Spencer
Spencer
Spencer
About Us
Spencer’s Retail Limited is a multi-format retailer providing a wide range of quality products to discerning young customers -
well-travelled citizens of the world, looking out for authentic flavors and experiences in a fun-filled shopping environment.
Our brand positioning – Taste the World – embodies this approach, delighting shoppers with the best that the world has to
offer in terms of interiors, ambience and merchandise.
Part of the Rs 15,500 crore RPG Group, we run about 250 stores (including about 29 large format stores) across 50 cities in
India, employing more than 6,000 people. As one of the earliest entrants in the retail space in India, we have been
instrumental in introducing Indian consumers to the concept of organized retailing, becoming the country’s first grocery chain
back in 1920, and offering the joys of hypermarket shopping in 2001.
A “food first” retailer we offer both fresh and packaged foods as well as groceries. We also have a wide selection of
electronics and electrical equipment, home and office essentials, garments and fashion accessories, toys, and personal
care.
About Us : Heritage
Heritage
Since 1863, Spencer’s has been a part of the Indian retail landscape. At one time, the Spencer’s Empire stretched from
Peshawar to Cochin, from Karachi to Chittagong, spanning the length and width of undivided India. Originally owned by a
British gentleman – yes, there was a Mr. Spencer (John William Spencer, to be precise) – it acquired Indian ownership in the
1960s, and became part of the RPG Group in 1989.
In 1995, RPG Enterprises, the flagship company of the RPG Group, launched
Foodworld as a joint venture with Hong-Kong based Dairy Farm International. The
joint venture, which operated supermarkets under thename “Foodworld” and
hypermarkets under the name “Giant”, was terminated in 2006. RPG retained 48
of the 93 stores it owned. These were re-furbished and their launch under the brand name, Spencer’s, kicked off a new
phase in both the history of the Spencer’s brand, and the retailin India.
Since inception Spencer’s has been a consumer-centric brand, constantly innovating, pioneering formats, evolving over time
but always keeping consumer needs and satisfaction center-stage. Back in 1920, we were the first grocery chain in India. In
1980, we became the first supermarket chain, and in 2001, we introduced India to the joys of hypermarket shopping.
What has remained unchanged almost 150 years is the trust the Spencer’s brand evokes. To the consumer, it carries the
promise of innovation, quality, and service; the confidence that they will always be able to find a Spencer’s at a convenient
location; that it will have a pleasant ambience; and that it will offer a wide range of products at affordable price
About Us : Differentiators.
Differentiators
In the Indian milieu, there are only two routes to survival – discounting and differentiation. Most retailers choose to play the
price game. We, however, preferred to focus instead on establishing ourselves as the preferred shopping destination for
discerning young customers looking for a range of quality products that let them participate in a global lifestyle.
Our brand positioning – Taste the World – embodies this unique approach, promising consumers a fun-filled shopping
environment with the best that the world has to offer in terms of interiors, ambience and merchandise.
The following characteristics distinguish the Spencer’s brand and create memorable 360° shopping experiences for
consumers:
• Products – we offer the widest range of food and lifestyle (fashion, home,
entertainment) brands, with a special expertise in food
• Heritage – we are India’s oldest retailer, with many firsts to our credit
• Multiple Formats – from daily to weekly and specialty shopping, we fulfill every need
and provide maximum convenience
• Promotions – we seek to offer the right products at the right time at the right price, with
promotions carefully designed to suit the buying cycle and shopping basket of the
consumers
• Brand Imagery – our stores and staff seek to make our customers feel right at home,
being international, contemporary, accessible, empathetic and trusted
Differentiators
In the Indian milieu, there are only two routes to survival – discounting and differentiation. Most retailers choose to play the
price game. We, however, preferred to focus instead on establishing ourselves as the preferred shopping destination for
discerning young customers looking for a range of quality products that let them participate in a global lifestyle.
Our brand positioning – Taste the World – embodies this unique approach, promising consumers a fun-filled shopping
environment with the best that the world has to offer in terms of interiors, ambience and merchandise.
