2009Shoppers’ Stop Submitted to: Prof. Pravin Patil Submitted by: Saumya Gupta Srusti Shrestha Panda 7/10/2009
AcknowledgementsThe toughest of endeavors in this world is not possible without the support of a helping handwhich guides and motivates a person to take on any challenge head on. Inputs from such helpinghand are always like very essential because more often or not certain mistakes which gounnoticed from our eyes.We are indebted to our Prof. Pravin Patil, ICFAI Business School, Pune for giving us such a niceopportunity to work something related to practical exposure of retail industry & extending hisuntiring guidance to us, by constantly discussing the project matter and helping us in clarifying ourthinking in several pertinent issues and providing a meaning full insight into the subject.
Shoppers’s Stop“The tapestry of history has no point at which you can cut it and leave the design intelligible.” The foundation of Shoppers Stop was laid on October 27, 1991 by the K. Raheja group ofcompanies, one of Indias biggest hospitality and real estate players. The Group crossed yetanother milestone with itslifestyle venture-Shoppers Stop. With its immense expertise in theservice industry and creditability, Shoppers Stop today boasts of 27 retail outlets across thecountry and is planning to spread its wings with futuristic expansion plans to meet the challengesof the retail industry. A benchmark for the Indian retail industry to follow, Shoppers Stop hasprogressed from a single brand shop to a Fashion & Lifestyle store for the families. ShoppersStop is a household name, known for its superior quality products, services and above all, acomplete shopping experience.Shoppers Stop was the first to redefine shopping experience and creating a niche for itself in theservice industry. As Indias first specialty chain with outlets in Mumbai, Bangalore, Delhi,Hyderabad, Jaipur and Chennai, Shoppers Stop offers a complete range of garments andaccessories for the entire family. More than 25,000 customers walk into Shoppers Stop everyday tofeel the experience of shopping. Andheri was the first store to be opened in India. The initiative ofthis store was taken by B.S.Nagesh at a time when the concept of retail industry was just cominginto the market. As on today, the current investors in Shoppers‘ Stop are ICICI, IL&FS Investmentsand Zodiac clothing. Their combined shareholding in Shoppers Stop is 19% while 79% is held byRaheja Group & balance 2% is held by its employees.
Corporate profile:Vision: To be a global retailer in India & maintain no.1 position in Indian market in DepartmentStore Category.Mission:“Nothing but the best”To strive & achieve nothing but the best in terms of processes, practices & deliverables.Values:The following values help Shoppers‘ Stop in achieving its mission & 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 apologize and/or forgive We shall respect our customers rights We shall be fair.Management:B.S. Nagesh (Customer Care associate & Managing Director)Govind Shrikhande (Associate Director & CEO)
Business Partners:Launched as Indias premier retail chain for branded apparel and accessories, Shoppers Stop hassystematically progressed from only branded apparel to private label garments to home furnishings,and finally into books and music - all focused on our customers lifestyle requirements andaspirations.In 2000, SSL diversified into Bookstore Retailing by acquiring 51% stake inCrossword which it later increased to 100% in 2005. SSL has also ventured into variouscategories like cosmetics through MAC, mother and infant care through Mothercare, homesolutions through Home Stop, food and beverages (F&B) through Brio and Desi Café, gamingand entertainment through Timezone, Ladies non-apparel and accessories through its luxuryformat, Arcelia, and into airport retailing through its 50:50 joint venture (JV) with the Nuancegroup. SSL also has 19% stake in the hyper-mart format of HyperCity and has plans to increaseit by 51% by end of June-2010.Shoppers‘s Store‘s sister store are:Crossword BookstoresCrossword Bookstores is a chain of largest bookstores in India with 52 branches. Shoppers Stopacquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as a lifestylebookstore with their spacious, well laid out stores which encourages customers ease in browsingthrough the merchandise of books, music, stationary and toys.Home StopHomeStop is premium home furnishings home concept store, which offers products in home decor,furniture and accessories, bath accessories, bedroom furnishings, mattresses, draperies, carpets,modular kitchens and health equipment.
