Emergence of New Retail Formats

8/8/2019 Emergence of New Retail Formats

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To study the emerging formats of retailing in

India

To study airport retailing in detail in the Indian

context To study the scope of airport retailing in Patna

Objective


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Secondary study- Internet & magazines

Primary study- Questionnaire

Survey area: Passenger at Patna airport

Sampling method: Convenient sampling Sample size: 30

Research Methodology


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ORGANIZED RETAIL IN INDIA

Source: Crisil Research All figures are in US billion $1$= Rs41


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High Income

Opportunities

Changing

Attitude

International

Exposure

Necessities to

Lifestyle

Service

Sector:

creating new

jobs.

Working

Population

Rising Salary

levels

From Save to

Spend

Highdisposable

income

Nuclear

Families

DINKS

(Double

Income No

Kids)

Exposure to

global

trends

Shift of expense

basket from

basics to lifestyle

products

Increased

spend on

Apparel and

entertainment

Easy Bank

credit boosts

retail

Market &

Government

FDI Policy

Tax policy


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Experi ent ti n itf rmat

Emergence f i counttores

Unorgani edretailingisgettingorgani ed

Experimentation itformats

Emergenceofdiscountstores

Unorgani edretailingisgettingorgani ed

Recent changes

Unorgani ed

Fragmented : Mostly small

individually owned businesses

Rural bias: Nearly two

thirds of the stores are located

in rural areas

Unorgani ed

Fragmented : Mostly small

individually owned businesses

Rural bias: Nearly two

thirds of the stores are located

in rural areas

Traditionally three

factorshaveaffected theretail industry


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CURRENT RETAILING FORMATS IN INDIA

Formats DescriptionKey categories

retailed

Typical

size Sq.ft.Example

Hyper

markets

Alarge superstore,combining a

supermarket and

departmental store,

Food, groceries,

apparel,

furnishings,

consumer

durables

15,000-100,000 Big Bazaar

Hypercity

Spencer

Vishal Megamart

Super

markets

Alarge self service

outlet offering food

and household

goods

Food, groceries

medicines 3,000-15,000FoodWorld,

Food baazar

Convenience

stores

Small size, easily

accessible stores

offering a quick

shopping

Food, groceries

medicines500-2,000 In&Out


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CURRENT RETAILING FORMATS IN INDIA(CONTD.)

Formats DescriptionTypical

size Sq.ft.Example

Speciality

Store

Focus on a specific

consumer need

apparel, watch,

music,

jewellery1,000-5,000

Tanishq,

Raymonds

Planet M

Music world

Factory

outlets

Off price stores of old

season stocksApparel 1,000-5,000 Primus

Madura garments

factory outlets

Key categories

retailed

Departmental

stores

variety of

Merchandise

organised into

Different

departments

Apparel,

accessories,

perfumes

10,000-50,000 Shoppers Stop,

Lifestyle,

Pantaloon,

Westside


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NEW RETAIL FORMATS

Rural retailing

E-Retailing

Direct Retailing/Door to Door retailing

Retail Kiosk Retailing

Catalogue and Mail Order Sales- Retailing

Airport Retailing


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RURAL RETAILING


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FEATURES OF RURAL RETAILING


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PROBLEMS IN THE RURAL MARKETING


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ROLE OF RURAL RETAILING


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DEVELOPMENT IN RURAL RETAILING

RURAL MALLS: CHAUPAL SAGAR


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E- CHOUPAL

Farmers

Sanchalak

Uses net

provides spot

quotes

If price right

farmer take the

produce to ITCcollection centre

SanyojakCoordinates a

group of villagers

Performs

documentation

work

Supplies inputs

from ITC to

Sanchalak

ITC

Factory


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OTHER RURAL RETAIL MODELS

Project Shakti - Hindustan Lever Ltd's (HLL)

rural self-help group initiative to push the

penetration of its products to reach areas of low

access and low market potential.


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FUTURE OF RURAL RETAILING

The business model successful only when

profit + social motive

The model should empower the rural consumer

and create of demand


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E-RETAILING

Retailing using a variety of different technologies

or media

Traditional

store

Direct

mail

Technology

E- retailing


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PROCESS OF E-RETAILING

Consumers find a product of interest

Shopping cart software used

A"checkout" process followed

Consumers allowed to sign up for a permanentonline account

The consumer receives e-mail confirmation


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CHALLENGES OF E RETAILING

Controlling customer data

Integrating on- and off-line order

Delivering the goods cost-effectively

Handling returns


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MODELS OF E-RETAILING

E-Retail + Traditional Retail Operations (Clicks-

and-Mortar): Shoppers stop

E-Retail + Catalogue Operations: Landsend.com

E-Retail + Web Site Content: Product reviews


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MAJOR E RETAILERS

Amazon.com: The domain amazon.com attracted at

least 615 million visitors annually by 2008 according

to a Compete.com survey.

E-bay.com:.

Buyers can bid on items of interest andall eBay users to browse through listed items in a

fully automated way

Indiatimes.com


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ADVANTAGES OF E-RETAILING

Convenient

Infinite shelf space available

Able to compare product price and features


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DISADVANTAGES OF E-RETAILING

Enjoyment of retail shopping lost

Privacy and security issues

Access to the Internet and computer necessary

Product category risk: purchasing on the Internetdecreases with increases in product risk

(Bhatnagar, Misra, & Rao)


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FUTURE OF E-RETAILING IN INDIA

Best model that works in India is -a combination of

retailing and e-tailing

Vishal retail launches online shopping portal.


