Theories In Retailing

THEORIES OF
RETAIL
DEVELOPMENT
By
RITA PRUSTY
IBCS

THE PROCESS OF RETAIL
DEVELOPMENT REVOLVE AROUND
THE IMPORTANCE OF:





Competitive pressures
Investments in organisational capabilities Creation of sustainable competitive advantage THEORIES ARE:
1.
2.
3.

Environmental Theory
Cyclical Theory
Conflictual Theory

ENVIRONMENTAL
THEORY:
Change in retail is attributed to the change in the environment in which the retailer operate.
 The various influences of the external environment are:
1. Technological
2. Economical
3. Demographic
4.
Legal & Political
5. Socio- Cultural


CYCLICAL THEORY:


Where change follows a pattern and phases can have definite identifiable attributes associated with them.

THE WHEEL OF RETAILING:

Mature RetailerTop heavy
Vulnerability Phase
Conservative
Declining ROI

Innovative RetailerEntry Phase
Low status and Price
Minimum service
Poor facilities
Limited product offering

Traditional RetailerElaborate facilities
Higher rent
More locations
Higher prices
Extended product offerings
Trading Up Phase

RETAIL ACCORDION
THEORY



Retailers enter a market as general retailer, with experience they focus down on particular product sectors.
Over time they begin to diversify their offering in order to grow but again will revert to specialisation.

LIFE CYCLE IN RETAIL:
1.
2.
3.
4.

Innovation -10 yrs (African markets)
Accelerated Growth -15-25 yrs
(Indian Markets)
Maturity- 5-10 yrs (South Asian markets) Stagnation – 5-10 yrs (Developed markets) CONFLICT THEORY:
The developments in retailing are as follows1. Thesis- Individual retailers as corner shops all across the country
2.
Antithesis- A position opposed to the thesis develops over a period of time
3.
Synthesis- A blending of the thesis and antithesis