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Group Members: Himanshu Johari Himani Garkoti Piyush Srivastava Mayur Singhal Ankit Garg
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TABLE OF CONTENT
Basic Industry Analysis
1.2 Evolution / Growth of the industry 1.2.1 Global Perspective 1.2.2 Indian Perspective 1.2.3 Recent Trends 1.3 Target customers 1.3.1 Rural Focus 1.3.2 Urban Focus 1.3.3 Categorcal distribution 1.3.4 General Trends 1.4 Related Industries 13 14 15 17 19 5 7 11
Industry Perspective 2.1 Global Industry Competitors 2.2 Global Industry functioning
2.3 Indian Industry Competitors 2.4 Indian Industry functioning
Functional Perspective and Economic Impact 3.1 Functional Perspective 3.2Economic Impact 44 48
Developing a Blueprint for Service Business 4.1 Customer Knowledge 4.2 Management issues in services 4.3 Competitive advantage 56 58 59
Capacity Management in Service 5.1 Demand management or Creating Demand 5.2 Supply of service from different locations 5.3 Problems in managing demand 62 65 66
Conclusion References Annexure
67 68 69
competitors among others. trends and customer focus. our report has enormous present and future relevance. showing great expansion potential. We in our project have analyzed the Retail Sector globally as well as in India in terms of the functioning. We also visited some of the leading retail outlets of India like Shoppers Stop. The Indian retail industry is the fifth largest in the world. It is the second largest industry in the U.S. 4 . retail sector in India is one of the fastest growing sectors. As mentioned above. With the retail sector comprising a great share of the Indian GDP. economic aspects. and tried to practically analyze the various aspects including growth. Comprising of organized and unorganized sectors. India retail industry is one of the fastest growing industries in India. focusing on the Service Management perspective. Big Bazaar etc.Executive Summary The retail industry has been showing a continuously growing trend since the past few decades.
8 trillion in sales annually ($4. It is extremely competitive. but other factors include convenience of location. Manufacturers sell large quantities of products to retailers. however these single-store businesses account for substantially less than half of all retail sales. The diversity of retailing is evident in the many forms it now takes.2. 1. attractiveness of the establishment. (approximately 90%) are single-store businesses. discount houses. Thus the majority of the revenue in the retail industry is generated by companies that run retail "chains". (responsible for approximately 12% of all US employment) with over $3. including vending machines. selection and display of merchandise. door-to-door and telephone sales. It is the second largest industry in the U.Chapter 1 Introduction 1. and consumer cooperatives. and the failure rate of retail establishments is relatively high. specialty stores. direct-mail marketing. Although the vast majority of all retail stores in the U. the Internet. and retailers sell small quantities of those products to consumers. which generated over 5 . The retail transaction is at the end of the supply chain. department stores. supermarkets.S. Price is the most important arena of competition.2 trillion if food sales are included). and reputation. but for use and consumption by the purchaser.2 Evolution / Growth of the industry 1.1 Definition : Retail is the sale of goods directly to the consumers / end users. not for resale.1 Global Perspective: The retail industry has been showing a continuously growing trend since the past few decades.S. Retailing began several thousand years ago with peddlers hawking their wares at the earliest marketplaces. The biggest retailer in the world is Wal-Mart.
The company operates a chain of discount wholesale stores that emphasize incredibly low prices and efficiency that enables the company to offer such low prices. the industry still generated revenue of approximately $335. Despite this. The growth of the industry is shown in the graph below. and forced small single-store businesses out of the markets which Wal-Mart enters. In 2008 there were 35 big box retailers with 3.S. Big box retail stores account for only a small percentage of the total number of stores in the total 'General Merchandise Stores' sector in the US. and the world in terms of revenue generated.451 outlets. Growth of Retail Industry in US Wal-Mart is by far the largest retailer (and company) in the U. Fig 1. WalMart's successful business model has pushed down prices throughout the retail industry. forcing companies to adapt their business models in order to effectively operate in the new landscape.0 billion over the year which equates to more than half of total revenue in 'General Merchandise Stores' sector in the US 6 .$344 billion in revenue in its last fiscal year.
Indian Retail Market 7 . however with the change of tastes and preferences of the consumers.000 crore in 2004-05 to Rs. 109. the retail industry in India was mostly unorganized. especially over the last few years. Comprising of organized and unorganized sectors.Fig 2. Comparative Penetration of Organized Retail Sector 1. With growing market demand.2.2 Indian Perspective: The Indian retail industry is the fifth largest in the world. India retail industry is one of the fastest growing industries in India.000 crore by the year 2010. 35. the industry is getting more popular these days and getting organized as well. The India retail industry is has grown from Rs. Though initially. Fig 3. the industry is expected to grow at a pace of 25-30% annually.
However. Infact the traditional stores have taken up 98 percent of the Indian retail market. 8 . Basically they provide high service with low prices. Traditional family run convenience stores are too well established in India than to be wiped out and besides there is uniqueness in the traditional items that represent the sub-continent. We have the Pushkar fair in Rajasthan which brings in a lot of revenue both from domestic buyers and buyers from abroad. kiranas still continue to score over modern formats primarily due to the convenience factor. The traditional family run convenience stores can take pride in the fact that the Kirana is the most common outlet forms for the consumers. leisure to the consumer as the retailers experiment with a variety of formats. The tough competition for convenience stores is coming from organized retail stores dealing in food items. like: Apna Bazaar Canteen stores Food World Subhiksha Food Bazaar Modern retailing has entered India in form of sprawling malls and huge complexes offering shopping. A range of exotic items are also available. from discount stores to supermarkets to hypermarkets to specialty chains. The major traditional retail sectors include: Traditional rural retail fairs are a very big attraction to foreign tourists. horses. In the Pushkar fair live stock like camels.The retail sector in India has a great long history and is very prominent as well. goats. entertainment. The retail stores in India are essentially dominated by the unorganized sector or traditional stores. The traditional items here are handmade jewellry and other colorful memorabilia of Rajasthan. If the stores are not food based then the type of retail items available are local in nature. Now stores run by families are primarily food based and the set up is as Kirana or the 'corner grocer' stores. cows. and sheep are sold as well as bought.
The Indian Retail growth can be attributed to the several factors including Demography Dynamics: Approximately 60 per cent of Indian population below 30 years of age. Second. Food and Grocery etc. Even there. Consumer Durable Goods. the modern retailer is yet to feel the saturation' effect in the urban market and has. the modern retailing trend. large chunks are yet to feel the impact of organized retailing. 9 . by introducing self-service formats as well as value-added services such as credit and home delivery. Plastic Revolution: Increasing use of credit cards for categories relating to Apparel. There are two primary reasons for this. However. despite its cost-effectiveness. probably not looked at the other markets as seriously. therefore. the boom in retailing has been confined primarily to the urban markets in the country.Fig 4. Double Incomes: Increasing instances of Double Incomes in most families coupled with the rise in spending power. Retail Formats available in India The traditional grocers. have tried to redefine themselves. First. has come to be identified with lifestyles.
Now a customer can travel miles to reach a particular shop. Journey of Organized retail Industry in India In the coming years it can be said that the hypermarket route will emerge as the most preferred format for international retailers stepping into the country. covering distances has become easier than before. Urbanisation: increased urbanisation has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale. if he or she sees value in shopping from a particular location. Fig 5. Estimates indicate that this sector will have the potential to absorb many more hypermarkets in the next four to five years. Covering distances has become easier: with increased automobile penetration and an overall improvement in the transportation infrastructure. there are 50 hypermarkets operated by four to five large retailers spread across 67 cities catering to a population of half-a-million or more. 10 . At present.
Experimenting with Quasi-mall Quasi-mall.3 Recent Trends Effecting Evolution And Growth: Increasing Importance of E-Commerce In the past ten years the Internet has changed the landscape of the retail industry. Foodworld express Small fashion stores Aggregation of Kiranas Aggregation of Kiranas Cash and carry Discount store 1. E-commerce has added new dimensions to traditional retailers as nearly every major company in the retail industry sells products through their own website (note that some retailers choose to run E-commerce operations in-house while others outsource the operations to E-commerce specialists). The Internet has enabled consumers to shop for and purchase goods online from the comfort of their home. This type of E-Commerce has created successful companies such as Amazon.com and eBay. smaller outlets. food retail Hypermarket Considering moving to self service Suburban discount store Hypermarket. adding food retail Corner shops Quasi-mall.2. Also. The profitable ecommerce market has served as a launch pad for companies like GSI 11 .List below shows retailers that have come with new formats: Retailer Shoppers' Stop Ebony Crossword Piramyd Pantaloon Subhiksha Vitan Foodworld Globus Bombay Bazaar Efoodmart Metro S Kumar's Current Format Department Store Department Store Large bookstore Department Store Own brand store Supermarket Supermarket Food supermarket Department Store New Formats.
newly innovated products (such as new flat-panel TVs or an updated line of iPods are released with high prices to maximize profits early on. create and manage e-commerce sales for retailers that do not wish to run online sales in-house. a number that has steadily grown in past years. Internet-savvy customers mature and Internet-usage becomes more widespread over time among consumers of all ages. Product Cycles One of the most influential growth factors for retailers is product cycles. How quickly product cycles mature drives the profit a retailer makes.6 billion. an important product cycle in consumer electronics retail currently is flat panel HDTVs).7% of total retail industry revenue ($104 billion annually). A significant number of deals have being carried out in the Indian retail sector in the past few months in order to acquire a larger share in the growing domestic market and to compete against the prospective global and domestic players. E-commerce will become increasingly relevant. In many cases. As younger. These companies design. which were collectively worth USD 25. E-commerce currently represents approximately 2. Competition between consumer retailers and increased supply from manufacturers drive down prices over time until each retailer makes little profit by the end of a product's life cycle. The table in the next page shows some recent deals that have taken place in the Indian retail sector: 12 . and these product cycles vary between retail industry sub-sectors. Merger and acquisition activities in Indian market: India witnessed a record number of M&A deals in the first half of 2006. for example. There are many product cycles cooccurring at any given point in time.Commerce (GSIC) that provide e-commerce services for retailers.
music. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered.3. music. France Nature of Business Retail (Footwear) Retail clothing Leisure retail chain (books. they are individually handled retail outlets and have a personal touch.Year 2005 2005 2005 2005 Acquired/ JV Company/ Target Liberty Shoes Indus – League Clothing Odyssey India Landmark Bistro Hospitality Indus League clothing Acquirer Future group Future group Deccan Chronicle Holdings Tata Trent TGI Friday’s (a subsidiary of Carlson Restaurant World-wide) Etam group. among people in general can be highlighted as follows: 13 . toys) Books.3 Target customers / Users 1.1 Small Scale Retailers/ RURAL FOCUS : Mom-and-pop stores: they are family owned business catering to small sections. The traditional family run convenience stores serves the purpose of the housewives who definitely wants to avoid traveling long distances to purchase daily needs. The convenience factor in terms of items. accessories Restaurant (Food retail) Consideration Stake (US$ million) 51% 68% 100% 74% 3 5 14 24 2006 25% N/A 2006 (Future group company) Lingerie and women’s wear retailing 50% 8 (JV) 1.
Groceries Fruits Drug Store Necessary stationery As such traditional family run convenience stores are here to stay and cannot be oversized by the organized retail sector besides. 1.service retail outlets Stores offering discounts on retail price through selling high volumes and reaping economies of scale Larger than a supermarket.3. vast choice available including services such as cafeterias Convenient location and extended operating hours Variety of shops available to each other 14 . certified product quality Greater choice to the consumer. appliances. toys etc. carry most of the brands available The Value Proposition Complete range available for a given brand. sometimes with a warehouse appearance.2 Large Scale Retailers/ URBAN FOCUS : Format Branded Stores Specialty Stores Description Exclusive showrooms either owned or franchised out by a manufacturer Focus on a specific customer need. generally located in quieter parts of the city. Extremely large self. comparison between the brands is possible One stop shop catering to varied consumer needs Department Stores Supermarkets Discount Stores Hyper Mart Large stores having a wide variety of products. it represents the variety of India. Small Self Service formats located in crowded urban areas An enclosure having different formats of in store retailers. furniture. house wares. organized into different departments such as clothing. all in one roof One atop shop catering to varied consumer needs Low prices Convenience Stores Shopping Malls Low prices.
3 Category Wise Target Customers Shopping malls: One of the biggest form of retail in India.3. It is hypothesized that needs for ‗self-fulfillment‘. movies etc. E-trailers: are retailers providing online buying and selling of products and services. Their needs are also higher for ‗excitement‘. malls offers customers a mix of all types of products and services including entertainment and food under a single roof.) are getting very common in urban India. The malls have now even come across as a recreational centre for the Gen Y. It is found that frequent mall shoppers have higher needs than others for ‗sense of belonging‘. ‗warm relationships‘. though the Indian mentality of consumers shows a liking for actually going and purchasing the products still this sector is gradually gaining pace.booking for tickets (flights. and ‗security‘. Target customers : These have varied shops and display immense variety in choices hence they attract customers from all ages and strata. ‗self-respect‘. The e services caught pace earlier with many people getting attracted to sites like o Ebay o Future Group o Dell o Make My Trip o Bharat Matrimony o Monster Jobs Target customers : These mainly target the people who prefer convenience and are adaptive to new technology changes.1. The e. 15 . and a ‗sense of accomplishment‘ are negatively related to mall-visitfrequency. trains.
such as electronics and sporting goods. The ongoing piracy is the biggest threat to such specialty stores. novels etc. Target customers : This usually targets the tech savvy youth of the country who have are aware and want to avail the tremendous options placed in front of them. Because of the immense variety in choices they now attract customers from all ages and strata. who believe in travelling an extra mile for buying discounted and branded clothes. video games. Though it‘s the upper middle class families only who intend taking their kids to such stores. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples. E. Target customers : these are usually an attraction to kids who have a very strong liking for music. Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories. This is also known as Multi Brand Outlets or MBO's. Target customers : These stores are usually an attraction for the youth and upper middle class families. Departmental stores: are general retail merchandisers offering a variety of quality products and services. Discount stores: these are factory outlets that give discount on the MRP. g. Target customers : These stores because of their competitive prices and availability of various brands attract women(of middle and upper middle class families) who are always looking forward for a tradeoff between quality and price. 16 . Spice hotspot Specialty stores: are retail chains dealing in specific categories and provide deep assortment.
Target customers : These vending machines are mostly present at office.3.. Vending: it is a relatively new entry. Map of India’s economy class 17 . Here beverages. snacks and other small items can be bought via vending machine. Branded Stores : These are showrooms of a particular brand. 1. Target customers : These stores have the products of only once brand so target the customers who are brand conscious and brand loyal. college and other workplaces hence the target customers are accordingly. These can be usually seen in higher end brands as their customers also serve the higher strata of society.4 General Trends Fig 6. in the retail sector.
seeking the aware and relatively wealthier families as target customers. The rural and the less developed cities still are customers to the local grocery shops. Hence.Most of the large scale retail shops are concentrated in the urban and metropolitan India. The attractiveness of the other stores actually appeals to the existing affluent class as well as those who aspire to be part of this class. Fig 7. Spatial distribution of large scale Retail Stores in India 18 . In order to appeal to all classes of the society. it represents the variety of India. As such traditional family run convenience stores are here to stay and cannot be oversized by the organized retail sector besides. In a sense. Though various discount options and competitive prices at many of the retail shops are now trying to tap the middle class families for their monthly grocery requirements. this trend is already visible with the emergence of stores with an essentially `value for money' image. retail stores would have to identify with different lifestyles. one can assume that the retailing revolution is emerging along the lines of the economic evolution of society.
Fastest Growing Formats in India 1.Fig 7.4 Related Industries Fig 8. Fastest growing retail segments in India 19 .
with both the companies and the customers benefiting out of it. Textile & Clothing Industry: Retail stores like Shoppers Stop and Pantaloons have clothes/accessories of various brands like : Van Huesen Levi‘s Flying Machine Gili Peter England Arrow Louis Philippe Blackberry Reebok Nike And others o Cosmetic Industry : Shoppers stop has a separate section for cosmetic products all together to attract the female and now even a large portion of male customers. Some of the common gainers are : Colorbar Versace Hugo Boss Charlie Calvin Klein Lakme etc.The large scale retail stores have created a WIN-WIN situation over the market. 20 . Jewelry. Some of the major benefitting industries include : Apparel Industry : o Footwear. Leather. The malls are giving a market to a diverse plethora of products.
Some of them are : o Blue O o Ansal Plaza o Gold Gym etc Music & Movie Industry : With many of the multiplexes and music stores coming in Malls.etc o Entertainment Industry : To attract children and youth into the malls. some of which are : o PVR o JAM o Wave o Music World o Planet M etc. Some of the common Companies benefitting are: o Bikanerwala o Haldirams o Dominos o Pizza Hut o Mc Donald‘s o Colonel‘s Kababs o Sagar Ratna. Food Industry : Most of the leading large and small food and sweet brands outlet can be found in Malls and Food courts.. they have come up with recreational gaming centers and gyms. 21 . This industry earns a lion‘s share of its product from malls and music retail stores.
This is also known as Multi Brand Outlets or MBO's. Examples include : o Electronics Bazaar o Spice Hotspot o Nokia/Sony/Boss Showrooms in malls. They are known as category killers as they focus on specific categories. 22 . such as electronics and sporting goods. Electronics Goods Industry : Along with particular companies stores now there are small specialty stores that offer a variety of categories.
Wal-Mart is 23 . It had 38 stores operating with 1.500 employees and sales of $44. The Kroger Co. Royal Ahold Metro AG Target Corporation Albertson’s Inc. 1969.Wal-Mart is the largest grocery retailer in the United States. Sears. as well as the largest toy seller in the U..Chapter 2 Industry Perspective 2. Founded by Sam Walton in 1962. is an American public corporation that runs a chain of large. Roebuck and Co. Arkansas.S. Carrefour Group The Home Depot Inc. Inc.1 Global Industry Competitors / Top Players : The top retailers all over the world are: Rank 1 2 3 4 5 6 7 8 9 10 Retailer Wal-Mart Store Inc. discount department stores.2 million . with an estimated 22% share of the toy market. with an estimated 20% of the retail grocery and consumables business. Kmart Corporation Home Country USA France USA USA Netherlands Germany USA USA USA USA Wal-Mart Stores. It is the world's largest public corporation by revenue. according to the 2007 Fortune Global 500. It opened its home office and first distribution center in Bentonville. it was incorporated on October 31.
