Professional Documents
Culture Documents
Tilyan
Tilyan
The retail store is the place where the customers take a decision on the purchase of the
products offered by the retailer. The store also influences the perception that customers
form in their minds about the store, the products, services and staff. From the
management’s point of view, operations of the store and a major element of the cost.
As a consequence, the store itself becomes a critical asset of the retail business and it is
imperative that the operations are managed well to achieve and sustain customer
satisfaction and be cost effective. Managing store operations for a small retail business
of any size or complexity from the neighborhood grocer to the national retail chain is a
challenging task
Introduction:
Retailing consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by post, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. A "retailer" buys goods or
products in large quantities from manufacturers or importers, either directly or through
a wholesaler, and then sells smaller quantities to the end-users / consumers. Retail
establishments are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility, like electric
power.
Shopping generally refers to the act of buying products. Sometimes this is done to
obtain necessities such as food and clothing; sometimes it is done as a recreational
activity. Recreational shopping often involves window shopping (just looking, not
buying) and browsing and does not always result in a purchase.
History of Nesto
Nesto, a respected name today in the retail industry. Nesto has become a pioneer by
having more than 40 Outlets in UAE, KSA, Bahrain and Kuwait. Being focused on
convenience, accessibility and providing quality of products at competitive prices to its
customers as to their door steps as a result of mobility. Over the past few years Nesto
is able to win hundreds of thousands of hearts, and became the preferred choice for
consumers all around the GCC. As it offers an experience for its customers to cherish
and make them come back again and again.
Nesto itself is a part of Western International Group which owns remarkable brands
like Geepas, Younglife, Royalford, Olsen mark, Clarkford, Parajohn, Baby plus,
Brandzone, Shoe Point and G-Square. Being backed up by a strong group like Western
International Group, gives Nesto a tremendous scope of expansion and growth which
will help Nesto to set new records and create history in the retail industry.
VALUES
1
Objectives of the study:
The main objective of the project is to study the retail store operations in Nesto
hypermarket.
To identify the factors that can explain the different techniques to save the store.
To calculate the average amount of purchasing/day of the customers and to
measure the number of customers visiting NESTO.
To analyze the growth and development trends of retail store.
To identify key areas and shortcomings to focus in order to improve the
performance of organized retail store Nesto.
2
LIMITATIONS OF THE STUDY
3
REVIEW OF LITERATURE
It also connects compares and contrasts these arguments, themes and methodologies
etc., with the concerns of a proposed piece of research. The literature review is not an
annotated bibliography or a summary of the sources listed one by one or just a
descriptive summary of the historical background to the research subject.
3. Mehmet Arda (2006)32 stated that the importance of supermarkets in the world
food economy has radically increased since the early 1990s. Supermarkets are
now major sellers and buyers of food items not only in developed but also in
4
developing countries. Urbanization and liberalization of the services sector have
been important facilitators of this process.
4. Anu Singh and Kaur Tripat (2006) 34 explained the strategies adopted by
retailers to keep pace with the changing moods of the shoppers. In the past few
years, there has been a shift in India from individual retail outlets owned
separately and managed distinctively to professionally managed retail stores.
The retail formats commonly analyzed are stores located in the malls. The study
addressed how factors within and outside the stores affect store-level shopping
decisions. The six main indicators on the basis of which retailers decide to go
for a specific type of retail format are: Price, Sales Personnel, Quality of
Merchandise, Assortment of Merchandise, Advertising, Services and other
Convenience Services.
5. Piyush Kumar Sinha and Sanjay Kumar Kar (2007) 35, India‘s retail
development is inevitable. Most of the organized retailers in India are harping
on quality, service, convenience, satisfaction and benefits to lure shoppers into
the store. Retailers should create value for the consumer and must decide
suitable vehicle to deliver desired consumer value. No doubt, that retail format
is one of the vehicles to deliver value proposition and it helps to position the
store in the mind of target shoppers. Retailers certainly need to be innovative in
designing the value proposition and deciding the format to deliver that to the
consumer. It is not all about deciding the format but all about serving the
consumer better, faster and at less cost. Retailers can use their store as an
indicator of what they stand for and what value they offer. Retailers have to out
think consumer in providing service and value. Now, most of the retailers are
concerned about growth in number of stores rather than creating value for
consumer.
6. Horst Raff and Nicolas Schmitt (2009) 56 , investigated the implications for
international markets of the existence of retailers/wholesalers with market
power. Two main results were shown. First, in the presence of buyer power,
trade liberalization may lead to retail market concentration. Due to this
concentration, retail prices may be higher and welfare may be lower in free trade
5
than in autarky, thus reversing the standard effects of trade liberalization.
