Retail Industry

INDIAN RETAIL INDUSTRY INTRODUCTION: TAKING a leaf out of Adam Smith’s Wealth of Nations, India may very aptly be described as a ‘nation of shopkeepers’. With over 10 million retail outlets of varying sizes and sophistication, from the neighbourhood panwalla (who often stocks some daily necessities) to the city-centre supermarket, India might easily replace the Britain in Adam Smith’s definition. With the retail trade accounting for over 10 per cent of GDP and employing approximately 8 per cent of the workforce, that is about 25 million people, this sector cannot be short-changed. And though organized retail accounts for a miniscule 2 per cent of the total retail market in the country, projections hold wholesale promise. For instance, the organised retail players now account for around Rs 5,500 crore of the total retail market, but consultancy KSA Technopak in its Retail Vision 2005 forecasts that this segment alone will, by 2005, account for Rs 29,842 crore. Analysts also expect the organised players to generate a couple of million jobs every year. And for a country such as India, with large-scale unemployment, these are surely heartening projections. RETAIL in India is undoubtedly a growth story. In various global rankings, India has emerged as one of the most favored retail destinations. The considerable investments made by large-scale domestic and international players have accelerated the development of large, modern store chains gradually superseding the 12 million or so traditional family-run retail outlets. Today, organized retail is estimated to represent only about 5-7% of Indian retail and yet is estimated to grow to about a quarter of sales in two to three years. Organized, western-style retailing has brought with it efforts to effectively address the market and retailers have been trying out a variety of product mixes and store formats—super markets, hyper markets, malls etc. The early entrants have tried, occasionally erred and then tweaked their systems to improve their business models. The time is right for Indian players to take advantage of this high growth phase by leapfrogging the more gradual evolution of retail optimization seen overseas. By learning from the most successful retailers in advanced economies, Indian retailers can benefit from the latest scientific study of consumer behavior.

CURRENT SCENARIO: Organized Retail

The Indian consumer is changing rapidly. The average consumer today is richer, younger and more aspirational in his/her needs than ever before. Consumers now value convenience and choice at par with getting value for their hard-earned money. A range of modern retailers are attempting to serve the needs of the ‘new’ Indian consumer. The last few years have witnessed an explosion of organized retail formats like supermarkets and hypermarkets in an otherwise fragmented Indian retail market. In fact, even the Government seems to be waking up to the potential of the retail sector. Therefore, its intention to open the retail sector to foreign direct investment (FDI). With the Group of Ministers reassessing the policy, closed doors may open for foreign investment in retail, eventually. This, say the proponents of organized retail, will give Indian retailing the much-needed funds to offer even better and cheaper products and services. Not to forget the hundreds of jobs. But will all this happen? Or is it a case of putting the cart before the horse? Skeptics point to the lackluster performance of several of the country’s leading organized, modern-format retailers, including pioneers such as Shoppers’ Stop, and the collapse of another of the pioneers – the Delhi-based Nanz chain of department stores. Organized retail, they argue, is just another bubble. While the jury is still out on this issue, undeniably modern retailing techniques have done this sector in India a world of good in the last 10- odd years. Consider the street-corner store, often