The following characteristics distinguish the Spencer’s brand and create memorable 360° shopping experiences for
consumers:
• Products – we offer the widest range of food and lifestyle (fashion, home,
entertainment) brands, with a special expertise in food
• Heritage – we are India’s oldest retailer, with many firsts to our credit
• Multiple Formats – from daily to weekly and specialty shopping, we fulfill every need
and provide maximum convenience
• Promotions – we seek to offer the right products at the right time at the right price, with
promotions carefully designed to suit the buying cycle and shopping basket of the
consumers
• Brand Imagery – our stores and staff seek to make our customers feel right at home,
being international, contemporary, accessible, empathetic and trusted
Innovations
•
Innovations
Throughout its long history (the first ever Spencer’s store opened in 1895), Spencer’s has been a recognized and
respected player in the Indian grocery business, synonymous with quality goods and services, trusted by India’s
exploding population of the upwardly mobile middle class.
Spencer’s has continually helped reshape the retail landscape in India, introducing a host of innovations to make
shopping even more convenient and enjoyable for the consumer. These include:
• Interior Design – to ensure that shoppers enjoy a warm and friendly ambience, an upscale look and feel, the joy
of exploring and the convenience of locating what they want
• Shopfit Design – from chef’s tables to signage aids, the emphasis is on attractive, space-efficient, and low-
maintenance presentation of modern, international goods alongside local flavors and product experiences
• Innovative Use of Materials, Finishes, and Lighting - from color-corrected lighting warming up the foods and
vegetables area, to carefully selected veneers and textures that complement the attractive, color palette of bright
orange, white, and Swiss coffee, our store interiors have a fresh, cheerful, and expansive feel
• Graphics & Signage - shopping at Spencer’s is a visual treat, enhanced by bright orange “Heritage boards” that
tell the Spencer’s story, curved signage featuring the signature “Taste the World” tagline, and category-specific
color arches suspended over zones and departments to provide visual relief and act as navigational aids
Originally rolled out at the Spencer’s hypermarket at South City Mall, Kolkata, the new retail design program is being
implemented at all stores.
• Feature Displays - Hotspots and focal points around the store carry thematic product displays to welcome
shoppers and give them the opportunity to pause and absorb the ambience that constitutes a “Taste the World”
experience, before continuing their journey of exploration.
• Presentation of Merchandise - Category-specific color coding (fresh green for food, sophisticated violet for
fashion, blue for electronics and multimedia, and red for furniture and home goods) make for easy navigation,
while visual metaphors of “farm-fresh” and “Taste the World” drive home our brand promise. An Eiffel Tower and
Big Ben here, a Chinese pagoda and Thai hut there - frame highly stylized displays at focal points. Fiberglass
models of aquatic food, breads, and cheese denote the fish counter and delicatessen.
Product Initiatives
All supermarkets and hypermarkets sell the same things, right? Wrong. While we do stock popular ranges, we go to a
great deal of effort to ensure you a unique range of products
•Gourmet Centre - Run by an expert Food Scientist cum Cordon Bleu Chef, our food innovation wing researches
world cuisines and develops recipes for a wide range of popular and trendsetting dishes. These form the basis for
developing our own range of products, which include delicious cookies and sauces, pickles and jams. Ingredients for
these dishes are also retailed through our stores, for those who’d like to prepare the dishes at home.
•Edutainment Booklets – Want to serve wine but not sure how? Want a recipe for preparing cheese fondue?
Curious to know why organic food is supposed to be better for you? Pick up a booklet and find out. From the story of
olive oil to the origins of cocktails, these tell you a little more about the products on offer and how to use them.
•Meat, Chicken, Fish - our counters for fresh non-vegetarian items truly represent the finest fresh cuts a shopper can
get. Seafood lovers, be sure to take your pick from the live fish-tanks on display.
•Wine & Spirits - Wine ignoramuses or aficionados … we cater to both, with a wide range of wines expertly selected
from as many as 181 countries. Spencer’s was, in fact, the first Indian retailer to offer a selection of Wine & Spirits in
its stores, and the first to present an in-store wine and cheese tasting experience to shoppers.
•Gourmet store - Kolkata’s first Gourmet store is spread over an area of 1500 sq. ft. It is has more than 4000
products to choose from and offers the finest ingredients of gourmet cuisine and recipes to guide in the making of lip
smacking delicacies from across the world.
