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Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP.[1][2] The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail market in the world, with 1.2 billion people.[3][4] India's retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centers. India's retail and logistics industry employs about 40 million Indians (3.3% of Indian population). Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process. In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple.[5] The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus.[6] In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores.[7] In June 2012, IKEA announced it has applied for permission to invest $1.9 billion in India and set up 25 retail stores. Fitch believes that the 30 percent requirement is likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan from opening stores and creating associated jobs in India.[8][9] On 14 September 2012, the government of India announced the opening of FDI in multi-brand retail, subject to approvals by individual states.[10] This decision has been welcomed by economists and the markets, however has caused protests and an upheaval in India's central government's political coalition structure. On 20 September 2012, the Government of India formally notified the FDI reforms for single and multi brand retail, thereby making it effective under Indian law.[11][12][13] On 7 December 2012, the Federal Government of India allowed 51% FDI in multi-brand retail in India. The Feds managed to get the approval of multi-brand retail in the parliament despite heavy uproar from the opposition. Some states will allow foreign supermarkets like Walmart, Tesco and Carrefour to open while other states will not.
Automatic approval is not allowed for foreign investment in retail. Regulations restricting real estate purchases, and cumbersome local laws. Taxation, which favours small retail businesses. Absence of developed supply chain and integrated IT management. Lack of trained work force. Low skill level for retailing management. Lack of Retailing Courses and study options Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins.
In November 2011, the Indian government announced relaxation of some rules and the opening of retail market to competition.
The government has also not defined the term Multi Brand. FDI in Multi Brand retail implies that a retail store with a foreign investment can sell multiple brands under one roof. In July 2010, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce circulated a discussion paper [14] on allowing FDI in multi-brand retail. The paper doesnt suggest any upper limit on FDI in multi-brand retail. If implemented, it would open the doors for global retail giants to enter and establish their footprints on the retail landscape of India. Opening up FDI in multi-brand retail will mean that global retailers including Wal-Mart, Carrefour and Tesco can open stores offering a range of household items and grocery directly to consumers in the same way as the ubiquitous kirana store.
Food products Hard goods or durable goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. Goods that do not quickly wear out and provide utility over time. Soft goods or consumables - clothing, apparel, and other fabrics. Goods that are consumed after one use or have a limited period (typically under three years) in which you may use them.
Department stores - very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service. Discount stores - tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee; Variety stores - these offer extremely low-cost goods, with limited selection; Demographic - retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals).
Mom-And-Pop : is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. The square feet area of the store depends on the store holder. Specialty stores: A typical speciality store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores. General store - a rural store that supplies the main needs for the local community; Convenience stores: is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases as it often works with extended hours, stocking everyday; Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. Supermarkets: is a self-service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000 and 40,000 square feet (3,700 m2). Example: SPAR supermarket. Malls: has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Category killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon, Pennyful and eBay. Vending Machines: This is an automated piece of equipment wherein customers can drop the money in the machine and acquire the products.
Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include:
Automated Retail stores are self-service, robotic kiosks located in airports, malls and grocery stores. The stores accept credit cards and are usually open 24/7. Examples include ZoomShops and Redbox.
Big-box stores encompass larger department, discount, general merchandise, and warehouse stores.
Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales.
