Indian Retail Industry -Pantaloon Retail (India) Ltd. A Case Example – Part II

Explanation of Retail Industry

Retailing has been observed to consisting of “the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer or to provide services to the consumer”, and this turn suggests that “retailers that enter foreign markets and understand the local cultures and customs will be higher profit performers than those who don’t understand the local cultures and customs” (Dunne & Lusch, 2007, pp.4). Hence, it is quite obvious that any organization thorough the process of providing a service or selling a product to the end customer performs the function of retailing.

On a more detailed note, “regardless of whether the firm sells to the consumer in a store, through the mail, over the telephone, through the Internet, door-to-door, or through a vending machine, the firm is involved in retailing” (Dunne & Lusch, 2007, pp.4). However, there are different types of retailers such as (1) high-performance retailers, (2) low-margin/low-turnover retailers, (3) low-margin/high-turnover retailers, (4) high-margin/low-turnover retailers, (5) clicks-and-mortar retailers and (6) high-margin/high-turnover retailers.

High-performance retailers are those that generate financial results that are significantly higher than the industry standard. While low-margin/low-turnover retailers operate “on a low gross margin percentage and a low rate of inventory turnover”, the low-margin/high-turnover retailers operate “on a low gross margin percentage and a high rate of inventory turnover” (Dunne & Lusch, 2007, pp.17-18). Similarly, high-margin/low-turnover retailers operate “on a high gross margin percentage and a low rate of inventory turnover”, and high-margin/high-turnover retailers operate “on a high gross margin percentage and a high rate of inventory turnover” (Dunne & Lusch, 2007, pp.18). Finally, clicks-and-mortar retailers, as the name suggests, sell online as well as by means of physical stores.

Read the full post(Requires Facebook Login)