Future of Organized Retail in Delhi and Ncr

8/12/2019 Future of Organized Retail in Delhi and Ncr

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INDIAN INSTITUTE OF PLANNING AND

MANAGEMENT

NEW DELHI

SUBJECT

FUTURE OF ORGANIZED RETAIL IN DELHI AND NCR

SUBMITTED BY:

BATCH:

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SECTION:

ABSTRACT

Unorganized retailers in the vicinity of organized retailers experienced a decline in their

volume of business and profit in the initial years after the entry of large organized

retailers.The consumers are generally in favour of more organized retail, the entry of

large retail chains have adversely affected the small, traditional retailers, who currently

form 97 per cent of the sector, in terms of lower sales and profits. India has the highest

shop density in the world with shops per !!! person. If the corpora! r!a"#starts

spreading in India without any control and if the "overnment brings in #oreign $irect

Investment in the sector, the potential social costs of the growth and consolidation of

organized retail, in terms of displacement of unorganized retailers and loss of livelihoods

will be enormous. %egulation needs to be more stringent and restrictive.

&ith the livelihoods of small traders and haw'ers in threat due to the corporate entry in

retail the resistance against the later is growing in almost every part of the country.

(aw'er unions, trader groups, farmers unions, wor'er unions and many more are )oining

hands to resist the corporate entry into retail. The entry of the big corporations was

detrimental to the business of the small retailers and haw'ers, and if no strong legislation

is made in favor of the latter they will not be able to save their livelihoods.

&ith the coming in of big retail there will be more instants of contract farming, which in

turn will lead to monopoly buying powers and monopolistic control over the farmers and

their products.

#or the consumers rather than enhancing choice, especially the lower income groups,

proliferation of large format retail stores would 'ill competition, lead to closure of

neighborhood mar'ets and ma'e consumers solely dependent upon the organized

retailers at a later stage. India will not be able to withhold the fall out of so many people

being thrown out of employment. The government should come out with a proper policy

to rein in such unrestricted growth of corporate retail in the country ta'ing cue from the

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experiences of other countries where big retail have created havoc with the society and

economy of the country.

AC$NOWLEDGEMENT

Through this ac'nowledgement I express my sincere gratitude towards all those people

who helped me in this pro)ect, which has been a learning experience.

I appreciate the co+ordination extended by my friends and also express my sincere

than'fulness to the entire faculty members of Indian Institute of lanning -

anagement, $elhi, giving me the opportunity to do this pro)ect/study and also assisting

me for the same.

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INTRODUCTION TO THE TOPIC

The farmers of India are definitely facing a deep crisis. orporate profits grow whilefarmers incomes shrin'. 1verage sales of the small retailers who are facing competition

from the organized retail industry fell from %s.,3,!7 in the pre+organized retail

scenario to %s.97,43 in the post+organized retail scenario, a drop by over 3 per cent.

There has been increasing incidents in several states where local small retailers have

physically resisted the opening of outlets of big retail chains. :uch protests prompted the

U government recently to pass an order disallowing any further opening of %eliance

#resh outlets in the state.

There is competitive response from traditional retailers through improved business

practices and technology up gradation. :mall retailers have been extending more credit

to attract and retain customers. There is also a big competition among small organized

vs. big organized retailers. choice of goods, more convenience, and a better shopping

environment, among other benefits.

This is feasible because organized retail can ta'e several formats, from small

neighborhood stores in densely populated cities with high real estate prices to large air+

conditioned malls in the periphery where real estate is cheaper. ;rganized retail can

appear small but spread in all local mar'ets, providing the convenience of a

neighborhood kirana store but with procurement on a mass scale that 'eeps prices low

and provides greater variety

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THEORETICAL RE&IEW'PERSPECTI&E

The Indian %etail :ector has undergone rapid transformation by setting scalable andprofitable retail models across various categories and formats. Traditional mar'ets are

ma'ing way for departmental stores, hypermar'ets, supermar'ets and speciality stores.