The store offers a wide range and assortment of gourmet breads, biscuits, 500 different types of beverages,
chocolates, 100 variants chilled & frozen food items, 200 variants of 300 types of cheese, cold-cuts, 60 variants in
vegetarian and non-vegetarian convenience foods, exotic and organic fresh fruits and vegetables, 300 types of
pastas and noodles, oils and vinegars. The products serve as ingredients to cuisines of Thailand, China, Indonesia,
America, Chile, Argentina, Italy, France, Spain, Sri Lanka and UK to name a few.
If you want to taste the world then a visit to Gourmet Centre at Spencer’s, South city hyper is a must
• Live Kitchen - Live Counters with Master Chefs preparing gourmet delights are always popular at buffets … we
• Modern Menu – Footsore and still not done with your shopping? Stop by at our food court and treat yourself to a
shake, swirl or savoury.
Awards
Spencer’s was awarded the first Coca Cola Golden Spoon “Most “Most Evolved Retailer of the Year”,
runners-up in the Visual Admired Food & Grocery Retailer, India Retail Forum, 2007
Merchandizing Category at the In- Convenience
store Asia, 2009 and Express Formats”, 2008
1980 Spencer’s becomes the first supermarket chain under Food World in India
1995 Spencer’s enters into a Technology Assistance Agreement with Dairy Farm International Holdings Ltd.,
Hong Kong, to set up the Foodworld chain of supermarkets in India
1996 First Foodworld store inaugurated in R A Puram, Chennai, by M. S. Subbulakshmi, renowned Karnatic
musician
2001 First hypermarket inaugurated in Musheerabad, Hyderabad, by Krishna Yadav, Labor Minister of Andhra
Pradesh
First new store under the Spencer’s brand name inaugurated in West Mambalam, Chennai
Exclusive tie-up with £ 3 billion Woolworths plc, UK, for retailing their internationally acclaimed toy brand,
Chad Valley, and their Ladybird brand of kidswear; the latter is Woolworths first international tie-up in the
children’s apparel segment
Tie-up with Au Bon Pain, the Boston-based fast casual dining and bakery caf é chain having more than 200
outlets in America, South Korea, Taiwan and Thailand
Alliance with Beverly Hills Polo Club – its first international tie-up in fashion
Acknowledgement
A task or project cannot be completed alone. It requires the effort of many individuals. I take this opportunity to thank
all those who helped me complete this project.I express my sincere gratitude to
Prof. Govardhan Jayanthi
for giving us the opportunity to unde
Study of Operations at Retail Industry
Executive Summary
Demographics continue to show a positive report to spur retailing growth. Consumers aged
20-45 years is emerging as the fastest growing consumer group and the mean age of Indians is now pegged at 27, a
mean age that reinforces spending across all the retailing channels of grocery, non-grocery and non-store. The
government stance of protecting local retailers and prohibiting 100% foreign direct investment in retailing continued in
2005, restraining international retailers' entry. However, there was gradual economic reform, giving way to easier and
faster franchising agreements as well as the loos franchising agreements as well as the loosening of zonal
regulations on retail expansion, thus stimulating retailing.Non-store retailing is expected to continue its fast-paced
growth from a miniscule base. Across all channels, growth in retailing is expected to be boosted heightened
competition during the forecast period due to the growing.ening of zonal regulat
Introduction
India’s retail market which is seen as THE GOLDMINE by global players has grabbed attention of the most
developed nations. This is no wonder to the one who knows that the total Indian retail market is US $350bn. (16,
00,000 crore INR approx.) of which organized retailing is only around 3 percent i.e. US $8bn (36,000 crore INR
approx).“Retailing includes all activities involved in selling goods or services directly to final consumers for personal,
non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from
retailing.” Retail is India's largest industry, accounting for over 10 per cent of the country's GDP and around eight per
cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and
fast paced industries with several players entering the market.The presence of 15million kirana stores brings into light
the very fact that the Indian retail industry is highly fragmented/ unorganized. Retailing in India is gradually inching its
way toward becoming the next boom industry, org shopping has altered in terms of format and consumer buying
behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping
centers, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof.The
future of Indian retailing may even witness the concept of 24 hour retailing. Even though this concept has been in
existence in few retail segments like pharmaceuticals and fuel, it still remains to be a challenge for other segments
like food and groceries, apparel etc to adopt this trend.Although the organized retailing in India is coming up in a big
way, it cannot simply ignore the competition from the conventional stores because of various factors like reach,
extending credit facility and other intangible factors like the human touch which are provided only by the conventional
stores.
