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
McNair represents this theory by Wheel of Retailing that explains the changes taking place in retailing.
According to him, the new entrant retailers are often into low cost, low profit margin, low structure retail business, which offers
some unique, real benefit to the consumers. Over some time they establish themselves well, prosper, and expand their
products with more expensive facilities, without losing focus on their core values.
 Conflict Theories of Retail
An evolutionary theory based on the premise that retail institutions evolve. The theory suggests that new retail formats
emerge by adopting characteristics from other forms of retailers in much the same way that a child is the product of the pooled
genes of two very different parents. Within a broad retail category, there is always a conflict between the retailing of similar
formats, which leads to the development of new formats. Thus, the new retail formats are evolved through dialectic process of
blending two formats.
 The Retail Life Cycle
Introduction Phase
When new products are released into the market, the introduction stage begins. During this phase, retailers typically focus on
generating consumer interest by investing in promotional activities such as advertising campaigns or special promotions.

Growth
When the product has gained some traction and started generating revenue, it moves into the growth stage, where its sales
climb steadily. As demand rises during this period, profits start flowing in for retailers who can capitalize on it effectively.

Maturity
Retailers frequently concentrate on growing their market share when a product is mature. To do this, they must invest heavily
in advertising campaigns and other promotional activities to maintain consumer interest. In this stage, the product is
considered a ‘cash cow.’ It is likely to be the most profitable product in its portfolio.

Decline
Retailers must invest more resources into marketing efforts when product sales decline marketing efforts to maintain
profitability. Sales of a product are likely to start slowing down and eventually stop in the decline stage.

In this stage, retailers can either discontinue the product or attempt to reposition it with a new branding strategy. A lack of
demand for the product characterizes this stage. At this point, retailers are no longer interested in stocking the product, and,
likely, most consumers are no longer interested in purchasing it.
 The Retail Life Cycle
The Retail Life Cycle refers to the various stages a retail business goes through from its inception to its eventual decline or
transformation. It consists of distinct phases that describe a retail business’s growth, maturity, and decay. Success in the
cutthroat world of retail requires an understanding of the life cycle of a retail firm.
 The Retail Life Cycle
Benefits Of Understanding the Cycle
By understanding the retail life cycle, businesses can develop strategies that will help them optimize their profits. Understanding a product’s life
cycle is essential throughout the entire process, from manufacturing to sun-setting. Some of the benefits of understanding this process include:

1. Avoiding products that are unlikely to be successful in the marketplace.

2. Identifying new products that are likely to be successful in the marketplace.

3. Evaluating the market for existing products.

4. Developing marketing strategies for products performing well in the marketplace.

5. Developing a product launch strategy for products nearing the end of their life cycle.
This will help businesses develop a product launch strategy that will help extend the life of their existing products by introducing new and
updated versions of these products to the market. A business that develops a successful marketing strategy for a particular product will
typically see an increase in the demand for the product as more customers become aware of the product and begin to purchase the product
regularly.

As demand increases, more suppliers will jump into the market to supply the product to meet the demand. As supply increases, prices will fall,
and retailers will sell more product to meet this increased demand.