Discount Store." replacing the "Always Low Prices. but it sold its retail operations in South Korea and Germany in 2006 after sustained losses. On September 12.the largest private user of electricity in the US. and in Japan as Seiyu. Grocery Stores. Canada. Owns a subsidiary electric company in Texas. It is also undertaking a number of environmentally conscious initiatives to reduce energy usage and waste. Carrefour is active in many types of retail distribution: hypermarkets. Puerto Rico. and Cash & Carry. Wal-Mart introduced new advertising with the slogan. with a global network of outlets. Brazil. which conducted the research that supported the ads. 2007. It has wholly-owned operations in Argentina. Carrefour means cross-road in French. Global Insight. 24 .500 per household Carrefour SA is a French international hypermarket chain. Dominican Republic and Colombia. which it had used for the previous 19 years. supermarkets. Always" slogan. and the UK. in the UK as ASDA. Argentina. Recently The $130 billion French retail Carrefour has set up a 100 percent-owned arm to enter the wholesale merchandise business in India and will opt for the franchising route to open multi-brand retail stores in the country. Cosmetics. Wal-Mart operates in Mexico as Walmex. The group was created by Marcel Fournier and Denis Deffore in 1957. found that Wal-Mart's price level reduction resulted in savings for consumers of $287 billion in 2006. and will possibly move into the power business. "Save Money Live Better. Carrefour operates mainly in Europe. Carrefour WC&C India will also enter these areas where the Indian franchisee can get the same technical expertise that go into running the retail trade stores of the French company across the globally. It is the second largest retail group in the world in terms of revenue after Wal-Mart. Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are highly successful. but also has shops in North Africa and Asia. which equated to $957 per person or $2. Brazil.
There are only 10 department store chains generating as much as $3 billion a year in annual sales. wine etc…. either directly or through its subsidiaries. Ohio. 2. with Wal-Mart and The Home Depot filling slots one and two. The company-wide program will increase the number of stores in the Kroger family that donate safe. year-over-year same-store sales declined by double digits. nearly 800 convenience stores. Kroger‘s goal is to donate 50 million pounds of nutritious. and Boscov‘s is in survival mode. and 42 manufacturing facilities in 32 states. perishable food to Second Harvest food banks that are equipped to safely handle and distribute fresh food.000 associates coast-to-coast and presently Kroger is active in many other Retail Distribution like Bakery. In the past year. Right Place‖. beer. is ―Right Store. 400-plus jewelry stores. 25 . Kroger operated.The Kroger Co. respectively. The retail industry can be divided into a number of smaller sectors or "sub-industries". Banking. Many chains are closing stores. laying off employees and cutting costs anywhere they can. Kroger‘s recently launched Perishable Donations Partnership will bring critically needed perishable food items into the food bank process.500 grocery stores. It reported over US$66 billion in sales during fiscal year 2007 and is currently the secondlargest grocery retailer in the country by volume and third-place general retailer in the country. and as a group their revenues total about $136 billion — one-third of WalMart‘s worldwide sales. segment-wide. The slogan of Kroger co. fresh food across the country. dairy. Department Stores There are those who continue to insist that the ―Age of Department Stores‖ is nearing its end. is an American retail supermarket chain and parent company. 579 of which had fuel centers. we employ a growing family of more than 290. West Coast operators Mervyns and Gottschalks became extinct. Some of these have been discussed below with suitable examples. founded by Bernard Henry Kroger in 1883 in Cincinnati. Revenues are in decline.
The ―why‖ is no surprise: ―The largest shares of female shoppers are engaging in ways to limit spending‖ on apparel. specialty store apparel retailers are going through another tough year. Penney Saks Off-Price Retailers Off-price retailers purchase retail merchandise directly from suppliers. says Kelly Tackett. taking advantage of manufacture overruns and canceled orders to acquire retail goods at an opportunistic discount. The off-price retail sector as a whole is growing faster than most other retail segments. ―Many 26 . Wal-Mart Target Costco Sears Macy's Kohl's J.C. then held in inventory until the next appropriate season for sale. shoes and accessories. items purchased at discount at the end of a season. with a CAGR greater than 10% over the past five years. senior consultant with Columbus. They also utilize "packaway". TJ Maxx and Marshall's Ross] Apparel With few exceptions. Ohio-based market research firm Retail Forward.
women also are shifting to less expensive brands. There are exceptions to this gloomy scenario.‖ Retail Forward‘s ShopperScan survey found that nearly half (46 percent) of consumers are ―shopping retailers across the soft goods sector less often than a year ago. styles and fabrics and changing how and where they shop.8 percent. Limited — which still sells more apparel than H&BC — was off 10. and Aéropostale. The Gap Abercrombie & Fitch Guess? (GES) American Apparel (APP) Some other examples from various sectors include: Consumer Electronics Best Buy Circuit City Radioshack Gamestop Office Supplies Staples OfficeMax Office Depot Home Improvement Home Depot Lowe's Pharmaceuticals CVS Walgreen's Rite Aid 27 . Forever 21 and Urban Outfitters remain destinations where 18.‖ A glance at the apparel Power Players confirms these findings: Gap sales were down 7. where sales rose 8.to 25-year-old shoppers spend like they can‘t spell recession. including off-pricer Ross Stores.8 percent.6 percent last year.
Wal-Mart purchases approximately $27 billion of its inventory directly from China each year. Wal-Mart's imports from China accounted for 15% of total 28 . which in turn are sold in Wal-Mart stores. many of the company's suppliers like Mattel (MAT) manufacture their products in China. The 3 broad categories into which functioning of any retail firm can be divided are: Customer interfacing System Operation Support Systems Strategic Decision Support System Strategies Adopted By World Leaders: Dependence on Imports from China and Vulnerability to Currency Rate Changes Many big retailers depend heavily on China for manufacturing its merchandise.2Global Industry functioning: With the advent of technology. the working of the retail industry is almost similar everywhere. Additionally.Home Products Bed Bath & Beyond Pier 1 Imports Footwear Foot Locker Finish Line Sporting Goods Dick's Sporting Goods Cabela's Academy Jewelry Tiffany Signet 2.
as a result of its dependency on Chinese manufacturing. Dial Corporation sells 28% of its manufactured goods to Wal-Mart annually.S. Since many suppliers depend on Wal-Mart for a majority of its business. the company would either have to raise its prices or would have to cope with narrowed gross margins. 7. Wal-Mart's bargaining power has helped the company maintain its low price leadership despite fluctuating commodities prices. that if WalMart were a country. the company is vulnerable to adverse legislation. such as higher tariffs. For example.S. exchange rate was $1 = 6. narrowing their margins or even redesigning their product offerings. these retailers are vulnerable to fluctuations in the value of the dollar compared to the Chinese Yuan. In fact.5 cents of every dollar spent in any retail store in the U. making Wal-Mart the most dominant retail and grocery chain in the world.. for example. trade deficit with China between 2001 and 2006. it would be China's sixth-largest export market. Wal-Mart uses its enormous size and buying power to pressure its suppliers into extremely low prices. grain. As a result. which was down from record levels of $1 = 8 Yuan in May 2006. that would raise the cost of its Chinese imports. including Target (TGT). and would have to double its sales to its next nine customers to replace sales to Wal-Mart.S. The retail giant also earns 21 cents of every dollar spent on groceries in the U. offering orders of high volumes of merchandise in exchange for low prices. the dollar weakens compared to the Yuan. By outsourcing to China.S. Wal-Mart's imports are so substantial in fact. Sears Holdings (SHLD). and dairy 29 . Retailers Use Large Size to Maintain Low Cost Leadership Wal-Mart is the largest retailer in the world by sales.U. For example. and accounted for 11% of the total U. reducing its profitability. although prices of gasoline. However. Wal-Mart is able to secure lower costs of inventory. the price of Wal-Mart's Chinese imports would rise. which the company in turn passes on to low prices for customers. companies often give in to Wal-Mart's cost cutting demands. In February 2010. Additionally. consumer products imports in 2007.8 Yuan. with almost 50% higher sales than its 7 closest competitors combined. Wal-Mart then passes on these savings to its customers. (excluding auto parts stores) is earned by Wal-Mart. and Macy‘s. If.
5%.6% in 2008. on the company‘s ability to open new stores and expand into new markets. Additionally. about 76% of Wal-Mart's planned stores for 2010 will be outside of the United States. and Central America. In 2009. Tailoring Merchandise Offerings by Region Many companies began a three-year plan to make its stores more relevant to customers and shift away from its previous single-strategy model. The second year of the plan falls in line with the company's remodeling plans. and largely involves changes in merchandise assortment and store experience. The first phase of the plan involved the use of several experimental stores to study specific customer demographics. As a result of overexpansion domestically. However.this is cannibalization. For example. if Wal-Mart builds a store relatively close to an already existing store. Wal-Mart achieved this by pressuring companies like General Mills (GIS) to shave its costs by implementing redesigns of its products and packaging. urban populations. women. such as Hispanics. with the most growth occurring in Mexico. Wal-Mart has actually reduced its prices on many food items by about 30% in 2008. Wal-Mart has transitioned to focusing on international expansion to markets with little or no presence of Wal-Mart stores.products have increased significantly during 2007 and 2008. Too Many Stores Means Cannibalization Reduces Comparable Store Sales The retailers long term sales and income growth depends. baby boomers. and more affluent customers. the new store might take away customers from the old store (a reason could be convenience) thus hampering comparable store sales -. 75% of new stores in 2009 were opened internationally. large sized stores run the risk of cannibalizing its own sales figures. Wal-Mart's comparable store sales increased 3. compared to 1. This movement towards tailoring merchandise offerings by 30 . For example. The company attributes cannibalization for an approximate 1. China. in large part. effectively competing with itself for market share.1% decrease of comparable store sales as the company had oversaturated the domestic market with stores.
