Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
RefReshing Business
Strategy
Submitted by-
Erum Khan
Sahil Gupta
Mayank Badkul
Executive Summary
The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of
the countrys GDP and around 8 per cent of the employment. The Retail Industry in India has come
forth as one of the most dynamic and fast paced industries with several players entering the market.
But all of them have not yet tasted success because of the heavy initial investments that are required
to break even with other companies and compete with them. The India Retail Industry is gradually
inching its way towards becoming the next boom industry. The total concept and idea of shopping
has undergone an attention drawing change in terms of format and consumer buying behaviour,
ushering in a revolution in shopping in India.
Foreign direct investment (FDI) inflows between April 2000 and December 2010, in single-brand
retail trading, stood at US$ 66.69 million, according to the Department of Industrial Policy and
Promotion (DIPP
With a vision to generate inclusive growth and prosperity for farmers, vendor partners, small
shopkeepers and consumers, Reliance Retail Limited (RRL), a subsidiary of RIL, was set up to lead
Reliance Groups foray into organized retail.Since its inception in 2006, Reliance Retail Limited
(RRL) has grown into an organisation that caters to millions of customers, thousands of farmers and
vendors. Based on its core growth strategy of backward integration, RRL has made rapid progress
towards building an entire value chain starting from the farmers to the end consumers.
The following paper first give the general overview of the retail industry in India, different type of
retail format present in India, major players present in the industry, growth opportunity, difficulties
the sector is currently facing.
Then it talks about Reliance Fresh the chain we have chosen to analyse and to revamp its current
strategies. So to revamp the existing model it is obvious that paper talks about how the chain started,
what all strategies are being followed by them,and most importantly the difficulties it has faced in the
past and currently it is facing
So by studying all these factors we suggest our own strategies related to different management
functions which company could adopt and will result them into being a profitable company
The emergence of the neighbourhood Kirana stores catering to the convenience of the
consumers.
Era of government support for rural retail: Indigenous franchise model of store chains run by
Khadi & Village Industries Commission.
1980s experienced slow change as India began to open up economy.
Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw
the emergence of retail chains.
Later Titan successfully created an organized retailing concept and established a series of
showrooms for its premium watches.
The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure
Retailers.
For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in
music; Crossword and Fountainhead in books.
Post 1995 onwards saw an emergence of shopping centers.
Mainly in urban areas, with facilities like car parking.
Targeted to provide a complete destination experience for all segments of society.
Emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety
and Volume
Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom
of the pyramid.
At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000
crore
Departmental Stores are expected to take over the apparel business from exclusive brand
showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in
Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its
own in store brand for clothes called Stop.
Hyper marts/Supermarkets:
Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are
located in or near residential high streets. These stores today contribute to 30% of all food &
grocery organized retail sales.
Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft
and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food &
grocery and personal sales.
Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a
limited range of high-turnover convenience products and are usually open for extended periods
during the day, seven days a week. Prices are slightly higher due to the convenience premium
MBOs:
Multi Brand outlets, also known as Category Killers, offer several brands across a single product
category. These usually do well in busy market places and Metros.
INDIAS NUMBER OF DOMESTIC GROCERY CHAINS AND EARLY FOREIGN
ENTRANTS
The India Retail Industry is the largest among all the industries, accounting for over 10 per
cent of the countrys GDP and around 8 per cent of the employment.
The Retail Industry in India has come forth as one of the most dynamic and fast paced
industries with several players entering the market. But all of them have not yet tasted success
because of the heavy initial investments that are required to break even with other companies and
compete with them.
The India Retail Industry is gradually inching its way towards becoming the next boom
industry.
The total concept and idea of shopping has undergone an attention drawing change in terms
of format and consumer buying behaviour, ushering in a revolution in shopping in India.
Modern retailing has entered into the Retail market in India as is observed in the form of
bustling shopping centres, multi-storied malls and the huge complexes that offer shopping,
entertainment and food all under one roof.
A large young working population with median age of 24 years, nuclear families in urban
areas, along with increasing workingwomen population and emerging opportunities in the services
sector are going to be the key factors in the growth of the organized Retail sector in India.
The growth pattern in organized retailing and in the consumption made by the Indian
population will follow a rising graph helping the newer businessmen to enter the India Retail
Industry.