Second, the procompetitive effects of trade liberalization are weaker under
buyer power than under seller power.
7. Alexander Chemev and Ryan Hamilton (2009) 57, in their research paper
majorly focused on the important decision that retailers always involves in
selecting the number of items constituting their assortments. A key issue in
making these decisions is the role of assortment size in determining consumer‘s
choice of a retailer. The authors address this issue by investigating how
consumer choice among retailers offering various-sized assortments is
influenced by the attractiveness of the options constituting these assortments.
The data show that consumer preference for retailers offering larger assortments
tends to decrease as the attractiveness of the options in their assortments
increases and can even lead to a reversal of preferences in favour of retailers
offering smaller assortments. This research further presents evidence that the
relationship between assortment size and option attractiveness is concave, like
the marginal impact of assortment size on choice decreases as the attractiveness
of the options increases. Data from eight empirical studies.
8. AbishekParekth (2002) 11 in his article titled, ―Enter the hyper markets‖ says
that the retail boom is rapidly gaining ground. Companies such as Pantaloon
fashions and S Kumar‘s are framing up plans to set up hypermarkets in various
locations. The calculated stores have begun trusted as ―India‘s answer to Wal-
Mart and carre-four‖ where consumers can get ―top quality products at rock-
bottom prices in a world-class environment‖. Hyderabad already hosts Giant,
India‘s first international standard hypermarket, belonging to the RPG group,
which opened its door. Hypermarket usually competes on price and a wider
product range, but they normally, lack product department depth and service
components.
6
destination for global retails. However, India has been ranked only sixth in a
global retail development index (recently developed by AT Kearney, Slovak
Republic, Hungary, The Russian Federation, Morocco) and of course, China has
been rated as more attractive than India. Ten years ago, the top 20 global
retailers had operations in 11 countries. Today they are present in 82 countries.
India is not on that list yet. However, with once promising South America now
losing their original appeal due to market saturation and economic risk, India is
a serious coretender for FDI (Foreign Direct Investment). But that will depend
on whether policy-makers will heed the Chinese success and allow FDI.
10. Vidya Srinivasan (2002) 13 in her article titled ―What is in store‖ has
highlighted the impact of Liberalization which puts products of various styles
and quality on shop shelves, giving consumers new choices, but it has left the
seller to live in a protected environment, department stores that form the basis
of the organized retail industry have no role models to follow except those set
by Macy‘s Bloomingdale‘s and Marks and Spencer‘s in the west, but none of
which has adequately fit into the Indian Scenario.
7
Retailing is a set of activities that markets products or services to final consumers for
their own personal and household use. It does this by organizing their availability on a
relatively large scale and supplying them to consumers on relatively small scale. Any
business that directs its marketing efforts towards satisfying the final consumer based
upon, the organization of selling goods and services as a means of distribution.
The term 'retail' is derived from the French word retailer which means 'to cut a piece
off or to break bulk'. In simple terms, it implies a first-hand transaction with the
customer.
Retailing can be defined as the buying and selling of goods and services. It can also be
defined as the timely delivery of goods and services demanded by consumers at prices
that are competitive and affordable.
David Gilbert has defined retail as any business that directs it marketing efforts towards
satisfying the final consumer based upon the organization of selling goods and services
as a means of distribution
As per the above definition the final consumer is a key concept within the distribution
chain, especially since the retailers are at the end of the chain and directly interact with
the customer. Moreover, the final consumer is presumed to be the final user of a 45
purchase unlike a customer who may have bought the goods for their own use, as a
present or as part of their own business activity.
The vast majority of retailing occurs in stores throughout the world, other venues for
retail vending machines, door-to-door sales, cyber sales (or e-tailing) and sales point of
consumption sales. Retailers are often referred to as intermediaries, middlemen, or
because of the positions they hold in the marketing process. A marketing intermediary
(middleman) links producers to other middlemen or to ultimate consumers through
contractual arrangements or through and reselling of products.
The retailing concept covers four broad areas and is an essential part of the retailing
strategy.
Customer Orientation: The retailer makes a careful study of the needs of the
customer and attempts to satisfy those needs.
8
Goal Orientation: The retailer has clear cut goals and devises strategies to
achieve those goals.
Value Driven Approach: The retailer offers good value to the consumer with
merchandise having the price and quality appropriate for the target market.
