Understanding Retail Industry

Indian Retail Market

India ranks fifth among the top 30 emerging markets for retail The size of India's retail sector : $450 billion Retail contributes 15% to GDP FDI in retail has created positive sentiments in the retail sector.

Growth Drivers & Barriers

Modern Retail Formats in India

1. HYPER MARKET Big Bazaar

2. CASH & CARRY Mito

3. DEPARTMENT STORES - Westside 4. SPECIALITY STORES Archies 5. DISCOUNT STORE Subhiksha 6. CONVENIENT STORE In & Out

MAJOR PLAYERS
Tata Group Future group Reliance group RPG Group K Raheja-

FDI in Retail

Hypercity

Introduction
Founded in 2006 by K. Raheja Corp. Group First store - Malad, Mumbai spread over 1,200,000 sq ft. HyperCity has a total of 12 stores in cities like Hyderabad, Bangalore, Jaipur, Amritsar, Bhopal, Ludhiana, Ahmedabad and Pune Array of products ranging from groceries, diary, clothing, furniture, consumer durables etc.

Store design
Aisles are designed so as to offer comfort in chaos Break the monotony for the shopper Vegetable and food section near the entrance Non veg section separated from veg section near crockery

Brands
Private brands:
Food & Groceries Clothing Appliances Technix Sports : Maxit

Promotions
'Buy One Get One', 'Happy Hours Campaigns with percentile discounts, those with rupee discounts Customer-specific campaigns. Indoor- Catalogue,display (pictures)

OutdoorNewspaper ads,Hoardings,billboards,Ads on Meru cabs

Pricing
Differentiated Pricing-WAS and NOW

Bundling(BULK) discounts

Warehousing
Unsold stocks was a serious issue in case of perishable items like fruits and vegetables Introduction of store-specific promotions to dispose of unsold stocks. Oracle Retail Solution helps the business users to execute new offers every few hours in a single day Happy Hour promotions on perishable items

Customer experience
VAS like ATM facility, telecom services, Bakery and Restaurants etc under one roof Hypercity extended Warranty: On purchase of their electronics Home delivery

Gift vouchers & Travelex - Forex & Money Transfer

Vodafone gallery ( shop-in-shop)

Innovative measures
1st store to introduce prepared chopped vegetables in India. Include a live demonstration kitchen with chefs cooking meals to encourage sales of ingredients, cooking utensils and kitchen appliances It has a kids interactive area to help toy sales A home entertainment demonstration room with specially fitted acoustics

Innovative measures (Contd)

Quick billing- Point of sale terminal Each outlet has around 30 POS. With Oracle Retail Back Office (ORBO), the software helps to speed up the billing process.

Target Customer
Targets the upper lifestyle segment In order that it appeals to the high-income consumer, they have pitched aspirations as a strategy. The style of advertising is very finely done and its between a product and a price. They will never allow the price to overshadow the product and the product overshadow the price.

Supply Chain
Visibility and transparency - B2B site to access information related to sale of his products, stock levels, payment status etc. Availability increases sales Adopting best practices -The retailer spent about Rs 5 crore to acquire the perennial license of the Oracle software. Damage analysis, insurance and claims

Cross Docking
In order to reduce time from dock to rack, they follow cross docking at the DC. The vendors are advised to create store packs and these are cross docked. This not only improves the TAT of product to the shelf, but also permits to keep cost under control and minimizes handling.

QC: eg-Hire a logistics representative to inspect products for exceptions before they are transferred from the production to the logistics phase.

Brand Heritage
1885 started in Londonderry, Ireland 1997- Brand came to India through Madura Garments 2000- Madura Garments acquired by Indian Rayon , Aditya Birla Nuvo Group

Background
The mid price market Plethora of store brands

Shirts sold mostly on retail push

Regional/local brand strengths Store brands had weak customer relationships

Relationship was primarily product oriented

No distinct brands image or emotional connection

Objectives
Short Term Launch phase communication designed to create quick and universal awareness of the brands USP of quality and price Long Term Build strong brand preference, and Sustain brand loyalty through attractive imagery and constantly reiterating the product benefits.