SHOPPERS STOP
The foundation of Shoppers' Stop was laid on October 27, 1991 by the K. Raheja group of companies, one of India's biggest hospitality and real estate players. The Group crossed yet another milestone with itslifestyle venture-Shoppers' Stop. With its immense expertise in the service industry and creditability, Shoppers' Stop today boasts of 27 retail outlets across the country and is planning to spread its wings with futuristic expansion plans to meet the challenges of the retail industry. A benchmark for the Indian retail industry to follow, Shoppers' Stop has progressed from a single brand shop to a Fashion & Lifestyle store for the families. Shoppers' Stop is a household name, known for its superior quality products, services and above all, a complete shopping experience. Shoppers' Stop was the first to redefine shopping experience and creating a niche for itself in the service industry. As India's first specialty chain with outlets in Mumbai, Bangalore, Delhi, Hyderabad, Jaipur and Chennai, Shoppers' Stop offers a complete range of garments and accessories for the entire family. More than 25,000 customers walk into Shoppers Stop everyday to feel the experience of shopping. Andheri was the first store to be opened in India. The initiative of this store was taken by B.S.Nagesh at a time when the concept of retail industry was just coming into the market. As on today, the current investors in Shoppers Stop are ICICI, IL&FS Investments and Zodiac clothing. Their combined shareholding in Shoppers Stop is 19% while 79% is held by Raheja Group & balance 2% is held by its employees
Corporate profile:
Vision: To be a global retailer in India & maintain no.1 position in Indian market in Department Store Category. Mission: Nothing but the best To strive & achieve nothing but the best in terms of processes, practices & deliverables. Values: The following values help Shoppers Stop in
achieving its mission & vision:
Business Partners:
Launched as India's premier retail chain for branded apparel and accessories, Shoppers' Stop has systematically progressed from only branded apparel to private label garments to home furnishings, and finally into books and music - all focused on our customers' lifestyle requirements and aspirations. In 2000, SSL diversified into Bookstore Retailing by acquiring 51% stake in Crossword which it later increased to 100% in 2005. SSL has also ventured into various categories like cosmetics through MAC, mother and infant care through Mothercare, home solutions through Home Stop, food and beverages (F&B) through Brio and Desi Caf, gaming and entertainment through Timezone, Ladies non-apparel and accessories through its luxury format, Arcelia, and into airport retailing through its 50:50 joint venture (JV) with the Nuance group. SSL also has 19% stake in the hyper-mart format of HyperCity and has plans to increase it by 51% by end of June-2010. Shopperss Stores sister store are:
Crossword Bookstores
Crossword Bookstores is a chain of largest bookstores in India with 52 branches. Shoppers Stop acquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as a lifestyle bookstore with their spacious, well laid out stores which encourages customers ease in browsing through the merchandise of books, music, stationary and toys.
Home Stop
HomeStop is premium home furnishings home concept store, which offers products in home decor, furniture and accessories, bath accessories, bedroom furnishings, mattresses, draperies, carpets, modular kitchens and health equipment
Brio
Brio makes Shoppers Stop Ltd.'s foray into Food and Beverage which was a step towards franchised coffee bars. Brio the caf bistro is designed provides customers a place to relax, revive and reflect. It has a classic yet sophisticated ambiance. Brio has 20 outlets in select cities. Cafe Coffee Day (CCD), the retail division of Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run its BRIO outlets.
Desi Cafe
Desi Caf and their operations have been taken over by Cafe Coffee Day (CCD), the retail division of Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run its Desi Cafe outlets.
Hyper City
HyperCity provides customers a wide variety of range of products for shopping in a large and modern retail environment. It offers a contemporary range of products, sourced from both local and international markets. The product range covers: Foods and Grocery, Homeware, Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Fashion.
M.A.C.
M.A.C. and Shoppers Stop Ltd. entered into a non exclusive retail agreement with cosmetics major Estee Lauder to open up M.A.C. Cosmetics stores in India. M.A.C. Makeup-Art Cosmetics - the professional brand of choice, is the first brand under the Estee lauder Group of Companies portfolio to enter the Indian retail market. Currently there are 9 M.A.C. stores operating
Arcelia
Arcelia is a new retail concept aiming at the growing accessories and cosmetics segment, with a strong emphasis on experience and indulgence and primarily caters to discerning women shoppers. It retails cosmetics, fragrances, fine jewelry, footwear, handbags.
Mother Care
MotherCare and Shoppers Stop come together to introduce products for infant and toddler care which stocks a variety of products for mother and babies, toddlers and children till eight years of age with the focus being on style, function and safety.
