Description
This is persentation describing the various retail formats followed by companies
India v/s World
• Indian retail is fragmented with over 12 million outlets operating in the country. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market
size as compared to India
• India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person) • Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG company). • The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about
three million people.
India v/s World
• Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today). • 60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format
•
Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average
inventory turns ratio of about 18. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10.
•
Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.
Traditionally three factors have plagued the retail industry
•
Unorganized : Vast majority of the twelve million stores are small "father and son" outlets
•
Fragmented : Mostly small individually owned businesses, average size of outlet equals 50 s.q. ft. Though India has the highest number of retail outlets per capita in the world, the retail space per capita
at 2 s.q. ft per person is amongst the lowest.
•
Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has typically two forms: "Haats" and “Melas". Haats are the weekly markets : serve groups of 10-50 villages and sell
day-to-day necessities. Melas are larger in size and more sophisticated in terms of the goods sold (like
TVs)
Recent Changes
•
Experimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc.
•
Store design : Biggest challenge for organised retailing to create a “customer-pull” environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are upto
10-15%. Retail chains like MusicWorld, Baristas, Piramyd and Globus are laying major emphasis & investing
heavily in store design.
•
Emergence of discount stores: They are expected to spearhead the organised retailing revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs.
•
Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large cineplexes, and malls, which are backed by the corporate house such as 'Ansals' and 'PVR„ the unorganized sector is getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.
Emerging Trends
• • India is rated the fifth most attractive emerging retail market: a potential goldmine. As per a report by KPMG the annual growth of department stores is estimated at 24%
•
Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT
Kearney.
•
Rural markets emerging as a
huge opportunity for retailers
reflected in the share of the rural market across most categories of consumption.
Positives
• AT Kearney has estimated India?s total retail market at US$ 202.6 billion which is expected to grow
at a compounded 30 per cent over the next five years.
•
With the organized retail segment growing at the rate of 25-30 per cent per annum, revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010.
•
The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade
•
Over next two years India will see several Indian retail businesses attaining a critical mass as growth
in the industry picks up momentum driven by two key factors: – Availability of quality real estate and mall management practices – Consumer preference for shopping in new environments
Positives
• Wal-Mart : huge plans for India. Moving a senior official from its headquarters in Bentonville,
Arkansas, to head its market research and business development functions pertaining to its retail
plans in India.
•
New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty major DLF
Properties to set up shop in a mall in New Delhi.
•
Tommy Hilfiger, retailer of apparels, expects to open one store each in Delhi, Ahmedabad, Lucknow and Bangalore in the next four months.
Negatives
• • 68 million square feet of mall space is expected to be available by end of 2007, which might lead to over-capacity of malls Lack of differentiation among the malls that are coming up. One option may be to look at specialization.
•
•
Poor inventory turns and stock availability measures - retailers clearly need to augment their operations.
Operations of retailers and suppliers are not integrated. Efficient replenishment practices practiced in the Indian auto and auto-component industry can be leveraged to implement efficient supply chain management techniques. Supplier maturity, in terms of adherence to delivery schedules and delivering the quantity ordered, is an issue Sales tax laws - lead to retailers having state-level procurement and storage leads to Indian retailers having higher inventories. VAT has helped alleviate this a bit.
• •
•
•
Increased adoption of IT and shrinkage management will be a critical area.
Supply chain and customer relations followed by merchandising, facilities management and vendor development are areas which have significant gaps and proactive training is a key imperative for overcoming these.
Emerging Trends in Modern Retail Formats & Customer Shopping Behavior in Indian Scenario: A Meta Analysis & Review
• Abstract
The Indian retail sector is going through a transformation and this emerging market is witnessing a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats. Currently two popular formats hypermarkets and supermarkets are growing at a rapid pace. Consumer dynamics in India is also changing and the retailers need to take note of this and formulate their strategies and tactics to deliver the exact expected value to the customer. In the backdrop of all these developments the present paper makes an attempt to: • Explain the emerging trends in the development of Modern Retail formats in Indian Context and also, Reveals the Consumer Shopping Behavior (Across the Country) among the Modern Retail Formats.