The modern malls cater to shopping, entertainment and food, all under one roof. It was

estimated that India will have over close to 4! million s


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S,ar! o+ 01-21 Y!ar Pop/#a"o o+ ,! Toa# Pop/#a"o

:ource= India %etail %eport *!!, Technopa' 1dvisors rivate @imited

The low median age of the population means a higher current consumption spend vs.

savings as a younger population has both, the ability and willingness to spend. The

younger population is also


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P!r*oa# D"*po*a3#! Ico4!5 Ho/*!,o# S!cor Sa)"% a GDP Acro** D!c"#!*5 A##

I"a5 0116 - 17

Increasing iddle class consumption growth

India has seen a significant change in the consumption of durables in recent years. The

changing income demographics, age profile and macro environment are visible in thegrowth in consumption of durables. #or example, the installed base of cars, cable

television subscribers and cellular subscribers has increased significantly over this

period.

%eal Dstate 8oom

The positive growth in industry is driving the real estate boom in India. The

development of real estate focuses on two primary areas= retail and residential. The

growth in mall space has been over ten fold in four years= from about * million s


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:ource= India %etail %eport *!!, Technopa' 1dvisors rivate @imited

Technology

Technological changes are being adapted for use in retail. %etailers are using call centres

and cell phones to 'eep their customers informed of new developments, schemes and

offers. Technology is being used to improve the customer experience, customer

information, security, logistics and supply chain management. 1s a conse


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India on their visits here. In addition, inbound tourists visiting India and loo'ing for

shopping here see' similar products at lower costs in a similar environment.

"lobalization has removed trade barriers and promoted consumerism. ;ver the last

decade, there has been an increase in branded goods, both domestic and international, in

the Indian mar'et across product categories. 8oth width and depth of product offering to

the Indian consumers is increasing.

$ynamics of organized retail

;rganized %etail derives its advantages from generating operational efficiencies while

simultaneously catering to rising consumer aspirations. :ize drives economies on

procurement, and lowers logistics and mar'eting costs while delivering better value to

customers in terms of lower price, better


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be created in the sector by *!!. The complexity of the operations re in *!!2 to around 2 > in *!!9

and is valued at %s. 4 billion ?source= India %etail %eport *!!, Technopa' 1dvisors

rivate @imitedA. #ood and grocery is estimated to be the largest single bloc', but the

contribution of the organized sector is at !.6 >. The clothing, textile and fashion

accessories constitute the second largest bloc' where nearly 7.4 > is contributed by the

organized sector. #ootwear has the highest contribution from organized retail ?03 >A.


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%etailers have to continuously upgrade systems and 'eep expanding their presence, both

to provide better services to customers and maintain their position in the mar'et. The

retail industry has benefited from the partial relaxation of restrictions on #$I in the real

estate sector. (owever, in the retail sector, #$I is allowed only in the cash and carry

formats and to the extent of 4 per cent in single brand retail operations.

RE&IEW AND RESEARCH

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(yderabad and 8angalore. The groupHs specialty retail formats include, boo's and music

chain, $epot, sportswear retailer, lanet :ports, electronics retailer, Dzone, home

improvement chain, (ome Town and rural retail chain, 1adhar, among others. It also

operates popular shopping portal, futurebazaar.com. #uture apital (oldings, the

groupHs financial arm provides investment advisory to assets worth over billion that

are being invested in consumer brands and companies, real estate, hotels and logistics. It

also operates a consumer finance arm with branches in 4! locations. ;ther group

companies include, #uture "enerali, the groupHs insurance venture in partnership with

ItalyHs "enerali "roup, #uture 8rands, a brand development and I% company, #uture

@ogistics, providing logistics and distribution solutions to group companies and business

partners and #uture edia, a retail media initiative. The groupHs presence in @eisure -

