This article throws light upon the top six large-scale retailers. The retailer are: 1. Mail Order Sale 2. Consumer Co-Operative Stores 3. Vending Machine 4. Discount Houses 5. Supermarket 6. One-Price Shop.
Retailer # 1. Mail Order Sale:
Standardisation, grading, branding and packaging brought about the growth of mail-order sale, i.e., selling or shopping by post-described as ‘armchair shopping.’ The seller approaches the prospects by mail publicity, i.e., sending circulars, price-list, catalogue, booklets, pamphlets, samples, etc., through the post office. Up to date mailing list is maintained.
All selling is done invariably through regular advertisements and direct mail publicity. Sometimes local agents are also employed for order collection, execution as well collection of dues, when sale is by instalments. However, usually orders are collected as, well as executed through the mail by V.P.P.
Goods Suitable/or Mail Order Business:
1. Lighter, valuable, durable standardised and branded goods.
2. Goods having regular demand and well-known in the market.
3. Goods which can be precisely described and advertised with pictures and demonstration. 4. Goods which can offer sufficient margin of profit to cover postage, advertisement, publicity, and cost of transport.
Examples of Goods Sold by Mail Order are:
i. Books,
ii. Toys,
iii. Cutlery,
iv. Watches,
v. Fountain pens,
vi. Clothes,
vii. Footwear,
viii. Seeds,
ix. Small appliances,
x. Common drugs and cosmetics,
xi. Ready-made foods.
xii. Records,
xiii. Household furnishing, etc.
Advantages:
i. An independent mail order business can be conducted at any place. It need not have a big shop or an office on the main streets of a city, and can save the cost of sales.
ii. If it acts as a middleman and an order-collecting agency on behalf of the wholesaler or manufacturer, it will not be required to purchase stocks and maintain a warehouse. Thus, the capital requirement will be meagre.
iii. The running and establishment charges are low. There will be a saving in shop rent, servant’s charges, freight for bringing goods to the shop and then to the buyer. Thus, it can give a very good competition to the department stores and other retail shops. It can also quote lower prices than local retail prices.
iv. It can be adopted as a side activity by the departmental store to eliminate the disadvantage of lack of local convenience. An enterprising manufacturer also can establish direct relations with consumers by opening a mail order section in his sales organisation.
v. It gives maximum local convenience just like street vendors and peddlers. The buyer gets home delivery of goods and will not be required to waste time and money in going to the city for purchasing his requirements. He can place his order on the basis of sales literature, samples, etc.
vi. The mail order advertisement reaches all persons. So all of them become prospective customers. The advertisement can be accurately measured by ‘keying’ it and the successful media of advertising can be ascertained. The seller can thus concentrate on those media only.
vii. Recently, in many countries mail order firm & have started credit sale of non-durable goods. Interest-free credit is given up to six months. Many families of average means find it convenient to pay by instalments for clothing, foot wear, household furnishing, linoleum, etc., over a period of six months.
viii. Recently, in many countries, mail order firms have started selling goods on ‘sale or return’ basis and also give full guarantee regarding quality of goods. Now we can get nationally branded goods at our residence at normal shop prices, from mail order firms.
Retailer # 2. Consumer Co-Operative Stores:
Just as multiple shop system is an instrument in the hands of manufacturer to eliminate all middlemen in distribution, similarly, a co-operative store is an organisation owned, managed and controlled by consumers themselves to induce the number of middlemen and their commission.
Features of Consumers’ Co-operative Store:
i. It is a voluntary association of consumers duly registered under the prevalent Co-operative Societies Act. At least ten members are required to register a society or store. The registration gives certain privileges and exemptions which are not available to other non-cooperative bodies.
ii. Members of the store make joint-purchases and sales among themselves at the current market prices. Sale at market price is preferred to avoid unhealthy competition with other retailers.
iii. Membership is open to all. Wealth is not a criterion; rich and poor are treated alike. However, stress is given on the moral character at the time of admitting a person as a member
iv. The store has a share capital of a small face value and the amount is recoverable by instalments. Every person has to pay an entrance fee.
v. Management of the store is democratic and generally honorary. One man, one vote is the rule. Day to day management is in the hands of permanent paid officers. The general meeting of members every year appoints an executive committee to look after the management of the store.
vi. Profits after payment of limited interest (12 60%) on capital are utilised for the distribution of dividends. The amount of dividend is based not on the shares held but is linked with the amount of purchases made by the members.
This linking of dividend with purchases is a unique principle in co-operative stores. It secures two advantages. Firstly, every member in his own interest will try to make maximum purchases from his store and this will ensure automatic loyalty of members to their store. Secondly, if every member makes maximum necessary purchases, the store will nave maximum sales profits without any resort to advertising.
vii. As consumer’s co-operative is essentially meant for working class and lower middle class population, capital will naturally have a secondary role. In co-operatives honesty and loyalty are capitalised and more emphasis is given on the moral character of the members. Personal security is the best security honoured in a co-operative organisation.
viii. The liability of members is generally limited by shares.
ix. The accounts of store are audited by the Registrar of Co-operative Societies or a person authorised by him.
x. Before declaration of dividend, at least 25% of the net profits must be credited to the General Reserve and 10% to the General Welfare Fund or a similar fund for social and educational benefits of members.