•
Classification of Customers
• Consuming Class
Most of these customers have a substantial disposable income and they form part of usually called as the upper middle and the lower middle class
Constitutes only 14 % of the country?s population
•
Serving Class
Research indicates that for every India one at least three India Twos are there, making up approx. 55 % of the population but due to low income they have a very little disposable income to spend on buying aspirational goods and services.
•
Struggling Class
It lives hand-to-mouth existence, so can not afford to even aspire for good living. Unfortunately this segment will continue to be on the peripheries of the consumption cycle in India, in years to come.
Emerging Trends in Consumers? Income & Consumption Pattern
• • • • • • Growing Prosperity Increase in the Sizable Disposable Income Place is no more important Increasing Potential in Rural Markets Higher Proportionate Rural Expenditure Young Population
•
Fundamental Changes in Indian Economy
Emerging Trends in Modern Retail Formats
• • • • • • Trial & Error Emergence of Wholesale Clubs Increasing Acceptance of Rural Markets Govt. is also promoting the Development of Modern Retail Formats Efficient Buying: Increasing Importance of Supermarkets & Discount Stores Hypermarkets: The Biggest Crowd Puller
•
•
Customers still rely on traditional concepts
Emergence of Private-Label Brands
Emerging Trends in Modern Retail Formats
• Ease of Shopping & Customized Services: Order of the Day: To activate it a new format has emerged in the name of Convenience Store. Magnetic Effect: Discounters not Shopkeepers: Category Killer: A New Concept imported from U.S.
• •
•
• •
Dollar Stores:
Retail Development in Rural India e-Retailing
Conclusion
• Message to Retailers: Evolve your all strategies around customers. Focus on building brands to reap the fruits in future. Keep growing. • “Customers is king of Past and now the Emperor of Future.”
Message to Customers: “Enjoy the Kingdom of Retailers”
doc_631445040.pptx
This is persentation describing the various retail formats followed by companies
India v/s World
• Indian retail is fragmented with over 12 million outlets operating in the country. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market
size as compared to India
• India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person) • Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG company). • The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about
three million people.
India v/s World
• Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today). • 60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format
•
Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average
inventory turns ratio of about 18. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10.
•
Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.
Traditionally three factors have plagued the retail industry
•
Unorganized : Vast majority of the twelve million stores are small "father and son" outlets
•
Fragmented : Mostly small individually owned businesses, average size of outlet equals 50 s.q. ft. Though India has the highest number of retail outlets per capita in the world, the retail space per capita
at 2 s.q. ft per person is amongst the lowest.
•
Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has typically two forms: "Haats" and “Melas". Haats are the weekly markets : serve groups of 10-50 villages and sell
day-to-day necessities. Melas are larger in size and more sophisticated in terms of the goods sold (like
TVs)
Recent Changes
•
Experimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc.
•
Store design : Biggest challenge for organised retailing to create a “customer-pull” environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are upto
10-15%. Retail chains like MusicWorld, Baristas, Piramyd and Globus are laying major emphasis & investing
heavily in store design.
•
Emergence of discount stores: They are expected to spearhead the organised retailing revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs.
•
Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large cineplexes, and malls, which are backed by the corporate house such as 'Ansals' and 'PVR„ the unorganized sector is getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.
Emerging Trends
• • India is rated the fifth most attractive emerging retail market: a potential goldmine. As per a report by KPMG the annual growth of department stores is estimated at 24%
•
Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT
Kearney.
•
Rural markets emerging as a
huge opportunity for retailers
reflected in the share of the rural market across most categories of consumption.
Positives
• AT Kearney has estimated India?s total retail market at US$ 202.6 billion which is expected to grow
at a compounded 30 per cent over the next five years.
•
With the organized retail segment growing at the rate of 25-30 per cent per annum, revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010.
