Store and Non-Store Retailing

In India, various types of retail stores exist to provide different products to consumers. Retailing can be classified into store retailing and non-store retailing.

 

Store Retailing

Store retailing refers to the sale of goods and services from a physical location.

 

Classification of Store Retailing

It is classified based on ownership and merchandise offered.

Based on Ownership

  1. Independent Retailer: An individual operates a store with the help of family members or assistants and has direct interaction with customers. Examples include local kirana stores and paanwalas. The retailer determines the store’s strategy based on location and product mix.
  2. Chain Retailer or Corporate Retail Chain: A single owner manages multiple outlets offering the same type of products, store environment, and promotions. Examples include Reliance, Bata, Arrow, Louis Philippe, and Food World.
  3. Franchising: A legal agreement between a company (franchiser) and a store owner (franchisee), allowing the store to operate under a recognized brand name. Examples include McDonald’s, Pizza Hut, and Van Heusen.
  4. Consumer Cooperatives: These retail stores are managed by customer members, often arising due to dissatisfaction with existing retailers. An example is Apna Bazaars in Mumbai.

Based on Merchandise Offered

  1. Convenience Stores: Small stores located in residential areas, open for extended hours, selling essential products like eggs, bread, milk, and vegetables.
  2. Supermarkets: Large retail stores offering a variety of consumer goods, mostly groceries and household items. They operate on a self-service model with minimal margins but high turnover.
  3. Hypermarkets: A combination of supermarkets and general merchandise stores, typically located in major destinations. They attract customers with low prices and a vast range of products, following a self-service model.
  4. Specialty Stores: These stores focus on a specific type of merchandise, such as furniture, jewelry, consumer electronics, sports equipment, and household appliances.
  5. Departmental Stores: Large stores offering multiple types of goods under one roof, usually located in busy commercial areas. They require significant capital investment and combine decentralized buying with centralized selling.
  6. Catalogue Showrooms: Retail stores that specialize in hard goods like housewares and consumer electronics. Customers browse catalogues to select products using item codes.

 

Non-Store Retailing

Non-store retailing refers to the sale of goods and services without a physical store. This form of retailing establishes a direct relationship with consumers.

Non-Store Retailing is classified into direct personal contact and direct response marketing.

Direct Personal Contact

Direct selling involves face-to-face interaction between the retailer and the consumer. Examples include cosmetics, jewelry, home appliances, educational materials, and nutritional products.

This type of retailing often follows a party plan or multilevel network, where retailers showcase products in gatherings or appoint customers as distributors on a commission basis.

Direct Response Marketing

In this method, customers learn about products and services through non-personal media like mail, catalogs, phone calls, television, or the Internet. Various forms of direct response marketing include:

  1. Mail Order Retailing: Retailers use customer databases to create and send targeted product catalogs.
  2. Television Shopping: Products are promoted on television along with their features, pricing, and warranty details. Phone numbers for different cities are provided so customers can place orders and receive home delivery. Example: Telebrands, a program showcasing fitness and health products.
  3. E-Shopping: Customers browse and purchase products online via websites. Payments are made digitally, and products are delivered to their doorstep.
  4. Telemarketing: Companies reach out to potential customers via telephone to promote products or services. Toll-free numbers are often provided for customer inquiries. Examples include banks offering credit cards and educational institutions seeking admissions.

 

Differences Between Store and Non-Store Retail

  1. Goods and Services Sold
  • Store Retail: Goods and services are sold from a physical location or store.
  • Non-Store Retail: Goods and services are sold without a physical store.
  1. Basis of Classification
  • Store Retail: Classification is based on ownership and the merchandise offered.
  • Non-Store Retail: Classification is based on direct personal contact and direct response marketing.
  1. Relationship with Consumers
  • Store Retail: It adopts an indirect relationship with the consumer.
  • Non-Store Retail: It adopts a direct relationship with the consumer.
  1. Product Arrangement
  • Store Retail: The retailer arranges the products.
  • Non-Store Retail: Customers become aware of products through non-personal media like mail, catalogs, phones, television, or the Internet.
  1. Purchase Process
  • Store Retail: Customers visit a showroom, inspect products, and make their selection.
  • Non-Store Retail: Companies provide toll-free numbers for customers to order products, which are then delivered to their homes.
  1. Mode of Transaction
  • Store Retail: Transactions occur through multiple retail channels.
  • Non-Store Retail: Transactions occur directly between the retailer and the customer.
  1. Display of Offers
  • Store Retail: Offers are shown visually in stores or marketplaces.
  • Non-Store Retail: Offers are showcased online or through digital platforms.
  1. Responsibility for Product Exchange
  • Store Retail: Retailers are responsible for the exchange of products.
  • Non-Store Retail: E-retailers are responsible for product exchange.

Organised Retailing & Unorganised Retailing