Peter Englands Competitive edge

Extensive range of office and casual wear

Good quality label and branding

Contemporary designs, colors and price Wide distribution , easy availability

Well-orchestrated merchandising
High market viability

Peter England simplified the buying process

From Search for a good shirt across counters Check for merchandise, color/design, fabric/stitching, overall look, brand/label Ask price Select 1 from many Buy a shirt with a label Start hunt all over To Ask for Peter England as their first choice Check color/design , decide on overall look

Know price band Select 1 from Peter England Buy Peter England Is happy, comes back to Peter England

Creative Strategy
Communication needed to link brands position good quality product at a great price and the consumers need for product plus brand imagery Research insight most consumers thought premium shirt brands were overpriced The brand line Peter England- The Honest shirt Creative Alter-ego format with an element of simplicity

Innovative Approaches
First time in India , a readymade shirt brand went outdoors extensively to deliver a high quality launch Extensive TV usage as main medium for readymade shirts and garments , earlier only print Bold use of vernacular media, earlier the big brands

Taking over Dadar Railway Station sites

Sponsor male oriented programmes

Brand Building
Once brand was established , quickly building volumes became critical The category demanded fresh fashion cues every season The second phase attempted to give a seasonal flavour to the brand 1999- Casual range introduced as sub-brand Elements The brand theme campaign supported by: o The Anti-Wrinkle Collection o The Solids collection o The Festival Collection o The English Cottons Collection o The Summer Mints Collection 2000- Trousers launched to cover the complete wardrobe

Performance
Research confirmed Peter Englands high brand equity Became a 1 million brand in 2 years The first mid segment brand to cross Rs. 100 cr

The only new lifestyle brand to feature in Best Brand Launch of The Strategist Quarterly in 1998

Extensions
Trousers T-shirts Denims Socks Suits Ties Wallets Launched Peter England Elite

GITANJALI

An Effervescent Beginning
1966 : Began as Gitanjali exports corporation Founder : Chinubhai Chokshi Named after his 2 daughters - Gita& Anjali

Core Business: Trading in rough and polished diamonds

The Rainmaker
1985 : Mehul C Chokshi established Gitanjali Gems Limited 1987 : Gitanjali-Mitsubishi retail joint venture

1990 : export arm, Gemplus Jewelry in SEEPZ at Andheri

1993 : 1st manufacturing unit in Borivali, Mumbai 1999 : 2nd diamond mfg unit in the city of Diamonds

Entry into Retail

1999: Gitanjali Belgian Cut Diamonds certied by the International Gemological Institute in Antwerp. 2001 : DTC agship program of Nakshatra 2002 : DTC agship program of Asmi

Turning Tides
2001 : Gitanjalis prots dropped Bullion trading became a low-margin, high- trading activity. Discontinue with the bullion trade due to the change in indirect taxation laws

Uneconomical for Gitanjali to operate the business

Blood Diamond issue

Back from the Brink

2002 : launch of Nakshatra in the UAE in collaboration with Damas in 2002 2002 : rst independent chain store, Cria The Ddamas Glitterati collection co-sponsored the IIFA Awards in Singapore and the IIFA cricket match in UAE. Gitanjali took over two of DTCs major brands, Nakshatra and Asmi.

Metamorphosis continues
Gili, Giantti, Ddamas, Damas Solitaire, Glitterati, etc. as well as DTCs Nakshatra and Asmi

Ezee diamonds

Vending machines

Innovative retailing
Gold

Outlook and challenges for Retail

Strong long-term growth potential

Severe cost pressure largely related to property rentals

Profitability likely to remain low

Driven more by traffic growth than ticket growth

Convenience stores to remain integral part of retail

Need for catering to local flavors

Internet retailing still to pick up in India
Source: Morgan Stanley India Retail: Key Takeaways from the India Retail Forum