•
The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade
•
Over next two years India will see several Indian retail businesses attaining a critical mass as growth
in the industry picks up momentum driven by two key factors: – Availability of quality real estate and mall management practices – Consumer preference for shopping in new environments
Positives
• Wal-Mart : huge plans for India. Moving a senior official from its headquarters in Bentonville,
Arkansas, to head its market research and business development functions pertaining to its retail
plans in India.
•
New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty major DLF
Properties to set up shop in a mall in New Delhi.
•
Tommy Hilfiger, retailer of apparels, expects to open one store each in Delhi, Ahmedabad, Lucknow and Bangalore in the next four months.
Negatives
• • 68 million square feet of mall space is expected to be available by end of 2007, which might lead to over-capacity of malls Lack of differentiation among the malls that are coming up. One option may be to look at specialization.
•
•
Poor inventory turns and stock availability measures - retailers clearly need to augment their operations.
Operations of retailers and suppliers are not integrated. Efficient replenishment practices practiced in the Indian auto and auto-component industry can be leveraged to implement efficient supply chain management techniques. Supplier maturity, in terms of adherence to delivery schedules and delivering the quantity ordered, is an issue Sales tax laws - lead to retailers having state-level procurement and storage leads to Indian retailers having higher inventories. VAT has helped alleviate this a bit.
• •
•
•
Increased adoption of IT and shrinkage management will be a critical area.
Supply chain and customer relations followed by merchandising, facilities management and vendor development are areas which have significant gaps and proactive training is a key imperative for overcoming these.
Emerging Trends in Modern Retail Formats & Customer Shopping Behavior in Indian Scenario: A Meta Analysis & Review
• Abstract
The Indian retail sector is going through a transformation and this emerging market is witnessing a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats. Currently two popular formats hypermarkets and supermarkets are growing at a rapid pace. Consumer dynamics in India is also changing and the retailers need to take note of this and formulate their strategies and tactics to deliver the exact expected value to the customer. In the backdrop of all these developments the present paper makes an attempt to: • Explain the emerging trends in the development of Modern Retail formats in Indian Context and also, Reveals the Consumer Shopping Behavior (Across the Country) among the Modern Retail Formats.
•
Classification of Customers
• Consuming Class
Most of these customers have a substantial disposable income and they form part of usually called as the upper middle and the lower middle class
Constitutes only 14 % of the country?s population
•
Serving Class
Research indicates that for every India one at least three India Twos are there, making up approx. 55 % of the population but due to low income they have a very little disposable income to spend on buying aspirational goods and services.
•
Struggling Class
It lives hand-to-mouth existence, so can not afford to even aspire for good living. Unfortunately this segment will continue to be on the peripheries of the consumption cycle in India, in years to come.
Emerging Trends in Consumers? Income & Consumption Pattern
• • • • • • Growing Prosperity Increase in the Sizable Disposable Income Place is no more important Increasing Potential in Rural Markets Higher Proportionate Rural Expenditure Young Population
•
Fundamental Changes in Indian Economy
Emerging Trends in Modern Retail Formats
• • • • • • Trial & Error Emergence of Wholesale Clubs Increasing Acceptance of Rural Markets Govt. is also promoting the Development of Modern Retail Formats Efficient Buying: Increasing Importance of Supermarkets & Discount Stores Hypermarkets: The Biggest Crowd Puller
•
•
Customers still rely on traditional concepts
Emergence of Private-Label Brands
Emerging Trends in Modern Retail Formats
• Ease of Shopping & Customized Services: Order of the Day: To activate it a new format has emerged in the name of Convenience Store. Magnetic Effect: Discounters not Shopkeepers: Category Killer: A New Concept imported from U.S.
• •
•
• •
Dollar Stores:
Retail Development in Rural India e-Retailing
Conclusion
• Message to Retailers: Evolve your all strategies around customers. Focus on building brands to reap the fruits in future. Keep growing. • “Customers is king of Past and now the Emperor of Future.”
Message to Customers: “Enjoy the Kingdom of Retailers”
doc_631445040.pptx