Nuance Group
Nuance Group with Shoppers Stop makes an entry into airport retailing. The alliance is marked with a joint venture with The Nuance Group AG of Switzerland, the worlds leading airport retailer. Shopper's Stop Ltd. is handling the retail operations at the duty free zones in international terminals. The joint venture company, called Nuance Group (India) Private Limited. is operating outlets at the International airports at Bengaluru and Hyderabad.
Hyper City-Argos
HyperCity-Argos and Shoppers Stop, the two retail ventures of K Raheja group had signed a memorandum of understanding with UKs leading retail chain Home Retail group to develop the Argos (retailer) retail format stores in India. Two years later, Shoppers Stop Ltd has informed Bombay Stock Exchange shall wind down and discontinue its catalogue retail operations under the Hypercity-Argos brand.
Time zone Shoppers Stop forayed into the Entertainment sector by acquiring 45% stake in
Timezone Entertainment Private Limited which is in the business of setting up and operating Family Entertainment Centers (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi Mumbai and Mumbai.
Customer Profile:
Shoppers Stops customers fall between the age group of 16 years to 35 years, the majority of them being families and young couples with a monthly household income above Rs. 20000 and an annual spend of Rs.15000. A large number of Non - Resident Indians visit the shop for cultural clothes in the international environment they are used to which means people from abroad are also interested in shopping in Shoppers stop. Their target customers are upper middle class and upper class.
Customer Rewards:
Shoppers Stops customer loyalty program is called The First Citizen. The program offers its members an opportunity to collect points and avail of special benefits. Currently, Shoppers Stop has a database of over 2.5 lakh members who contribute to nearly 65% of the total sales of Shoppers Stop. They also offer a co-branded credit card with Citibank for their members.
International Affiliations:
Shoppers Stop is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29 experienced retailers from all over the world, which include established stores like Selfridges (England), Karstadt
(Germany), Shanghai No. 1 (China), Matahari (Indonesia), Takashimaya (Japan), C K Tang (Singapore), Manor (Switzerland) and Lamcy Plaza (Dubai). This membership is restricted to one member organization per country/region
Objective of Shoppers Stop: Their main objective is to make their customer satisfy and
then profit through sales, employee added after all every organization works to earn money which is possible through good sales and if our customers are not satisfy then it will be difficult for us. So we put our effort on retaining our customers because retaining old customers is more profitable than making new customers. And if we analyze this statement then we come to know that their 65% of their customers are their first citizen customers. Today people goes for variety and shoppers stop is doing that, they offer total 250 brands to their customers which act as their strength and help them retaining as well as making new customers. They believe in producing quality so they offer quality products basically international brands like Louis Phillip, Black Berry, Police, DKNY, Ferrari, etc. Shoppers Stop aims to position itself as a global retailer. The company intends to bring the worlds best retail technology, retail practices and sales to India. Currently, they are adding 4 to 5 new stores every year
Types of Retail Outlets: Shoppers Stop is known as multi-Brand retail outlet because of
their verity of Products. They offer various products like apparels, Accessories, Toys, Fragrances, Beauty Products, Travelling products, Home Appliances, etc. They offer various products like Apparels, Fragrance & Beauty, Home & Travel, Gift ideas. Under this they have different Categories, Brands and Styles to offer customers. They have many other showrooms of Shoppers Stop in Delhi and NCR, so we can say that they have long chain of retail outlets. They also offer online purchasing which means that they are using new technology to increase their sales.
