Retail Business

RETALING Presented by:SHIVANI ATARA

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INTRODUCTION WORLD OF RETAILING INDIAN RETAIL SECTOR MAJOR FORMATS OF ORGANIZED RETAILING APPAREL RETAIL IN INDIA PORTER’S FIVE FORCE MODEL CHALLENGES OPPORTUNITIES 10/02/09

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INTRODUCTION RETAIL MEANING :-

• Retail comes from the French word retailer which refers to "cutting off, clip and divide" in terms of tailoring (1365). • It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). • It's literal meaning for retail was to"cut off, shred, paring“.Business of selling products and services to the public as the ultimate consumer.

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Basic concept of retailing • Retailing is the set of business activity that adds value to the product and services sold to consumers for their personal or family use • Retailing - the last link in the Supply Chain • Desired Product - Desired Sizes - Desired Times. • Retailing covers diverse products such as foot apparels, consumer goods, financial services,Jewellery, etc. . 10/02/09

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• Retailing involves selling many different products and services, either from a store location or in direct selling through vending machines and in-home presentations, mail order, and so on. • First retailers in India include BATA, Pantaloon, Bombay Dyeing. The current Retail scenario is controlled by the likes of shoppers stop, Big Bazaars. 10/02/09

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• THE REMARKBLE WORLD OF RETAIL • Retail is currently the biggest industry in the world with sales of $7.2 trillion • Every 10th billionaire in the world is a retailer.

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World Retail Scene  global retail sales to cross US$13 trillion!

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Share of organized retail in selected countries

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Indian retail sector • The Indian retail market is a Rs. 9,00,000 crore industry and is growing at a rate of 8.5% pa. • The Indian Retail sector is very unorganized, fragmented and with a rural bias.

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THERE ARE NEARLY TWELVE MILLION RETAIL OUTLETS IN INDIA

UNORGANISED 94% 10/02/09

ORGANISED 6%

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Indian Retail  The growth of Indian retail is associated with the growth in the Indian economy

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Growth in Indian Retail (Total)

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Retailing formats in India India’s number of Domestic grocery chains and Early Foreign Entrants

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Major formats of Organized Retailing Format

Description

The Value Proposition

Branded Stores

Exclusive showrooms either owned or franchised out by a manufacturer.

Complete range available for a given brand, Certified product quality.

Specialty Stores

Focus on a specific consumer need, carry most of the brands available.

Greater choice to the consumer, comparison between brands possible

Department Stores

Large stores having a wide variety ofOne stop shop catering to varied products, organized into differentconsumer needs. departments, such as clothing, house wares, furniture, appliances, toys, etc.

Supermarkets

Extremely large self-services retail outlets.

Hyper-mart

Larger than a Supermarket, sometimes Low prices, vast choice available with a warehouse appearance, generally including services as cafeterias. located in quieter parts of the city

Shopping Malls

An enclosure having different formats of Variety of shops available close to each in-store retailers, all under one roof. other.

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One stop shop catering to varied consumer needs.

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Organized retail expansion by format

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Major Organized Players and their Formats

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Retailer

Current Format

Shoppers' Stop

Department Store

Piramyd

Department Store

Pantaloon

Own brand store

Subhiksha

Supermarket

Foodworld

Food supermarket

Globus

Department Store

Big Bazaar

Hyper Market

Cross roads

Shopping Malls

Fun Republic

Shopping Malls SLPT Management College

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Retail in India Life Style and Apparel Retail

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• Consumer today can purchase the cloths from verity of retile organization. There are store retailers, non store retailers, and retail organization. • Although many retail stores are independently owned, an increasing numbers are part of some form of corporate retailing. Corporate retail organization achieves economies of scale, greater purchasing power, wider brands, more credit and better trained employees.