Operations management is an area of business that is concerned with the production of good quality goods
and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is the
management of resources, the distribution of goods and services to customers.
APICS The Association for Operations Management also defines operations management as "the field of study that
focuses on the effectively planning, scheduling, use, and control of a manufacturing or service organization through
the study of concepts from design engineering, industrial engineering, management information systems, quality
management, production management, inventory management, accounting, and other functions as they affect the
organization".Additionally, The Operations Management Body of Knowledge (OMBOK) Framework defines the scope
of operations management and the activities and techniques that are a part of the operations management
profession.Operations also refer to the production of goods and services, the set of value-added activities that
transform inputs into many outputs. Fundamentally, these value-adding creative activities should be aligned with
market opportunity for optimal enterprise performance.
Operations as a Transformation Process
Inputs
⇒
Transformation
⇒
OutputOperations management is about the way organizations produce goods and services. Everything you wear,
eat, sit on, use, read or knock about on the sports field comes to you courtesy of the operations managers who
organized its production. Every book you borrow from the library, every treatment you receive at the hospital, every
service you expect in the shops and every lecture you attend at university all have been produced. This definition
reflects the essential nature of Operations Management; it is a central activity in organizing things. Another way of
looking at an operation is to consider it as a transformation process.
Operations are a transformation process; they convert a set of resources (INPUTS) into services and goods
(OUTPUTS). These resources may be raw materials, information, or the customer itself. These resources are
transformed into the final goods or services by way of other 'transforming' resources - the facilities and staff of the
operation.
Raw Materials
An obvious example is a cabinet maker, who takes some wood, cuts and planes it, and then polishes it until a piece
of furniture is produced.
Information
A tourist office gathers and provides information to holiday makers, and assists in advising on places to stay or visit.
Customers
At an airport, you are one of the many resources being processed. The operation you are involved in is about
processing your ticket and baggage, moving from ticket desk through the customs and duty-free areas, to deliver you
to the awaiting plane.
Extending the process...
If we add a few more parts to the transformation process, we can see the key elements that operations managers
need to consider. Operations is about designing services, products and delivery systems;
1.Managing and controlling the operations system.
2.Finding ways to improve operations.
Operations Management is all about providing customers with products and services.
You survive by giving customers with what they want
Every Product or Service is really a bundle of different attributes.
Product, place, price, performance, quality, timing, service, etc.
Customers are looking for a bundle of characteristics
Total bundle provides the level of value customers deem appropriate
Buying products with the attributes they want at the lowest price possible
•Attributes
•Price
•Quality
•Image
•Performance
•Safet
•Place – distribution
•Time – delivery, availability
How do you decide which product to produce?
How do you find out what attributes your product should have?
How do you get those attributes into your product?
•What process?
•What resources do you need?
•Where do you get those resour Examples of Operations Decisions
Operations managers must make decisions on three levels
Strategic
Tactical
Operating
STRATEGIC DECISIONS:
Longer term decisions
Usually made at the senior management level
Product and service strategy
Competitive priorities
Positioning strategy
Location, capacity
Long term partnershipsces?
•
TACTICAL DECISIONS
Medium term decisions
Tactical in nature
Made by middle and senior managers
Process design
Technology management
Job design and workforce management
Capacity management
Facility location
Facility layout
OPERATING DECISIONS
Shorter term decisions
Made at middle and lower management levels
Forecasting
Materials management
Inventory management
Aggregate planning
Master production scheduling
Production control
Scheduling
What is Retail?
The word 'retail' is derived from the French word 'retaillier' meaning 'to cut a piece off' or 'to break
bulk'. In simple terms it involves activities whereby product or services are sold to final consumers in small quantities.
Although retailing in its various formats has been around our country for many decades, it has been confined for
along time to family owned corner shops. Englishmen are great soccer enthusiasts, and they strongly think that one
should never give Indians a corner. It stems from the belief that, if you give an Indian a corner he would end up
setting a shop. That is how great Indians retail management skill is considered.
