RETAILING

Amrita BandyopadhyayPrabhat Kumar

Shrey KumarSM Mashque

Gautam

INDIAN RETAIL SECTOR

The Indian Retail Sector is at an inflexion point, with changing demographics driving growth of organized retailing and driving growth in consumption.

There is increase in consumer spending which is driven by nuclearisation of families, increasing population of working women and new job opportunities in emerging service sectors such as IT Enabled Services.

Central Statistical Organization (CSO) estimated private final consumption of consumers in India is about Rs.17,600 billion in FY10. Of the total private consumption, retail sector accounted for approximately 60% at Rs 8570 bn. Of this, food and beverages, apparel and consumer durables are the top three categories of consumer spend and form 87% of the total retail sales in India

ORGANISED RETAILING With close to 12 million retail outlets India has the largest retail density in the world.

(Source: CII Mc Kinsey Report). However, most of these retail outlets belong to the unorganized sector.

The Indian retail industry is evolving in line with changing customer aspirations across product groups, with modern formats of retailing emerging.

Organized retail derives its advantages in generating operational efficiencies while simultaneously catering to rising consumer aspirations, delivering better value to customers in terms of lower price, better quality, greater selection, improved service and in store ambience.

Consumerism and brand proliferation has been enabler for organized retailing Organized retail has to overcome significant challenges in terms of regulations and

infrastructural barriers in order to realize its full potential. Availability of quality retail space is the main constraints.

There exist differential sales tax rates across states in India which adds to cost and complexity of distribution.

Equity options are also restricted with Foreign Direct Investment not being permitted in the retail sector.

The availability of trained manpower poses a key risk for the retail sector Both vendor management and logistics management are still undeveloped.

RETAILING TYPE

Value Retailing These stores primarily retail primarily food and house hold items. These are primarily large stores with volume based discounted prices. The share of expenditure on food and grocery in a consumer’s wallet, availability

of a vide variety of products at a reasonable price are the main factors has contributed to the growth of this segment. Ex. Big Bazaar, Star India, Food world

Lifestyle retailing These stores retail primarily non-food items such as apparel, footwear, accessories,

cosmetics and household products. They stock multiple brands across product categories, though some of them focus

on their in house store label The convenience factor coupled with the aspirational perception of shopping in a

department store has contributed to their growth. Ex. Pantaloons’, Shoppers’ Stop, Westside, Lifestyle

PANTALOONS RETAILING STRTAGIES

INTRODUCTION Part of the Future Group. Founder and Group CEO, Mr. Kishore Biyani. Operates in multiple retail formats, both the value and

lifestyle segment of the Indian consumer market. Headquartered in Mumbai. Has over 1,000 stores across 73 cities in India and

employs over 30,000 people. As of 2010, it was the country's largest listed retailer by

market capitalization and revenue.

Lines of Business Fashion - Pantaloons, Central, aLL, Brand Factory, Blue Sky, Top 10, Fashion

Station, Big Bazaar, Lee Cooper General Merchandise - Big Bazaar, Shoe Factory, Navras, Electronics

Bazaar, Furniture Bazaar Electronics - eZone, Electronic Bazaar, STAPLES (JV) Home Improvement - Home Town Furniture - Collection i, Furniture Bazaar, Home Bazaar E-tailing – Future bazaar Books & Music - Depot Leisure & Entertainment - Bowling Co., F123 Wellness - Star & Sitara, Tulsi Telecom & IT - Gen M, M Bazaar, M-Port, ConvergeM Consumer Durables - Koryo, Sensei, IPAQ Malls - Central (Bangalore, Hyderabad, Pune, Mumbai, Vadodara, Gurgaon, Indore, Ahmedabad)

AWARDS

CNBC Awaaz Consumer Awards 2009 Most Preferred Multi Product Chain - Big Bazaar Most Preferred Multi Brand Food & Beverage Chain - Big Bazaar Images Fashion Forum 2009 Most Admired Fashion Group Of The Year - Future Group Most Admired Private Label - Pantaloons, the lifestyle format Critics Choice For Pioneering Effort In Retail Concept

Creation - Central Coca-Cola Golden Spoon Awards 2009 Most Admired Food & Grocery Retailer Of The Year Most Admired Food Court Most Admired Food Professional Future Group was awarded the Most Admired Retail Company of the

year in 2010. Mr Kishore Biyani also won Retail Face of the Year.