called the kirana. With the entry players such as FoodWorld, the demise of the kirana was foretold! But this has not happened. The kirana stores struck back, offering personalized service, credit facility and even stocking up on products they wouldn’t have earlier. And all this at the customer’s doorstep. Indeed, competition is a wonderful thing! Many neighborhood stores have reinvented themselves. In New Delhi, for instance, several small retailers have set up common sourcing systems to get the advantages of scale; others are working at leveraging their long-standing relationships with customers and still others, at offering all that modern retailers offer. The beneficiary of all this is, of course, the consumer. Perhaps the most compelling argument for the organized retail sector is the role it has played, and can play, in employment generation. Consider the example of the RPG group company, FoodWorld, which employs a few hundred young men and women, many of whom have never been to college and never had a hope of finding a job. Or consider Shoppers’ Stop which employs those with a college degree. Not surprisingly, FoodWorld and Shoppers’ Stop have become the poaching ground for new retail chains. And with almost all the modern organized retailers talking of expansion, the number of jobs in this sector should only increase. Comments an analyst who’s been tracking the sector for a while: “Yes, there has been some hype and those who are in retail for making a quick buck will probably go under. But for those in for the long haul, things are not so bad. After all, modern large-format retail is only about a decade old in India.” Surely there will be a shakeout, with the not-so-serious players falling by the wayside. Food and grocery retailing, for instance, has huge potential given that over 40 per cent of the spending by the Indian consumer is on this. So those who offer value in this segment are likely to have greater success. The other stamp of a successful organized retailer is scalability. Pundits are almost unanimous that retailers who hit upon the right format and who can customize its size to suit the requirements of different geographic locations, will be around. Above all, successful retailing is about getting right the nitty-gritty of retailing – merchandising, forecasting, the supply chain, training and recruitment, branding, category management and so on. Or simply about getting the detail right.

Role of ServiceScape in Marketing of Services

The concept of a servicescape was developed by Booms and Bitner to emphasize the impact of the physical environment in which a service process takes place. Booms and Bitner defined a servicescape as "the environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service" For e.g. Mango Masala, the hangout restaurant in the city centre Ajmer uses fluorescent colors, wrought iron furniture , collages on the walls and a mock aero plane suspended from the ceiling to excite its guests and suggests that it is the ‘happening place’ of the city. Depending on the nature of desired and designed encounter a servicescape can be of the three possible types.

A SELF SERVICE SERVICESCAPE The service is designed around a customer helping self with the service .The role of service employees is limited. Customer performs most of the activities, either on their own or with a little help from the provider. Examples are ATMs, cinema halls, gymnasium and self service restaurants etc.The service provider must plan the facility exclusively with the customer in mind. The facility design can attempt to position it for the desired market segment, by making the facility pleasing and appropriate to use for them. A gym layout and design and design (choice of equipment) conveys the segment of population that is targeted – slimming enthusiasts, body shapers, sportspersons, business executives and housewives or the youth.

AN INTERPERSONAL SERVICESCAPE When a service encounter requires a close interaction between the customer and provider the servicescape must be facilitate this interaction. An interpersonal servicescape is appropriate. Hotels, hospitals, schools and banks are examples of this type of servicescapes, they must be designed to attract, satisfy and facilitate the activities of both conducive to the interaction between the two.

A REMOTE SERVICESCAPE

There are service settings where there is little or no customer involvement in the servicescape. Telecommunications, insurance and call centres etc., are examples of remote encounters. These use remote servicescapes. They are back office .The place has to be designed to keep employees’ motivation and morale high. The servicescape should premeditate ergonomically to facilitate teamwork, supervision and operational efficiency. Further each type of servicescape can be elaborate and lean. Lean servicescape will have simple processes, simple layout little equipment, little geographic (physical) spread and few simple interactions. STD-PCO an ATM a dry cleaner and filling station are examples of lean servicescapes. For these, the designing is simple and uncomplicated, and more so if they are self service or remote servicescape with either customers or providers on the scene a five star resort or theme park or an airport etc., are examples of elaborate servicescapes with complex and dynamic interactions between customer-employees,customers-customers,customersequipments,equipments-employees,and employees-employees. While customer presence requires elements of comfort and convenience to be built in, the providers seek productivity, operational conveniences and amenities.

Roles of Servicescape A servicescape is not a passive setting it plays an important role in service transactions. An evaluation of the roles they have in service encounters will reveal how important it is to design an appropriate servicescape .A servicescape plays four important roles.

Package Servicescapes ‘package’ the service offer and communicate an image to the customers of what they are going to get. It is the corporeal manifestation of the service idea for interest groups to form a shared appreciation-ma perceptible metaphor for an intangible service. They are predetermined to render an intended image to the service concept and evoke a particular sensory and emotional reaction that sets the stage for a germane experience that augments the efficacy of the offer. Appropriate servicescaping is a sure shot way to create an image that the service

provider is seeking to put up. It also helps moderate customer expectation and reinforces his experience and reminiscences. Servicescape is an outward appearance of organization and thus can be critical in forming initial impressions or setting up customer expectation.