The Facts
Retailing in more developed countries is big business and better organized that what it is in India. Report
published by McKinsey & Co. in partnership with Confederation of Indian Industry (CII) states that the
global retail business is worth a staggering retailing to unorganized in US is around 80 to 20, in Europe it
is 70 to 30, while in Asia it comes to around 20 to 80.
In India the scenario is quiet unique, organized retailing accounts for a mere 5% of the
total retail sector. Although there are around 5 million retail stores in India, 90% of these have a floor
space area of 500 sq.ft. or less. The emergence of organised retailing in IUS $ 7 trillion. The ratio of
organized The emergence of organised retailing in India is a recent phenomenon and is concentrated in
the top 20 urban towns and cities.
The Reason
This emergence of organized retailing has been due to the demographic and psychographic changes
taking place in the life of urban consumers. Growing number of nuclear families, working women, greater
work pressure, changing values and Lifestyles, increased commuting time, influence of western way of
life etc. have meant that the needs and wants of consumers have shifted from just being Cost and
Relationship drive to Brand and Experience driven, while the Value element still dominating the buying
decisions.
Global Scenario
Retail stores constitute 20% of US GDP & are the 3 rd largest employer
segment in USA. China on the other hand has attracted several global retailers in recent
times. Retail sector employs 7% of the population in China. Major retailers like Wal-Mart
& Carrefour have already entered the Chinese market. In the year 2003, Wal-Mart &
Carrefour had sales of US $ 70.4 Crore & US $ 160 Crore respectively.
The global retail industry has traveled a long way from a small
beginning to an industry where the world wide retail sales is valued at $ 7 x 10 5 Crore.
The top 200 retailers alone accounts for 30 % of the worldwide demand. Retail turnover
in the EU is approximately Euros 2,00,000 Crore and the sector average growth is
showing an upward pattern. The Asian economies (excluding Japan) are expected to
grow at 6% consistently till 2005-06.
On the global Retail stage, little has remained same over the last
decade. One of the few similarities with today is that Wal-Mart was ranked the top
retailer in the world then & it still holds that distinction. Other than Wal-Mart's
dominance, there's a little about today's environment that looks like the mid-1990s. The
global economy has changed, consumer demand has shifted & retailers' operating
systems today are infused with far more technology than was the case six years ago.
Scenario of Retailing in India
Retailing is the most active and attractive sector of last decade. While the
retailing industry itself has been present since ages in our country, it is only the recent
past that it has witnessed so much dynamism. The emergence of retailing in India has
more to do with the increased p of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales
are at the highest point in history and new technologies are improving retail productivity.
though there are many opportunities to start a new retail business, retailers are facing
numerous challenges.urchasing power of buyers, especially post-liberalization, increase
in product variety, and increase in economies of scale, with the aid of modern supply
and distributions solution.Indian retailing
KEY CHALLENGES:
1) LOCATION:
Supermarket
: A subdued version of a hypermarket.
Merchandise: Almost similar to that of a hypermarket but in relatively smaller
proposition.
Space occupied: 5000 Sq. ft. or more.
SKUs: Around 10000.
Example: Nilgiris, Apna Bazaar, Trinethra.
Convenience store: A subdued version of a supermarket.
Merchandise: Groceries are predominantly sold.
Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.
Example: stores located at the corners of the streets, Reliance Retail’s Fresh and
Select.
Department store
: A retail establishment which specializes in selling a wide range of products without a
single prominent merchandise line and is usually a part of a retail chain.
Merchandise: Apparel, household accessories, cosmetics, gifts etc.
Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.
Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside.
Discount store
: Standard merchandise sold at lower prices with lower margins and higher volumes
Merchandise: A variety of perishable/ non perishable goods.
Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.
Specialty store
: It consists of a narrow product line with deep assortment.
Merchandise: Depends on the stores
Example: Bata store deals only with footwear, RPG’s Music World, Crossword.
MBO’s
: Multi Brand outlets, also known as Category Killers. These usually do well in busy
market places and Metros
Merchandise: Offers several brads across a single product category.
Kirana stores:
The smallest retail formats which are the highest in number (15 million approx.) in
India.
Merchandise: Offers several brads across a single product category.
