in order to keep the middleman’s profit to themselves. A co-operative society is formed in which members invest their capital with the main purpose of supplying goods and services to its members at a low price through its store.
The members also get an interest on their capital. The store is managed by representatives of the members. Consumers’ co-operatives are not suitable for consumers of very low income levels as they would not be able to provide the necessary capital, and consumers with high income levels are not interested in the economies which are possible by means of such stores. Thus these co-operatives are particularly suitable for consumers of the lower middle- class.
Today there has been an increase in the opening of cooperative stores all over India such as the Sahakari Bhandar in offers them generally to the consumers at lower prices than those prevailing in other shops. In this sense they are rendering a good service.
(iv) Departmental Stores
Many small shops sell a variety of goods but when this is done on a large scale various departments are opened, each department selling different types of article. Thus a large departmental store is really a number of shops under the same management and under the same roof. Departmental Stores are generally owned by joint stock companies.
Each department is treated as a separate unit under a separate manages but all being centrally controlled by the General Manager and a Board of Directors. There is also a staff Personal Manager to recruit and supervise the large staff necessary to run such a big organisation.
The following are some of the advantage of departmental stores:-
(a) Each department advertises the others as a customer who comes to buy goods from a particular department is likely to be attracted by the goods displayed in the other departments.
(b) Large departmental stores can provide departments which are non-profit making in themselves but which attract customers by providing services such as lifts, post offices, theatre ticket booking offices, rest rooms, film snows, mannequin parades, music etc.
(c) As they buy large quantities they can buy directly from the manufacturer at a lower rate.
(d) As their profits are large, they can advertise on a big scale.
(e) Losses made by one department are made up by the profits of other departments.
(f) As all kinds of gods are sold in the same building, customers can get everything they require from one stores instead of having to go from shop to shop.
(g) As they are usually situated in a central locality in a large city they attract a large number of customers.
(i) They can afford the services of expert buyers who can get the best quality goods at the lowest rates.
The following are some of the disadvantage of departmental stores:-
(a) As departmental stores are usually situated in the busiest part of large cites, the rent is very high.
(b) The organisation of departmental store is so large that customers cannot expect the personal attention they can get from small retailers.
(c) Customers who are at a long distance will only be able to come to the store once in a while so for their immediate needs they will go to local stores.
(d) The non-profit making departments which have to be maintained for the comforts of customers will need a large staff and this additional expense will make management keep the prices high with the result that the poorer class of customer will not be able to take the advantage of getting all his requirements under one roof.
(e) Larger departmental stores are difficult and expensive to manage.
(f) A great deal has to be spent to attract customers from long distances.
(g) When sales begin to fall, the profits of departmental stores begin to fall off considerably as the heavy overhead expenses have to be maintained.
(v) Mail-Order Business
These are organizations which conduct their business through the mail and thus extend the scale of their operations by reaching out into a wider territory. The main problem of mail order business in India consists of the various languages prevailing in different parts of the country which makes it difficult for the mail order business to extend outside a small local area.
They may thus have to concentrate on the major cities by conducting their business in English as operating in different languages in different areas might be expensive.
(vi) Self-Service Stores and Supermarkets
In the case of well-known goods sold in packages of convenient size with trademarks or trade names, there is really no need to get any advice or assistance from a salesman. Thus in Europe and America many retailers have cut down the expenses of employing a large staff by providing self-service.
The branding and packaging and standardisation of quality of goods make this very easy. The latest in shopping in England and in America is the supermarket with its wire trolleys and white-coated floor walkers. The supermarket has created a revolution in retail distribution and changed people’s buying attitudes.
The supermarket originally started in America in the food business and it was then looked upon as a poor man’s store because the prices were low. Today’s supermarkets vary in size the average catering to as many as 7,000 customers a week with air-conditioning, arrangements, for delivering packages to cars, music, rest rooms, bakeries, luncheon counters and yards of refrigerated cabinets for frozen foods and meats.
Grocery business is thus done on a large scale in the supermarket but the be packaged, standardised and branded and is of convenient size can be sold in a supermarket where the shopper has to pick up the packages he requires, put them into a wire trolley and take the trolley to the check-out counter.
As there are no sales attendants there is a considerable saving in expense. Thus the supermarket is like a department store where the customer has to serve himself. The supermarket has its limitations as bulky goods and goods of style and fashion cannot be sold in this manner.
(vii) The Auto market of the Future
The Auto market is the market of the future where shopping will be done by pressing, button. In many parts of England and America almost anything that can fit into a drawer of about six by seven inches is sold from a machine and if this is carried far enough, the future may see large stores with sleek glass-front slot machines and no human staff at all except a mechanic to keep the machines in order.
Modern Trends in Retailing
The following are some of the modern trends in retailing: –
(ii) Window Dressing
(iii) Window Dressing
(iv) Gift Vouchers
(v) Gift Wrapping
(vi) After sales service
(vii) Beauty Salons.
(viii) Free Delivery
(ix) Return and exchange of merchandise
(x) Post Office
(xi) Self service
(xii) Push button or Slot machines
(xiii) Credit facilities
(xiv) Lost & Found Department
(xvi) Privacy In Shopping
(xvii) Theatre ticket and Travel-Agencies
(xviii) Santa Claus & Chacha Deepak.