BrioBrio makes Shopper‘s Stop Ltd.s foray into Food and Beverage which was a step towards―franchised coffee bars‖. Brio – the café bistro is designed provides customers a place to relax,revive and reflect. It has a classic yet sophisticated ambiance. Brio has 20 outlets in select cities.Cafe Coffee Day (CCD), the retail division of Amalgamated Bean Coffee Trading (ABCTL), hassigned an MoU with Shoppers Stop to run its BRIO outlets.Desi CafeDesi Café and their operations have been taken over by Cafe Coffee Day (CCD), the retail divisionof Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run itsDesi Cafe outlets.Hyper CityHyperCity provides customers a wide variety of range of products for shopping in a large andmodern retail environment. It offers a contemporary range of products, sourced from both local andinternational markets. The product range covers: Foods and Grocery, Homeware, HomeEntertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Fashion.M.A.C.M.A.C. and Shopper‘s Stop Ltd. entered into a non exclusive retail agreement with cosmetics majorEstee Lauder to open up M.A.C. Cosmetics stores in India. M.A.C. Makeup-Art Cosmetics - theprofessional brand of choice, is the first brand under the Estee lauder Group of Companies portfolioto enter the Indian retail market. Currently there are 9 M.A.C. stores operatingArceliaArcelia is a new retail concept aiming at the growing accessories and cosmetics segment, with astrong emphasis on experience and indulgence and primarily caters to discerning women shoppers.It retails cosmetics, fragrances, fine jewelry, footwear, handbags.
Mother CareMotherCare and Shoppers Stop come together to introduce products for infant and toddler carewhich stocks a variety of products for mother and babies, toddlers and children till eight years ofage with the focus being on style, function and safety.Nuance GroupNuance Group with Shoppers Stop makes an entry into airport retailing. The alliance is markedwith a joint venture with The Nuance Group AG of Switzerland, the world‘s leading airport retailer.Shoppers Stop Ltd. is handling the retail operations at the duty free zones in international terminals.The joint venture company, called Nuance Group (India) Private Limited. is operating outlets at theInternational airports at Bengaluru and Hyderabad.Hyper City-ArgosHyperCity-Argos and Shoppers Stop, the two retail ventures of K Raheja group had signed amemorandum of understanding with UK‘s leading retail chain Home Retail group to develop theArgos (retailer) retail format stores in India. Two years later, Shoppers Stop Ltd has informedBombay Stock Exchange shall wind down and discontinue its catalogue retail operations under theHypercity-Argos brand.Time zoneShoppers Stop forayed into the Entertainment sector by acquiring 45% stake in TimezoneEntertainment Private Limited which is in the business of setting up and operating FamilyEntertainment Centers (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi Mumbaiand Mumbai.
Customer Profile:Shoppers‘ Stop‘s customers fall between the age group of 16 years to 35 years, the majority of thembeing families and young couples with a monthly household income above Rs. 20000 and an annualspend of Rs.15000. A large number of Non - Resident Indians visit the shop for cultural clothes inthe international environment they are used to which means people from abroad are also interestedin shopping in Shopper‘s stop. Their target customers are upper middle class and upper class.Customer Rewards:Shoppers Stop‘s customer loyalty program iscalled The First Citizen. The program offersits members an opportunity to collect pointsand avail of special benefits. Currently,Shoppers‘ Stop has a database of over 2.5lakh members who contribute to nearly 65%of the total sales of Shoppers‘ Stop. They alsooffer a co-branded credit card with Citibankfor their members.International Affiliations:Shoppers‘ Stop is the only retailer from India to become a member of the prestigiousIntercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29 experiencedretailers from all over the world, which include established stores like Selfridges (England),Karstadt (Germany), Shanghai No. 1 (China), Matahari (Indonesia), Takashimaya (Japan), C KTang (Singapore), Manor (Switzerland) and Lamcy Plaza (Dubai). This membership is restricted toone member organization per country/region.
