8 Ways to Win in Retailing

K. Dasaratharaman

8 Ways to Win in Retail:

The Pentagon & Triangle Model
Place (Size, Location , Layout & Design)

Systems
Communication
- Positional
- Promotional

Product
- Style & Fashion
- Intensity
- Assortment

Logistics

Value (Price, Quality)

Suppliers

People ( Service, Knowledge, Climate)

Pentagon elements - Place , Product,

People, Value and Communication
These are aspects that are external facing for the Retailer
These are the aspects that are Experienced by the
Consumer.
These are the aspects that will get compared by the
Consumer
These are all connected to Strategic Design of the Retail
format.
Pentagon elements differentiate the Retail format from
competitors.
Need to DESIGN the strategies that will differentiate the
Retail Brand.

Triangle elements Systems , Logistics

and Suppliers
These are aspects that are Internal facing for the
Retailer
These are the aspects that have great impact on
the Pentagon aspects but are not seen by the
Consumer.
How well these aspects are designed and
managed result in Consumer experience and
retail success.
Triangle elements result in Cost Leadership
These are all connected to Strategic Design of the
Retail format.

The Key questions for a New Retail brand

Pentagon elements :

What are our strategies?

How Differentiated are they?
How Sustainable are they?
What COMPETENCIES do we need to Win?

Triangle elements:
What are our strategies?
What COMPETENCIES do we need?
How to make it sustainable?

The 5 Key questions for each Pentagon

and Triangle Corner for an ongoing
Retail brand

Do we Win?
By How much? (a little or a lot)?
Is it getting Better or Worse (direction )?
Does anybody Care?
Is it Sustainable?

8 Ways to Win in Retail The Spencers

Experience
Place (Size, Location , Layout & Design)

Systems
Communication
- Positional
- Promotional

Product
- Style & Fashion
- Intensity
- Assortment

Logistics

Value (Price, Quality)

Suppliers

People ( Service, Knowledge, Climate)

Place
Locations in correct catchments basis research
Store design done to aid customer flow
Layout done as per customer category
adjacencies
Fixtures customised to the category

Product
Research leading to
correct range OPPs,
price laddering;
Differentiators thru
special categories wine ,
gourmet, pattisserie.
SKU pruning to suit
purchase..
New product information
to relevant consumers

People / Processes
Training as per moments of
truth meet and greet ,
service, cashiers
Stacking as per plannogram
Customer service within the
bay
Speed up check out time:
POS system, product
masters, cashier training
Work with vendors on
consumer insights
Empower and hold people
accountable...

Vendor
Business
Insights &
Strategy

Retailer
Insights
&
Execution

BUILD
Happy
Shoppers

Price and Value

KVI / KVC, OPP = market right prices
Loyalty program: monthly sms on points
accumulated and redemption offers..
Basket analyses to determine who buys
what and what are the opportunities..
Pin point communication to lapsed users
Lost miles card points accrual thru the
website / helpline
12 hours toll free helpline

Communication
Spencers- makes fine living affordable
Prices you can Trust
Quality since 1863..

Triangle elements

ARS
Price benchmarking
Back end for F&V
Outsourcing of Fish & Meat
Put away vs Flow thru at the DC
Spaceman
Category Mgt
Plannogramming

Increasing consumer aspirations, a growing middle class

and a younger demographic profile of our population is
helping the growth of the consumption economy.
Modern retail is playing a vital role as a catalyst in driving
consumption- led growth in India.
As modern retail grows in India, Indian consumers will not
only have more choice and convenience but it will also
have a broader social impact of generating millions of
jobs as well as creating markets for domestic
manufacturers, producers and service providers.
Kishore Biyani Group CEO , Future Group

The opportunity
% Share
2007

Growth
rate
(200712)

Market
size
US$
billion
2012

% Share
2012

Growth
Rate
(201217)

Market
Size
US$
billion
2017

% Share
2017

212.0

62%

8%

307.3

58%

7%

430.9

54%

Personal Care

15.4

5%

8%

22.6

4%

8%

33.2

4%

Apparel

26.4

8%

12%

45.5

9%

10%

73.2

9%

3.4

1%

9%

5.3

1%

8%

7.7

1%

Furniture & Furnishings

10.3

3%

13%

18.5

3%

11%

31.2

4%

CDIT

15.4

5%

12%

26.5

5%

9%

40.8

5%

Jewellery & Watches

13.7

4%

12%

23.6

4%

10%

38.0

5%

Medical Care & Health Services

34.2

10%

13%

61.6

12%

12%

108.6

14%

0.6

0.2%

15%

1.3

0.2%

24%

3.8

0.5%

Others

10.6

3%

11%

17.5

3%

13%

32.2

4%

TOTAL

342

100.0%

11.9%

530

100%

11.4%

800

100%

Food, Beverages & Tobacco

Footwear

Recreation

Market
Size
US$
billion
2007

Upgrading of the Consuming Class will be the

next inflection point

Middle class to swell from 5% of population in 2005 to 41% of population by 2025

The heart of the Diamond will look for Quality versus just Price driven by needs
of Fashion, Convenience, Durability & Experience

High
Income

Middle
Income

50 Million
(5%)

318 Million
(27%)

583 Million
(41%)
Middle Income

Low Income

2005
Source : McKinsey Global Institute

Market Place & BHPCs Vision

2015

2025

Overall Retail to double in next 7 years

Modern Retail to quadruple in the same period
Current Size & Future Projections for Indian Retail Market

US$ Billion

25% share

900
800
700
600
500
400
300
200
100
0

800
16% share
3.5% share

342

373

408

445

486

530

200
26

39

59

87

12

18

2007

2008

2009

2010

2011

2012

Total Retail

Source: Technopak Analysis : 2010

Market Place & Spencers Vision

Organized Retail

2017

Consumer Behavior of the Middle Class

Bazaar shopping
Touch and feel shopping
Bazaar environment
Bargain hunters
Snacking during shopping

Brand Big Bazaar..

Big Bazaar and the Indian
bazaar concept ..
Reflected in :
Locations : Sec B/C
catchments
Range & Assortment: Pan
Indian + Local
Bazaar Ambience:
Floor stacking, overspills
Open gunny sacks,
Pickle counter, chaat
counter..
Managed chaos..
Unattended service

Brand Big Bazaar..

Big Bazaar consumer understanding
and the Indian bazaar bargain
idiom
Reflected in :
Price points / Discounts : OPPs ,
KVI,
Sabse Sasta / Maha Bachat:
Positional + Promotional
communication