Facilitator Another important job of servicescape is to act as an a facilitator in assisting both the customers and service employees to make most of the opportunity it should make the service consumption comfortable convenient for the customer. For employees it should be pleasant to conduct activities. This setting is designed can enhanced or inhibits the efficient flow of activities in the service setting making it easier or harder for customer and employee to accomplish their goals.

Socializer Design of servicescapes aids in socialization of both the customers and employees, conveying expected roles, behavior and relationship. Compare the servicescape of a public bank with that of a private bank. In a public bank a large part of the floor is marked as restricted, leaving little space in the form of an arrow aisle along the outer walls of the hall for customers. The message is clear –customer must not enter the restricted area, that is where the most important job of the bank, internal operations, is conducted and by entering t0hat area , customers will be interfering with that task. Whereas private banks approach customers with conviviability. The air conditioned lounge with comfortable seats and a cold water dispenser as you pass through a spotlessly clean glass door, makes customers feel welcome . They are allowed more space to move and occupying a seat across from executives desks suggest that customer are indeed central to all activity. The service with public bank also suggests that customers have a formal –official relationship with public bankers, whereas servicescapes in private banks encourage casual – affable interactions.

Differentiator With the layouts a customer can make out what kind of bank it is. A dominance of green at IDBI bank differentiates it with red of HDBC bank. Candle lit tables with smooth classical music and tables with clothes and pre-laid cutlery differentiates a restaurant from other with flour cent colors and pattern on the walls, blasting music, crowded with young boys and girls and

motorcycles at the makeshift parking in front. Clearly the design of the servicescape differentiates one provider from its competitors, and hints at eth segment the services are targeted at. Companies adapt servicescape to reposition the services or identify new customer segments.

With an unparalleled assortment of the leading international and national brands in clothing for men, women, and kids; accessories, fragrances, cosmetics, footwear; home furnishing and décor products, our stores aim to provide shoppers a truly international shopping destination. Experienced, professional management; supported by world-class systems and practices; and a talented pool of associates with a shared passion for making every shopper visit a memorable one, has helped Shoppers Stop to grow from a single store in 1991 to the largest chain of Department Stores in India today. Our unending pursuit to benchmark ourselves with the best in the world is testified by the fact that Shoppers Stop is the only Indian member of the “Intercontinental Group of Departmental Stores”, which has the likes of Selfridges (United Kingdom), Karstadt (Germany), Marks & Spencer (UK), Matahari (Indonesia), Myers Grace Bros. (Australia) and Rustan’s (Philippines) among its members.

Vision " To be a global retailer in India and maintain its No. 1 position in the Indian market in the Department Store category." The following are the values that help us in achieving our mission and vision :  We shall not take what is not ours.  The Obligation to dissent (against a viewpoint that is not acceptable).

 We shall have an environment conducive to openness.  We shall believe in innovation.  We shall have an environment conducive to development.  We shall have the willingness to apologise and/or forgive.  We shall respect our customers' rights.  The value of trust.  We shall be fair.

The foundation of Shopper's Stop was laid on October 27, 1991 by the K. Raheja Corp. group of companies. Being amongst India's biggest hospitality and real estate players, the Group crossed yet another milestone with its lifestyle venture - Shopper's Stop.

From its inception, Shopper's Stop has progressed from being a single brand shop to becoming a Fashion & Lifestyle store for the family. Today, Shopper's Stop is a household name, known for its superior quality products, services and above all, for providing a complete shopping experience. With an immense amount of expertise and credibility, Shoppers’ Stop has become the highest benchmark for the Indian retail industry. In fact, the company’s continuing expansion plans aim to help Shoppers’ Stop meet the challenges of the retail industry in an even better manner than it does today.

YEAR

EVENTS

1991

We opened our first store at Andheri,a suburb in Mumbai selling only Menswear

1992

Ladieswear was introduced

1993

Added Children & non apparels

1994

Loyalty Program titled First Citizen was launched.