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DIRECT RETAILING/DOOR TO DOOR

RETAILING

Face-to-face sales presentations at home or in the

workplace

Party plans: Hosting groups to view a product

demonstration and encouraging participants topurchase the products.

y Example: Eureka Forbes.

Send messages directly to consumers, without

the use of intervening media.

This involves commercial communication (direct

mail, e-mail, and telemarketing) with consumers

or businesses, usually unsolicited.


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ADVANTAGES OF DIRECT RETAILING

Personal attention to customer.

Convenience of time and place of presentation.


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RETAIL KIOSK RETAILING

Small carts

Located : high foot traffic area

Examples: The Redbox kiosk allows customers to

walk up and choose a DVDfor certain rental fee


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ADVANTAGES OF RETAIL KIOSK RETAILING

Ensures round the clock sales or service

Encourages self service

Reduces work load

Increases market reach: wide variety of users


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DISADVANTAGES OF MALL OR RETAIL KIOSK

RETAILING

Complex and technical transactions

Expensive

Disgruntled employees: sales commission


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CATALOGUE AND MAIL ORDER

SALES- RETAILING

Selling products via mail order

Example: Burlington, Klingle, Atto,

Spiegel, Together

Ability to reach hundreds of thousands of readerswith just one mailing .

Written, designed and mailed purposefully to a

particular target demographic

Because payment is received in advance, retailersmay not need to stock the merchandise and tie up

their cash flow.


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AIRPORT RETAILING

A R


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AIRPORT RETAILING

Traditionally, airport as a transition space betweenground and air transportation

Life in airports is changing.As time-strapped travellers

seek to use every minute

Today, airports are using spaces into revenue-generating

Travel experience begins when the customer enters the

airport


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Brand Identity for airports

Commercialisation

Rising F&B Demand

Uniqueness: local specialty, an exclusive area

specialising in local offerings


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Large groups of prospective shoppers

Captive audience

Strong sales per square foot of retail space

Strong sales of gift and travel items

Difficulty in replenishment

Longer operating hours

Duty-free shopping possible.


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AIRPORT STRESS AND ROLE OF AIRPORT

RETAILER

Research from Pragma Consulting

Focus on Shopping and

eating

Check

in

Time

Arrival Airport Flight

Anticipation/Excitement

Stress


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Apassenger currently spends less than $3

(Rs138) on average while shopping at Indian

airports, according to retail industry estimates.

The global average is $15.Although Indians are

compulsive duty-free shoppers outside, they are

shy of buying at terminals in India(Source: The

Hindu)


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AIRPORT RETAILING IN INDIA

According to a report published by Cushman and

Wakefield, airports globally earn nearly 50 per

cent of their revenues from non-aeronautical

sources, of which retail is the largest.

Airport privatisation : GMR (DIAL) non-

aeronautical revenues 35 per cent

Every premium brand in India is keen on

participating in the airport's retail zone.(Source:

GMR website)


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MEASURES ADOPTED BYAAI

Invited tenders for five-year duty-free shop contracts

Airports under the tender, including

Thiruvanthapuram, Kolkata, Chennai, Bangalore,

Hyderabad, Calicut, Gaya, Ahmedabad, and Goa.

The AAI has also identified 15 non-metro airports

includingAurangabad, Bhubaneswar, Coimbatore,

Vadodra, Varanasi, Vizag, Trichy, Rajkot, Port Blair,

Patna, Bhopal, Indore, Agatti, Nagpur, and

Khajuraho for development

Emerge as major tourist destinations where retailers

can also add regional flavours and continue to

generate revenue


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The target audience comprising of passengers, visitors

and escorts

Increase in the number of low-cost carriers

Foreign direct investment (FDI): possible in duty-free

products


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MAJORAIRPORT RETAILERS

Shoppers' Stop: The Nuance Group AG, 50:50 JV

Versace store:Versace home-line store at Indira

Gandhi International Airport

Caf Coffee Day : nine airport cafes, including NewDelhi and Bangalore, and tourist attraction centres

ofAgra and Jodhpur, Kochi and Coimbatore.

Croma: The 850 sq ft store is called Croma Zip. JV

with Australian retailer Woolworths.

Pantaloon: The Alpha-Pantaloon JV 7,000 sq ft at

Delhi's Indira Gandhi International Airport


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MAJORAIRPORT RETAILERS

Mithaas (confectionery):Bial

Kingfisher Sports Bar and restaurant

ITC's Kitchens of India range

Illy caf from Paris


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PATNAAIRPORT AND

RETAIL ESTABLISHMENT

Bookstore and a restaurant

No apparel store

Large parking area


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TRAVEL FREQUENCY


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HOW PASSENGERS SPEND TIME DURING

WAITING FOR FLIGHT


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PREFERENCE OF THE RETAIL STORES AT AIRPORT

Most preferred category of retail is Food followed by Menswear. (However,

the data is a little skewed because 28 out of30 respondents were males)


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PRODUCT PREFERENCE


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EXPECTED SERVICE


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FACTORS ATTRACTING PASSENGERS TO VISIT THE

STORES AT AIRPORT


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FACTORS PASSENGERS PREFER IN AIRPORT RETAILING

OVER MALL/HIGH STREET SHOPPING


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FINDINGS: AIRPORT RETAILING THE SUCCESS LOOP

National Brands

Hassle free

Environment &

Duty free

Merchandise

Store Ambience

&

Visibility

Food & Mens

Apparel

Full fledged

Customer

Service


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Documents

Emergence of New Retail Formats