Objective of Shoppers’ Stop:Their main objective is to make their customer satisfy and then profit through sales, employeeadded after all every organization works to earn money which is possible through good sales and ifour customers are not satisfy then it will be difficult for us. So we put our effort on retaining ourcustomers because retaining old customers is more profitable than making new customers. And ifwe analyze this statement then we come to know that their 65% of their customers are their firstcitizen customers. Today people goes for variety and shoppers stop is doing that, they offer total250 brands to their customers which act as their strength and help them retaining as well as makingnew customers. They believe in producing quality so they offer quality products basicallyinternational brands like Louis Phillip, Black Berry, Police, DKNY, Ferrari, etc. Shoppers‘ Stopaims to position itself as a global retailer. The company intends to bring the world‘s best retailtechnology, retail practices and sales to India. Currently, they are adding 4 to 5 new stores everyyearTypes of Retail Outlets:Shopper‘s Stop is known as multi-Brand retail outlet because of their verity of Products. They offervarious products like apparels, Accessories, Toys, Fragrances, Beauty Products, Travellingproducts, Home Appliances, etc.They offer various products like Apparels, Fragrance & Beauty, Home & Travel, Gift ideas. Underthis they have different Categories, Brands and Styles to offer customers. They have many othershowrooms of Shopper‘s Stop in Delhi and NCR, so we can say that they have long chain of retailoutlets. They also offer online purchasing which means that they are using new technology toincrease their sales.
Brands Offered:Shoppers Stop retails products of domesticand international brands such as LouisPhilippe, Pepe, Arrow, BIBA, Gini & Jony,Carbon, Corelle, Magppie, Nike, Reebok,LEGO, and Mattel. Shoppers Stop retailsmerchandise under its own labels, such asSTOP, Kashish, LIFE and Vettorio Fratini,Elliza Donatein, Acropolis etc. The companyalso licensees for Austin Reed (London), aninternational brand, who‘s mens‘ andwomens‘ outerwear are retailed in Indiaexclusively through the chain.
Different brands offered under each category are given as billow: APPARELS Arrow Orly Louis Phillipie Lee Park Avenue Parx Levice Van Heusen Pepe Zodiac Killer Stop Lee Cooper Caliber Wrangler Blackberries Spykar Scullers Life Givo Allen Solly Provouge Wills Jewellery Music Pedrini Pyren Facet Planet M Carbon Music World Hair Styling Sparkles Habbibs Home Décor Tanishq FQ Books Swaroski Yamini Crossword Gili Four Seasons Oyzsterbay Viva Sarvoski Welspun Estelle Borosil Corning Ware
Fragrances Jdel Pozo Watches Christian Dior Myrurgia Casio Ysl Etienne Aiger Esprit Davidoff Xm Fossil Joop Titan Sunglasses Diesel Ray Ban Shoes Lancaster Nicos Lee Cooper Red Tape Jil Sander Calvin Klein Picasso Boucheron Stop Police LifeStoresShoppers Stop is one of the leading retail stores in India. Shoppers Stop began by operating a chain ofdepartment stores under the name ―Shoppers‘ Stop‖ in India. Currently Shoppers Stop has twenty seven(27) stores across the country and three stores under the name HomeStop. Shoppers Stop has also begunoperating a number of specialty stores, namely Crossword Bookstores, Mothercare, Brio, Desi Café,Arcelia.Shoppers Stop retails a range of branded apparel and private label under the following categories ofapparel, footwear, fashion jewellery, leather products, accessories and home products. These arecomplemented by cafe, food, entertainment, personal care and various beauty related services.
The list of main stores are given billow: North New Delhi Jaipur Gurgaon • Andrew Ganj, Near • Gaurav towers 2, • Mgf, Metropolitian south extension, plot no 2, mall Mehrauli- Khel Gaon Marg, Indira palace, gurgaon road, New Delhi - 110049 Malviya Nagar, Gurgaon,Haryana Jaipur - 302017.