many value-driven consumers navigate to these stores during tough economic times. Wal-Mart's $4 Prescription Program has saved its customers an estimated $1 billion. because of its position as a low-price provider. or even by store. and negatively impacting communities and small business. discrimination.5% in 2009.4% during the same period. Wal-Mart offers $4 prescriptions of over 350 generic medications at over 4. Launched in September 2006. Low-Income Customers Turn to Stores in Weakened Economy Major discount store‘s main customer base has an average annual income of $35. This new model may work to bolster Wal-Mart's lackluster same store sales figures. the company's earning potential. Legal risks and public perception Many retailers have faced considerable pressure from a number of politicians. As a result.200.000. median of $48. labor groups. consumers turned to cheaper options for their shopping needs. These macro factors impact a greater percentage of the retailers‘ customer's income than they do the average American's. affecting the customer's buying power and. including rising health care costs. one-size-fits-all strategy. For example. The most prominent active lawsuit is 31 .000 Wal-Mart locations worldwide. These actions. Many companies found success using its price leadership to take control of the low-end market and grow. comparable store sales of Wal-Mart stores increased by 3. and lawsuits. energy costs. its reliance on a poorer demographic makes the company vulnerable to the same macroeconomic trends that threaten its low-income customers. therefore. Conversely. Wal-Mart's low price proposition is particularly crucial because of lower levels of consumer dispensable income following the 2007 Credit Crunch. which in turn could affect the company's ability to expand into new areas or attract new customers. Programs like Wal-Mart's $4 Prescription Program attract consumers seeking a break from their economic woes. which are often wellreported by the media. However. versus the overall U. interest rates. while comparable store sales at rival competitor Target declined 0.region. affect the company‘s reputation. attacking the company on issues such as employee wages and benefits. is a marked change from Wal-Mart's previous. and a softening real estate market.S. As of May 2008.
utensils. Currently Big Bazaar stores are located only in India. general merchandise. The company owns and 32 . Pantaloon was founded by Mr. Kishore Biyani.com. Later the management agreed to reinstate the sacked workers Pantaloon Retail India Ltd. health. The lawsuit began in 2000 and as of July 2009 is still ongoing. 2. Wal-Mart Stores. The idea was pioneered by entrepreneur Kishore Biyani. It works on the same economy model as Wal-Mart and has considerable success in many Indian cities and small towns. home solutions and consumer electronics. fashion products etc. currently with 75 outlets. has over 450 stores across 30 cities in India and employs over 18. communication products. It offers all types of household items such as home furnishing. On April 1 2007. fashion. the CEO of Future Group.Dukes v. The real estate fund management company promoted by the Future Group expects to develop more than 50 projects across India covering a combined area of more than 16 million sq.000 people. books and music. It is the biggest and the fastest growing chain of department store and aims at being 350 stores by the end of year 2010. It has a grocery department and vegetable section known as the Food Bazaar and its online shopping site is known as FutureBazaar. Future Group. Headquartered in Mumbai (Bombay).. is India‘s leading retail company with presence across food. an $11 billion class action suit (the largest civil rights class action suit in US history) accusing Wal-Mart of discrimination against 1. E-tailing and leisure and entertainment. It is owned by the Pantaloon Retail India Ltd. Inc. wellness and beauty. ft. Big Bazaar had to shut its outlets in Mumbai as the 120 retrenched employees called a strike with the support of Bhatia Kamgar Sena (the trade Union wing of Shiv Sena).3 Indian Industry Competitors / Top Players Big Bazaar is a chain of department stores in India.6 million female employees.
and eventually have a pan-India footprint by year 2011.000 crore venture and it plans to add more stores across different g. Kishore Biyani is the unchallenged king of retail. He has the knack of catching rivals off-guard and striking where it hurts most. The Reliance Fresh supermarket chain is RIL‘s Rs 25. Reliance plans to invest Rs 25000 cores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. Unilever and Procter & Gamble at consumer discounts of 20-30 per cent. The latest to face the wrath of the 43-yearold is South African hypermarket Shop rite. all (fashion apparel for plussize individuals). The super marts will sell fresh fruits and vegetables. lower than even Biyani's purchase prices in his Big Bazaar and Food Bazaar stores. a hypermarket chain. Founded in 1987. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. a supermarket chain. The hypermarket began retailing products from big boys Nestle. Collection I (home improvement products).com. It went on to launch Central. a first of its kind. In 2001. gifts and stationeries).Mukesh Ambani. music. It has recently launched its retailing venture. Pantaloon Retail forayed into modern retail in 1997 with the opening up of a chain of department stores. seamless mall located in the heart of major Indian cities. staples. Depot (books. Some of its other formats include. Reliance Fresh is the retail chain division of Reliance Industries of India which is headed by Mr. In India's chaotic markets. Pantaloons. he won't let anyone . as a garment manufacturing company. Shoe Factory (footwear) and Blue Sky (fashion accessories). which opened shop in Mumbai last month through a franchise agreement with local company Normal Lifestyle. it launched Big Bazaar. futurebazaar.manages multiple retail formats catering to a wide cross-section of the Indian society and its width and depth of merchandise helps it capture almost the entire consumption basket of the Indian consumer.catch him slacking. followed by Food Bazaar. And now that he's set himself the task of retaining control of the largest retail space in the country. groceries. fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for 33 .suppliers or international promoters included . E-Zone (consumer electronics).
Besides. pharmacy and telecom chain. Hyderabad. It was started and is managed by Mr. according to the company. AP. IIM Ahmedabad alumni. Vision to deliver consistently better value to Indian consumers. 2007) opened several "Fresh" outlets in Chennai. professionally managed and vibrant organization. R. Subhiksha now has the pan Indian presence with stores across Delhi. Reliance is still testing its retail concepts by controlled entry beginning in the southern states Subhiksha is an Indian retail chain with more than 760 outlets selling groceries. Jaipur. vegetables. He also plans to invest Rs. 365 days a year. medicines and mobile phones.500 crore to increase the number of outlets to 2000 across the country by 2009. It opened its first store in Thiruvanmiyur in Chennai in March. Punjab. the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people. Subhiksha now has even opened Specialized Mobile shops called Subhiksha Mobile where mobiles are sold at a discounted price Subhiksha is India's largest supermarket. Today. It is also dubbed as India's largest retail chain. it is now present nationally across 1000 outlets and spread across more than 90 cities. it is a multi-location. The retail chain has seen a considerable growth by offering goods at cheaper rates and thereby increasing its customer base. The company also has plans to train students and housewives in customer care and quality services for part-time jobs. It has recently commenced operation in Kerala also. Maharashtra. Derived from the Sanskrit word. Gujarat. Subramaniam. Subhiksham or "giver of all things good". fruits.non-vegetarian products. Chandigarh. 1997 with an investment of about Rs. New Delhi. 5 lakh. Hariyana. Started in 1997 as a single store entity in South Chennai. Karnataka and TN. ICICI Venture Capital has a 24% stake in Subhiksha. Mumbai. Reliance Fresh recently (24th Jan. without any compromise on quality of goods purchased. UP. has guided Subhiksha to deliver savings to all consumers on each and every item that they need in their daily lives. Ludhiana increasing its total store count to 40. 34 . You can now locate the nearest Subhiksha store in your area with the Store Locators.
2000-3000 crore in all the emerging areas from metros to class cities in the next two years. DLF is also of the leaders in innovating shopping malls in India. Erode. Till last year the company was involved in building 18 malls out of which 10 were in the NCR region. a part of the RPG Group. DLF has plans to invest Rs. In August 1999 it became a separate company. It was started in May 1996 as a division of Spencer & Co. Bharti's JV with Rothschild. Chennai. Currently it operates 89 stores in Bangalore. The second JV concerns the franchise arrangement. Hyderabad. Salem. Coimbatore. shopping mall in Gurgaon. Chairman of the Bharti Group assured that the ventures will use ―low prices every day‖ and ―best practices for the satisfaction of the customer‖. It has plans to come up with an investment of more than $2 billion in convenience stores.Food world is a chain of supermarket stores. The first JV ensures cash and carry business. Has announced two joint ventures (JV)with the international retailing behemoth. Local players like ITC. the A. Trivandrum and Vellore DLF Retail Developers Ltd. Sunil Mittal. Secunderabad. 35 . Bharti Retail aims to foray every city with a population exceeding 1 million.V. It caught public eye when it launched the 2. Kodai. Pondichery. is one of the troikas of the DLF Group. Future plans of DLF involve opening up of 100 malls (specialty malls. Birla Group and Tatas have given the hints to enter organized retail. Pune. in which 100 percent FDI is permitted and it can sell only to retailers and distributors. Processed foods and vegetables will be delivered by Bharti Field Fresh. Besides being India's largest real estate developer. They are slowly transforming into 'lease' and 'revenue share' models. France‘s Carrefour SA and Britain‘s Tesco too were recently in news for their future plans to explore the Indian retail market Bharti Retail. Wal-Mart. big box retailing and integrated malls) across 60 cities in next 8-10 years.000 sq ft. 50. a wholly owned subsidiary of Bharti Enterprises. It has brought a dramatic change in the lifestyles and entertainment with its City Centers and DT Cinemas.