In India the vast middle class and its almost untapped retail industry are the key attractive
forces for global retail giants wanting to enter into newer markets, which in turn will help the India
Retail Industry to grow faster.
Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry
in India dominates the shopping basket.
The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at
over 20 per cent per year.
The future of the India Retail Industry looks promising with the growing of the market, with
the government policies becoming more favorable and the emerging technologies facilitating
operations.
India is the country having the most unorganized retail market. Traditionally it is a familys
livelihood, with their shop in the front and house at the back, while they run the retail business.
More than 99% retailers function in less than 500 square feet of shopping space. Global
retail consultants KSA Technopak have estimated that organized retailing in India is expected to
touch Rs 35,000 crore in the year 2005-06.
The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized
sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in
the waiting for the consumer-savvy organized retailer.
Indian retailers need to advantage of this growth and aiming to grow, diversify and
introduce new formats have to pay more attention to the brand building process. The emphasis here
is on retail as a brand rather than retailers selling brands.
The focus should be on branding the retail business itself. In their preparation to face fierce
competitive pressure, Indian retailers must come to recognize the value of building their own stores
as brands to reinforce their marketing positioning, to communicate quality as well as value for
money.
There is no doubt that the Indian retail scene is booming. A number of large corporate
houses Tatas, Rahejas, Piramals, Goenkas have already made their foray into this arena, with
beauty and health stores, supermarkets, self-service music stores, newage book stores, every-daylow-price stores, computers and peripherals stores, office equipment stores and home/building
construction stores. Today the organized players have attacked every retail category.
The Indian retail scene has witnessed too many players in too short a time, crowding several
categories without looking at their core competencies, or having a well thought out branding
strategy.
The Indian retail sector is highly fragmented with more than 90 per cent of its business being carried
out by traditional family run small stores. This provides immense opportunity for large scale retailers
to set-up their operations a slew of organized retail formats like departmental stores, hypermarkets,
supermarkets and specialty stores are swiftly replacing the traditional formats dramatically altering
the retailing landscape in India.
India is the third-most attractive retail market for global retailers among the 30 largest emerging
markets, according to US consulting group AT Kearneys report published in June 2010.
Retail Market Size
The total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12 billion by
2015, according to the BMI India Retail report for the third quarter of 2011. Robust economic
growth, high disposable income with the end-consumer and the rapid construction of organised retail
infrastructure are key factors behind the forecast growth. Along with the expansion in middle and
upper class consumer base, the report identifies potential in Indias tier-II and tier-III cities as well.
The greater availability of personal credit and a growing vehicle population providing improved
mobility also contribute to a trend towards annual retail sales growth of 12.2 per cent.
Indian retail sector accounts for 22 per cent of the country's gross domestic product (GDP) and
contributes to 8 per cent of the total employment.
Rural Retailing on a High
Rural retailing enjoys an intense focus from big brands.
Future Group and Godrej Agrovet's joint venture (JV) in rural retailing, 'Aadhar', is all set for a
revamp. The group promoter Kishore Biyani has revealed that the JV is planning to come up with
wholesale distribution centers across different districts and franchisees would be rolled out to local
entrepreneurs who would have a better understanding of the concerned area. They would be able to
source the products from these wholesale centers and then sell it in their villages. The alliance
operates stores in Gujarat, Maharashtra, Haryana and Punjab and mainly sells wheat and paddy apart
from daily need products. The company also provides farmers with solutions to problems regarding
their agricultural output, which includes what kind of crop can they plant and when, along with
techno-commercial suggestions to help them give a better output.
Meanwhile, Rajkot based Champion Agro Ltd is planning to come up with single window shopping
facility for farmers. The company already has 35 agri-retailing outlets in the Saurashtra region, and is
expected to open around 400 outlets at a taluka level across Gujarat by 2016. It will open 50 new
outlets by the end of 2011with an investment of US$ 3.3 million. The overall investment planned is
between US$ 66.7 US$ 88.94 million.
On similar lines, Vadodara based ACIL Cotton Industries is all set to come up with around 40 outlets
of 'ACIL Krishi Store' in Gujarat. Of these, four outlets got operational in April - May 2011. As for
2011, ACIL has decided to focus on the Gujarat market. ACIL stores will sell all types of seeds,
fungicides, fertilisers, micronutrients.
