INTRODUCTION TO RETAILING

Course Title: Retail Management Course Instructor: Ms. Shyama Labh Email: shyama@asiapacific.edu

BEFORE I START..


Why should you listen to me ????????

WANTED!
 SKILLED

RETAIL MANPOWER

BECAUSE
  

Organized part of Indian retail sector-3% sectorOut of total 300 billion $ Growth- 25%Growth- 25%-30% annually

Jobs expected to get createdcreated-

80 lakh in the next 5-6 years ! 5-

WHAT IS RETAILING?
Retail Philosophy By The People, For The People and Of The People


Retailing is a set of business activities that adds value to the products or services sold to consumers for their personal or family use

THE CYCLE

Right place

Right merchandise

Right price

DISTRIBUTION MANAGEMENT
 

Point of production-Point of sale productionDelivery of utilities

FUNCTIONS PERFORMED BY RETAILERS



  

Provides an assortment of products and services Breaking bulk Holding inventory Providing services

THE TWO KEY PARAMETERS

  

Margin Turnover Volume vs. Value

MARGIN


Margin is defined as the percentage mark-up at markwhich the inventory in the store is sold

TURNOVER


Is defined as the number of times the average inventory is sold in a year

THE MARGIN TURNOVER FRAMEWORK

Low Margin-High MarginTurnover High Margin-High MarginTurnover

Low Margin-Low MarginTurnover

High Margin-Low MarginTurnover

THE FRAMEWORK
A DISCOUNT STORE A CONVENIENCE FOOD STORE

A store of this type is a disaster

AN UPMARKET SPECIALITY STORE

RETAILING ACTIVITIES
 

   

Choosing the store location Sourcing/Buying/Vendor management/Supply chain management Merchandising/Category Management Visual Merchandising Sales promotion Store positioning/Brand building

..
     

Store operations IT Inventory management Shrinkage loss prevention Real Estate development Achieving efficiencies in retail operations

RETAIL MIX
LOCATION

CUSTOMER SERVICE

MERCHANDISE ASSORTMENTS

STORE DESIGN AND DISPLAY

PRICING

COMMUNICATION MIX

PARAMETERS FOR MEASURING EFFICIENCIES IN RETAIL OPS.

   

Turnover Margin (gross) Margin (net) Fixed assets/Investment/Capital employed


    

No. of employees Sales volume No. of transactions Store space Operating expenses

Theories of Retail Development

   

Wheel of retailing The Retail Accordion Melting Pot Theory Polarization Theory

Wheel of Retailing: Retailers that enters at a fairly low prices, low status, and with low pricing. With time, they acquire elaborate facilities and mature as high cost, high-price retailers. highThe Retail Accordion Retail accordion theory a.k.a. general-specific-general theory is general-specific"a theory of retail institutional change that suggests that retail institutions go from outlets with wide assortments to specialized narrow line store merchants and then back again to the more general wide assortment institution,"

Melting Pot Theory According to this theory, a new value proposition gives rise to two new retailers with the same proposition. Ex- Petrol ExPumps. Polarization Theory In longer term, the industry consists of mostly large and small size retailers. The medium size becomes unviable. This is called polarization.

CONTEMPORARY RETAIL SCENARIO

INDIA

THE SCENE
     

A big quantum leap Retailers expectations of profits increase Retail chains go in for positioning and branding Exclusive retailing becomes popular PDS/Civil Supplies/Cooperatives Retail cost escalation

   

Spread of shopping malls Spread of retail chains Industrial houses coming in Spread of Super markets/Department stores/Mega stores

FIGURES
 

FIFTH LARGEST Estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015 12 million retail outlets present in the country, nearly 5 million sell food and related products. Current Market Leaders- Future Group, Tatas, LeadersReliance.

Luxury retail AT Kearney Report: India's luxury market, estimated to be the 12th largest in the world, has been growing at the rate of 25 per cent per annum. Indian luxury retail market is estimated to grow from around US$ 3.5 billion to US$ 30 billion by 2015. 2015.

A number of foreign brands including French Connection, Sanrio of Hello Kitty fame, Jimmy Choo, La Pearla and Calvin Klein among others have already lined up for permission to infuse foreign direct investment through the singlesinglebrand retail window.