Dntertainment segment is led through, umbai+based listed company "alaxy

Dntertainment @imited. "alaxy leading leisure chains, :ports 8ar and 8owling o. 1nd

family entertainment centers, #*0. Through its partner company, 8lue #oods the group

operates around !! restaurants and food courts through brands li'e 8ombay 8lues,

:paghetti Citchen, 5oodle 8ar, The :poon, opper himney and "elato. #uture

"roupHs )oint venture partners include, U:+based stationery products retailer, :taples

and iddle Dast+based 1xiom ommunications. #uture "roup believes in developing

strong insights on Indian consumers and building businesses based on Indian ideas, asespoused in the groupHs core value of JIndianness.H The groupHs corporate credo is,

J%ewrite rules, %etain values.H

CONSUMPTION COSMOS

The retail formats are geared to capture onsumption :pending in 'ey categories in both

value and lifestyle segment. 1nd specialized businesses bac'ed by capital and

investments in developing the necessary consumption infrastructure is helping build a

consumption ecosystem.

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This empowers antaloon %etail to build a comprehensive business model that can

capture a dominant share of the single biggest business opportunity in India + the

consumption space.

Or%a"8a"o Pro+"#!

9No3o( S!##* C,!ap!r a B!!r8ig 8azaar is a chain of department stores in

India currently with !! outlets. It is owned by antaloon %etail India @td, #uture

"roup. It wor's on the same economy model as &al+art and has been successful in

many Indian cities and small towns. The idea was pioneered by entrepreneur r.

Cishore 8iyani, the D; of #uture "roup. urrently 8ig 8azaar stores are located onlyin India. It is the fastest growing chain of department stores and aims at having 04!

stores by *!!.

8ig 8azaar has democratized shopping in India and is so much more than a hypermar'et.

(ere you will find over 7!,!!! products under one roof that cater to every need of a

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family, ma'ing 8ig 8azaar IndiaHs favourite shopping destination. 1t 8ig 8azaar, you

will get the best products at the best pricesKthis is our guarantee. #rom apparel to

general merchandise li'e plastics, home furnishings, utensils, croc'ery, cutlery, sports

goods, car accessories, boo's and music, computer accessories and many more. 8ig

8azaar is the destination where you get products available at prices lower than the %,

setting a new level of standard in price, convenience and


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In three days between Banuary *4 and Banuary *7 *!!6, 8ig 8azaar sold over

!!,!!! pairs of Beans and *!!,!!! shirts

8ig 8azaar has a base of over million loyalty ard members

ore than 3!,!!! products are sold at 8ig 8azaar storeTO EMERGE AS THE BEST AND THE MOST PROFITABLE RETAILER IN

INDIAMISSION >TO SPEARHED HIS COMPANY TO BE THE FINEST AND

THE MOST PREFERRED CHAIN IN RETAILING

B"% Ba8aar o a !?pa*"o *pr!!

ountries leading retail chain #uture "roup is going for a ma)or expansion of its 8ig

8azaar chain of outlets, with the company planning to ta'e the total number of stores

to 4! by Bune *!!9. 8ig 8azaar presently has 9* outlets across the country and has

plans to add over 24 stores by the end of Bune *!!9, #uture "roup $irector %a'esh

8iyani said. 8esides, the company is also exploring for a 4!=4! )oint venture with

International "roup for its 'ids&ear segment. &e are exploring various proposals and

options to maximize our efficiency and operations,M he said on the sidelines of the ure

- lay %etail :ummit here. &hen as'ed 1bout the media reports regarding #uture

"roup plans to split the company into two specialized segment consisting of front + end

and bac' + end retail, 8iyani refused to omment on the issue. MThe company cannot

comment on speculated stories run by sources. There is no official 1nnouncement or

decision in this regards,M 8iyani said. (e added that the companyHs expansion would be

fully funded, with its own capital. MThe funding plans are being done by preferential

allotment and we have already decided about the amount, M he said. #uture "roup

is also starting its own ethnic womens wear stores and the first one will start by

1ugust this year.