Also, FMCG and retail giants are making good use of technology to reach out to rural India. From
low-cost handsets to tablet PCs, the Indian FMCG and retail sector is latching on to technology and
applications to reach out to rural India.
For instance, Marico is using mobile technology innovatively to arm its field representatives in their
procurement process. The IT team at Marico developed a mobile-based application for Nokia 5235
series handsets. The company gave these GPS-enabled phones to 120 of its field representatives, with
mapped routes. This helped the agri-representative to get the exact route and also saved on time. The
mobile application can also get real-time data from farmers. Pictures of crop and soil taken from the
camera are used for monitoring progress of contract farming, seed information and weather
condition. Since the data is available online, this also helps the company analyse and take decisions
quickly.
Meanwhile Hindustan Unilever Ltd (HUL) is experimenting with tablet PCs in its attempt to increase
its rural reach. It has been able to reach to 500,000 outlets in a years time. According to Nitin
Paranjape, managing director, HUL, We put all the villages on an IT map. The name of the village,
its total strength, nearest distributors available, whether it has a school, a hospital, a primary health
centre, all of this was mapped. We used this information to determine the opportunity the village
presented to us.
Organised vs Unorganised Retailing
The Indian retail market, over the last decade, has been increasingly leaning towards organised
retailing formats. The pattern in domestic retailing is altering in the favour of organised modern
retailing, a big change from the traditional plethora of unorganised family-owned businesses. Rapid
urbanisation, changes in shopping pattern, demographic dividend and pro-active measures by the
Government are abetting the growth of the retail sector in India.
Organised retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18
per cent of the total retail market and reach US$ 450 billion by 2015, according to a McKinsey &
Company report titled 'The Great Indian Bazaar: Organised Retail Comes of Age in India'.
Furthermore, according to a report titled 'India Organised Retail Market 2010', published by Knight
Frank India, during 2010-12 around 55 million square feet (sq ft) of retail space will be ready in
Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides,
between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million
sq ft to 95 million sq ft.
Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in
India is set to be more than double to US$ 150 billion by 2025, according to a report by KPMG.
Singapore-based CapitaMalls Asia, which develops, owns and manages malls across Asia,
has pledged US$ 400 million to its growth in India up till 2014. Mr Kevin Chee, CEO and
Country Head of CapitaMalls Asia, has said that apart from funding the two malls that are
operational now, this money would be used to develop seven more malls in India.
Reliance Retail will enter the cash and carry market with "Reliance Market" in Ahmedabad;
the first one to be opened by August 2011.
Ujala fabric whitener maker Jyothy Laboratories has bought Henkel AG's 50. 97 per cent
stake in its Indian subsidiary for US$ 137.02 million, including debt and preference shares,
the two companies revealed. The deal includes Henkel's entire portfolio that includes Henko
and Chek detergents, Pril dish cleaners and Fa deodorant, and rights to the multinational's
future launches.
With the launch of its first 'Arvind Experience Store' in Gujarat at Vadodara, denim major
Arvind Ltd. is looking at 100 stores by the end of the financial year 2011-12. The store in
Vadodara is the company's eighth in the country after seven stores in Andhra Pradesh.
Quick food service restaurant chain Subway will set up 45 outlets across the country by 201112 entailing an investment of around US$ 9 million. The company has now 205 outlets in
India and plans to take its count to 250 by the end of 2011-12.
Max Hypermarkets, the food retailing chain of the Dubai-based Landmark Group is investing
US$ 122.14 million for its store expansion business across 30 cities in India.
Currently the share of retail trade in India's GDP is around 12 per cent, and is estimated to
reach 22 per cent by 2010.
According to Government of India estimate the retail sector is likely to grow to a value
of ` 2,00,000 crore (US$45 billion) and could yield 10 to 15 million retail jobs in the coming five
years; currently this industry employs 8% of the working population.
India continues to be among the most attractive countries for global retailers. According to
the Department of Industrial Policy and Promotion, approximately US$ 47.43 million was the
amount of Foreign Direct Investment (FDI) inflow as on September 2009, in single-brand retail
trading.
More than 80% of the retail sector in the country is concentrated in the large cities. A study reveals
that among the more than 20 locations, for organized retail in India, Mumbai was found to be the
most preferred location followed closely by Bengaluru in the second position.