Kirana stores:
The smallest retail formats which are the highest in number (15 million approx.) in
India.
Merchandise: Mostly food and groceries
It is the non-food segment, however that foray has been made into a variety of new
sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle,
Westside), apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies,
MusicWorld, Crosswords, Landmark), appliances and consumer durables (Viveks,
Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo).
Increasing competition in the retail market:
New entrants such as Reliance, Bharti Enterprises and the AV Birla group will compete
against well-established retailers, such as Pantaloon Retail, Shoppers’ stop, Trent,
Spencer’s and Lifestyle stores. Foreign retailers are keenly evaluating the Indian market
and identifying partners to forge an alliance with in areas currently permitted by
regulations. With an estimated initial investment of USD 750 million, Reliance is
planning to launch a nationwide chain of hypermarts, supermarkets, discount stores,
department stores, conven stores. These 5,500 stores will be located in 800 cities and
towns in India.
Increase in Private Labels:
With the emergence of organized retail and modern retail formats, private labels have
been gaining significance. They enhance the profitability levels of product categories,
increase retailers’ negotiation powers and create consumer loyalty. More retailers are
introducing their own brands in all categories including Food & Groceries, apparel,
accessories, footwear. These own brands also do not have to manage intermediaries
since retailers maintain oversight of the supply chain.
The label penetration is in a huge rise. Private Label penetration has been on a rise. It is
mainly growing among FMCG products in most supermarkets with groceries accounting
for 45.9%
Expanding to Tier II and III cities:
Indian retailers are planning to extend operations into Tier II and Tier III cities as
heightened IT offshoring activity in these locations have increased consumers’
disposable income. The population in these cities is typically well educated and willing
to purchase goods and services. Some major retailers, like Globus, Reliance Retail and
Pantaloon, have already begun building a retail presence in Tier III cities before many
retailers have finalized their Tier II retail operations.
Foray into Retail Agri-Business:
India’s most prestigious business houses and global retailers are planning to enter retail
agri-business. Market entrants plan to invest in the entire value chain, moving goods
“from the farm to the fridge at home.” Viewed as India’s next “Sunrise Sector,” retailers
are employing contract farming as a means of boosting their ventures. Contract farming
enables farmers to a.ccess land, manpower and farming skill without having to
purchase land. Of the total Cultivable land of 400 million acres in India, contract farming
represents 7 million acres thus indicating a tremendous opportunity. For pure corporate
contracts between farmers and companies, only 2,00,000 acres are used.
Technology in Retail:
Over the years as the consumer demand increased and the retailers geared up to meet
this increase, technology evolved rapidly to support this growth. The hardware and
software tools that have now become almost essential for retailing can be into 2 broad
categories.
Customer Interfacing Systems:
Bar Coding and Scanners
Point of sale systems use scanners and bar coding to identify an item, use pre-stored
data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a
new concept where the consumer pushes the full shopping cart through an electronic
gate to the point of sale In a matter of seconds, the items in the cart are hit with laser
beams and scanned. All that the consumer has to do is to pay for the goods.
Payment
Payment through credit cards has become quite widespread and this enables a fast and
easy payment process. Electronic cheque conversion, a recent development in this
area, processes a cheque electronically by transmitting transaction information to the
retailer and consumer's bank. Rather than manually process a cheque, the retailer voids
it and hands it back to the consumer along with a receipt, having digitally captured and
stored the image of the cheque, which makes the process very fast..
Internet
Internet is also rapidly evolving as a customer interface, removing the need of a
consumer physically visiting the store.
Operation Support Systems:
ERP System
Various ERP vendors have developed retail-specific systems which help in integrating
all the functions from warehousing to distribution, front and back office store systems
and merchandising. An integrated supply chain helps the retailer in maintaining his
stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs,
while servicing the customer better.
CRM Systems
The rise of loyalty programs, mail order and the Internet has provided retailers with real
access to consumer data. Data wareho This, along with the various available CRM
(Customer Relationship Management) Systems, allows the retailers to study the
purchase behavior of consumers in detail and grow the value of individual consumers to
their businesses.
