Retail Industry


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Retail Industry

  2. 2. <ul><li>Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products. </li></ul>
  3. 3. <ul><li>Retail comes from the Old French word retailer (compare modern French retailler ), which means &quot;to cut off, clip, pare, divide&quot; in terms of tailoring. It was first recorded as a noun with the meaning of a &quot;sale in small quantities&quot; in 1433 (from the Middle French retail , &quot;piece cut off, shred, scrap, paring&quot;). Like the French, the word retail in both Dutch and German ( detailhandel and Einzelhandel , respectively) also refers to the sale of small quantities of items. </li></ul>
  4. 4. <ul><li>Customer satisfaction </li></ul><ul><li>Ability to acquire right products </li></ul><ul><li>Product presentation </li></ul><ul><li>Traffic building </li></ul><ul><li>Layout </li></ul><ul><li>Location </li></ul><ul><li>Keeping pace with technology </li></ul>
  5. 5. <ul><li>Unorganized Retail sector </li></ul><ul><li>Organized Retail sector </li></ul>
  6. 6. <ul><li>Food Products </li></ul><ul><li>Hard Goods – (“hardline retailers”) appliances, electronics, furniture, sporting goods etc.. </li></ul><ul><li>Soft Goods – clothing, apparel and other fabrics </li></ul>
  7. 7. <ul><li>Counter service </li></ul><ul><li>Delivery </li></ul><ul><ul><ul><ul><li>Mail order </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Order by phone </li></ul></ul></ul></ul><ul><li>Door to door </li></ul>
  8. 8. <ul><li>Departmental stores </li></ul><ul><li>Mom-and-Pop stores </li></ul><ul><li>Category killers </li></ul><ul><li>Malls </li></ul><ul><li>Discount stores </li></ul><ul><li>Supermarkets </li></ul><ul><li>Street vendors </li></ul><ul><li>Hypermarkets </li></ul><ul><li>Kiosks </li></ul>
  9. 9. <ul><li>Cost-plus pricing </li></ul><ul><li>Suggested retail pricing </li></ul>
  10. 10. <ul><li>Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc. </li></ul><ul><li>RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s Super, Daily & Fresh. </li></ul><ul><li>The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma </li></ul><ul><li>Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance Autozone, iStore </li></ul><ul><li>Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain. </li></ul><ul><li>Vishal Retail Group-Formats: Vishal Mega Mart </li></ul><ul><li>Marks & Spencer: Clothing, lifestyle products, etc. </li></ul><ul><li>Aditya Birla Group - &quot;More&quot; Outlets </li></ul>
  11. 11. <ul><li>Global economic slowdown </li></ul><ul><li>Competition from the unorganized sector </li></ul><ul><li>Retail sector has no recognition as Industry </li></ul><ul><li>High real-estate costs </li></ul><ul><li>Lack of basic infrastructure </li></ul><ul><li>Supply-chain inefficiencies </li></ul><ul><li>Challenges with respect to human resources </li></ul><ul><li>Shrinkage </li></ul>
  12. 13. <ul><li>Introduction </li></ul>About Big Bazaar Hyper mart Chain of development store in India Out let More than 100 outlets Located in India Parent group Future group Owner Kishore Biyani (CEO) Founded 2001 Head quarter Jogeswari , Mumbai Industry Retail website Tag line Is se sasta aur achha kahin nahi.
  13. 14. <ul><li>Mission And Vision </li></ul><ul><li>VISION </li></ul><ul><li> </li></ul><ul><li>Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner. </li></ul><ul><li>MISSION </li></ul><ul><li>We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. </li></ul>
  14. 15. <ul><li>Positioning And Establishment </li></ul><ul><li>Customers Segmentation </li></ul><ul><li>Big Bazaar targets higher and upper middle class customers. </li></ul><ul><li>The large and growing young working population is a preferred customer segment. </li></ul><ul><li>Big Bazaar specifically targets working women and home makers who are the primary decision makers. </li></ul>
  15. 16. <ul><li>Marketing Mix </li></ul>Physical Evidence People Place Promotion Price Product Process 7 ‘ P ’
  16. 17. SWOT Analysis <ul><li>Strengths: </li></ul><ul><li>High brand equity enjoyed by Big Bazaar </li></ul><ul><li>State of the art infrastructure </li></ul><ul><li>A vast variety of stuff available under one roof </li></ul><ul><li>Everyday low prices, which attract customers </li></ul><ul><li>Maximum percent of footfalls converted in sales </li></ul><ul><li>Huge investment capacity </li></ul><ul><li>Biggest value retail chain in India </li></ul><ul><li>It offers a family shopping experience, where entire family can visit together. </li></ul><ul><li>Available facilities such as online booking and delivery of goods </li></ul><ul><li>Weakness: </li></ul><ul><li>Unable to meet store opening targets on time </li></ul><ul><li>Falling revenue per sq ft </li></ul><ul><li>General perception: ‘Low price = Low quality’ </li></ul><ul><li>Overcrowded during offers </li></ul><ul><li>Long lines at billing counters which are time consuming </li></ul><ul><li>Limited only to value offering low price products. A no of branded products are still missing from Big Bazaar’s line of products. E.g. Jockey, Van heusen, </li></ul>