Key Players in Indian Retail Sector
AV Birla Group has a strong presence in apparel retail and owns renowned brands like Allen
Solly, Louis Phillipe, Trouser Town, Van Heusen and Peter England. The company has
investment plans to the tune of ` 8000 9000 crores till 2010.
Trent is a subsidiary of the Tata group; it operates lifestyle retail chain, book and music retail
chain, consumer electronic chain etc. Westside, the lifestyle retail chain registered a turnover
of ` 3.58 mn in 2006.
Landmark Group invested ` 300 crores to expand Max chain, and ` 100 crores on Citymax 3 star
mark by 2010. Segments include books, music and gifts, apparel, entertainment etc.
Reliance has more than 300 Reliance Fresh stores; they have multiple formats and their sale is
to touch 30 million by 2010. Segments include Food & grocery, e-tailing, home solutions,
consumer electronics, entertainment, shoes, books, music & gifts, health & beauty care services.
Retail and recession
The global economic slump has had its impact on the India retail sector. One of the earliest players in
the Indian retail scenario Subhiksha's operations came to a near standstill and required liquidity
injection. Vishal Retail secured corporate debt restructuring (CDR) plan from its lenders while other
players like the Reliance Retail run by Mukesh Ambani and Pantaloon led Kishore Biyani by went
slow on expansion plans and even scaled down operations. However, during the last quarter a bit of
confidence was restored as the economy showed signs of growth.
Future Trends
Lifestyle International, a division of Landmark Group, plans to have more than 50 stores across
India by 201213.
Shoppers Stop has plans to invest ` 250 crore to open 15 new supermarkets in the coming three
years.
Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million this fiscal to add up to existing 2.4
million sq ft retail space. PRIL intends to set up 155 Big Bazaar stores by 2014, raising its total
network to 275 stores.
Timex India will open another 52 stores by March 2011 at an investment of US$ 1.3 million taking
its total store count to 120. In the first six months of the current fiscal ending September 30,
2009, the company has recorded a net profit of US$ 1.2 million.
Australia's Retail Food Group is planning to enter the Indian market in 2010. It has plans to clock
US$ 87 million revenue in five years. In 20 years they expect the India operations to be larger
than the Australia operations.
Retail and real estate are the two booming sectors of India in the present times. And if
industry experts are to be believed, the prospects of both the sectors are mutually dependent on each
other.
The trends that are driving the growth of the retail sector in India are
Another credible factor in the prospects of the retail sector in India is the increase in the
young working population. In India, hefty pay packets, nuclear families in urban areas, along
with increasing working-women population and emerging opportunities in the services sector.
These key factors have been the growth drivers of the organized retail sector in India which
now boast of retailing almost all the preferences of life - Apparel & Accessories, Appliances,
Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and
many more. With this the retail sector in India is witnessing rejuvenation as traditional
markets make way for new formats such as departmental stores, hypermarkets, supermarkets
and specialty stores.
The retailing configuration in India is fast developing as shopping malls are increasingly
becoming familiar in large cities. When it comes to development of retail space specially the
malls, the Tier II cities are no longer behind in the race.
If development plans till 2007 is studied it shows the projection of 220 shopping malls, with
139 malls in metros and the remaining 81 in the Tier II cities. The government of states like
Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land
for commercial development thus increasing the availability of land for retail space; thus
making NCR render to 50% of the malls in India.
Retail, one of Indias largest industries, has presently emerged as one of the most dynamic
and fast paced industries of our times with several players entering the market.
Accounting for over 10 per cent of the countrys GDP and around eight per cent of the
employment retailing in India is gradually inching its way toward becoming the next boom
industry.
India is being seen as a potential goldmine for retail investors from over the world and latest
research has rated India as the top destination for retailers for an attractive emerging retail market.
Indias vast middle class and its almost untapped retail industry are key attractions for global retail
giants wanting to enter newer markets.
Even though India has well over 5 million retail outlets, the country sorely lacks anything
that can resemble a retailing industry in the modern sense of the term. This presents international
retailing specialists with a great opportunity. The organized retail sector is expected to grow
stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income
and favorable demographic outline.
Retailing in India is witnessing a huge revamping exercise as can be seen in the graph .
India is rated the fifth most attractive emerging retail market: a potential goldmine.
Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3
percent or US$ 6.4 billion .