Retailer # 3. Vending Machine:
The coin-operated vending machines are used as a complementary form of retailing many goods and services, e.g., sale of cigarettes, soft drinks, hot beverages, candy, chocolates, platform tickets, milk, etc., and services such as laundering and insurance policies.
Thus, well-known presold, pre-packed brands with a high rate of turnover can be sold successfully by vending machines. The goods should be reasonably low in value, small and uniform in size and weight.
The initial cost is quite high including expenditure on regular maintenance and repair. Consumers cannot feel or see a product before buying. They do not offer opportunity to return unwanted goods. Packaging requires special attention. The owners have to develop special packs to suit the machines.
The machine must present attractive appearance and must be reliable in its operation. The machines are frequently used to supply to certain service to the employees and to get night time business by the retail store. They have a promising future in retail sales with the growth of the economy.
Retailer # 4. Discount Houses:
The latest addition to the various types of retailers is the so-called discount house which brought about a revolution in retailing since 1950. The discount houses are large retail stores freely open to the public, advertised widely, stocked with well-known brands of hard goods, e.g., appliances, home furnishing, sports goods, jewellery, etc.
They deliberately and consistently sell their goods below the advertised list prices. They operate in heavily travelled but low rent areas. They spend minimum amount on premises, furniture and fixture and offer very few customer services.
A new class of consumers consisting of large middle-income group of people emerged after the Second World War and these people were price-minded. These people preferred low prices and few services for such people with so many wants and limited purchasing power, the supermarkets and discount “houses were most suitable. Branding, packaging and advertising required little sales efforts and local sales promotion.
Thus, the situation after 1950, many countries was ripe for major changes in retailing. Discount houses saw great prospects in a low-margin, high turnover type operation, with very few services but big price cuts. They could reduce their operating expenses to about 15 per cent of sales while department stores and limited line stores has operating expenses up to 35 per cent of sales.
Retailer # 5. Supermarket (Self-Service Store):
A supermarket is a novel form of retail organisation specialising in necessaries and convenience goods. Usually it concentrates on all food article — groceries, meat, fruits, vegetable and tinned products. Non-food items sold by these stores should satisfy a few conditions.
Firstly, it must be widely used and must appeal to general consumers.
Secondly, a non-food article must be a branded product i.e., presold to customers through intensive advertising.
Thirdly, it should be a low-priced article.
The following are some distinctive features of supermarkets, which are very popular in the U. S. A. and Europe:
i. It is a large, cash and carry store. It saves in terms of credit facilities and delivery expenses.
ii. A big supermarket may have a very wide variety of articles sometimes covering thousands of items.
iii. There is no sales pressure. Buyer is at ease and gets sufficient time for selection, The supermarket represents the most developed form of the self-service retailing. The distribution is cheaper. Self-service is a general rule and buyer may be provided with conveyance on wheels to carry his from purchases point to point. Thus, it provides individual selections without salesmen.
iv. Packing plays a very important part. Immediate identification regarding contents, quantity, price, etc., is provided by packages of products which are kept on self-service shelves. Transparent packing helps to meet these requirements.
v. It has a minimum selling area of 3, 600 sq. metres (60 mt. by 60 mt.). It must have a central situation and an expert management to secure a very high turnover.
vi. Self-service combined with the large buying power and low percentage of profit margins means that super-markets can sell at low prices. This low price appeal is an important feature of supermarkets.
vii. Modern packaging, labelling and branding devices have encouraged the growth of self- service shopping and supermarkets, which provide a number of advantages, e.g., reduction in the sales staff, cut in establishment or running costs. Bulk purchases are always cheaper. Hence, sale price can be kept down.
viii. Self-service shopping and supermarkets may be operated by co-operatives and department stores.
ix. More than 75 per cent of the sales in grocery in the U. S. A. were done by supermarkets in 1982. Supermarkets have rapidly taken over food retailing. They have also added non-food items.
x. All supermarkets at present are usually run by limited companies.
xi. At present, discount selling in food articles is also undertaken by the supermarkets.
xii. Supermarkets are cut-price and self-service chain stores. They give very keen competition to all types of retail shops. The policy of ‘loss’ leaders followed by the supermarkets leads to cutting the price of some popular articles, e.g., sale of sugar much below the market price. The losses on sugar are fully compensated by profit on the extra sales secured for other goods bought by the housewives.
Retailer # 6. One-Price Shop:
The fixed or one-price shop is a typical kind of retail organisation in which one identical price is fixed for a very large variety of articles of everyday use. The articles are of low price and they appeal to bargain making instinct, rather something for nothing instinct of human being and due to this these shops get a huge amount of sales turnover.
The margin of profit per article is very low but the profit on the total sales turnover is quite substantial. As the common price for all articles is purposely kept at a low level, these one-price shops can serve as good instruments for mass distribution. Such one-price shops can be chained together and run in the form of chained one-price shops. All units will be under one ownership, management and control.
The purchases are usually made by a central office or a depot. The central organisation makes a wise and careful selection of a wide variety of goods of about the same piece or within a narrow price range.
The selected articles are procured from manufacturers or manufactured by the concern on a large-scale. The central organisation of one-price shop tries to eliminate all slow selling lines and concentrate fully on those goods which have a large and continuous demand.
As there is the same price for any article, the buyer is at ease and he is given full opportunity to choose whatever article he likes. In India we come across many mobile retailers of this variety crying ‘Har ek mal char char rupaye’.