Coordinated Effort: Every activity of the firm is aligned to the goal and is
designed to maximize its efficiency and deliver value to the consumer
Functions of Retailing
Retailers perform various functions like sorting, breaking bulk, holding stock, as a
channel of communication, advertising, storage and certain additional services such as:
Sorting: Manufacturers usually make one or a variety of products and would like to
sell their entire inventory to a few buyers to reduce costs. Final consumers in contrast
prefer a large variety of goods and services to choose from and usually buy them in
small quantities. Retailers are able to balance the demands of both sides, by collecting
an assortment of goods from different sources, buying them in sufficiently large
quantities, and selling them to 46 consumers in small units.
Breaking Bulk: Breaking bulk is another function performed by retailing. The word
retailing is derived from the French word retaillier, meaning to cut a piece off. To
reduce transportation costs, manufacturers and wholesalers typically ship large cartons
of the produce which are then tailored by the retailers into smaller quantities to meet
individual consumption needs.
Holding Stock: Retailers also offer the service of holding stock for the manufacturers.
Retailers maintain an inventory that allows for instant availability of the product to the
consumers. It helps to keep prices stable and enables the manufacturer to regulate
production. Consumers can keep a small stock of products at home as they know that
this can be replenished by the retailer and can save on inventory carrying costs.
Retail development can be looked at from the theoretical perspective. No single theory
can be universally applicable or acceptable. The application of each theory varies from
market to market, depending on the level of maturity and the socio-economic conditions
in that market.
The theories developed to explain the process of retail development revolve around the
importance of competitive pressure, the investments in organizational capabilities and
the creation of a sustainable competitive advantage .this requires the implementation of
strategic planning by retail organizations. Growth in retail is a result of understanding
market signals and responding to the opportunities that arise in a dynamic manner.
2) Cyclical – where change follows a pattern ad phases can have definite identifiable
attributes associated with them.
10
3) Conflictual – the competition or conflict between two opposite type of retailers leads
to a new format being developed.
Environmental Theory:
Darwin’s theory of natural selection has been popularized by the phrase survival of the
fittest. Retail institutions are economic entities and retailers confront an environment,
which is made up of customers, competitors and changing technology. This
environment can alter the profitability of a single retail store as well as of clusters and
centers. The environment that a retailer competes in is sufficiently robust to squash any
retail form that does not adjust.
Thus, the birth, success or decline of different forms of retail enterprise is many a time
attributed to the business environment. For example the decline of department stores in
the western markets is attributed to the general inability of those retailers to react
quickly and positively to environmental change. Those retail institutions which are
keenly aware of their operating environment and which react without delay, again from
the changes.
Thus, following the Darwinian approach of survival of the fittest, those retailers that
successfully adapt technological, economic, demographic and legal changes are the
ones that are most likely to grow and prosper. The ability to adapt to change,
successfully, is at the core of this theory.
Cyclical Theory
The most well-known theory of retail evolution is The Wheel of Retailing theory. This
theory, described by McNair II, helps us understand retail changes. This theory suggests
that retail innovators often first appear as low-price operators with a low-cost structure
and low profit-margin requirements, offering some real advantages, such as specific
merchandise, which enables them to take customers away from more established
competitors.
As they prosper, they develop their businesses, offering a greater range or acquiring
more expensive facilities, but this can mean that they lose the focus that was so
11
important when they entered the market. Such 'trading up' occurs as the retailer becomes
established in his own right.
The theory suggests that new forms of retailing appear as price cutting, low cost and
narrow profit margin operations. Eventually the retailer trades up by improving displays
and location, providing credit, delivery and by raising advertising expenditure.
Thus, retailers mature as high cost, high price, conservative operators, making the
mselves vulnerable to new, lower priced entrants. A low price retailer should avoid
incurring extra costs on the existing format and instead should open another store with
better service levels and premium brands catering to the upmarket segment. These two
stores should be distinct in their brand name, offerings and operations.
Conflict
Theory
Conflict always exists between operators of similar formats or within broad retail
categories. It is believed that retail innovation does not necessarily reduce the number
of formats available to the consumer; instead, it leads to the development of more
12
formats. Retailing thus evolves through a dialectic process, i.e., the blending of two
opposites to create a new format.
B. Antithesis- A position opposed to the thesis develops over a period of time. These
are the department stores. The antithesis is a "challenge" to the thesis.
C. Synthesis- There is a blending of the thesis and antithesis. The result is position
between the "thesis" and "antithesis". Super markets andhypermarkets thrive. This
"synthesis" becomes the "thesis" for the next round of evolution.
RESESARCH METHODOLOGY
13
and it allows the researcher to infer about the variables. Like in this case, the variables
were analyzing Footfall, Catchment Area and the Average Ticket Size of the customers.