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.
Multiple drivers leading to a consumption boom:
o Favorable demographics
o Growth in income
o Increasing population of women
o Raising aspirations: Value added goods sales
Food and apparel retailing key drivers of growth
Organized retailing in India has been largely an urban phenomenon with affluent classes and
growing number of double-income households.
More successful in cities in the south and west of India. Reasons range from differences in
consumer buying behavior to cost of real estate and taxation laws.
Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural
market across most categories of consumption .
o ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural
hypermarkets.
o HLL is using its Project Shakti initiative leveraging women self-help groups to
explore the rural market.
o Mahamaza is leveraging technology and network marketing concepts to act as an
aggregator and serve the rural markets.
IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically
change buying behavior across the globe.
slowly making its presence felt.
Overambitious expansion, squeezed profit margins, and unsustainable operational costs have
adversely affected Indias organized retail sector
Till recently, the government and the industry alike were betting big on the countrys organized retail
sector, touting it as the growth engine for job creation and economy.
However, the faltering of Subhiksha, which had 1,600 stores till December 2008, seems to have
shattered the hopes. Before Subhikshas debacle came into public glare, it was the shining example
of a successful retail venture. Its founder R Subramanian was the blue-eyed boy of the industry. So
what went wrong? Does it mean that the business model that supports discounted small-stores format
is flawed or is Subhiksha only an exception?
Retail Facts
Total Indian retail market is estimated to grow from $353 billion in 2008
to $416 billion by 2010
Share of organized retail sector is ~7% and is expected to be 12% by
2010
Size of organized retail sector is estimated to reach $51 billion by 2010
The Indian retail industry can be broadly classified into food and grocery,
pharmaceuticals, consumer durables, apparel
Some major players in food and grocery sectorReliance Fresh,
Spencers, Big Bazaar, More etc.
A flawed model?
When the era of organized retail started in India, a lot of players entered this segment. In the food
and groceries section itself, players like Subhiksha, Reliance Retail, Big Apple, Sabka Bazaar,
Spencers, More etc started opening outlets and most of them adopted the discounted small-store
format. An industry insider says the model that these companies adopted was flawed because their
expenses far outstripped profit margins. Thus, more money was seeping out in the form of discounts
and operational costs, while less was coming back into the kitty. Their expenses, which included
rentals, employee salaries, inventory, cost of monitoring etc, were higher than their margins. These
stores were making money but were not profitable, he says.
Brands Vs In-house Brands
Brands
In-house brands
Brand name
Consumers associate
them with quality
Advertisements, hence
better visibility
Prestige associated with
owing the brand
Expensive
Must live up to
expectations
Tea
Handwash
Dettol, Lifebuoy
Jam
Kissan, Tops
Noodles
Advantages
Disadvantages
Some Examples
The situation worsened with the expansion spree. Another reason is that they thought customers
would be attracted by discounts, for which they eliminated the middlemen and started dealing
directly with big fast-moving consumer good (FMCG) players.
The FMCG players have their own vested interest and in the long run they would like to be in a
commanding position than in a negotiating position, which would have been the case with organized
retail players.
Sinha substantiates the point and says, If you give more discounts, your margins will further shrink
and therefore you need more customers. A bigger store may not necessarily mean more footfalls.
And if you do not have more consumers, your inventories will suffer because you will have the
burden of more stocks to clear.
Sinha says, Everybody is trying to give a good value to customers. However, the cost that is
incurred in the process takes time to be re-couped. The market may not grow at that rate. What has
happened is in the wake of growth is that players have focused on opening more stores than
consolidating the older ones. The process of expansion has to be supported with adequate funds,
inventory, and service, which was clearly lacking in the case of Subhiksha. Does this mean that other
retailers are also following the footsteps of Subhiksha in unmindful expansion?
Customers unprepared?
Vijaylakshmi Menon, a housewife who prefers to purchase grocery from the kirana store says, I do
go to organized retail outlets, but not that frequently. I am aware that these stores do provide some
discounts, but I do not mind spending one or two rupees extra at the nearby kirana store where I have
been a regular for almost the last three years.
One of the reasons behind the attractiveness of kirana stores over organized retail outlet is the
nearness of these stores and this supports unplanned and sudden purchases. Also, the rapport that
customers develop with mom-and-pop stores also plays an important role in affecting consumer
behavior.