SouthBangalore Chennai Hyderabad Raheja point, No.2 Harrington Opp. Alladin mansion,17/2 Ashok nagar, road, 1-22-251/1, Magrath road, Chetput, Begumpet, HyderabadBangalore-560025 Chennai-600031. -500016. Marketing Strategies followed by Shoppers’ StopDiscounts and brand promotion
Shoppers’ Stop with “OM SHANTI OM”Shoppers’ stop trough internet
Shoppers‘ Stop basically follows 2 marketing strategies: 1. Guerrilla marketing 2. Interactive marketing 1. Guerrilla marketing is an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget. Typically, guerrilla marketing tactics are unexpected and unconventional; consumers are targeted in unexpected places, which can make the idea thats being marketed memorable, generate buzz, and even spread virally. Guerilla Marketing involves unusual approaches such as intercept encounters in public places, street giveaways of products, pr stunts, any unconventional marketing intended to get maximum results from minimal resources. More innovative approaches to Guerilla marketing now utilize cutting edge mobile digital technologies to really engage the consumer and create a memorable brand experience. Principles of guerrilla marketing Guerrilla Marketing is specifically geared for the small business and entrepreneur. It should be based on human psychology instead of experience, judgment, and guesswork. Instead of money, the primary investments of marketing should be time, energy, and imagination. The primary statistic to measure your business is the amount of profits, not sales. The marketer should also concentrate on how many new relationships are made each month. Create a standard of excellence with an acute focus instead of trying to diversify by offering too many diverse products and services. Instead of concentrating on getting new customers, aim for more referrals, more transactions with existing customers, and larger transactions. Forget about the competition and concentrate more on cooperating with other businesses. Guerrilla Marketers should always use a combination of marketing methods for a campaign. Use current technology as a tool to empower your business. 2. Interactive marketing is a strategies adopted by then retailers where they allow customers to customize the product as per their preference. This strategy is mainly followed by service industries like hotels but Shoppers‘ Stop is able to carve out this facility in a retail store. The concept that has already made a debut at Shoppers‘ Stop outlets in Mumbai, allows customers — who are referred to as guests — to go through various stages of activity in creating their own teddy bear (or other stuffed toy), including choosing a stuffed animal, stuffing it, giving it a heart, stitching, fluffing, naming and dressing it. And though the toys are priced at a premium level ranging between Rs 595 and Rs 1,295 for a stuffed animal and add-ons such as sound chips, clothes and accessories coming at extra cost —
the interactive shopping experience also adds on an element of entertainment for young customers and can turn into a family affair as well.Use of CRM, ERP & SCM at Shoppers’ Stop:CRM:Retail chain Shoppers‘ Stop Ltd, is eyeing over 50 per cent sales this year from its customer relationshipmanagement (CRM) initiatives. The company has also lined up an aggressive expansion plan targetingsmaller towns and cities in the country.BS Nagesh, managing director and CEO of Shoppers‘ Stop, told FE that the company has given a newdirection to its CRM initiatives after it acquired a business intelligence software called ‗BusinessSolutions‘ about eight months ago.The new software helps generate intelligent data from Shoppers‘ Stop customer base of about 2,30,000.The company then collects this data and touches base with customers via direct mailers informing themof all new promotions that is currently on and also updates them about the upcoming events.Shoppers‘ Stop claims that it has taken its CRM initiatives to a new height and now calls it‘s loyaltyprogrammes Customer Experience Management.―If we find from the data that a customer had bought a pair of trousers, we tell him about a new range ofshirts that we have just brought into our store,‖ says Mr Nagesh.―We are planning to open 35 outlets within the next three years. We have identified 21 new locationsincluding Kanpur, Amritsar, Jalandhar, Ahmedabad and Indore, among others to set up these outlets,‖ MrNagesh said.
ERP:Shoppers‘ Stop was the first few retailers to use scanners and barcodes and completely computerise itsoperations. Today it is one of the few stores in India to have retail ERP (Enterprise resource planning) inplace, which is the best retail planning system in the world. With the help of the ERP, they are able toopen new stores faster and get information about merchandise and customers online, which reduces thetime in taking quick decision.SCM:Understanding the importance of distribution and logistics in ensuring that merchandise is available onthe shop floors has led Shoppers‘ Stop to streamline its supply chain. The company has developedprocess manuals for each part of the logistics chain. These modules include vendor management,purchase order management, stock receiving systems, purchase verification and inventory buildup, fixingof price and store tags, dispatch of stocks to the retail floor and forwarding of bills for payment.If we talk about various brands then the answer is that they have a direct tie ups with different companiesand companies deliver all the needed products to their door-step means deliver all the goods to everyshopper‘s stop showroom. But there are some companies which do not provide them these services so forthose they have their own carrier.Controllable & Uncontrollable FactorsControllable & Uncontrollable factors are those which are directly or indirectly affect the retail outlet.The difference between these two factors is that one can be controlled by the retailer and another cannotbe controlled. The variables which are controllable can be change according to the retailers but if we talkabout uncontrollable factors then the retailer have to change him/her according to those factors. There arevarious Controllable &uncontrollable Factors. When we ask about these factors to the employee ofShopper‘s Stop, he told us the following important things:
Controllable Factors of Shopper’s Stop Pricing Store Location Managing a business/workforcePricingHe told us that setting price of a product is in our hands. This is our decision that how much profit wewant to make by selling our products. Sometimes we have to set our prices according to the competition.Store LocationSelecting the location for the store is in the hands of retailers because before selecting the location theyhave to check many factors like walking traffic, competitor, parking, infrastructure, etc. They also have todecide that they want to buy the site or they will take it on rent. So after deciding all these things theyreach to the final decision.Managing a Business/WorkforceHe told us that managing the workforce means a lot to them, because they have to decide that what typeof people they need what type of training our employees need, and what will be the salary of ouremployees.All these things can be controlled by the retailer.
