1. INDUSTRY OVERVIEW Retailing is one of the pillars of the economy in India and accounts for 13% of GDP. The retail industry is divided into organized and unorganized sectors. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These refer to the corporate- backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, convenience stores, hand cart and pavement vendors, etc.
CONTD… The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6 percent. The Retail Business in India is currently at the point of inflection. Rapid change with investments to the tune of US $ 25 billion is being planned by several Indian and multinational companies in the next 5 years. It is a huge industry in terms of size and according to India Brand Equity Foundation (IBEF), it is valued at about US$ 395.96 billion. Organised retail is expected to garner about 16-18 percent of the total retail market (US $ 65-75 billion) in the next 5 years.
2.COMPANY HISTORY The company was founded by Joseph Hepworth in Leeds in 1864 as a tailor under the name of Joseph Hepworth & Son. In 1982 Hepworth & Son acquired Kendall & Sons Ltd, a Leicester based rainwear and ladies fashion company from Combined English Stores. The intention was to redevelop the Kendalls stores as women swear chain of shops. Terence Conran, the designer, was Chairman of Hepworths at this time and he recruited George Davies, who went on to become Chief Executive of NEXT. The first NEXT shops opened on 12 February 1982, with the Kendalls conversion complete by the end of 1983. Made chief executive in 1984, Davies then converted the 50 Hepworths stores to the NEXT format, extending the total concept look at the same time to cover menswear. This allowed the development mini department across the entire footprint, selling womens and mens and clothes. This was added to by the introduction of NEXT interiors to stores which were deemed in the "right demographical areas." In 1986, Davies moved the group’s headquarters from Leeds to Leicester, to be closer to the main garment manufacturers. The groups name changed to NEXT plc
5. SWOTOrganizational StrengthThe strength of NEXT Plc is their adult fashionwear for people between 20 to 40 which are soldunder their own label. This is their main targetgroup. While some of its competitors haveproblems to satisfy this segment, NEXT managedit very well in the past, selling their stylish productsat reasonable prices. NEXT customers associatewith the NEXT label - good quality of the clothsused and good workmanship. As they are usingtheir own brand they can react on consumerwishes very quickly and have total control over thequality management.
CONTD… 2. Weakness Further gains can be made by the e-commerce division. NEXT, who spent GBP 125,000 sees the internet as an extension of the telephone to order their products online. It is nothing more than a vehicle to get the orders to the retailer. Their competitors interpret the internet phenomenon differently. Debenhams for example invest more than GBP 5m on internet technology and Mark and Spencer even spend GBP 50m in e-commerce and digital TV.
CONTD… 3. Opportunities Nevertheless mail order is an important plank in the retail trading stakes. Employees aged 20-40 have little time to do their shopping. So it is good that NEXT has gained a foothold in this market. They are ranked number one among the High Street names which are offering mail order clothing. This could be a great opportunity for NEXT to increase market share - speaking of the domestic market as of the foreign markets - to use their knowledge and experience over the years they can make it even harder for its competitors to step in.
CONTD… 4. Threat• A threat is the low market growth and the strong competition. Some companies are very aggressive in their attempts to gain market share or to maintain it. To reach their aim they are offering high street products manufactured in third world low labour cost areas at dumping prices. Tesco for example offered Lewis 501 denims twenty pound cheaper than the high street shops.
6. NUMBER OF OUTLET This 2,000 square feet store of appliances doesn’t need much introduction. Next is a part of a large consumer appliances retail chain which has made its presence felt in 16 states with around 400 outlets. Next Retail India Plans to Open 400 Showrooms Next Retail India plans to open 400 showrooms across the country in the next three months upping the total number of retail stores to 1,000 by the end of the fiscal year 2010-11.
6. RESEARCH METHODOLOGY Types of Research Descriptive Research Sample Design Non Probability Research Design Sampling Units In our research, Pune is the sampling unit.
CONTD… Sources of Data Collection Primary Source of Data Interview of Assistant Store Manager Observation in the store Secondary Source of Data Websites, Books.
7. CUSTOMER SEGMENTATION NEXT has segmented on the basis of following criteria-: Geographical Segmentation NEXT is mainly targeting on Metropolitan cities and Tier-1 cities like Bangalore, Mumbai, Pune, Chennai etc. Income Lower middle class, middle class, higher middle class.