M1 total ethnic in the women wear category will come up in various cities and the

stores will be on 4,!!!+3,!!! s< feet,M 8iyani added that the company is planning togrow by 4+*! per cent in apparel wear and double its sales of ethnic women wear in the

next few years. The company is also loo'ing for an increase of 4!+44 per cent in its total

sales over the next five years.

SECURITY MEASURES

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http://economictimes.indiatimes.com/News/News_By_Industry/Services/Retailing/Big_Bazaar_on_an_expansion_spree/rssarticleshow/3180371.cmshttp://economictimes.indiatimes.com/News/News_By_Industry/Services/Retailing/Big_Bazaar_on_an_expansion_spree/rssarticleshow/3180371.cms


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antaloon 1pparel, food, etc. ;:= (ome+grown solution :1 %etail 8I and $ata

warehouse= ongoHs ?process of evaluationA handheld scanners at #ood 8azaar

F5= ompany+wide networ' lin'ing all the branches They have loss prevention cell

?@A that will be loo'ing after the safety measures in the organizations. There are 4

members in each store.

T,!( ,a)! @ (p!* o+ a%*


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the operation at the store is being performed in coordination and cooperation he has to

communicate with the corporate office regarding any changes being applied at the store.

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I+or4a"o T!c,o#o%(

This department is responsible for the maintenance of the systems of the stores. 1ll

billing machines their functioning networ'ing with the master machine etc. If there is

any problem with the machine then this department comes into function.

Ca*,"% D!p

This department is responsible for the collection of sales amount i.e. cash sales, redit

sales, etc under this department all billing machines of the stores comes. The sales

amount collected throughout the day by the cashierHs has to be submitted to this

department.

Mar!"%

This dept is responsible for the mar'eting of the store in different media li'e Television,

5ewspaper, and (oldings etc. the authorized person has to visit different companies and

has to loo' after for tie+ups etc. The executives arranges rallyHs

&"*/a# M!rc,a"*!

This department is responsible for the product arrangement at the store with respect to

their nature. The basic function of this dept is it divides the store into several

departments based on the nature of the product and within the department it decides how

the products should be arranged by 'eeping in mind the customer should not suffer.

H/4a R!*o/rc!(uman %esource basically wor's for the welfare of the employees. It acts to organize

the manpower and wor' to increase productivity of the employees. 8asically (uman

%esource performs the functions of %ecruitment, (iring, Induction, Training and

development, erformance appraisal of the employees. (uman %esource studies and

involves in inter life cycle of the employee from his )oining the organization to till his

end from the organization.

CSD C/*o4!r S!r)"c! D!*

This is the separate unit, which is mainly focuses on customer service li'e if the

customer find difficulty in finding any product, ustomer complaints any replacement,

ustomer assistance etc.

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S/pp#( c,a" 4aa%!4!:

ompanyHs supply chain was split into the broad categories of fashion, food and general

merchandise, leading to a more focused approach to businesses, improved service levels,

better customization of logistic and supply chain related needs, and finally deliverables.

#urther, with new concepts and lines of business being included during the year, as well

as strategic alliances with other companies, the process of gradually integrating them

have either been completed or close to completion. The existing supply chain design

consists of a aster $istribution entre ?$A and city warehouses upgraded to

%egional $istribution enters ?%$sA and additional $istribution enters ?$sA. The

company had one $ and 3 %$s and $s The company has also appointed leading

international and domestic players in the warehouse infrastructure and technology front.

The company also introduced the concept of reverse logistics that loo's at setting up a

process to transfer finished goods from the consumption point to the point of origin. This

reduces wastage and can lead to significant cost savings. ;n the technology front, all the

existing $s, %$s and $s are live on :1, thereby facilitating standardization,

real time data management and reporting, as well as optimum operational efficiencies.