Gurgaon. the Group has become the foremost retailer in the Gulf. Currently. 1991 by the K. The company intends to bring the world‘s best retail technology. Bharti Telecom also has plans to offer all its fixed and mobile telecom products and services from a single window to the SMB (Small and Medium Business) enterprises under the Bharti Infotel division. youthful and vibrant brand that offers customers a wide variety of merchandise at exceptional value for money. Lifestyle began operations in 1998 with its first store in Chennai in 1999 and now has 13 Lifestyle stores. they are adding 4 to 5 new stores every year with an immense amount of expertise and 36 . a Dubai-based retail chain. ft. retail practices and sales to India. Business World-IMRB Most Respected Company Awards Survey has rated Lifestyle as the Most Respected Company in the Retail Sector in 2003 and 2004. With over 30 years‘ experience in retailing. the Reid & Taylor Retailer of the Year Award for 2006 and more recently. Bangalore. Lifestyle has also been awarded the ICICI-KSA Technopak Award for Retail Excellence in 2005. Raheja Corp. the Lycra Images Fashion Award for the Most Admired Large Format Retailer of the Year in 2006 The foundation of Shopper's Stop was laid on October 27. 5 Home Centers and 1 Baby shop store across Chennai. Mumbai and Ahmedabad. Lifestyle is part of the Landmark Group. group of companies Shoppers‘ Stop aims to position itself as a global retailer. The expansion drive looks ambitious but analysts are worried that Bharti may face stiff competition from Pantaloon and Reliance as they too have sanguine plans to flood the markets with thousands of retail outlets in the coming five years. Hyderabad. Delhi.supermarkets and hypermarkets spread over an aggregate 10 million sq.. Positioned as a trendy..
Levi‘s. The showrooms have over 70. The Vishal stores offer affordable family fashion at prices to suit every pocket. The merchandise at Shoppers‘ Stop is sold at a quality and price assurance backed by its guarantee stamp on every bill.12 million for fiscal 2005. one of the fastest growing business conglomerates in India. The group had of turnover Rs 2884. Vishal Mega Mart is one of fastest growing retailing groups in India. 1463.) was established in 2003 as a part of Welspun Group. Le Teint Ricci etc.credibility. Ram Chandra Aggarwal. It is covering about 1996592 lac sq. Color Plus. in 18 states across India. 6026. Their motto: ―We are responsible for the goods we sell‖. From apparel brands like Provogue. Its outlets cater to almost all price ranges.S. With its wide range of merchandise. exclusive shop-in-shop counters of international brands and world-class customer service. The cost benefits that is derived from the large central purchase of goods and services is passed on to the consumer the group had a turnover of Rs. Arrow.the group‘s prime focus is on retailing. Scullers. Zodiac to cosmetic brands like Lakme. under the dynamic leadership of Mr..53 million for fiscal 2007. Shopper's Stop has become the highest benchmark for the Indian retail industry Shopper's Stop in the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). Welspun is a U. Shoppers' Stop retails its own line of clothing namely Stop. Shoppers‘ Stop caters to every lifestyle need.43 million for fiscal 2006 and Rs. 37 . Welspun Retail Limited (W. $1 billion group.R.000 products range which fulfills all your household needs. ft. and can be catered to less than one roof. Chambor. Kashish. Vettorio Fratini and DIY. Shoppers‘ Stop brought international standards of shopping to the Indian consumer providing them with a world class shopping experience. into diverse businesses.L. The stores offer a complete range of apparel and lifestyle accessories for the entire family. Each store gives you international quality goods and prices hard to match. Life.
The Retail brands. Our International Home Textiles Company.industries. SPACES.Home & Beyond has carved its niche with its fashion driven model in the country's major metros. while Welhome targets a larger audience with its value for money model. 79 and Curtains starting at Rs. the aspiration clientele and the value for money conscious clientele. Launched Spaces -Home & Beyond and Welhome (Welspun Factory Outlet) in the same year. towels starting at Rs. Design Studio ranks amongst the best in the country. W. Offer specialized products at affordable prices. is the first Retailer of soft furnishing for "Home" in India. WRL with an aim to capture the Home Textiles market in 2003.L.L. Welspun India Limited (W I L) launched its Indian retail division. has two models that cater to both. The turnover of the Retail division stands at 100 crore. 99 38 . expected to double in the next 5 years Key Differentiating Attributes W.R. 199.R. Panel of International Designers for the new collections. regions and has six companies under the umbrella brand. Phenomenal growth anticipated in FY 2007-08. Bed sheets starting at Rs.
cheaper and less time consuming. Nagpur. as shown below. Gurgaon. Chennai. Kolkata.Trent is the retail arm of the TATA group. An international shopping experience. Bangalore. Ahmedabad. has created a loyal following for Westside's own brand of merchandise. Delhi. The company has a turnover of Rs. Pune.Westside operates stores in Mumbai. technology evolved rapidly to support this growth. Over the years. Ghaziabad. and offering the latest styles. is paying high dividends as retail is one of the booming sectors in India. Lucknow. one of the many growing retail chains in India. Started in 1998. All these categories need to be supplemented with an accordingly trained manpower to allow proper execution Customer Interfacing Systems Bar Coding and Scanners 39 . The foresight of the TATA Group. Westside was named the 'Most Admired Large Format Retail Chain of the Year' by the Lycra Images Fashion Awards 2005. as the consumer demand increased and the retailers geared up to meet this increase. Vadodara. 357. 2. Surat. Indore. a perception of values. One of the greatest influencers in the growth and development of the Retail industry in India is the Technology boom.6 crores (FY 2005-2006) and currently operates 22 stores in the major metros and mini metros of India. The basic jobs. which invested in retail relatively early. hardware & software tools that have now become almost essential for retailing can be divided into 3 broad categories. Mysore. Jaipur. Hyderabad. Noida.4 Industry functioning in India The basic model of functioning in India is same to the one being followed abroad. Trent operates Westside. which makes the functioning process relatively simpler.
use pre-stored data to calculate the cost and generate the total bill for a client. which device the integrated system at the hardware and software level. Tunnel Scanning is a new concept where the consumer pushes the full shopping cart through an electronic gate to the point of sale. Electronic cheque conversion. Skill Set and Resource Requirement: The back end of these systems needs to be handled by web development based IT companies. Rather than manually process a cheque. Internet Internet is also rapidly evolving as a customer interface. The can be trained on using the software and usually do the mechanical work. All that the consumer has to do is to pay for the goods.Point of sale systems use scanners and bar coding to identify an item. Payment Payment through credit cards has become quite widespread and this enables a fast and easy payment process. which have to take care of the online security of the entire payment process. the retailer voids it and hands it back to the consumer along with a receipt. Skill Set and Resource Requirement: The back end of these systems needs to be handled by IT companies. the items in the cart are hit with laser beams and scanned. In a matter of seconds. 40 . processes a cheque electronically by transmitting transaction information to the retailer and consumer's bank. The front end however requires cheap labour with a basic knowledge of computers. which makes the process very fast. having digitally captured and stored the image of the cheque. There needs to be coordination with the banks of whose credit card acceptance. removing the need of a consumer physically visiting the store. a recent development in this area.
which device the integrated system at the hardware and software level. while servicing the customer better. A hierarchy of managers can also be maintained for very large stores. The can be trained on using the software and usually do the mechanical work. getting his supplies on time. The front end however requires cheap labour with a basic knowledge of computers. who knows about operations and supply chain management. along with the various available CRM (Customer Relationship Management) Systems. Operation Support Systems ERP System Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution. allows the retailers to study the purchase behavior of consumers in detail and grow the value of individual consumers to their businesses. as their work requires just a mechanical input. preventing stock-outs and thus reducing his costs. with every manager taking care of his/her department separately. 41 . Skill Set and Resource Requirement: The decision making process in the supply chain management is to be made by a Manager. Though the actual carrying of goods and placing in stack requires less skilled labour. CRM Systems The rise of loyalty programs. Data warehousing & mining technologies offers retailers the tools they need to make sense of their consumer data and apply it to business. Skill Set and Resource Requirement: The back end of these systems needs to be handled by IT companies. This. mail order and the Internet has provided retailers with real access to consumer data. front and back office store systems and merchandising. An integrated supply chain helps the retailer in maintaining his stocks.
42 . monthly forecasting. Skill Set and Resource Requirement: The decision making process in the CRM is to be made by a Manager. They enable consolidation of activities such as long term budgeting. Manugistics. software packages are helping retailers not only in their locational decisions but in decisions regarding store sizing and floor-spaces as well. Advanced Planning and Scheduling Systems APS systems can provide improved control across the supply chain. The lower level staff is supposed to work on the recommendation suggested by managers after thoroughly going through the APS. Strategic Decision Support Systems Store Site Location Demographics and buying patterns of residents of an area can be used to compare various possible sites for opening new stores. A hierarchy of managers can also be maintained for very large stores. These APS packages complement existing (but often limited) ERP packages. who specializes in marketing and CRM. MerciaLincs and Stirling-Douglas. Skill Set and Resource Requirement : The systems need to be analyzed and worked on by the Mangers at every level of the hierarchy. weekly factory scheduling and daily distribution scheduling into one overall planning process using a single set of data. Today. Leading manufacturers. This aims at a continuous process and is the life line of business. all the way from raw material suppliers right through to the retail shelf. distributors and retailers and considering APS packages such as those from i2. with every manager taking care of his/her department separately. Bann.