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Major Manufacturers and their Market Share

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Apparel Retail in India

Menswear Womenswear Infants wear 10/02/09

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Market Segmentation

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Apparel retail format

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SHOPPER’S STOP

PANTLOONS WILLS LIFESTYLE ADIDAS

Adidas • Came to India in 1996, Established by Adi Dassler • Adidas today has a total of 96 exclusive stores across the country. • The price range starts from Rs. 120 for a pair of socks to Rs. 12,500 for our iconic product the adidas • Our core audience comprises of young Indians aged 14 to 24 years with 17 year olds at the epic centre. • Positioned as a sports performance brand. We have fashionable products. • 10/02/09

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Adidas • Adidas branding of 3 Stripes in various colors such as Black, Light Scarlet and white. • Feel range uses muted-bright seasonal color trends such as Blaze red, Mélange, Black and Chrome and focuses on sensory appeal in fabrics and washing. • Brand ambassadors like Sachin Tendulkar, Sania Mirza, Zaheer Khan and many others,

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Adidas

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Adidas • Clarity of thought : The window display focuses on the women wear and accessories specially for the sports. • Creativity : The tagline being used is quite motivating for the women of this era and would assure her that anything is possible for. Also, the color used in the background is blue signifying the cool and sporty look.

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Adidas • Effectiveness : The display of upside down women signifies the freedom and independency of women and thus is very much effective which motivates them to walk in the store. • Why did it work : It forces female customers to ponder what all does the store holds for them. 10/02/09

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Pantaloon Retail (India) Limited –The Future Group

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PANTALOONS India’s leading retailer operating in value and Lifestyle segment of the Indian consumer Market  Headquartered at Mumbai  Company operates over 7 million square feet Of retail space,1000 stores across 51 cities in India and employees over 25000 people  A flag ship company of future group 10/02/09

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ACHIEVEMENTS  “INTERNATIONAL RETAILER OF THE YEAR 2007” By U.S based National Retail Federation  “EMERGING MARKET RETAILER” of the year 2007 at world retail congress held at Barcelona.  The Reid & Taylor Awards For Retail Excellence 2008  Coca-Cola Golden Spoon Awards 2008  Most admired Retail Company of the year: Pantaloon Retail (India) Ltd 10/02/09

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FUTURE GROUP  VISION: “To deliver everything, everywhere, every time to every Indian consumer in the most profitable manner”

 MISSION: “Indianess as a core value”  CORPORATE CREDO: “Rewrite rules, retain value” 10/02/09

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COMPETITORS FOR PANTALOONS • As retail is a growing sector there are many market players in the field. To name a few: Shopper stop, Vishal Mega mart, Westside, Wills Lifestyle an ITC brand, etc.

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Pantaloons

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Pantaloons • Clarity of thought : The window display clearly shows that the sale season is going on for the apparels and accessories offered by the store. • Creativity : The red color is used to indicate sale period which can be discovered from a far distance. Red color is physically and psychologically attached to the customers and portray excitement. 10/02/09

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Pantaloons • Effectiveness : A customer interested would surely walk-in to avail the discounts as the display is shouting out for the sale season. • Why did it work : The entire display used the red color tints and shades indicating sales period & also providing an opportunity to avail extra reduction.

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Pantaloons • Effectiveness : A customer interested would surely walk-in to avail the discounts as the display is shouting out for the sale season. • Why did it work : The entire display used the red color tints and shades indicating sales period & also providing an opportunity to avail extra reduction.

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Pantaloon Retail (India) Limited The Future Group • Currently adopted retail format by the group: –Lifestyle Segment• »Pantaloon • »Central –Value Segment • »Big Bazaar • »Food Bazaar

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Pantaloon Retail (India) Limited The Future Group • –Private Labels •Pantaloon’s apparel retail business derives its 75 per cent of sales from its private label such as: • John Miller shirts JM Sports • Lombard Pantaloon • Bare Leisure Bare Denim • Annabelle Mix Match • Akkriti

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Pantaloon Retail (India) Limited The Future Group –Major Strategic Alliances • PRIL has entered into 50:50 JV with Ginni & Jonny–known brand for kids • Sole Franchisee of Mark& Spencer, Guess and Women’s Secret in India • PRIL holds a 51 per cent stake in JV with Liberty Shoes called ‘Foot Mart’ • runs stores under the name of ‘Shoe Factory’ • located in shopping malls and also opened as independent stores • Pantaloon Retail

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Pantaloon Retail (India) Limited The Future Group –Business Strategy • Targeting greater market share by entering into formats such as departmental stores, supermarket, hypermarkets, malls etc. • Developed a Dual Strategy • –Of opening smaller versions in its flagship stores like ‘BIG BAZAAR’ • –Opening larger Independent Stores. • Think Globally Act Locally

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SHOPPER’S STOP LIMITED VISION “To be a global retailer in India and maintain its no. 1 position in the Indian market in the department store category.”

