CHANNEL MANAGEMENT

Group F: Laura Fee Hahnefeldt, Javier Fernandez Gil, Ananya Jain, Marine Laval, Imre Szapary, Géraldine Willame

SPENCER'S RETAILSTORES IN INDIA

AGENDAIndian Retail IndustryAbout SpencerSpencer's CompetitionThe problem statementSpencer's target segment andcustomer profileEarlier positioning - Taste TheWorldNew positioning - Make Fine LivingAffordableRecommendations

I n d i a n   R e t a i l   I n d u s t r y

S i z e   o f   t h e   I n d i a nr e t a i l   s e c t o r :   U S $ 4 0 0b i l l i o n   i n   2 0 1 1

G r o w i n g   a t   a n   a v e r a g ea n n u a l   r a t e   o f   8   t o   1 0p e r   c e n t

M o r e   t h a n   1 2   m i l l i o nr e t a i l   s t o r e s

H i g h l y   f r a g m e n t e di n d u s t r y   s t r u c t u r e

O r g a n i s e d   r e t a i l :p r e s e n t   o n l y   i n   b i g   a n de m e r g i n g   c i t i e s                 -     3 0   p e r   c e n t   o f   t h e    I n d i a n   p o p u l a t i o n   &   7 0p e r   c e n t   o f   I n d i a n   G D P

SPENCER RETAIL - Founded in 1983 by 2british nationals - Closely held, publiclimited company

- Member of RP-SanjivGoenka holding since 1989,with market capitalizationof $1,67 billion dollars.

SPENCER'S EXPRESS 

Size: 1000 sq. ft. Category:Convenience StoreStocks: dairy, fruits,vegetables, bread,ready to eats, fishmeatTime of visit: anytime

SPENCER'S DAILY 

Size: from 2000 sq. ft.upto 5000 sq. ft. Category:Convenience StoreStocks: all groceries,fresh produces andweekly top-upshopping such ascereal etc.Time of visit: on anaverage second orthird day

SPENCER'S SUPER 

Size: upto 10000 sq.ft. Category: ConvenienceStoreStocks: not only dairyproducts but also homecare and personalproductsTime of visit: fortnightlyto monthly

SPENCER'S HYPER 

Size: greaterthan 15000 sq.ft. Category: Anchor StoresStocks: everything fromfood to furniture atconcessional prices or dealsTime of visit: monthly orbimonthlyCombined a supermarketwith a department storeIn-store programs 

Which other grocery storesdo you shop at...?

Competitor's Landscape

205 stores(163 Big, 43 Food)

 

1300 stores                           

93 cities  120 cities 

180 stores                          

44 cities 

Big Bazaar:(Hypermarkets)Food Bazaar:(Supermarkets)

Reliance SuperReliance FreshReliance Mart

Spencer’s Express,Spencer’s Daily,Spencer’s Super,Spencer’s Hyper

bundling pricing strategy

sells speciality productswell p

rese

nted

staf

f

private la

bels

value added services

backward integration

Competitive pricesNo consumer loyaltyCarries a wide range

Different formatsPresent in Big and emerging cities

Attribute Map

Spencer’s has to find a way to maintain itsreputation as the top-notch retail choice for

Indian shoppers while at the same timeencouraging SEC B and SEC C shoppers to

embrace it as their store.

ProblemStatement

Growing middleclass that longedfor a shoppingexperience similarto shopping atinternationalsupermarkets anddepartment stores

Targetsegment

2 5 - 3 4

S e n i o rE x e c u t i v e

M a l eA l o n e

B u s i n e s s m a n& S r . E x e c

S E C A 1 & A 2

3 5 %

4 5 %

2 9 %

7 6 %

8 2 %

Customer Profile

Taste The WorldPositioning

The goal of the TTWpositioning was to brand theretail store through its décor,its merchandising and itspricing policies. The value proposition was toprovide shoppers a futuristicand international shoppingexperience.

TTWBROAD COMPONENTS

Highlight of British parentageroots Product displays like seen inthe US or EuropeItems with opening price points and price-promotion signs were a rarity.

product quality

storeenvironment

value for money

Customer satisfaction after TTW

MAKE FINE LIVINGAFFORDABLE POSITIONING

Retaining the high quality image ofSpencer’sCorrect Spencer’s expensive priceperception and retain the highquality image for consumers. Shifting to  more of a valueretailer Focused on growing middle classthat longed for a shoppingexperience similar to shopping atinternational supermarkets anddepartment stores 

They were items that most householdsbought regularly and therefore wereknowledgeable about the prices of theseitems

K E Y M E R C H A N D I S I N G C O M P O N E N T S :

K N O W N V A L U EI T E M S ( K V I )

O P E N I N G P R I C EP O I N T ( O P P )

Introduction of OPP shop-keeping units invalue-sensitive categories.

S P E N C E R ’ SP R I V A T E L A B E L S

TThe goal was to leverage the high-qualityperception of Spencer’s and offer privatelabels at competitive prices.

The MFLA Transition

People's response to,

Range and assortmentCustomer serviceStore spaciousness

Merchandise QualityPrice

Improved

Same as earlier

MFLA Trouble....

Profit margin27,41%

Sales Volume75,60%

play on yourstrengths

RECOMMENDATIONS

a few

to solve the problem

01 Improve the salesfrom thedepartmentalstore 

ApparelElectronics & Electricals

General Merchandise

Contributionto sales Margin

579

3079

02 Capture B1 and B2socioeconomicgroups of shoppers

A1A2B1B2

Indian population %age

3788

4324157

Spencer's shoppers

03 Open stores inposh areas of Delhi

Delhi

GDP per capita

175,812 0

Total stores

04 Do not lose itsidentity of being anupper classgrocery store

Do not decrease the pricesConcentrate on high end product availabilityto maintain the upper handSelf checkouts for busy people (Big Bazaaris close to Spencer in terms of Quick check-outs)Better advertise their private labels 

05 Improve "HaraBhara" & "AnnaDhara"

Promote freshness and variety available, notthe less priceLesser price may indicate lesser quality, notprompting the consumer to purchase

Q & A