A new store needs a lot of resource allocation and legal obligations besides taking into consideration the consumer needs. Skill Set and Resource Requirement: The decision making process needs a great deal of innovation so has to be handled by a manager specializing in Consumer Behavior and there needs to be immense coordination with the operations manager as well. operations etc. A larger number of visual merchandising tools are available to him to evaluate the impact of his stacking options. The SPACEMAN Store Suit from AC Neilsen and ModaCAD are example of products helping in modeling a retail store design. 43 . marketing. These are very strategically driven decisions and need a great level of expertise. brainstorming and mutual cooperation of various departments like finance. Skill Set and Resource Requirement: The store site locations are mainly a concern of the Board or the top Management in the industry. Visual Merchandising The decision on how to place & stack items in a store is no more taken on the gut feel of the store manager. The decisions made should be reviewed by the board as it gets difficult to change the basic structure of the store once laid down.
1 Functional Perspective The retail industry is a people as well as technology intensive industry. In response.Chapter 3 Functional Perspective and Economic Impact 3. 44 . the technology continues to grow and retailers search for ways to measure technical business value and to balance the effective utilization of the technical resource. reduce inventory holding and ultimately save cost. Consumers have come to expect more value and higher service levels. retailers generally need to become more disciplined in managing the IT function. line managers. There are hardware and software tools that have now become almost essential for retailing. Over the years as the consumer demand increased and the retailers geared up to meet this increase. Retailers want to get more value out of technologies and ensure they are spending their limited resources in ways that improve their over al l offer to the customer. Technology has proven to be a competitive weapon in retail. is the key to achieving this. Access to timely and even real-time information to a wide variety of channel and trading partners. It is a well-known fact that the retail industry always works on razor thin margins and the key to survival lies in optimization of resources both in space and time dimensions as well as maximization of customer satisfaction. which is a dramatic shift from a decade ago. Successful retailers today work closely with their vendors to predict consumer demand. shorten lead times. store managers etc. Completing and delivering IT projects on time and on budget is overwhelming enough without the project team considering their project‘s interdependencies with other business initiatives and corporate goals. technology evolved rapidly to support this growth. As a consequence. sales personnel. IT is technology that will help the retailers to score in such fierce competition. Technology dependence Retailing is a ―technology-intensive" industry.
Then the focus shifted to marketing. the need and ability for inventory visibility. but in the past five years or so. as the onboard computer tracked the cart's movement down the aisles. customers ordering on line.Technology has transformed the buying behavior of customers everywhere. POS is undergoing major changes because of broadband access. • PLASMA SCREEN TVs : Since the '70s. radio frequency ID (RFID) chips would prompt the processor to notify the customer of sale items and appropriate promotions. in-store TV networks have popped up at Wal-Mart. The original idea was to include a bar code scanner on the carts so shoppers could circumvent the checkout line. It's easy to see the appeal: A captive audience in buying mode. returns and pick-up in the store and also the movement toward an ASP (application service provider) model. • Use of RFID : o RFID helps improve inventory management RFID. Some of the recent trends shown are : • Communication with customer‘s through media cart and new ways of marketing and technology such as Text messages. It also offered a guide to the customer's most frequently purchased items and. Smart shopping carts sporting book-sized computers that appeared in two Safeway stores in California in 2002 required a customer to swipe his or her Safeway card at which point the cart's brain would access the customer's shopping history. o Improving customer service o Boosting customer loyalty • SMART SHOPPING CARTS : Smart shopping carts have been around in one form or another for about 20 years. among other places. Target and Borders. Technology in the store is all moving toward integration and more and more savvy customers. 45 . The cart would then display four grocery items at sales prices available to them exclusively. select supermarkets have been using in-store TV programming (usually cooking demonstrations) to move product.
An integrated supply chain helps the retailer in maintaining his stocks. Most shoppers already have cell phones. Partially.. measures raw numbers and is supplemented by old fashioned head counts. a consortium of retailers. the retailer voids it and hands it back to the consumer along with the receipt.. Electronic cheque conversion. 46 . say. • CREDIT CARDS : Payment Payment through credit cards (plastic money) has become quite widespread and this enables a fast and easy payment process. Rather than manually processing a cheque. a recent development in this area. That's thanks to the efforts of Nielsen Co.S. getting his supplies on time.I. which sit on store shelves. a smart shopping cart.• BI-DIRECTIONAL INFRARED SENSORS : In 2008. marketers and media agencies. • CELL PHONES : Using mobile phones to alert shoppers about complementary items. preventing stock outs and thus reducing his costs. • ELECTRONIC SHELF LABELING Despite the inventory-clearing advantages of a store sale. while servicing the customer better. So far. in conjunction with The In-Store Marketing Institute and P. which makes the process very fast. a retailer still takes in on the chin when it comes to the bottom line.R. processes a cheque electronically by transmitting transaction information to the retailer and consumer‘s bank. hours of employees' time are taken up painstakingly changing prices on shelves (prices that usually have to get changed back a few days later). which has been around since the '70s. GPS devices on shopping carts did not work. many analysts agree. measured store traffic in 160 stores this year with bi-directional Infrared sensors. sales and as a vehicle for coupons is a very attractive option for retailers. Third party companies are also rushing in with solutions. there will likely be some sort of industry standard metric for in-store media.M. it's the best approach. In addition to losing out on potential revenue. that's because it's a lot cheaper than. front and back office store systems and merchandising. so that limp its the back-end investment. keying digitally captured and stored the image of the cheque. The technology. • ERP SYSTEMS: ERP system Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution.
in-store location tracking and previously scanned merchandise which would help to keep customers track and help customer‘s to escape standing in the long cue‘s for paying the bills for hours. along with the various available CRM systems. 47 . This. improve customer service. The concurrent development of handhelds has dramatically broadened retailers' options for application delivery. applications such as POS. sales and as a vehicle for coupons is a very attractive option for retailers. • RFID helps in Inventory management. EEFECTS OF TECHNOLOGY: • Increase in sales by targeting shoppers with text message based promotions. • Wi-Fi: As Wi-Fi technology has matured. mail order and Internet has provided retailers with real access to consumer data. redemption history. With Wi-Fi enabled handheld devices. allows the retailers to study the purchase behavior of consumers in detail and grow the value of individual consumers to their business. inventory audit. Data warehousing & mining technologies offers retailers the tools they need to make sense of their consumer data and apply into business. retailers have begun to see it as a robust. customer loyalty. item lookup. • Access for Improved decision making. inexpensive option for in-store connectivity. • Delivering targeted promotions based on users" shopping behavior. • Using mobile phones to alert shoppers about complementary items.• CRM systems: The rise of loyalty programs. pricing and labor scheduling can be used anywhere on the sales floor.
according to Ernst &Young's report `The Great Indian Retail Story' this sector is expected to create 2 million jobs by 2010 end. High incidence of female employment and part time employment. employees are being re-trained according to international standards and practices that are being bought in. Food and grocery constitute the largest segment of retailing 48 . this. implies that about 20 crore people are dependent on this sector.2 Economic Impact of Retail Industry: Global: Facts relating to global retail market are as follows: Retailing is one of the biggest private industries in the world and total sales exceeded US $ 8 trillion in 2002. The companies are also employing people who are physically handicapped. About 4 crore people are employed in retail trade. The next few years are expected will see the sector offering new jobs to 50. Also. This will bridge the gap in availability of talented professionals at the middle and lower levels. assuming each person supports a family of 5. The APS systems need to be analyzed and worked on by the Mangers at every level of the hierarchy. With foreign companies opening expanding in India. It accounts more than 10% of GDP in western countries and India and 8% in China. who specializes in marketing and CRM.000 young graduates and diploma holders. 3. There is also an increase in the number of retail management programmes and institutes.Human Resource dependence: Skill Set and Resource Requirement to handle these technological advancements: The decision making process in the supply chain management is to be made by a manager. with every manager taking care of his/her department separately. The decision making process in the CRM is to be made by a manager. A hierarchy of managers can also be maintained for very large stores. who knows about operations and supply chain management.
GDP share: According to AT Kearney. the organized sector will be 20% of the total market share. Rapid urbanization. In modern retailing. India is the 4th largest economy as regards GDP (in PPP terms) and is expected to rank 3rd by 2010 just behind US and China. Thailand (1997) and Indonesia (1998). The retail sector in India is worth USD 394 billion and is growing at the rate of 30% annually. income growth. Over the past few years. retailers are coming up with various innovative formats to provide an edge to retailers. South Korea (1996).Total procurement by global retail chains from India is estimated to be below US $ 3 billion out of which 1 billion by Wal-Mart alone Indian: Growth trends: For the fourth time in five years. the size of modern retail is about US$ 8 Billion and has grown by 35% CAGR in last five years (KSA Technopak. June 2006). increased participation of women in labour force and improvements in infrastructure in 1980s and 1990s led to organised retailing. India has been ranked as the most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm A T Kearney in its eighth annual Global Retail Development Index (GRDI) 2009 published in June 2009.7. As per study commissioned to Indian Council for Research on International Relations (ICRIER) by the Department of Consumer Affairs. Mexico. a key strategic choice is the format. the retail sales in India are hovering around 33-35% of GDP as compared to around 20% in the US. Since then. Brazil. By the same time. 49 . Argentina (1994).000 crore in 2002. According to a report by Northbride Capita. as markets like China become increasingly saturated. India is given the top ranking as the next foreign investment destination. the India retail industry is expected to grow to US$ 700 billion by 2010. the size of Indian retail market has been estimated as Rs. Most countries liberalised policies for opening of FDI in retailing.40. FDI allowed in China (1992).
medical and diagnostic items and items sourced from Indian small sector (manufactured with technology provided by the foreign collaborations). travel accessories. the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country.In 2007. such that it can promote competition and contribute to the growth of the Indian economy. The policy of permitting 51% FDI in single-brand product retailing has led to the entry of only a few global brands such as Nike (footwear). With politicians arguing that the global retailers will put thousands of small local players and fledging domestic chains out of business. the two main FDI rules in India can be summarized as: FDI up to 51 per cent is allowed in retail trade of 'Single Brand': The only opening in the retail sector so far has been to allow 51% foreign stakes in single brand consumer stores. it rose to 12%. Fig 9: Comparison of retail trade in India . private labels. It is also expected to reach 22% by 2010. In 2009.US and China FDI in retail Global retailers have already been sourcing from India. the opening up of the retail sector to the FDI has been fraught with political challenges. Louis Vuitton (shoes. Parties supporting the FDI suggest that the FDI in retail should be opened in a gradual/ phased manner. watches. 50 . high tech items/ items requiring specialized after sales service.