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SHOPPER’S STOP- PRODUCT LINE • Shopper's Stop Ltd. with its ear-to-theground approach first defines consumer expectations and then meets them. Home stop is a step in this direction. • Shopper's Stop Ltd. operates Mother care stores in India under franchise from Mother care PLC, UK.

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Brands

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SHOPPER’S STOP • The stores offer a complete range of apparel and lifestyle accessories for the entire family. From apparel brands like Provogue, Color Plus, Arrow, Levi’s, Scullers, Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci etc., to accessories like Cross, Ray-Ban, ferrari,police watches…etc 10/02/09

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SHOPPER’S STOP LIMITED Shopper's Stop First Citizen Reward Points for every time you shop at Shopper's Stop. Exclusive benefits & privileges. Exclusive cash counters at Shopper's Stop so you can spend more time shopping than waiting in a line.  Also the Rs 303 crore-turnover retail group, Shoppers' Stop's experimentation with a festival during its off-season period has paid it dividends.  Extension of operations online and to other cities.    

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Shopper’s Stop

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Shoppers Stop • Clarity of thought : It is very much clear from the display that the store is selling casual party wear apparels for youth. • Creativity : The display gives the party like feel with the use of dark colors and props like party hanging balls. The window glass has a sticker signifying music which tells about enjoyment and excitement. 10/02/09

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Shoppers Stop

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Shoppers Stop –Business strategy • –Primarily catering to the Lifestyle Retailing segment through Departmental Stores -Offers a gamut of products –apparels, accessories, footwear, cosmetics, music, books, leather products, furnishing etc. • Ventured to the Value Retailing segment with inception of ‘HYPERCITY’ • Apart from these stores, the company also has presence in Niche Retailing format.

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Shoppers Stop -With the brands such as: • Crossword–a lifestyle bookstore; these are run in 3 formats –‘Corner Store’, ‘Brand Stores’ and ‘Flagship Stores’. • MAC –it’s a tie-up with a cosmetic major, Estee Lauder. • Home Stop –it’s a specialty store, caters exclusively to home furnishings and furniture. • Mother Care -it’s a franchise agreement with a UK-based Mother care marketing baby clothes, toys, baby care products and maternity clothes. 10/02/09

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Shoppers Stop Future Expansion Plans • The company plans to form a JV with AGROS of UK to start Catalogue Retailing Business in India • Plans to diversify into airport retailing, for which also signed an MOU with the Nuance Group of Switzerland

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• Wills Sport relaxed wear for men and women. • Launched Wills Classic formal wear (2002) and Wills Club life evening wear (2003). • Introduced John Players, in 2002. • In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week

• Will open 50 more exclusive outlets, thus establishing its presence in 40 Indian cities 10/02/09

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Achievements & Awards Retailer of the Year Award at Asia Retail Congress 2008. Top 5 Luxury brands in the country in a Global Luxury Survey conducted by TIME Magazine 2004: Rising Star Brand of the Year - John Players 2003: Most Admired Exclusive Brand Retail Chain of the Year - Wills Lifestyle 2002 : Most Admired Women's Wear Brand of the Year Wills Sport 2001 :The Most Admired Exclusive Brand Retail Chain of the Year - Wills Lifestyle. 10/02/09

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Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Clublife evening wear. fashion accessories and Essenza Di Wills – an exclusive range of fine fragrances and bath & body care products for men and women. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country. Wills Lifestyle has been established as a chain of exclusive specialty stores providing the Indian consumer a truly 'International Shopping Experience' 10/02/09

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• Clarity of thought : The display is very clear & tells that the main merchandise on display are apparels and accessories for teenagers & women. • Creativity : The entire display gives a very homely touch & is very attractive being for the season.