The IMAGES-KSA projections indicate that by 2015, India will have over 55
Crore people under the age of 20 - reflecting the enormous opportunities
possible in the kids and teens retailing segment
.2. Organized retail is only 3% of the total retailing market in India. It is estimated to
grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
3. Percolating down
: In
4. Rural Retailing:
India's huge rural population has caught the eye of the retailers looking for new areas of
growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of
products from FMCG to electronic goods to automobiles, attempting to provide farmers
a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram
group which provides farm related inputs & services. The Godrej group has launched
the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as
fertilizers & animal feed along with the required knowledge for effective use of the same
to the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for
growing the right quality of tomato for its tomato purees & pastes.
Threats:
1 If the unorganized retailers are put together, they are parallel to a large supermarket
with no or little overheads, high degree of flexibility in merchandise, display, prices and
turnover.
2Shopping Culture
: Shopping culture has not developed in India as yet. Even now malls are just a place to
hang around with family and friends and largely confined to window-shopping.
3. Cultural Variation leads to variation in merchandise in India at different geographical
locations.
Challenges in Retail
The following are the key areas that may pose a threat to those retail companies that
ignore the impacts of giving less importance to manage their demand and supply: -
Forecasting and Inventory Management for JIT replenishments of products.
Peak Season Demand Handling.
Order Management in case of retailers with multiple outlets.
Warehouse Management in case of multiple outlets.
Supply Chain Strategies in Retail
Bulk-Breaking
: Orders can be done in smaller lots with a good understanding with the supplier. This
can be achieved by following ways: -
Spatial Convenience: Strategically locating the outlet with distribution networks and
warehouses located proximally.
Supplier holds inventory.
Vendor Managed Inventory
: In this case, the vendor himself is given the responsibility to handle the inventory. A
space for the vendor is rented in the outlet, and he takes care of the shelves and the
space. It is a 2-way agreement wherein the vendor gets the space to market his product
by interacting one-to-one with the customers
Store register work is made online and paper work is done with.
Forecasting made with data on past consumption and present market trend.
Optional forecasting is made in case of seasonal requirements.
Periodic offers and incentives are made available to the customers to generate demand.
Tips For Controlling Retail Inventory
Part of the answer to the "buying problem" is inventory control. In fact, the biggest
reason retail businesses fail is that they lack inventory control. However, when
employed aggressively against competitors, effective management of your inventory
can be a lethal weapon. Imagine doubling your inventory turnover rate (certainly not far-
fetched wit you could sell product at half the normal margin and still gross the same
amount of dollars in a given time period. Inventory control has been used to take down
many competing retailers.
Like much of the new technology available to business owners,
Manageexpensive. MiS tools can be implemented to gain a significant advantage over
competitors. However, it is critical that you understand the uses and goals of an
inventory management
General Merchandise
In marketing, a product is anything that can be offered to a market that might satisfy a
want or need. In retailing, products are called merchandise. It is an art and science of
displaying merchandise within store, it is about implementing effective design, ideas to
educate customer, create desire and finally increase store traffic and sales volume.
Home Lien Items
Electronic Items
Mobile Zone
Furniture
Star Sitara
Opticians
Men, Ladies and Kids wear
Foot Wear
Music
Toys
Stationery
7 P’s of Services
1st P: PRODUCT
Product- refers to the merchandise i.e. the range of clothes.
Supplementary services -include a component of fashion, life style and Ambient
shopping as an addition to the core product.
Today, customers buy experiences and not brands or products.
2nd P : PRICING
Cost plus price and Percentage method pricing:
Most widely used technique to price apparels.
Ex:- COLOR PLUS and IN-HOUSE brands like those of SHOPPER’S STOP or
WESTSIDE use this technique.
3rd P : PLACE
Apparel Retailing Business is driven by one crucial factor:
Location
Approachable
Parking
4th P: PROMOTION
Print medium.
Loyalty programs
In-store Visual merchandising
5th P: PEOPLE
Every second a customer spends inside the store has to be viewed as Moment of Truth
“People” is that aspect of the marketing mix which adds tangibility to the service of
creating an experience
6th P: PROCESSES
7th P : PHYSICAL EVIDENCE
Managing Appearance of the building & Location
Maintaining Temperature , Music, Lighting and Fragrance inside the store
Availability of services like Prams, Wheel Chair, Valet Parking etc
Stylish Stocking of Merchandise
CHANGES IN RETAILING
Conclusion
For a start, these retailers need to invest much more in capturing more specific market.