C/*o4!r pr!+!r!c! aa#(*"*

ustomer preference analysis is the process that can allow an organization to concentrate

its limited resources on the greatest opportunities to increase sales and achieve asustainable competitive advantage. ustomer preference analysis should be centered on

the 'ey concept that customer satisfaction is the main goal. ustomer preference analysis

can serve as the foundation of a mar'eting plan. 1 mar'eting plan contains a set of

specific actions re


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a strategy throughout an organization, by creating strategy tactics that then become

strategy goals for the next level or group. Dach one group is expected to ta'e that

strategy goal and develop a set of tactics to achieve that goal. This is why it is important

to ma'e each strategy goal measurable.

ar'eting strategies are dynamic and interactive. They are partially planned and

partially unplanned. 1s 8ig 8azaar is a hypermar'et, we are going to analyze the 7Hs of

mar'eting mix handled by them in order to 'now about their effective sales with

regarding to their customers opinion.

7P=* -Mar!"% 4"?:

Pro/c:

The product management and product mar'eting aspects of mar'eting deal with the

specifications of the actual goods or services and how it relates to the end+userHs needs

and wants.

Pr"c"%:

The process of setting a price for a product including discount.

Pro4o"o:

%efers to the various methods of promoting the product/service, brand or company

which includes advertising, sales promotion, publicity and personal selling.P#ac!4!:

The locations for distribution, which explains how the products get to the customer.

P!op#!:

1ll people that are directly or indirectly involved in the consumption of a service are an

important part of the Dxtended ar'eting ix. Cnowledge wor'ers, employees,

management and consumers often add significant value to the total product or service

offering.

Proc!**:

rocedure, mechanisms and flow of activities by which services are consumed ?customer

management processesA are an essential element of the mar'eting strategy.

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P,(*"ca# E)"!c!: The ability and environment in which the service is delivered. 8oth

tangible goods that help to communicate and perform the service, and the intangible

experience of existing customers.

.1 C/*o4!r S!r)"c! D!*

ustomer :ervice $es' is a platform where in ustomer service representatives are

employed by many different types of companies to serve as a direct point of contact for

customers. They are responsible for ensuring that their companyHs customers receive an

ade


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cler', as needed. In insurance agencies, a customer service representative interacts with

agents, insurance companies, and policyholders. These wor'ers handle much of the

paperwor' related to insurance policies, such as policy applications and changes and

renewals to existing policies. They answer


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employed by an insurance agency or in a grocery store may have customers approach

them in person or contact them by telephone, computer, mail, or fax. any of these

customer service representatives wor' a standard 2!+hour wee'L however, their hours

generally depend on their employerHs hours of operation. &or' environments outside of

a call center also vary accordingly. ost customer service representatives wor' either in

an office or at a service or help des'.

ustomer service representatives may have to deal with difficult or irate customers,

which can be challenging. (owever, the ability to resolve customersH problems has the

potential to be very rewarding.

Tra""%5 O,!r /a#"+"ca"o* A A)ac!4!*:

ost )obs re


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1bout 2 percent of customer service representatives were employed in administrative

and support services. These wor'ers were concentrated in the business support services

industry ?which includes telephone call centersA and employment services ?which

includes temporary help services and employment placement agenciesA. 1nother

percent of customer service representatives were employed in retail trade establishments

such as general merchandise stores and food and beverage stores. ;ther industries that

employ significant numbers of customer service representatives include information,

particularly the telecommunications industryL manufacturing, such as printing and

related support activitiesL and wholesale trade.

In ay *!!3, median hourly earnings for wage and salary customer service

representatives were 0.3*. The middle 4! percent earned between !.70 and 7.2!.