69 million. Tesco and many other retail giants struggling to enter Indian markets. stood at US$ 194. . Foreign direct investment (FDI) inflows between April 2000 and March 2010. Damro (knock-down furniture). textiles ready-to wear). Increased local sourcing. the Indian Government restrictions on the FDI are creating ripples among the international players like Walmart. cutlery. Table below lists the pros and cons of allowing FDI into retail. Increase in the real estate prices. Marginalize domestic entrepreneurs. Provide better value to end consumers. traditional home accessories and gift items) and Toyota (retail trading of cars). However. Improvement in the quality of employment. However. franchisee agreement and cash and carry wholesale trading (since 100% FDI is allowed in wholesale trading). Promoting cartels and creating monopoly. Fendi (luxury products). Benefits of FDI in retail Inflow of investment and funds. according to the Department of Industrial Policy and Promotion (DIPP). in single-brand retail trading. into retail tradingThe 100 per cent FDI is allowed in cash-and-carry wholesale formats: International retailers see India as the last retailing frontier left as the China's retail sector is becoming saturated.ties. Generating more employment. Lladro (porcelain goods). The financial strength of foreign players would Investments and improvement in the supply 51 Drawbacks of FDI in retail Would give rise to cut-throat competition rather than promoting incremental business. Argenterie Greggio (silverware. other international players are taking alternative routes to enter the Indian retail market indirectly via strategic licensing agreement.
opportunities for displace the unorganized players. the presence of global retailers will further enhance exports from India as they would also source Indian goods for their international outlets in a big way leading to a remarkable increase in Indian exports. local Absence of proper regulatory guidelines would induce unfair trade practices like Predatory pricing Seeing the benefits. 52 . Implementation of IT in retail. Stimulate infant industries and other supporting industries. Franchising entrepreneurs. Increased efficiency. Due to the FDI restrictions the international players are looking for alternative avenues to enter the Indian markets. it can be said that this investment boom could change the face of Indian retail by offering quality goods at lower prices to the consumers. Cost reduction. Growth of infrastructure.chains and warehousing. The chart below shows the current formats permitted by the Government of India for the international players. In addition to this.
0 billion in 2010 to US$ 543.86 billion in 2010. BMI forecasts consumer electronic sales at US$ 29. with over the counter (OTC) pharmaceutical sales at US$ 3. The greater availability of personal credit and a growing vehicle population to improve mobility also contribute to a trend towards annual retail sales growth of 11.Fig 10: Current permitted retail formats Sales growth trend: The BMI India Retail Report for the third-quarter of 2010. released in May 2010 forecasts that the total retail sales will grow from US$ 353. The latter is predicted to be the 53 .2 billion by 2014. BMI predicts that sales through Mass grocery retail (MGR) outlets will increase by 154 per cent to reach US$ 15.28 billion.4 per cent.29 billion by 2014.
89 76.75 Growth Net Growth% % Profit YoY (Rs mn) QoQ (compared to correspondi ng quarter) 243. released in May 2007.62) 0.41 15.74 4.6 0 53.88 Growth OPM% OPM% EPS % YoY Q1FY06 Q1FY05 Q1FY06 CMP P/E 42. India will also become the 5th largest consumer market.07 4. India's middle class will swell by more than ten times—from 50 million in 2007 to 583 million people by 2025.20 0.7 (1.07 47.18 billion by 2014.7 26.00 0.7 6) 3. an increase of 88.42 1844.91 6.8 5 120.82 2.00 3.00 6. the next phase of growth is expected to come 54 .75 s' Stop Pantalo on (Retail) India Limited 18677.73 72.0 (4. moving up from the 12th position it occupied in 2007.fastest growing retail sub-sector over the forecast period.00 Road ahead: Investments in the range of US$ 20+ Billion are expected in the next 5 years in Retail & its Supply Chain alone.50) 8 27.35) 8 271.00 (74. BMI forecasts that sales will reach US$ 6.5 per cent.94 Trent Shopper 6455.55 875. (Q3FY0 (Q3FY0 (Q3FY0 85 6) 6) 6) (16.53) 114.30 66.43 4.25 7. According to industry experts. By 2025.03 5.0 0 604.67) 0. Consumption trend: According to a study by the McKinsey Global Institute (MGI). The revenue.38 7.94) 5 641.99 Limited (9.5 (2.00 (3.28 1 57.4 2 Pyramid Retail 991. growth and other parameters of different company is shown in the table below: Revenu Growth% es (Rs mn) QoQ (compared to correspondi ng quarter) 3464.
55 . organised retail market in India is expected to reach US$ 50 billion by 2011.from rural markets. 'Booming Retail Sector in India'. the third party logistics market is forecasted to reach US$ 20 billion by 2011 Apparel. will lead organised retailing in India. along with food and grocery. According to a market research report published in June 2008 by RNCOS titled.9 per cent from 2007 to 2015 Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50 per cent Driven by the expanding retail market. Number of shopping malls is expected to increase at a CAGR of more than 18.
At work. Moreover. The best source to learn about customers is personal interaction with them. Consumers don't select toothpaste. into segments. individual familiarity is not feasible. But understanding of buyers starts with the realization that they purchase benefits as well as products. Customers buy when they want an offering and have the time and money to purchase it. some will pay for a decay preventive. understanding of each major customer and buying influence is essential. Listen to customers.1 Customers Knowledge: Everybody is unique. When dealing with a large number of customers. whose reactions to offerings are similar. Hence mass merchandisers and others in this situation group their customers. Each person has individual pressures and criteria. perceptions differ. In the industrial field. however. Buying patterns can often be discerned from an analysis of customers and their purchases. Identification of customers and prospects makes effective targeting possible.Chapter 4 Developing a Blueprint for Service Business 4. and chance encounters. Or perhaps any formula at a bargain price will do. The astute businessperson deduces and accepts the buying logic of customers and serves them accordingly. people talk and reveal their attitudes and motivation. Some seek pleasant taste. Others want bright teeth. Then they design a separate appropriate marketing program for each segment. Small business owners pride themselves on knowing their customers personally. A seller characterizes what customers are buying as goods and services. Instead. social and civic activities. 56 .
Once the individual is in the shop it is then possible to make further recommendations that are likely to be of interest and draw through actual sales from the initial communication.Customer contact approach: More than ever before retailers are under pressure to differentiate themselves from competitors. Marketing efficiency can be gauged and subsequently increased. all without vast expense. the retailer can track which campaigns engage which customers. and the success rates. public hordings. Using customer as a resource:. make significant cost savings and find innovative ways of driving footfalls into stores.All the companies are using customer as a resource. for example.TV and also by making call also. advertisement on internet . as a result. The technology facilitates location-specific marketing through the appropriate channels. This requires a fresh approach to customer engagement that can be implemented cost effectively and efficiently. Marketing campaigns will become increasingly targeted and. Even traditional retailers need to find a creative way to raise their brand above the day to day marketing noise. For example. it would be possible for a supermarket to contact a customer by personal SMS at lunchtime with an appropriate incentive (such as 10% off purchases. retailers will be able to contact customers in specific areas with relevant offers or information about products that may be of interest. There is a proper display in the stores so that customer have a full overview of the product and then buy it according to their need so in this way even a single salesman can handle the customers 57 . will yield higher conversion rates of communication to sale. or extra loyalty points). so that customer come to know what latest offer is going on. They can communicate them via e-mails.
efficiently. So in this way no of employees would be less and less expenditure will be there in the form of salary. By delivering the quality of the product now customer itself act as a resource to the company means he himself promote the store by expressing his experience to the others
4.2 Management issues in services
Availability of skilled manpower: The non availability of trained manpower, especially at the management level, poses a key risk for the retail sector. With growing opportunities in the emerging service sectors, the ability of the retail business to hire and retain quality people is under pressure. Further, as organized retail grows rapidly, there will be pressure on existing players as new entrants look for trained manpower at various levels.
Supply chain issues: The character and personality of an organization reflects the character and personality of its top management. In the case of customer service, there are some real advantages to achieving consistency and continuity in management. Customer-service policies that change with every change in management or ownership are confusing to employees and customers alike. Supply Chain Management efficiencies are essential to retailers to maintain and improve margins. SCM includes vendor management and logistics management. Vendor selection is an important outcome of the sourcing process and a key to most efficient sourcing. Logistics management aims to get the goods from the vendor to the store in the shortest possible time thereby avoiding unnecessary stocking of goods. In India, both vendor management and logistics management are still underdeveloped.