Intelligence as well as almost real-time customer purchase behavior information. The
retailers also need to make substantial investment in understanding/acquiring some
advanced expertise in developing more accurate and scientific demand forecasting
models. Re-engineering of product sourcing philosophies-aligned more towards
collaborative planning and replenishment should then be next on their agenda. The
message, therefore for the existing small and medium independent retailers is to closely
examine what changes are taking place in their immediate vicinity, and analyze
Whether their current market offers a potential redevelopment of the area into a more
modern multi-option destination.
Recent Trends
Retailing in India is witnessing a huge revamping exercise as can be seen
in the graph
India is rated the fifth most attractive emerging retail market: a potential
goldmine.
Estimated to be US$ 200 billion, of which organized retailing (i.e. modern
trade) makes up 3 percent or US$ 6.4 billion
As per a report by KPMG the annual growth of department stores is
estimated at 24%
Ranked second in a Global Retail Development Index of 30 developing
countries drawn up by contd. AT Kearney.
Recent Trends
Traditionally three factors have plagued the retail industry:
Unorganized
:
Vast majority of the twelve million stores are small "father and son" outlets
Fragmented
:
Mostly small individually owned businesses, average size of outlet equals
50 s.q. ft. Though India has the highest number of retail outlets per capita
in the world, the retail space per capita at 2 s.q. ft per person is amongst
the lowest.
Rural bias:
Nearly two thirds of the stores are located in rural areas. Rural retail
industry has typically two forms: "Haats" and “Melas". Haats are the weekly
markets : serve groups of 10-50 villages and sell day-to-day necessities.
Melas are larger in size and more sophisticated in terms of the goods sold
(like TVs)
Recent changes:
Experimentation with formats:
Retailing in India is still evolving and the sector is witnessing a series of
experiments across the country with new formats being tested out. Ex.
Quasi-mall, sub-urban discount stores, Cash and carry etc.
Store design :
Biggest challenge for organised retailing to create a “customer-pull”
environment that increases the amount of impulse shopping. Research
shows that the chances of senses dictating sales are upto 10-15%. Retail
chains like MusicWorld, Baristas, Piramyd and Globus are laying major
emphasis & investing heavily in store design.
Emergence of discount stores: T
hey are expected to spearhead the organised retailing revolution. Stores
trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar,
RPGs.
Unorganized retailing is getting organized:
To meet the challenges of organized retailing such as large cineplexes, and
malls, which are backed by the corporate house such as 'Ansals' and 'PVR‘
the unorganized sector is getting organized. 25 stores in Delhi under the
banner of Provision mart are joining hands to combine monthly buying.
Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.
Recent Trends contd.
Multiple drivers leading to a consumption boom:
–
Favorable demographics
–
Growth in income
–
Increasing population of women
–
Raising aspirations : Value added goods sales
Food and apparel retailing key drivers of growth
Organized retailing in India has been largely an urban phenomenon with
affluent classes and growing number of double-income households.
More successful in cities in the south and west of India. Reasons range
from differences in consumer buying behavior to cost of real estate and
taxation laws.
Rural markets emerging as a huge opportunity for retailers reflected in the
share of the rural market across most categories of consumption
–
ITC is experimenting with retailing through its e-Choupal and Choupal
Sagar – rural hypermarkets.
–
HLL is using its Project Shakti initiative – leveraging women self-help
groups – to explore the rural market.
–
Mahamaza is leveraging technology and network marketing concepts to act
as an aggregator and serve the rural markets.
IT is a tool that has been used by retailers ranging from Amazon.com to
eBay to radically change buying behavior across the globe.
‘e-tailing’ slowly making its presence felt.
Companies using their own web portal or tie-sups with horizontal players
like Rediff.com and Indiatimes.com to offer products on the web.
Major Retailers:
India’s top retailers are largely lifestyle, clothing and apparel stores
This is followed by grocery stores
Following the past trends and business models in the west retail giants
such as Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros
and small cities almost doubling their current number of stores
These Walmart wannabes have the economy of scale to be low –medium
cost retailers pocketing narrow margin