I took the base of DESCRIPTIVE RESEARCH because I worked on the data provided
by the store i.e. it was secondary data (total sales, total no. of customers etc.) for three
weeks and I knew which parameters to work upon. Also I interviewed the customers
and observed their buying behavior towards Store. As Descriptive research design are
used when the researcher has a substantial data about the problem and of the variables
that are to be measured. In this case I knew which all areas need to be covered up and
analyzed thoroughly.
Primary Data Collection: Primary data was collected with the help of a structured
questionnaire. The questionnaire was administered to the selected 50 respondents.
Technique of data collection: The two type techniques which were used are:
● Communication Based Technique- In this technique data was collected by
asking a set of question and receiving a response. Two people are necessarily
involved. Like –Questionnaire.
● Area of study: The study on retail store operations has been limited to
consumers in Muscat region. The period of the study covers 1 month.
Theproject’s data collection was through Primary and Secondary sources. The
primary source is collected from the sample respondents in the study area.
Simple random sampling method was used in selecting the respondents.
● Sample size:I took one month data from the Nesto Store It included Total
Footfall, Total Customers, Total Sales, Average Sales per Customers, No. of
items sold and Conversion Ratio. For the questionnaire filling I took a sample
of 30 people from the nearby locations (Muscat region). I also interviewed those
14
who visited the store regarding the Store Ambiance, Assortments of products
and the Services provided.
Age Group
15
18 – 25 years 4
25-35 years 6
35-60 years 18
60 and above 2
60 and above
7%
18-25
years
13%
25-35 years
20%
35-60 years
60%
Interpretation:
From the above chart it can be interpreted that majority of the respondent (60%) are in
the group of 35-60 years, followed by 25- 35 years (20%) ,18 – 25 years (13%) and
60 and above with (7%).
16
Gender:
Male 14
Female 16
male
34%
female
66%
Interpretation:
From the above chart it can be interpreted that majority of the customers are females
(66%) and the rest are male (34%).
Occupation
17
Employee 14
Business person 5
others 11
Others
37%
Employee
46%
Business Person
17%
Interpretation:
It was found that (46%) of the respondents are Employees, (17%) are business person
and the others constitutes (37%) as customers.
18
1. How often you purchase from Nesto Hypermarket?
Weekly 15
Monthly Twice. 7
Monthly once 8
Daily 0
Daily
0%
Monthly once
32%
Weekly
40%
Monthly twice
28%
Interpretation:
The chart depicts that (40%) of the respondents purchase weekly, (32%) of the
respondents visit Monthly once and monthly twice constitutes to (28 %.)
19
2. What segment of product do you buy/prefer buying from Nesto Hypermarket?
Consumer
Electronics
13%
Fashion Accessories
7%
Groceries and Fresh
Food
Healthcare 45%
16%
Homeware
19%
Interpretation:
The chart depicts that (45%) of the respondents purchase Groceries and Fresh Food,
(19%) of the respondents purchase Homeware , (16%) purchase Healthcare ,(13%)
purchase consumer electronics and Fashion Accessories constitutes to (7 %.)
20
2. While Shopping at Nesto hypermarket how frequently do the customer service
associates interact with you?
Frequently 3
Rarely 16
Never 4
On requirement 7
Frequently
7%
On requirement
44%
rarely
39%
Never
10%
Interpretation:
The chart depicts that (39%) of the respondent says Customer service interacts rarely,
(44%) of the respondents says customer services interacts on requirement, (10%) says
Customer service never interacts and (7%) says Customer service frequently.
21
4. As compared to other stores, what do you think of the pricing of the products of
Nesto Hypermarket?
Very low 0
Low 12
Almost Same 13
High 5
Very high 0
very high
0% Very low
0%
High
12%
Low
29%
Almost same
59%
Interpretation:
The chart depicts that (59%) of the respondent says price of the products are Almost
same, (29%) of the respondents says price of the products are Low, (12%) says price
of the products are High and no one says the price is very high and very low.
22
5. How long is the time taken for the billing?
2-5 mins
11%
6-10 mins
22%
Interpretation:
The chart depicts that (67%) of the respondent says billing time takes more than 10
mins, (22%) of the respondents says billing time takes 6-10 mins, (11%) says billing
time takes 2-5 mins and no one says less than 2 mins.
23
6. Which is the best part of the Nesto Hypermarket?
packaging of
products and
Availability of services
products and 0%
service
Environment of the
9%
store
5%
Quality of the
products
Discount and 19%
incentives
67%
Interpretation:
The chart depicts that (67%) of the respondent says Discounts are the best in Nesto,
(19%) of the respondents say about Quality of the products is best ,(9%) says
availability of products and (5%) says the environment of the store.