The customers take time to migrate from these stores. Retail does not merely mean distribution.
A lot of work has to happen before customers start patronizing the stores. And it takes time for
customers to understand a lot of things like whether they are getting the right deal or not.
You cannot ask customers to shift by giving them the lure of better environment. It is the value that
one delivers overtime that drives consumers. That ensures whether the customer will stick to you or
not, says Sinha.
No localized approach
The business of retail (food and grocery) is very localized.
The consumer behavior in a particular area, for example Delhi, may not be the same as those of
consumers in another city such as Chennai. Thus, the consumer needs differ widely across the
country. Therefore, distinct strategies should have been adopted for different regions. What one
must keep in mind is that if you are opening a store such as a grocery store then you have a
catchment area. It is a very localized business that has to be built bottom up. It is not a business that
can be pushed from top to down. So, macro strategies may not work all the time. You need
customized strategies, says Sinha.
Freshness: A concern
For most of the customers DARE spoke to, freshness of the commodity was a major concern. Unlike
the West, Indian consumers lay huge importance to the freshness of food especially milk, vegetables
and fruits. Even loyal customers of organized retail stores purchased these items from traditional
stores, street hawkers and mandis. Their recent purchase pattern indicated that even though they
bought pre-processed food, pulses, spices etc from the organized retail stores, perishable items such
as milk, curd, vegetables and fruits were bought from the local stores.
Says Vijaylakshmi, I buy fruits and vegetables from the local market. This is because they are fresh
and I can negotiate prices. Moreover, these items are bought in small quantities and therefore for
many consumers, traditional stores, street hawkers and mandis make more sense because of
convenience.
Home deliveries
There are some services that are provided exclusively by kirana stores that drive consumers to these
stores, such as home-delivery. In India, groceries are purchased in bulk mostly at the beginning of
the month and home delivery facilitates this. Also, selling on credit has long been the forte of the
kirana stores. This ensures that customers stick to with them for long.
In-house brands vs private brands
For customers like Monica Chawla, who prefers retail chains over the nearby mom-and-pop store, it
is the availability of branded goods that matters the most. Unlike the kirana stores, the organized
stores stock up a number of brands of a single product. However, these stores also have a generous
supply of in-house brands.
On an average, in-house brands come at a discount of up to 30 to 40%, which is due to the absence of
advertising and distribution costs. However, this also means that these private labels lag behind the
branded products in terms of visibility and hence, sale.
Moreover, when such products are placed vis--vis branded items, consumers may opt for a branded
product than a private label. The discounts caused a major hit at profit margins
Retailing in India is gradually inching its way toward becoming the next boom industry. The
whole concept of shopping has altered in terms of format and consumer buying behavior, ushering
in a revolution in shopping in India.
Modern retail has entered India as seen in sprawling shopping centres, multi-storied malls
and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing
sector is at an inflexion point where the growth of organized retailing and growth in the
consumption by the Indian population is going to take a higher growth trajectory.
The Indian population is witnessing a significant change in its demographics. A large young
working population with median age of 24 years, nuclear families in urban areas, along with
increasing workingwomen population and emerging opportunities in the services sector are going to
be the key growth drivers of the organized retail sector in India.
However, manufacturers and service providers will also increasingly face a host of specialist
retailers, who are characterized by use of modern management techniques, backed with seemingly
unlimited financial resources. Organized retail appears inevitable.
Retailing in India is currently estimated to be a US$ 200 billion industry, of which organized
retailing makes up a paltry 3 percent or US$ 6.4 billion. By 2010, organized retail is projected to
reach US$ 23 billion. For retail industry in India, things have never looked better and brighter.
Challenges to the manufacturers and service providers would abound when market power shifts to
organized retail.
CONCLUSION
The retail sector has played a phenomenal role throughout the world in increasing productivity of
consumer goods and services. It is also the second largest industry in US in terms of numbers of
employees and establishments.
There is no denying the fact that most of the developed economies are very much relying on their
retail sector as a locomotive of growth. The India Retail Industry is the largest among all the
industries, accounting for over 10 per cent of the countrys GDP and around 8 per cent of the
employment.
The Retail Industry in India has come forth as one of the most dynamic and fast paced industries
with several players entering the market.