  17. 18. SWOT Analysis Cont. <ul><li>Opportunity: </li></ul><ul><li>A lot of scope in Indian organized retail as it stands at approximately 4%. </li></ul><ul><li>Increasing mall culture in India. </li></ul><ul><li>More people these days prefer to visit big stores where they can find large variety under one roof </li></ul><ul><li>Threats: </li></ul><ul><li>Competition from other value retail chains such as Shoprite, Reliance (Fresh and trends), Hypercity and D mart. </li></ul><ul><li>Unorganized retail also appears to be a threat to Big Bazaar’s business. A large population still prefers to visit local convenient stores for daily purchases </li></ul><ul><li>Changing Government policies </li></ul><ul><li>International players looking to foray India </li></ul>
  18. 19. <ul><li>Consumer Insights And Perceptions </li></ul><ul><li>Big bazaar is based on 3-C theory of Kishore Biyani. The 3-C determines change, confidence and consumption, and according to this theory, “change and confidence is leading to rise in consumption”, </li></ul><ul><li>They divided Indian customers into 3 categories: </li></ul><ul><ul><ul><li>India one: </li></ul></ul></ul><ul><ul><ul><ul><li>Consuming class, constitutes only 14% of Indian population. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Upper middle class and most of the customers have substantial disposable income. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Initial focus of big bazaar </li></ul></ul></ul></ul>
  19. 20. <ul><ul><ul><li>India two: </li></ul></ul></ul><ul><ul><ul><ul><li>Serving class which includes people like drivers, house-hold helps, office peons, etc. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>For every India One there are at least India Two and have 55% of Indian population. </li></ul></ul></ul></ul><ul><ul><ul><li>India three: </li></ul></ul></ul><ul><ul><ul><ul><li>Struggling class, remaining population of India. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Cannot afford to inspire for better living. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Need cannot be addressed by current business model. </li></ul></ul></ul></ul><ul><li>The potential customers of big bazaar are India One and India Two. </li></ul>
  20. 21. <ul><li>The customer insights were developed by close observation of the target set. The insights that came out were: </li></ul><ul><ul><li>The clean and shiny environment of modern retail stores creates the perception that such store are too expensive and exclusive, and are not meant for India Two. </li></ul></ul><ul><ul><li>India two finds moves and find a lot of comfort in crowds, they are not individualistic. They prefer to be in queues. </li></ul></ul><ul><ul><li>Indian-ness is not about being swadeshi , it’s about believing in Indian ways of doing things. </li></ul></ul><ul><ul><li>Advertisements about schemes and offers through local news paper, radio in local language inspires more customers more than the traditional ways. </li></ul></ul><ul><ul><li>Hypermarkets in India should be situated in the city unlike western countries where they are situated away from city. </li></ul></ul>
  21. 22. <ul><li>Strategic Decision Taken To Build Big Bazaar Brand </li></ul><ul><li>Real-estate game: </li></ul><ul><ul><ul><li>According to Kishore Biyani, real estate cost should be lesser than 5% of total sales of store in order to provide maximum benefits to customer . </li></ul></ul></ul><ul><ul><ul><li>The strategic decisions to secure spaces before other retailers join in have resulted in cost saving. </li></ul></ul></ul><ul><li>Nurturing relationship: </li></ul><ul><ul><ul><li>Kishore Biyani follows the strategy to develop trust and nurture relationship with suppliers. Whoever works with Future Group, either leaves in initial deals or continues forever. </li></ul></ul></ul>
  22. 23. <ul><li>Use of technology, scenario-planning & story telling: </li></ul><ul><ul><ul><li>scenario planning and story telling techniques used for store design layout and store-location selection. </li></ul></ul></ul><ul><li>Design management </li></ul><ul><ul><ul><li>Design-led thinking helped Big Bazaar to achieve ‘customer-first’ objective and ultimately led to financial performance. </li></ul></ul></ul><ul><li>Back-end operations, supply chain: </li></ul><ul><ul><ul><li>India may not have a modern supply chain but it definitely has a cost-effective one i.e. Pantaloon's supply chain. </li></ul></ul></ul>
  23. 24. <ul><li>Today, retailing is about so much more than mere merchandising. It’s about casting customers in a story, reflecting their desires and aspirations, and forging long-lasting relationships. </li></ul><ul><li>Retail today has changed from selling a product or a service to selling a hope, hope an aspiration and above all an experience that a customer would like to repeat. </li></ul><ul><li>For manufacturers and service providers the emerging opportunities in urban markets seem to lie in capturing and delivering better value to the customers through retail. </li></ul><ul><li>Challenges to the manufacturers and service providers would abound when market power shifts to organized retail. </li></ul>