The lowest ! percent earned less than 6.7 and the highest ! percent earned more

than **.. Darnings for customer service representatives vary according to level of

s'ill re


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ost customer service managers are acutely aware of being caught in the middle. &e

feel the pressure from upper management and their goals, plans, and decisions. &e also

feel pressure from our department ++ the needs of our employees for support,

information, resources, and often for explanation.

?&hat was management thin'ingOA If youve ever felt the pressure from both sides and

wondered how to cope, read on for definition and awareness of your role plus some

ideas to help cope productively with the Ms


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our people. ;ften management decisions ma'e sense only when viewed from a larger

perspective. &e have access to the Mbig picture.M In sharing our interpretation we help

people understand the company and the importance of their contribution. They become

more 'nowledgeable about their role in the company. They gain a sense of purpose and

commitment. ustomer service managers strengthen the role of the department by

implementing ten 'ey actions=

irculate results of customer satisfaction surveys.

ublish customer service victories.

%einforce value by researching how much company spends to ac


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There is a substantial body of empirical literature that establishes the benefits of

customer satisfaction for firms.

C/*o4!r S!r)"c!: A Or%a"8a"oa# O3!c")!

It is often said and widely accepted that customer service is the 'eystone to all service+

oriented business. Get the words and concept are often not fully comprehended by many

within the service industries. omptrollership is multifaceted, but in all respects, it is a

service+oriented business. 1ssuredly, the dynamics of customer service guarantee that

sooner or later the level of service we give and receive will affect all of us, both

personally and professionally. ustomer service, good or bad, doesnt )ust happen.

Therefore, it is important that we absolutely commit to effective customer service,

understand its significance, and promote a plan to accomplish our goals and ob)ectives.

&hat Is ustomer :ervice and &hy Is It ImportantO

8roadly defined, customer service is an activity on behalf of a person, organization, or

cause that meets a need or re


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NEW DE&ELOPMENTS IN THE RESEARCH AREA

Franchising:#ranchising is a special form of licensing in which the franchiser ma'es a

total mar'eting program available including the brand name, logo, products and methodof operation. Usually the franchise agreement is more comprehensive than a regular

licensing agreement in as much as the total operation of the franchisee is prescribed. It

differs from licensing principally in the depth and scope of


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TOPICS FOR FURTHER RESEARCH

:ome of the topics for further research would be

To became a number one in the Indian subcontinent only re


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RECOMMENDATIONS

The pro)ect was a great experience for me in order to study the mar'eting aspects in the

world. It was a great opportunity for me to express what I have studied.

This industry is a place where two ma)or players are there in the world. This epsi

ompany gave me lot of opportunity and scope to understand the soft drin' industry and

its mar'eting structure and distribution channels.

@ot of voluble information regarding the company and also the retailers, has been

collected from the survey, which helped me clearly to understand the real problems

faced by the mar'eters to distribute and also ma'e retailers to sell the companyHs

products in the mar'et. I understood who difficult to do the mar'eting in the present

scenario.The suggestions made to the company were really applicable for the growth and benefit

for the company in order to increase its mar'et share and to become the mar'et leader in

the soft drin' industry, because a large number of competitors craving for the same

mar'et.

Thus, finally it can be said that the industry needs a lot of channel management activities

to done along with various promotional strategies for the customers. I wish the company

to achieve its ob)ectives achieved soon.

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CONCLUSION

A The company has to increase its


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BIBLIOGRAPHY

:.5o 1uthor Title ublisher Folume

Gear

. hilip 'otler ar'eting rentice, * th

*!!4 anagement (all of India

*. F: %am :wami ar'eting ac illan 0 th

*!!4

anagement

0. Boel %. Dvans ar'eting 8iztantra 6 th

*!!4

8erry 8erman

2. hunawalla :.1 1dvertising (all of India * th

*!!4

W!3 S"!* R!+!rr!:

&&&.epsi.com

&&&.mar'etingteachers.com

&&&.co'e.com

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Documents

Future of Organized Retail in Delhi and Ncr