TYPES OF DISPLAYS AVAILABLE The display of products which makes them appealing attractive, accessible, engaging, and enticing to shoppers in a retail store. 2 Main Retail Shop Display Types in NEXT are- Counter Top Display
9. CATEGORIES MANAGED NEXT mainly deals in following items:- Business Categories Consumer Electronics LCD, CTV, DVD, Audio & Home Theatre. LCD segment would be the fastest growing sub category Contributes 44 % of the total Sales Home Appliances Refrigerators, AC, Washing Machine Category, would be expanded in current financial year across India Contributes 44% of the total sales IT & Gaming Laptop, Desktop, DTH, Imaging, Gaming, Printer & Accessories Digital Camera’s, Camcorder’s newly introduced Contributes 5% of the total sales Small Home Appliances Microwave, Food Processors, Water Purifiers, Toaster etc. Contributes 7 % of the total Sales
10. SIGNAGES These are the signages used by NEXT inside the outlets.
11. VISUAL MERCHANDISING
12. PRODUCT DISPLAYS NEXT is doing this in three ways.1. First, the packaging has to be attractive.2. Second, the product must be displayed well in the relevant section. Third, we have to highlight the price differential. When a consumer who wants to buy a Laptop finds that our Laptop is priced lower than the discounted price of branded Laptop, it gets him or her thinking
13. CUSTOMER SERVICE NEXT provides separate section for clearing the doubts of the customers. They provide section to their customers to keep their belonging. Additional billing counter are provided so that customer don’t have to wait in queue for longer period of time.
14. LOYALTY PROGRAMS
CONTD… .The three key benefits available to the card members are:1. Higher earning of points An Empower programme member earns up to five Empower points for every Rs 100 spent. Additionally, members earn one additional Empower point whenever the credit cards are used.1. Faster earning of points Members earn Empower points every time they spend. Hence points accumulate faster.2. Instant redemption Empower members can use their points to make payments at partner outlets while shopping, and instantly settle their bills in part or full.
15. PROMOTIONS USED Next is a UK based retailer chain delivering apparel, footwear, swimwear, outerwear, intimates, home ware and furniture internationally through its online website. It offers customer discounts and email updates on sales. Customers find shopping on Next online easy and the regular discounts and sales a great NEXT Retail marketing plans, sales promotion ideas, branding and advertising resources for retailers. Learn how to use loss leaders, media buys and sales events to the benefit of your retail store. Select a newspaper to advertise in, create an effective ad and understand newspaper rate cards
16. FUTURE EXPANSIONS Electronic retail chain brand Next Retail, is all set to take its store count to 1,000 in the next two years. The new expansion will be done via both company owned and franchised outlets. Presently, the company has 600 outlets, out of which 430 are franchisee owned. KS Raman, Director, Next Retail informs, “We will be taking the store count to 1,000 in near future. These new outlets will be targeting all B, C, D and E class towns. We are not looking for expansion in metro and Tier I cities.” The company has opened 80 franchise stores in the last six months Our future plans are to expand both the franchise and the company owned outlets. In the company owned stores, we will go in for the large format stores, which are better designed to give a lifestyle experience to the consumers
17. INNOVATIONS Following are the innovation done by NEXT:- The next retail technology evolution arrived with the invention of the mobile computer. Information is no longer tethered to a desktop application — now workers in the front and back rooms can hold all the tools needed to streamline day-to-day tasks right in the palm of their hands. At the press of a button, a store associate can look up pricing and check stock — in the backroom and at other store locations. Advanced data capture — including the ability to scan a bar code or magnetic stripe on a credit or other ID card — enables associates to quickly perform a stock take, ring up sales and more. Integrated voice and data devices with push-to-talk 1 WHITE PAPER: The next revolution in retail technology functionality allow associates to quickly reach out for assistance or answers to questions — without ever leaving the customer’s side. And RFID makes real-time inventory visibility a reality, delivering a number of strategic advantages for retailers from better purchasing decisions and a reduction instocking inventory requirements to the ability to instantly locate any item in the store — even if it has been misplaced.