Uncontrollable Factors of Shopper’s Stop Government Policies Seasons Inflation Rate Technology InfrastructureGovernment PoliciesGovernment policies or Legal Restriction cannot be controlled and the big example of this is ―sealing ofillegal shops‖. The taxes and duties which retailers have to pay to the government.SeasonsHe told us that natural climates cannot be controlled and they have to go according to that like in wintersthey have to change their theme and products also. He also told us that a sometimes season plays anegative role like in rainy season their sales goes down. So these things cannot be controlled and theycan only launch new marketing strategies to attract the customers.Inflation RateHe told us that as we all know that now inflation rate is more that 12% so it is creating more problems forus because due to this people are getting more aware of saving money and due to which our sales is alsoaffected. If we analyze the global market then we will see that every sector is going down except one ortwo. And retail sector is also not doing well these days. Against this we can‘t do anything, we can onlywait.TechnologyHe told us that day by day the technology is upgrading and the problem is that the new competitor comeswith new technology because of which they also have to upgrade their technology which results moreexpenditure, which is not good for any business.
Competitor’s Analysis:In India, as we analyzed we find only few competitors for Shoppers‘ Stop & those are mainly foreignplayers and also Individual stores. The name of few competitors is given below: Lifestyle Globus Central Pantaloons Westside EbonySituational Analysis:Situational Analysis includes current organizational mission, current ownership and managementalternatives, and current goods/services category. As we have explained above about the missionmanagement alternatives, current products, so now here we have done the SWOT analysis of Shopper‘sStop.Strength Variety Range Different Brands Pioneer Loyal customer Low risk Good financial position Presence across various segments Parikrama the festival
Weakness Very high prices: They provide international Brands due to which their prices are very high. Less Schemes: They do not offer so much schemes, they offer schemes only on special occasions like Diwali, Independence Day, etc. Less Discounts : They offer less discount in their schemes, they basically offer 10% to 20% discount Competition from standalone stores Late entry into value retailing Store makeover expenditureThreats Government Policies Entrance of New Players High attrition Lesser consumer spending Entry of foreign players Unorganized sector Independent storesOpportunities Awareness about the brands Quality Youngsters Higher disposable income Collaborate Private levels Tier 2 & tier 3 cities Enter new consumer goods segments.
Financial Condition of Shoppers’ Stop:Shoppers Stop clocked 9% growth in SPSF in FY2008 to Rs8,671 (Rs7,973), but registered a de-growthof 10% in FY2009 to Rs7,800 on the back of sluggish Top-line growth. Though we believe that SSL willtake about a year to recover from the aftermath of the ongoing economic slowdown on its LifestyleRetailing business, we expect spending to pick up in FY2011. We estimate SSLs SPSF to post a CAGRof 9% over FY2009-11E to Rs9,205, albeit on a comparatively lower base of FY2009 SPSF. This can beexplained with the help of the following graph:Suggestions: They should introduce more schemes, discounts, sales to increase the sales. They should introduce Low rate Brands which will attract the middle class customers also or brands for masses. The stores becomes a bit messy because of a large footfall & small size of stores so they should have larger outlets They offer parking space only for the ―first citizen‖ card holders which acts as a constraint for many first visitors to visit the malls. Shoppers stop‘s competitors used aggressive medium of advertisement like television commercial ads, thus to gain a competitive advantage over the competitors Shoppers Stop should also use such medium of marketing.