Retail Logistics


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Organized retail in India has grown considerably. The presentation on Retail Logistics deals with the rise of organized retail and players in retailing. The results of organized retail and the emerging aspects of retailing are also included. Welingkar’s Distance Learning Division has initiated this presentation.

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Retail Logistics

  1. 1. Welingkar’s Distance Learning Division CHAPTER-11 Logistics for Retail We Learn – A Continuous Learning Forum
  2. 2. Rise of Organized Retail • Organized retail in India has indeed come of age • From “ Neechay dukaan upar makaan’ the organized retail business has taken a vibrant shape • Organized retail is expected to grow at 25% per annum.
  3. 3. Rise of Organized Retail • Retail boom is not only confined to the metros, but is fast moving towards the small towns • Smaller organized retail formats have certain obvious cost advantages which they can leverage in their battle against the large players
  4. 4. Players in retailing • At the world level, Wal-Mart, Tesco, Carrefour, Shoprite, are leading players • In India we have Big Bazaar, Trent’s Westside, RPG’s Foodworld, Vijay Sales in Mumbai, Subhiksha, Nilgiris and Vishal Mega Mart are leading players • Reliance is also coming up with large chain of retail outlets under brand name “Reliance Fresh”
  5. 5. Factory Outlet Chain • Caters to value seeking customers • Company owned or franchised outlets sells exclusively the company brands • The most extensive presence of organized retailers is in the apparel and clothing market, followed by foods groceries and appliances
  6. 6. Organized retail has resulted into • • • • • Shift in bargaining power balances Retailer advantaged Promotions in large retailers Fast feedbacks Control, organize, and manage the supply chain from production to consumption Ch-11 Logistics for Retail
  7. 7. Emerging Aspects in Retailing • The retailers are having more control over the secondary distribution • Supplies should be of composite loads • Retailer itself conducts milk runs • More frequent delivery of smaller consignments • Quick response strategy Ch-11 Logistics for Retail
  8. 8. Emerging Aspects in Retailing • Electronic data interchange • Integrate primary and secondary distribution • Large retailers collaboration with manufactures Ch-11 Logistics for Retail
  9. 9. Emphasis is shifting to retailers demanding • • • • More and Frequent deliveries With shorter and shorter lead times Of smaller and smaller quantities Resulting in more and more of manufacturer suppliers not being able to make optimum utilization of delivery units • Holding more stocks at delivery centers Ch-11 Logistics for Retail
  10. 10. Retailers and manufacturer are sharing information on • • • • Trends in demands Stock levels Future plans Marketing initiatives Ch-11 Logistics for Retail
  11. 11. Cash and Carry Format • Retailer itself assumes the role of the manufacturer and caters to the requirements of other retailers • Is similar to wholesaling to smaller retailers • The German cash and carry giant Metro has already set up base Ch-11 Logistics for Retail
  12. 12. Global Data Synchronization System • Unique code, description, classification and identification number to a product, companies are ensuring that supply chain partners use common product descriptions so that no scope for minor inefficiencies. Ch-11 Logistics for Retail
  13. 13. Private Label • Private labels are product lines that are owned, controlled, merchandised, and sold by the retailer himself, has its own distribution strategy • For large retailers like Big Bazaar, Subhiksha it makes a lot of economic sense to push their in store brands of normal grocery items where the profit margins cab be as high as 20-25 % Ch-11 Logistics for Retail
  14. 14. Stand Alone Supermarket • Supermarket store is bigger than a normal grocer with average shelf space of around 1500 to 2000 s.ft. • Offers product slightly less than the MRP • They are single and self service stores Ch-11 Logistics for Retail
  15. 15. Other important retailers • 2.5 lacs chemists are important part of the retail distribution scenario • Medicine Shoppe , having around 60 outlets spread across the country • Panwalla are important category buy itself • Buying visibility in a paan shop is lower, and the cost of servicing is comparatively higher. Ch-11 Logistics for Retail
  16. 16. Summary • Organized retailing in India has growing importance and very good growth opportunities • Key players in Indian markets are, Big Bazaar, Westside, Food world, Subhiksha etc. • Retail boom is not confined to metro, its fast moving to other cities of country Ch-11 Logistics for Retail