Kids' retail :  Monalisa, the Versace of kids, is coming to India.  International brand Zapp tied up with Raymond to foray into kids' apparel.  Disney launched exclusive chains which stock charactercharacterbased stationery.  Pantaloon's joint venture with Gini & Jony set up a retail chain to market kids' apparel.  Swiss kidswear brand Milou is collaborating with TirupurTirupurbased Sreeja Hosieries.  French furniture brand Gautier hit the Indian retail market with a comprehensive range of furniture for children and infants.  The UK based retail chain, Marks & Spencer, is launching its kids' wear categories in India.

Discount Malls : Affiliated branded discount outlets in India. 50 such malls are to come up in the next two years across the country positioned in the middle-to-themiddle-to-the-premium end of the market. Pantaloon Retail (India) Ltd's Brand Factory, Arvind Mills Ltd's Megamart andand Provogue (India) Ltd's Promart

Retail Franchising : Growing at the rate of 60 per cent in the last three years and is set to grow two-fold in the twonext five years. years. To meet the increasing consumer expectations of quality, ambience and brand experience. In addition, this route also helps the big retailer players to rapidly foray into the tier II and III towns and rural areas.

Rural retail : Acc. study by CII and YES BANK, rural retail market is estimated to cross US$ 45.32 billion mark by 2010 and US$ 60.43 billion by 2015.

International Retailers :


Microsoft's first shop-in-shop pilot has been launched with shop-inthe Tata Group subsidiary Infiniti Retail's multi-brand multiconsumer durables retail format, Croma. The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores. World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR tieLimited. Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital". German sportswear and Apparel Company, Adidas is going in for a major expansion across India, and plans to have a total of about 450 franchisee outlets in the country.

The Indian Retail Sector can be broadly classified into :

Food Retailers Clothing & Footwear Indian Retail Sector

Home Furniture & Household Goods Health & Beauty Products

Durable Goods

Leisure & Personal Goods

SOME MAJOR PLAYERS

.

SHOPPERS STOP
      

Andheri.. K Raheja Group 260000 sq. ft. 18,000 customers/day Food courts Consumer research Private brand- STOP brandPartner- Warburg Pincus (HK) Partner-

CROSSROADS
      

Jewelry and children Gifts and women Household goods Menswear Ajay Piramal Group 1.5 lakh sq. ft. Destination for Shoppertainment

WESTSIDE


The Tatas acquired Littlewoods a London based retail chain. Littlewoods was subsequently renamed Westside. Established in 1998 as part of the Tata Group, Trent Ltd Exclusive Brands-Westside, Basic Blues Brands-

GLOBUS
 

Rajan Raheja Group Globus Elite Program- customer loyalty and Programpromotion program

ALSO..
  

Nilgiris Food Lands Sahara Mall

And.
FATHER OF THEM ALL.

PANTALOONS
    

Pantaloon Retail India Ltd. Biyani family Department store chain Hyper market chain Now FUTURE GROUP

FUTURE GROUP
        

Kolkata, August 1987 as Manz Wear Pvt. Ltd. PRILPRIL-1991 IPOIPO- 1992 In more than 85 cities and 60 rural locations across the country Stores cover around 15 million square feet of retail space and attract around 220 million customers each year Revenues targeted- 1073 crore targetedEmployeesEmployees- 12,000 Customer base- 12 crore Indians baseIn 2001, launched Big Bazaar-isse sasta aur accha kahi nahin Bazaar-

Pantaloon Retail (India) Limited focuses on the lifestyle retail segment led by the Pantaloons and Central formats Future Value Retail focuses on the value retail segment through the Big Bazaar, Food Bazaar and KBs Bazaar, Fairprice formats

THE GLOBAL SCENARIO

TOP 5
RANK COMPANY
1 2

COO FORMATS
U.S DISCOUNT, WAREHOUSE

SALES (2000)
191,329 MILLION $ 59,703 MILLION $ 49,000 MILLION $ 45,378 MILLION $ 42,439 MILLION EUROS

WALWAL-MART CARREFOUR KROGER HOME DEPOT METRO

FRANCE CASH AND CARRY,HYPER, DISCOUNT U.S U.S CONVENIENCE, DEPARTMENT DIY, SPECIALITY

3 4

GER

DEPARTMENT, MAIL ORDER

WHATS NEW
FDI IN RETAIL

IMPLICATIONS OF FDI IN RETAIL

   

Jan 24, 2006- Partial opening of FDI route 2006Single Brand products- 51% productsIndian partner for 49% equity Sold under the same brand internationally

A START HAS BEEN MADE



Moja Shoes Pvt. Ltd. And Mauritius based Tano India Pvt. Ltd. LVMH, Llladro Spain, Chanel

And consequently you will have more.

JOBS!

UNTIL THEN
THANKS