24
7. Which in your opinion needs improvement in NestoHypermarket?
Quality of
the
product
17%
Interpretation:
The chart depicts that (49%) of the respondent saysEnvironment of the store to be
improved in Nesto, (17%) of the respondents saysQuality of the products to be
improved, (10%) says packaging of products to be improved, (7%) says the discount
and (13%) says the availability of the products.
25
8. Which offer do you like the most?
others
13%
Reward
Points
10%
Interpretation:
The chart depicts that (50%) of the respondent says buy 1 get 1 free, (18%) of the
respondents saysgift voucher is best,(23%) says others and (9%) says the Reward Points
is the most.
26
9. How much distance do you have the store?
0-5 Km 15
5-10 km 7
10- 15 Km 5
More than 15 Km. 3
0-5 Km
43%
10-15 Km
29%
5-10 km
20%
Interpretation:
The chart depicts that (43%) of the respondent comes from 0-5 Km, (29%) of the
respondents comes from 5-10 km , (18%) comes from10- 15kmand (8%) come from
more than 15 km.
27
11. Would you recommend Nesto hypermarket Store to your neighbors?
Yes 17
No 4
Not sure. 9
no
11%
Interpretation:
The chart depicts that (46%) of the respondent says they will recommend Nesto to their
neighbours, (43%) of the respondents says that not sure and (11%) of the respondents
says they will not recommend Nesto to their neighbours.
28
FINDINGS
29
CONCLUSION
Finally analyzing all the factors responsible for increasing sales and the number of
customers in NESTO hypermarket, through various data analysis like correlation and
regression analysis, I came to a conclusion that Nesto should give emphasis on the
measures taken to increase the Footfall , Ticket Size and Catchment area. Nesto does
not provide any Advertisement about its products and Services whereas its main
competitor LULU does. So, the company should focus on the tools present to analysis
its customer and various other factors.
Also the group has a major focus on achieving customer needs and their satisfaction
level and not to those who made it possible. There are multitudinous programs and
events taking place to attract a large amount of crowd from the respective locations.
But the industry should also keep in mind the integrated efforts made by the team i.e.
the CSA’s, Store Supervisors, Store Manager and the people involved in store activities
for the enhancement customers attraction by the store and finally maximization of
revenue. Because, ultimately it is the sales personnel of any background upon whom
the future of the organization depends
30
Suggestions
The following are the suggestions offered to increase the promotion of the product
Nesto hypermarket in better way.
● As per the customers’ feedback, many of the people were not satisfied with the
environment of the store of NESTO hypermarket. This was one of the few
reasons, why people were reluctant to buy NESTO product.
● A few respondents are dissatisfied about the Customer service interacts rarely in
NESTO hypermarket.
● Most of the respondents purchase Groceries and Fresh Food and it would be
better to improve the other segments like consumer Electronics and Fashion
accessories.
31
Vocational Training center SEEB
QUESTIONAIRE
A study on Retail store operations on Nesto
Hypermarket.
Please answer the questions below:
Name :
Gender : MaleFemale
Please read the following statement by making tick mark () in the
appropriate box that represents your point of view:
Q1.How often you purchase from Nesto Hypermarket?
a) Weekly
b) Monthly Twice
c) Monthly once.
d) Daily
32
Q2. What segment of product do you buy/prefer buying from Nesto Hypermarket?
Q3. While Shopping at Nesto hypermarket how frequently do the customer service
associates interact with you?
a) Frequently.
b) Rarely.
c) Never.
d) On requirement.
Q4.As compared to other stores, what do you think of the pricingof the products of
Nesto hypermarket?
a) Very low.
b) Low
c) Almost Same.
d) High.
e) Very high.
Q5. In your experience, how long is the time taken for the billing?
33
Q7. And which in your opinion needs improvement?
a) 0-5 Km
b) 5-10 km
c) 10- 15 Km
d) More than 15 Km.
a) Yes
b) No
c) Not sure.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
___________________________
34
REFERENCES
1. Gupta, S.P & Gupta, M.P, Measures of Central Tendency, Business Statistics,
14th edition.
2. Sharma, J.K Analysis of Variance, Business Statistics, 2nd edition.
3. Sharma, J..K, (2208), Correlation analysis, Business Statistics, 2nd edition.
4. Sharma, J.K, (2008), Regression analysis, Business Statistics, 2nd edition,
5. Sharma, J.K, Hypothesis testing, Business Statistics, 2nd edition,
6. Hawkins, Del I. &Tull, .Donald S, Marketing Research in Practice,
Marketing Research-
35