However, with growing size of operations, supply chain efficiencies will become a key differentiator of profitability in retail. Growth in consumption: The changes in demographics are driving changes in consumption pattern in the country. Urban consumer‘s shopping basket is changing: Within the overall private final consumption expenditure there are category shifts happening in urban consumption pattern that urban consumers have increased their expenditure on eating out, movies and theatre, books and music, clothing and personal care items even as they have reduced savings and investments. Traditionally, the small store (kirana) retailing has been one of the easiest ways to generate self-employment, as it requires minimum investments in terms of land, labour and capital. These stores are not affected by the modern retailing as it is still considered very convenient to shop.
4.3 Competitive advantage
A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.competitive advantage is a key determinant of superior performance and it will ensure survival and prominent placing in the market. Superior performance being the ultimate desired goal of a firm, competitive advantage becomes the foundation highlighting the significant importance to develop same. a)With respect to price:- Price is the motivators for the common people means where they will find that it is cheaper than the other one they start buying the things from there only .so one who is offering the goods at the lower value would have an advantage than its competitors. Also if there is some promotional scheme is going on then this motivates them also to buy. So after understanding this concept,By removing inefficiencies from the distribution chain ,stores like big bazaar are able to unleash attractive savings which are
passed on to the consumer. Big Bazaar provides more than 2,00,000 items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationery, electronics and white goods which are sold at a discount to the maximum retail price. Price is the principal value proposition at these stores. there are so many slogans used by these stores like
Big Bazaar- ‗Isse Sasta aur accha kahin nahin‘ Gold Bazaar- ‗Sasta bhi shudh bhi‘ Food Bazaar- ‗Wholesale prices‘
b) With respect to service:- Now a days Services are acting as a motivator to shop. Retail stores are providing some good services like while shopping u can have fun also means u can play the games, watch the TV and can eat also. All the big name in retail sector are trying to give better services so that customer would have the nice shopping experience. Services would be like the variety of the products ,different brands ,each product of all the categories according to the need of all the age group so that if a family comes for a shopping so every one would find something for their interest no one feel bore and want to spent maximum time while shopping. In order to keep pace with the modern formats, kiranas have now started providing more value-added services like stocking ready to cook vegetables and other fresh produce. They also provide services like credit, phone service, home delivery etc. The organized retailing has helped in promoting several niche categories such as packaged fruit juices, hair creams, fabric bleaches, shower gels, depilatory products and convenience and health foods, which are generally not found in the local kirana stores. For example With it has been noticed that the sale of Basmati rice has gone up by four times than it was a few years back; as a superior quality rice (Basmati) is now available at almost the same price as the normal rice at a local kirana. Thus, the way a product is displayed and
61 . There is a misconception that if the thing is cheap it would not be good but this is no true with the big stores.promoted influences its sales.
Chapter 5 Capacity management in retail sector Capacity management is the process ensuring that cost-efficient IT capacity is always available based on the current and future requirements of the retail industry. In retail sector it is used to describe the activities of demand forecasting. Higher levels of security and availability. including: Correct forecasting of capacity needs. and order 62 . planning. Reducing costs associated with capacity. Managing utilization.1 Demand management or Creating demand Demand management is the art or science of controlling economic demand to avoid a recession. storage capacity. how much is the return on investment. and network bandwidth to make business systems work as they should. If capacity management is lax and there are vast numbers of underutilized hardware and software assets. best-inclass capacity management programs include the following core capabilities: • • • Understanding business requirements. capacity management makes sure we have enough processing power. Capacity management actually plays an important role in determining how effectively an organization uses its assets to produce income i. Rather. The success of Capacity Management in retail industry depends on a number of key indicators.e. Capacity management programs are not just about building a basic capacity plan. then the business will have more assets than it needs to support the income level of the business — resulting in a lower ROA. In short. Monitoring capacity against service obligations. Greater user and customer satisfaction. 5.
and access to goods and services on the basis of needs. Fig 11.fulfilment. A lean or off peak period for a retail industry is defined as a period during which demand does not exceed the capacity of the retailer. not as a means of foisting 63 . In order words the retailer can serve more customers without additional resources and there is excess capacity in the system. In this case demand need to be created. The issue of inventory management is also faced by the retail industry. returning to a normal level. During this period demand has to be managed or fulfilled. Demand management during peak and lean periods To match what can be produced with what is being demanded. A peak period is when the demand increases temporarily. essentially balancing the supply chain with the demand chain demand forecasting and capacity planning becomes important. In economics the term is also used to refer to management of the distribution of.
This is usually based on prior data about the same product or close substitutes. Under stocking would cause unsatisfied customers who may quickly move to other stores.inventories upstream in the supply chain to willing suppliers. the retailer should aim at a replenishment policy by which the rack never gets empty and never overflows. 64 . The results are a matching of just-in-time deliveries with actual manufacturing needs. Slow moving goods may be restocked leisurely compared to fast moving goods. When close substitutes are available for some products. but as a way to reduce the need for the extraneous inventories in the supply chain system and to utilize capacity to the most effective degree possible. Though it is infeasible to manually forecast the demand of all the products. and reduction of the buffer stocks by virtue of knowing what is truly being taken out of the system at the customer end of the chain. This reduces the burden from the humans but requires lot of compute power available. total profits. maximize margin. the retailer may compensate for a lower current stock in one good with another one. total revenue earned. the retailer cannot forecast for all goods it sells. Over stacking may increase the money locked up in inventory. An important aspect of demand management is demand forecasting. Forecasting aims at optimizing the total sale volumes. Forecasting A big retailer may have thousands of items per shop. quality forecasts can be obtained from the automated tool and the expert analysts can be employed to forecast few of the most important products. In most cases. It is important for retailers to provide the customers the specific goods that the customer asks of the retailer. Since forecasting is an important yet expensive task. it is possible to use automated tools to do so. It may also be based upon analysis done at another location with similar buyer patterns. Another important aspect of forecasting is the when to restock. Hence. Creditability of such optimization decisions pivots on the ability to correctly predict the sales.
Distribution of services and expansion of business Different companies are following different strategies to expand their business. it would 65 . It would retail imported products across 23 categories for a single price point of 99. Failure of the distribution sector to perform its role well – which can arise if government policies restrict competition – can lead to a significant misallocation of resources and economic costs.2 Distribution of service in Retail sector The distribution sector provides the necessary link between producers and consumers. Suppliers will ship truckloads of products to the distribution center. sharing space. The efficiency of the sector is crucial to ensuring that consumers have access to a wide variety of goods at competitive prices.5. The way a typical retail distribution network operates is to have centers set up throughout a commercial market. often with refrigeration or air conditioning. within and across borders. Large distribution centers for companies such as Wal-Mart serve 50–125 stores. Many retailers own and run their own distribution networks. Distribution centers are the foundation of a "supply network" as they allow a single location to stock a vast number of products. which is stocked with products (goods) to be re-distributed to retailers. The distribution center will then store the product until needed by the retail location and ship the proper quantity. equipment. A distribution center for a set of products is a warehouse or other specialized building. while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center. Some organizations operate both retail distribution and direct-to-consumer out of a single facility. to wholesalers or directly to consumers. Since a large retailer might sell tens of thousands of products from thousands of vendors. Each center will then serve a number of stores. For example Pantaloon‘s is coming out with single price retailing to its line of business. it would be impossibly inefficient to ship each product directly from each vendor to each store. For Pantaloon. labour resources and inventory as applicable.
to the point of putting some of them out of business. Sporadic demand (erratic sales for many items in the store) 3. Firms face a multitude of challenges due to the following factors: 1.mean adding another business vertical to its list as it can retail single price imported products which still has a good demand in the market owing to its attractive pricing strategy. Scale of forecast (how many goods to include in the forecast?) 2. Introduction of new goods 4. make existing stores bigger. These are the different strategies followed by the retail industries so as to expand. Problems in managing demand and its solutions The main problem in demand management is in forecasting demand. and to expand into other sectors of retail. However. Every step of the way. So the different challenges faced by retail industry in forecasting demand are: A small retailer may not need and afford a full-fledged demand forecasting analysis. it strives to make money and dominate its competitors. with increasing number of bigger retailers entering the market demand forecasting becomes feasible. Also a typical Wal-Mart model is to build more stores. Changing prices and promotions 66 .
placement. direct contracts with other shops and the corporate sector. remains a critical tool that plays key roles in manufacturing. stakes involved in a product are lesser. advertising. allocation of resources. small scale retailers can employ qualitative techniques on the historical data and considering the behaviour trends in the market. They may find it easy to liquidate assets through sales. For these retailers. thus. Demand forecasting. forecasting is done for longer time duration and involves substantial amounts of asset cost. 67 . Also. They can easily find substitutes to fill up their rack space. Retailers who have their own brand labels use the forecasting techniques of the kind we study in theory. This is because their prediction of sales directly affects their manufacturing.Conclusion The Retail sector in India is growing at a magnificent pace and the increasing competition is compelling retailers to use demand forecasting tools. On the other hand.
nic.researchandmarkets.com/ www.indiainbusiness.globalretailtrends.indianmba.about.wikipedia.com/retail www.com http://retail.com/ www.References • • • • • • • • http://www.in www.marketwatch.com/industry/Retail http://www.com/ 68 .com www.wikinvest.
What is your strategy to attract your target customers? 6. Who do you think are your potential competitors? 69 . What are the skills required by your staff at different levels? 4. What is the organizational hierarchy of your store? 3. How do you cater to the dynamic customer requirements? 8. What are your target customers? 5.Annexure Questionnaire 1. How has the market evolved in the past decade? 2. How have the needs of customers changed in the past decade? 7.
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