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• Effectiveness : The colors being used are bright colors like blue and red signifying cool, excited, stimulated and powerful environment. • Why did it work : The display gives an aesthetic touch and a homely environment. The display gives a feeling to the customer that they can also avail the same comfort and calmness by acquiring these merchandises. 10/02/09

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Strategy: • With its brands, ITC aspires to build a dominant presence in the apparel market through a robust portfolio of offerings. • Wills Lifestyle has been established as a chain of exclusive specialty stores providing the consumer a truly 'International Shopping Experience' through world-class ambience, customer facilitation and clearly differentiated product presentation.

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• To enhance product availability through expansion of “Wills Lifestyle” chain of exclusive stores in high potential catchment malls. The brand is now available in over 150 locations through ‘exclusive brand outlets’ (EBOs) and ‘shop-in-shops’.

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Porter’s Five Force Model Threat of Entry

Supplier Power

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Rivalry

Threat of Substitutes SLPT Management College

Buyer Power

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Threat for New Entrants Factors Organized Un-organized Economies of Scale High Low Capital Requirement High Low Cost Advantage High Low Differentiation Low Low Expected Retaliation Low High from existing firms Industry status High Tax and Licensing High 10/02/09 College Cost of Real EstateSLPT Management High

Low Low Low

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Bargaining Power of Suppliers Factors

Organized

Un-organized

Low Supplier Concentration

Low

Low

Differentiation Switching costs Forward Integration Retail Industry an Important Buyer

Low High High Low

Low Low Low High

Suppliers’ product not an important input for the buyer’s business

Low

Low

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Space Availability

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Low

Low

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Bargaining power of buyers

Factors Quality Conscious Price Sensitivity

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Organized low High

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Un-organized High Low

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Threat of Substitutes Factors

Organized Un-organized

Product-for-product Substitution

Low

Low

Substitution of Need

High

Low

Generic Substitution

Low

Low

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Rivalry among existing competitors • Brand loyalty rather than store loyalty • Organized retail v/s Organized retail e.g. Big Bazaar "Is se Sasta aur accha kahin nahin"

• Unorganized retail v/s Unorganized retail • Organized v/s Unorganized retail Supermarket retail chains sell quality products offered at substantial low price as compared to the mom and popshops. 10/02/09

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Organized : Retail Sector High

New Entrants Low

Low

Suppliers Power

Low

Rivalry

Buyers Power

Low

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Unorganized : Retail Sector Low

New Entrants High

Low

Suppliers Power

High

Rivalry

Buyers Power

Low

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Challenges  The Apparel retail Industry is growing at a very high rate but still there are some barriers, which are hindering the growth of this industry. Some of them are:  The production rate is still not able to match with ever rising demand.  Do not have enough resources and manpower to explore them.  Competition has increased.  As apparel industry is fashion driven, and fashion keeps changing. Thus they usually have to work under pressure.  Availability of products within the time. i.e SCM in apparel sector

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Internal

External

• Retaining qualified manpower

• High real estate cost

• Implementing SOP’s & best practices • Focus on improving operational efficiency • Cost control

• Anarchic laws • Shortage of qualified manpower • Unorganized & poor supply chain

• CRM & Service levels

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Opportunities • Before liberalization –Many brands were not available –Government disallowed imports of most products –Luxury items banned/had high import tariffs • Post liberalization –Enhanced availability of branded and superior products at affordable prices • Two incidental factors –Spread of cable and satellite television influencing consumer behavior

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• —Emergence of brand-first foreign product available at affordable price • 4th largest economy in the world, in terms of Purchasing Power Parity • Growth primarily from Services Sector, currently accounting for 59% of the Economy • India is a part of the “golden triangle” countries (others being China & Russia) that are high on target list of premium & luxury brands • A Growing Economy 2nd fastest growing economy in the world Rated among the most favourite investment destinations 10/02/09

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• One-stop shopping, speed and efficiency of purchases • Consumerist attitude –Guilt-free spending –Savings not very high priority –Spending money for look-good -Shift of expense basket from basics to lifestyle products -Increased spend on Apparel, personal care • Consumer - High disposable income -Changing consumer preferences -28 states, 100+ religion, 250+ festivals

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Thank You! Any DOUBTS!!

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Thank U

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