1995 1997 1998 1999

2000

Opened our second store in Bangalore Launched our co-branded credit card for our loyalty members in association with HSBC. Opened our third store in Hyderabad Implemented JDA Retail ERP (a global leader in retail ERP packages). Opened our fourth & fifth store in Jaipur & Delhi Opened our sixth & seventh store at Chennai & Chembur – Mumbai. Acquired Crossword – India 's leading retail book chain

2001

Opened our eight & ninth store in Pune & Bandra

2002

Opened the tenth store in Kandivli – Mumbai

2003

2004

Opened the eleventh, twelfth & thirteenth store in Mulund – Mumbai, Gurgaon & Kolkata Opened our fourteen, fifteen & sixteenth store in Malad – Mumbai, Kolkata & Bangalore Opened our seventeen, eighteen, nineteen & twentieth store in Pune, Juhu –

2005

Mumbai, Bangalore & Ghaziabad . Launched M.A.C & Homestop – our home store. Opened out twenty first (Mumbai) and twenty second store in Lucknow .

2006

Launched Mothercare in India and our F & B outlets Brio & Desi Café. Bought 45% of Timezone India . Signed a 50:50 Joint Venture with the Nuance Group for Airport Retailing

2007

Signed an MOU with the Home Retail Group of UK to enter into a franchise arrangement for the Argos formats of catalogue & internet retailing.

One may browse Shoppers’ Stop for:

 Men •

Men’s Apparel

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Men’s Accessories

 Women •

Women Apparel

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Women Accessories

 Kids •

Toys

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Mothercare

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Girls

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Boys

 Home and Travel •

Home

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Travel

 Fragrances and Beauty •

Frangrances

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Skincare

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Makeup

 Gift Ideas •

For Him

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For Her

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For Home

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Gift Vouchers

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Crossword

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Discounts and Bargains

Responses  Shopper's Stop has become the highest benchmark for the Indian retail industry as

Shopper's Stop is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS).

 Shopper's Stop is a household name, known for its superior quality products and services. Shoppers’ Stop is known for providing a complete shopping experience for whole family.

 Shopper's Stop positions itself as Fashion & Lifestyle store for the family. It provide shoppers a truly international shopping destination.

 “First Citizen” Loyalty program. Following benefits are enjoyed by the loyalty card holders: •

Exclusive Cash Counters (They need for wait in que for payments)

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Out-store Offers (Delicery of purchased items in the car)

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Reserved Parking

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Associate Card

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Program Partners Reward Points (More the points more the benefits of discounts and free gifts)

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Shoppers Stop Gift Vouchers Shoppers Stop is not about shopping, it's an experience you

feel. Likewise, Shoppers Stop Gift Vouchers are not about gifting, they symbolise the joy of living. •

Personal Gifting (Wish your loved ones on their special days with our Gift Vouchers.)  Anniversary  Birthday

 Diwali  Congratulate on success  Best wishes and so on.

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Corporate Gifting (As a Corporate house you could use our Gift Vouchers) 

Rewarding and gifting Employees, Distributors / Dealers

 Gifting Clients  Redemption from Loyalty Programs  Sales / Marketing Promotions  Festival Offers  Uniform Allowances

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Shop with confidence •

Secure Shopping

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Customer Care

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Shipping Policy

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Privacy Policy

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Return Policy

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Size Charts

Blufi @ Shoppers’ Stop This is something unique where the shoppers can switch on their Bluetooth as soon as they enter the store and the management informs them about the various offers through messages via Bluetooth. Some randomly chosen shoppers are entertained by special gifts and discounts.

 Impact of Servicescape on customers’ perception  As an effect creating medium  As an message creating medium  As an attention creating medium

 3 main characteristics in servicescape, influencing customers’ experiences are:  Pleasatness (Color, Lighting, sound, ambience)  Convenience  Safety

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Servicescape is beneficial in Creating Corporate identity and positioning:  Similar Ambience  Huge Parking Area  Pleasant interiors  Air conditioned  Departments and sub-departments  skilled and knowledgeable staff