Brands Offered:
Shoppers Stop retails products of domestic and international brands such as Louis Philippe, Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie, Nike, Reebok, LEGO, and Mattel. Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish, LIFE and Vettorio Fratini, Elliza Donatein, Acropolis etc. The company also licensees for Austin Reed (London), an international brand, whos mens and womens outerwear are retailed in India exclusively through the chain
Shoppers Stop basically follows 2 marketing strategies: 1. Guerrilla marketing 2. Interactive marketing 1. Guerrilla marketing is an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget. Typically, guerrilla marketing tactics are unexpected and unconventional; consumers are targeted in unexpected places, which can make the idea that's being marketed memorable, generate buzz, and even spread virally. Guerilla Marketing involves unusual approaches such as intercept encounters in public places, street giveaways of products, pr stunts, any unconventional marketing intended to get maximum results from minimal resources. More innovative approaches to Guerilla marketing now utilize cutting edge mobile digital technologies to really engage the consumer and create a memorable brand experience. Principles of guerrilla marketing Guerrilla Marketing is specifically geared for the small business and entrepreneur. It should be based on human psychology instead of experience, judgment, and guesswork. Instead of money, the primary investments of marketing should be time, energy, and imagination. The primary statistic to measure your business is the amount of profits, not sales. The marketer should also concentrate on how many new relationships are made each month. Create a standard of excellence with an acute focus instead of trying to diversify by offering too many diverse products and services. Instead of concentrating on getting new customers, aim for more referrals, more transactions with existing customers, and larger transactions. Forget about the competition and concentrate more on cooperating with other businesses. Guerrilla Marketers should always use a combination of marketing methods for a campaign. Use current technology as a tool to empower your business. 2. Interactive marketing is a strategies adopted by then retailers where they allow customers to customize the product as per their preference. This strategy is mainly followed by service industries like hotels but Shoppers Stop is able to carve out this facility in a retail store. The concept that has already made a debut at Shoppers Stop outlets in Mumbai, allows customers who are referred to as guests to go through various stages of activity in creating their own teddy bear (or other stuffed toy), including choosing a stuffed animal, stuffing it, giving it a heart, stitching, fluffing, naming and dressing it And though the toys are priced at a premium level ranging between Rs 595 and Rs 1,295 for a stuffed animal and add-ons such as sound chips, clothes and accessories coming at extra cost the interactive shopping experience also adds on an element of entertainment for young customers and can turn into a family affair as well.
Retail chain Shoppers Stop Ltd, is eyeing over 50 per cent sales this year from its customer relationship management (CRM) initiatives. The company has also lined up an aggressive expansion plan targeting smaller towns and cities in the country. BS Nagesh, managing director and CEO of Shoppers Stop, told FE that the company has given a new direction to its CRM initiatives after it acquired a business intelligence software called Business Solutions about eight months ago. The new software helps generate intelligent data from Shoppers Stop customer base of about 2,30,000. The company then collects this data and touches base with customers via direct mailers informing them of all new promotions that is currently on and also updates them about the upcoming events. Shoppers Stop claims that it has taken its CRM initiatives to a new height and now calls its loyalty programmes Customer Experience Management. If we find from the data that a customer had bought a pair of trousers, we tell him about a new range of shirts that we have just brought into our store, says Mr Nagesh. We are planning to open 35 outlets within the next three years. We have identified 21 new locations including Kanpur, Amritsar, Jalandhar, Ahmedabad and Indore, among others to set up these outlets, Mr Nagesh said.
ERP: Shoppers Stop was the first few retailers to use scanners and barcodes and
completely computerise its operations. Today it is one of the few stores in India to have retail ERP (Enterprise resource planning) in place, which is the best retail planning system in the world. With the help of the ERP, they are able to open new stores faster and get information about merchandise and customers online, which reduces the time in taking quick decision.
Technology He told us that day by day the technology is upgrading and the problem is that the new competitor comes with new technology because of which they also have to upgrade their technology which results more expenditure, which is not good for any business.
SWOT ANALYSIS
Strength
Variety Range
Different Brands
Pioneer Loyal customer Low risk Good financial position Presence across various segments
Less Schemes: They do not offer so much schemes, they offer schemes only on special occasions like Diwali, Independence Day, etc. Less Discounts : They offer less discount in their schemes, they basically offer 10% to 20% discount Competition from standalone stores Late entry into value retailing Store makeover expenditure
Threats
Government Policies Entrance of New Players High attrition Lesser consumer spending Entry of foreign players Unorganized sector Independent stores
Opportunities
Quality Youngsters
Higher disposable income Collaborate Private levels Tier 2 & tier 3 cities Enter new consumer goods segments