Domain Study- Retail

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presentation done by my friends on Retail. Good info presented, if you are interested in retail- then its a must read.

presentation done by my friends on Retail. Good info presented, if you are interested in retail- then its a must read.

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  • 1. Retail Domain Study A presentation by PGPM Class of 2009, SPJIMR, Mumbai Sameer | Sivaram | Mihir | Chetan | Prashant
  • 2. Facts and Figures India • 10% of GDP • 8% employment to nation’s workforce • Market in value – $460 billion USD • Organized Retail – $43.8 billion USD Global • Speciality Retail most lucrative – 80% of industry group value • Europe Accounts for 34% of global retailing • Global market is $ 11,326 billion USD and will grow to $ 14,347 billion USD by 2013 11/20/2009 Retail Domain Study 2
  • 3. Emerging Market 7.00, 11% 18.00, 28% 7.00, 11% China India TOP EMERGING MARKET BY Australia VOLUME (MAY 08 - NOV 08) Russian Federation 8.00, 12% Poland Turkey 14.00, 22% 651.80, 9.12% 10.00, 16% 2301.00, 1147.10, 32.18% 16.04% Russian Federation Republic of Korea TOP FIVE EMERGING MARKET BY Brazil VALUE IN $M (MAY 08 - NOV 08) Australia China 1174.80, 16.43% 1874.90, 26.22% 11/20/2009 Retail Domain Study 3
  • 4. Key Retail Functions • Demand Forecasting • Procurement • Logistics and Warehousing • Category Management • Pricing • Promotion 11/20/2009 Retail Domain Study 4
  • 5. Window of Opportunity 11/20/2009 Retail Domain Study 5 Source:
  • 6. Outsiders in India? 11/20/2009 Retail Domain Study 6
  • 7. Impact on Indian Economy • Unemployment concern: • FDI Regulations: Large scale liberalization might As apart of India‘s ongoing affect adversely, the economic reforms, foreign unorganized retail sector in retailers are allowed to own 51 near term percent of single-brand outlets • Modernization and • Emergence of India as retail employment opportunities in sourcing hub long term • Rural retailing holds the key • Expansion of manufacturing for growth of bottom part of sector pyramid • Benefits to Indian agriculture 11/20/2009 Retail Domain Study 7
  • 8. Risk & Challenges • Current recession resulting into very low footfalls • Liquidity under pressure • Working capital on rise • Decline in inventory turnover • Real estate availability and high rental costs • Crowding in unattractive locations • Inability to compete with traditional retailers • Over reliance on debt funding • Improperly developed malls & under trained staff • Underdeveloped supply chain & infrastructure • Protests against organized retailers 11/20/2009 Retail Domain Study 8
  • 9. Dynamic Retail Environment Recent Market Dynamics Today's Challenge Low/ negative inflation Macro - Constrained top-line Global economic downturn Economy growth Geo-political shocks Slowing population growth Downward margin Consumer Shifting spending patterns pressure Greater information access Globalized competition Competition Market saturation and Increased operational consolidation complexity Blurring of business models 11/20/2009 Retail Domain Study -9- 9
  • 10. Push tool to Pull Platform Producer Retail Consumer Experiences Organised Services Informed Social Products Connected Retailing Material Consumer 11/20/2009 Retail Domain Study 10
  • 11. Better Store Experience => Better Wallet Share Financial Impact Pain Points Enabling Solution Value to Retailers $$ Customer-level Anonymous Mobile Marketing • Basket size Consumer Shoppers +20% Consumer Lifetime • Frequency +15% Management Lack of Loyalty Digital Signage Profitability •Wallet share +35% Price Sensitivity Assisted Selling Wallet share Turnover HR portal Top customer • Ramp time -30% Retention • Employee Employee High Labour Costs Store Manager Portal retention +20% Empowerment Employee Flexibility • Productivity Training Costs Employee sales +40% Cost variability assistance Store level inventory Assortment Manual Processes •Data accuracy Localization T-log Extraction +80% Optimized Inventory visibility • Error rates -80% Store NMROI Collaborative • Transaction Operations Lack of Local costs -20% 11/20/2009 product Retail Domain Study sold before % 11 Assortment requirements paid
  • 12. Future of Retail– A world of extremes Ultra Efficient, Integrated Enterprises & value webs Consumers Retailers •“Super shoppers” armed •Dominance of mega-retailers with ubiquitous information •Proliferation of focused access specialists • Maximizing personal •Failure of undifferentiated, satisfaction based on diverse mid-tier competitors value drivers Consumer Product Companies •Accelerated consolidation •Global vs. local operational complexity •Strong competition from private brands •Mid-tier brands squeezed out There would be a consumer marketplace of tremendous complexity, with big winners and losers 11/20/2009 Retail Domain Study 12
  • 13. Trends – Cutting Costs 11/20/2009 Retail Domain Study 13
  • 14. Trends in coming days Sales growth to decline on cutback of consumer spending Customer loyalty will be critical Customer experience will be the key Short term Investments (<12 months) will be top priority Large scale and lengthy projects will be put on the back burner 11/20/2009 Retail Domain Study 14
  • 15. IT in Retail – Key Priorities Multichannel convergence Customer Optimization service in stores Supply Chain Merchandising Data Foundation renewal (GDS) 11/20/2009 Retail Domain Study 15
  • 16. Happy Shopping 11/20/2009 Retail Domain Study 16