DIVERSIFICATION STRATAGIES

Diversified the business

keeping retailing

as the common goal. Each business is set to

operate on defined strata. Company has divided Indian

customers in 3 groups. INDIA

ONE,INDIA TWO, INDIA THREE Each has different values,

products and quality requirements.

INDIA ONE is the consuming class . Constitutes only 14% population. In the needs hierarchy they are located are in self actualization and

Esteem needs. For this class pantaloon patterned Future bazaar, E zone, Central,

brand factory, Home town and star Galaxy entertainment. INDIA TWO is the serving class. The population of this class is more than 30%. In the needs hierarchy they are located in for Social and security needs. Earning capacity of this class is 60% lesser than INDIA ONE. For this class as the big bazaar, Food bazaar, Future money and other

retail formats are presented. INDIA THREE is the struggling class. The class led life on hand to mouth existence. The present business model is not addressing this class.

DIVERSIFICATION STRATAGIES

PRICING STRATEGY Value pricing Used in case of external factors such as recession or increased competition To provide 'value' products and services to retain sales. Promotional pricing Pricing is done to promote a product. The application of This done by BOGO (Buy one Get One), BTGO (Buy Two Get One Free) etc. Bundling Bundling is marketing tool sell two or more complementary product as a package with attractive

price. The price is will lesser then individual selling price. . Physiological discounting In India this approach is called as Bata rating system. Organization utilizes this approach when product has emotional value rather than rational value. Example a product is priced for 99 instead of 100. Time pricing During holidays rate of customer is more. With less advertisment, more customer can be attracted. On public holiday like 26 Jan or 15th Aug.

OTHER STRATAGIES

Store location Location occupies an important place in retail strategy. Pantaloon stores have excellent location mostly in big malls, at the centre of the

city. Traffic The traffic– pedestrian as well as vehicular– that passes the site is an important

determinant of the potential sales that can be generated from a store. A pantaloon is known to have good parking space wherever it’s located. Accessibility of the market Accessibility of a market is defined in terms of the availability of public transport . Mostly located in posh locality in the center of the city. Store security Have ample staff to guide as well as keep a check on customers. Also cc cameras put up at various spots.

STRATEGIES CONTINUED…

Visibility Pantaloons is situated very close to the main road. Pantaloons generally being a three floor building have great visibility. To enhance the visibility pantaloons has put its sign board on the top of the

building. Product Placement High ticket value items like perfumes, cosmetics close to main entrance Seasonal products on promotion (private brands) like wind cheaters,

sweaters in front of entrance to catch customer attention Adjacencies High level of adjacencies - Jewellery section next to Women Ethic Wear Men Accessories like Wallet, Socks etc close to point of sale First Formal wear then Evening wear then Casual Wear then Sportswear Kids toys and women wear

STRATEGIES CONTINUED…

Pantaloon puts its hoarding at prime locations, featuring the upcoming Fashion events or its brand ambassadors who are generally eminent celebrity or the discounts available.

It is the main sponsor for many events like Femina Miss India. Introduced two innovative logistics techniques, cross-docking and EDI (electronic

data interchange) The core of their systems is the Connected Retailer Merchandising Solution, which

streamlines operations, unifies asset management, and provide retailers the information.

Bar Coding and Scanners are used. The shopping environment is serene and calm. Packaging is good and made of Recyclable Plastic Bags. The new launched products are showed by prominent color back ground. Window display is highly interactive for impulsive buyer No bad reputation like child labor.

HR STRATAGIES There seems to be a high level of attrition in the retail sector which is almost 40% according to

a recent study. Front end jobs are facing an attrition rate as high as even 80%. Retention and motivation of personnel has become the major concern of HR. Pantaloons provide congenial working atmosphere, support learning and training facilities,

and a highly competitive pay structure. Assigning the "right project to the right person" is the organizational motto and this is done

by Manpower Allocation Cells (MAC). Appetite for taking risks is encouraged. Learning while doing is allowed. No rigid organizational structure Balanced Score card approach used. At the senior management level, the group hired high profile executives from reputed

organizations like Goldman Sachs , Coca-Cola India, etc. In addition to bringing in new talent at the senior management level, PRIL also tied up with a

few management schools to create a management talent pool for the lower levels of the organization.

STRATAGIES NEEDED While the metros have already been exploited, the focus has to be now

shifted towards the tier-II cities. India's has a huge rural population which must caught the eyes of the

group. Collaborate with other online retailers to offer its products.