This document summarizes the findings of a study on the state of independent retailers in Chennai and surrounding areas. It identifies the key challenges they face as business growth slowing while margins shrink, high rent and staff attrition, and increasing competition from e-commerce and organized retailers. Retailers expressed a need for clearer regulations around licensing and operating norms to reduce minor irritants and speed up processes. Overall, the study aimed to understand the on-ground issues facing independent retailers to help address their needs through policy changes.
Student International Business Council (SIBC) - McKinsey & Company - Spring 2017
• Investigated Walmart's ability to compete with Amazon’s new “fast-checkout” store, Amazon Go
• Recommended Walmart acquire an AI firm and more actively invest in app development and R&D
• Modeled the recommendation's impact to increase annual net profit ~$6 bn by 2022
• Presented findings to McKinsey & Co. in their Chicago office
Student International Business Council (SIBC) - McKinsey & Company - Spring 2017
• Investigated Walmart's ability to compete with Amazon’s new “fast-checkout” store, Amazon Go
• Recommended Walmart acquire an AI firm and more actively invest in app development and R&D
• Modeled the recommendation's impact to increase annual net profit ~$6 bn by 2022
• Presented findings to McKinsey & Co. in their Chicago office
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Looking to transform your FMCG business into a more competitive organisation using analytics and planning. This documents shares details on some of initiatives that can be done using Big Data Analytics, AI, Forecasting, Planning, Data Visualisation and Predictive Algorithms
Ian Rutter's presentation on the Engage Business Network as part of the panel at the 'Real people, real lives - Focus on food' event which took place on 3rd July 2012 in the Age UK conference suite.
After viewing this project one can understand how a FMCG company operates its finances. The ratio analysis of the firm showing how to calculate the profitability, sustainability, viability of a firm to operate its day to day business in a profitable zone.
IBM Retail solutions offer long-standing commitment and investment
in leading-edge mobile partnerships, cognitive computing solution
development, acquisitions and research that provide disruptive
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business problems.
Your cognitive future in retail industryTero Angeria
Cognitive + retail = the future
Welcome to the age of cognitive computing, where intelligent machines simulate human brain capabilities to help solve society’s most vexing problems. For retail,cognitive computing has already arrived, and its potential to transform the industry is enormous. Cognitive systems are driving more personalized
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Your Cognitive Future in the Retail IndustryLuke Farrell
Taking from Tero Angeria IBM
Cognitive + retail = the future
Welcome to the age of cognitive computing, where intelligent machines simulate human brain capabilities to help solve society’s most vexing problems. For retail,cognitive computing has already arrived, and its potential to transform the industry is enormous. Cognitive systems are driving more personalized
shopping experiences and helping unearth customer trends. Our research reveals that retail leaders globally are poised to embrace this groundbreaking technology more holistically and, by doing so, will redefine the future in retail.
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Knowledge Report - Making Retail a preferred employment choice in the digital world by Anil Talreja, Partner M&A Tax, Deloitte India & Sucheta Hota, Director, Human Capital Consulting, Deloitte
The conference will focus on three key areas: Customer experience, Marketing and Supply Chain. These are the thrust areas for all retail businesses trying to evolve in lockstep with the changing business environment. Not surprisingly, all technological interventions are taking place in these areas and they are driven by analytics or big data. Over the two days, you will get insights into realities of the digital economy and challenges with respect to these areas and learn how some retailers have managed to overcome the hurdles and equip themselves for retailing in the digital era.
2. Why this study?
6%
40%
Size of the retail market - 2013
100% = USD 440 bn, Rs 265,000 cr
Organized Retail; including e-
tailing
“Mom & Pop” stores
“Organizing”
Retailers
<20 stores
< 20 cr Turnover;
Modern practices –
billing / inventory
• Qualitative
• 23 retailers in
• Chennai and
surrounding
markets
• Categories:
Apparel,
Grocery, Food,
Restaurant,
Fast fashion,
Cosmetics,
Jewelry
3. “State of Play” of Independent Retail
Business Growth
Profitability
Competition
People
Technology
Regulatory
Policy
Customer
experience
Space
• Growth for most
retailers is 15% + y-o-
y – last 3 to 5 years.
• Margins – Shrinking
or Stable. No-one
spoke about
expanding margins
4. Branding is the single biggest challenge
Business Growth
Profitability
• Creating a brand in
the customer’s mind –
single biggest
challenge.
• Mechanisms:
• Franchising
• Creating own
label
• Service
• Move up the
value chain
Competition
People
Technology
Regulatory
Policy
Customer
experience
Space
5. “Customer's expect a
modern apparel store
which has invested in
frontage and store
windows to sell an item
worth Rs.500 at Rs.100” –
Vimal Rajan, Director,
Amigos
“Consumer discretionary
spend on apparel, footwear
is decreasing. Inflation
needs to be stable for
consumer confidence to
return” - Murali Krishnan,
MD, Kalyani Associates
Grocery retailers: Input
cost has increased by
more than 50% for the last
two years – they were not
able to pass on the entire
price rise to the
consumer.
6. Competition: “Re” and “E”
Business Growth
Profitability
Competition
People
Technology
Regulatory
Policy
Customer
experience
Space
“I realize the power
of e-commerce,
when I see my staff
regularly giving
directions to the
Flipkart delivery
boy”, Arun Kumar,
Director, Sri Ramana
Silks; Madurai
7. Space and People worries
Business Growth
Profitability
Space
Technology
Regulatory
Policy
Customer
experience
People
Not only is space
cost increasing, the
pace is the highest in
the smaller towns –
Salem, Trichy, Erode,
Karur, Thanjavur.
Retailers in these
cities report that
rentals have risen as
much as 10 times in
the last 10 years.
Competition
8. People Matters
All but one retailer
spoke of high
attrition – in most
cases - above 90%
per year. That
means that front
end staff in any
given store
changes
completely every
year.
“Attrition is linked to ‘brand power’.
Even banks give better loans to staff
who work for brands like Levi’s”
- Vimal Rajan, Diretor, Amigos
9. Technology: Social, but not sure how to go
about e-commerce
Technology
Regulatory
Policy
Emerging Retailers
are “ Surprisingly
Social”
Billing / Inventory are
automated.
Except for grocery /
small format
supermarkets, all
retailers felt that an
ecommerce listing
would help – but were
not always sure how
to go about it.
10. Regulatory: Accumulative, minor ‘irritants’
Regulatory
Policy
Emerging retailers want clarity and speed
on licensing and operating norms.
Reactions to FDI are mixed – some
believe it will push up space and people
costs, others see it as an opportunity to
learn from global retailers.
Larger retailers among those surveyed
see GST as an enabler.
About a third of the retailers wanted
protection from the predatory pricing of e-
tailers.
11. Regulatory: Accumulative, minor ‘irritants’
Regulatory
Policy
Need clarity,
transparency on:
• Licenses for store
opening
• 365 days
permission
• Labour registers
• Coordination with
urban planning (e.g.
metro work in
Chennai)
Emerging retailers want clarity and speed
on licensing and operating norms.
Reactions to FDI are mixed – some
believe it will push up space and people
costs, others see it as an opportunity to
learn from global retailers.
Larger retailers among those surveyed
see GST as an enabler.
About a third of the retailers wanted
protection from the predatory pricing of e-
tailers.
12. In summary: “State of Play” of Independent
Retail
Business Growth
Profitability
Space
People
Competition
Regulatory
Policy
Customer
experience
Technology
Based on your
feedback we will look
to continue this
dialogue with retailers
across other markets
– Delhi, Bangalore,
Mumbai, Surat etc.