Wednesday, February 6, 2013

Theories of Retail Development

Theories of Retail Development
Retail development can also be looked at from the theoretical perspective. No single theory can be universally applicable or acceptable. The application of each theory varies from market to market, depending on the level of maturity and the socio-economic conditions in that market.
The theories developed to explain the process of retail development revolve around the importance of competitive pressures, the investments in organizational capabilities and the creation of a sustainable competitive advantage, which requires the implementation of strategic planning by retail organizations Growth in retail is a result of understand in market signals and responding, to the opportunities that arise in a dynamic manner. Theories of retail development can broadly be classified as:
1. Environmental- where a change in retail is attributed to the change in the environment in which the retailers operate.
2. Cyclical- where change follows a pattern and phases can have definite identifiable attributes associated with them.
3 Conflictual- where the competition or conflict between two opposite types of retailers, leads to a new format being developed
Environmental Theory
Darwin's the of natural selection has been popularized by the phrase "survival the fittest".
Retail institutions are economic entities and retailers confront an environment which is made up of customers, competitors and changing technology. This environment can alter the profitability of a single retail state as well as-of clusters and centers. The environment that a retailer competes in is sufficiently robust to squash any retail form that does not adjust.
Thus, the birth, success or decline of different forms of retail enterprises is many a times ""attributed to the business environment. For example, the decline of department stores in the ?western markets is attributed to the general inability of those retailers to react quickly and positively to environmental change.
Cyclical Theory
The most well known theory of retail evolution is The Wheel of Retailing theory. This theory, described by McNair II, helps us understand retail changes. This theory suggests that retail innovators often first appear as low-price operators with a low-cost structure and low profit-margin requirements, offering some real advantages, such as specific merchandise, which enables them to take customers away from more established competitors.
As they prosper, they develop their businesses, offering a greater range or acquiring more expensive facilities, but this can mean that they lose the focus that was so important when they entered the market. Such 'trading up' occurs as the retailer becomes established in his own right.
Conflict Theory

Conflict always exists between operators of similar formats or within broad retail categories. It is believed that retail innovation does not necessarily reduce the number of formats available to the consumer; instead, it leads to the development of more formats. Retailing thus evolves through a dialectic process, i.e., the blending of two opposites to create a new format.
This can be applied to Developments in retailing as follows: --
A. Thesis- Individual retailers as corner shops all across the country
B. Antithesis- A position opposed to the thesis develops over a period of time. These are the department stores. The antithesis is a "challenge" to the thesis.
C. Synthesis- There is a blending of the thesis and antithesis. The result is position between the "thesis" and "antithesis". Super markets and hypermarkets thrive. This "synthesis" becomes the "thesis" for the next round of evolution.

13 comments:

  1. Thank you very much, it was of help.

    ReplyDelete
    Replies
    1. So Nice of you dear Kunjal.....Keep reading the updated posts

      Delete
  2. Thanks for sharing, it was a last minute help.

    ReplyDelete
  3. So Nice of you dear Kunjal.....Keep reading the updated posts

    ReplyDelete
  4. please can I have articles references who talk about retail models/theories

    ReplyDelete
  5. Here is the investors contact Email details,_   lfdsloans@lemeridianfds.com  Or Whatsapp +1 989-394-3740 that helped me with loan of 90,000.00 Euros to startup my business and I'm very grateful,It was really hard on me here trying to make a way as a single mother things hasn't be easy with me but with the help of Le_Meridian put smile on my face as i watch my business growing stronger and expanding as well.I know you may surprise why me putting things like this here but i really have to express my gratitude so anyone seeking for financial help or going through hardship with there business or want to startup business project can see to this and have hope of getting out of the hardship..Thank You.

    ReplyDelete
    Replies
    1. do they offer loans to people from different countries

      Delete
    2. you should add more valuable data only 3 factors are not sufficient to elaborate the theories. #imhoneyhk

      Delete
  6. Very useful information.thank you so much...Retail Management Courses India

    ReplyDelete
  7. Hello everyone on here my name is Fumo Sadiku living in Malindi City Kenyan I want to tell a little more about a good hearten man called Benjamin Breil Lee working with Le_meridian funding service as loan officer, Mr Benjamin Breil Lee helped me get a loan of 37,115,225.00 Shillings on my trying time trying to get back on my feet to raise my business I know there are some of you here who are in financial difficulties to talk to Mr Benjamin on what's app 1-989-394-3740 Or email his company E-Mail lfdsloans@lemeridianfds.com also with his personal E-mail on lfdsloans@outlook.com I'm so glad for what he did for me and for his Bank accountant as well Accountant Hernandez Lucas Thank you very much for your work well done.

    ReplyDelete
  8. UP Development, LLC, a premier retail developer with more than 25 years of experience focused primarily in urban communities in the Southeast and Midwest, is expanding into high growth markets nationwide.

    ReplyDelete