But all of them have not yet tasted success because of the heavy initial investments that are
required to break even with other companies and compete with them.
The India Retail Industry is gradually inching its way towards becoming the next boom industry.
RELIANCE FRESH
History of Reliance Fresh
Post launch, in a dramatic shift in its positioning and mainly due to the circumstances
prevaling in UP, West Bengal and Orissa, it was mentioned recently in news dailies that,
Reliance Retail is moving out of stocking fruits and vegetables[. Reliance Retail has decided
to minimise its exposure in the fruit and vegetable business and position Reliance Fresh as a
pure play super market focusing on categories like food, FMCG, home, consumer durables,
IT and wellness , with food accounting for the bulk of the business.
The company may not stock fruit and vegetables in some states. Though Reliance Fresh is not
exiting the fruit and vegetable business altogether, it has decided not to compete with local
vendors partly due to political reasons, and partly due to its inability to create a robust supply
chain. This is quite different from what the firm had originally planned.
When the first Reliance Fresh store opened in Hyderabad last October, not only did the
company said the stores main focus would be fresh produce like fruits and vegetables at a
much lower price, but also spoke at length about its farm-to-fork theory. The idea the
company spoke about was to source from farmers and sell directly to the consumer removing
middlemen out of the way.
Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint,
Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various
formats that Reliance has rolled out.
In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of
Apple Specialty Stores branded as iStore, starting with Bangalore
The Reliance Retail had to face various difficulties before the launch of Reliance fresh,
because of the various circumstances prevailing in Orissa, West Bengal and UP, along with
the news focusing on the dearth of vegetables and fruits stocks.
The retail business of Reliance then minimized its exposure in vegetable and fruit business,
as a result established Reliance fresh positioning a pure super market play focusing on
various categories like IT, consumer durables, home, FMCG and food.
The retail company of Reliance may not supply the vegetables and fruits in a few states, the Reliance
Fresh decided to not to race with local wholesalers partly because of the political reasons as well as
its incapability to maintain a healthy supply chain
Steve Madden, a leading designer, wholesaler and retailer of fashion-forward footwear and
accessories for women, men and children.
Quiksilver, a leading outdoor sports lifestyle company to launch their core brands 'Quiksilver'
and 'Roxy'.
Across India, Reliance Retail serves over 2.5 million customers every week. Its loyalty programme,
"Reliance One", has the patronage of more than 6.75 million customers.
A subsidiary of Reliance Industries of India that is headed by Mukesh Ambani, Reliance Fresh is
primarily a supermarket that strives to provide all the essential household commodities under one
roof.
In addition to fresh fruits and vegetables, the store also sells staple food items, diary products,
packaged food products, baby products, electrical goods, and the like.
The size of a typical Reliance Fresh store varies between 3,000 and 4,000 square feet, and it can
easily cater to an area of 2 to 3 Kms in its vicinity.
In the present day, there are 560 outlets of Reliance Fresh across the country, and in the next 4 to 5
years the company plans to invest Rs. 25,000 crores in this venture.
BACKGROUND
Reliance Fresh a convenient store format, is governed by the Mukesh Ambani and is the
most important part of Reliance Industries retail Business. Reliance Ltd. has planned to invest
more than Rs. 25000 crores in the retail division.
It also comprises more than 560 reliance fresh stores all over the country. The outlet sells
fresh fruits, staples, dairy products, fresh juice bars, groceries and vegetables.
A distinctive Reliance Fresh outlet is around 3000 to 4000 sq. feet and accommodates
catchment area of one to three Kilometers.
The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars
and dairy products and also will sport a separate enclosure and supply-chain for nonvegetarian products. Besides, the stores would provide direct employment to 5 lakh
young Indians and indirect job opportunities to a million people, according to the
company.
The company also has plans to train students and housewives in customer care
and quality services for part-time jobs.
The company is planning on opening new stores with store-size varying from 1,500 sq ft
to 3,000 sq ft, which will stock fresh fruits and vegetables, staples,FMCG products and
dairy products.
Reliance Retail has decided to minimise its exposure in the fruit and vegetable business
and position Reliance Fresh as a pure play super market focusing on categories like
food,FMCG, home, consumer durables, IT, wellness and auto accessories, with food
accounting for the bulk of the business.
The company may not stock fruit and vegetables in some states, Orissa being one of
them.
Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it
has decided not to compete with local vendors partly due to political reasons, and partly
due to its inability to create a robust supply chain.
This is quite different from what the firm had originally planned. When the first Reliance
Fresh store opened in Hyderabad last October, not only did the company said the stores
main focus would be fresh produce like fruits and vegetables at a much lower price, but also
spoke at length about its farm-to-fork theory. The idea the company spoke about was to
source from farmers and sell directly to the consumer removing middlemen out of the way.
Reliance may exit some businesses if the business does not increase by March 2008.
OBJECTIVES
The chief objective of Reliance Fresh stores is :1) To provide customers first-rate household products at affordable rates.
2) At the same time, the company spares no effort to safeguard the interest of the farmers
and manufacturers.
3) The producers get a chance to sell their products directly to the merchandiser, and
that too at the best price.
Thus, it is a win-win situation for all, the merchandiser, producer and consumer.
The first ever a Reliance Fresh store was established in Hyderabad, wherein the company,
mainly focused on the fresh produced vegetables and fruits at comparatively low price along with an
introduction of farm to fork theory.
This was the idea, which was anticipated by the company was to take the supply direct from
the farmers and then sell straightaway to the consumers removing the middle-men off the beaten
track. Reliance introduced several formats in the marketplace to cater to needs of common people,
which includes Reliance Fresh, Reliance Super, Reliance Footprint, Reliance Timeout, Reliance
Jewels, Reliance wellness, Reliance Mart and Reliance Digital, to name a few.
In addition to this, the Reliance Retail also entered into a treaty with Apple, which is a
leading Information Technology company, to set up a series of Apple Specialty Outlets branded as
IStore, with its first ever store in Bangalore.
With an idea to produce inclusive prosperity and growth for farmers, consumers, small
shopkeepers and vendor partners, Reliance Retail was set up in order to lead the foray of Reliance
Group into an organized retail.
7. Customers - were middle class folk from my apartment block. They kept touching and turning
around each vegetable before selecting them just like they do at the regular vegetable sellers. This
looked really out of place and added to a huge crowd
Reliance eyes retail JV with Marks & Spencer
Reliance Industries chairman Mukesh Ambanis deal-making spree to get the best
domain expertise in the retail sector is poised for the big one now. Reliance Retail (RRL), is locked
in substantial discussions to float an equal joint venture with iconic UK fashion retailer Marks &
Spencer (M&S) for apparel, gourmet food and cafes, multiple sources said.
The deal, slated to be clinched in the next three weeks, would see the UK retailer
bringing in new formats like food and cafes into India. M&S core business apparel and lingerie
is already operational in the country. According to a source close to the deal, the gourmet food
format is likely to be integrated with Reliance Fresh wherever possible, (upmarket localities) as a
shop-in-shop format. This would help M&S get immediate scale in food business. There are 491
Reliance Fresh stores that sell food, FMCG and fruits and vegetables and this figure is likely to touch
1,400 by the end of next fiscal.
The implications of this particular JV are much deeper. Its much more holistic in
nature and therefore taking long to seal, the source added. The $16-billion M&S, operating in the
country through a franchisee arrangement with Planet Retail since 2001, is in the midst of charting a
new India strategy aimed at accelerating expansion in the domestic market. It recently slashed prices
by 20% to attract more footfalls in the stores and taking prime space in malls to open more stores
Porter 5 force model for the existing Reliance fresh Business model
As the winds of economic reform have swept across the Indian economic landscape since the 1990s,
the slow pace of retail liberalisation has become increasingly conspicuous. Most notably, foreign
direct investmentfreely permitted in most sectorscontinues to be banned in the retail sector, with
the exception of single-brand retailing. Now it was the turn of domestic corporate retailers to face the
heat.
The trouble began in late August 2008 , in Uttar Pradesh, Indias most populous state, when the state
government cited law-and-order problems to order the shutdown of all stand-alone corporate retail
outlets selling fruit, vegetables and groceries. This was in response to violent protests against new
Reliance Fresh stores set up in the cities of Lucknow and Varanasi by Reliance Industries, an
Indian corporate giant with ambitious retailing plans. As of mid-October, protestors against
organised retail had targeted Reliance and other corporate retailers in Uttar Pradesh, Kerala, West
Bengal, Mumbai and Orissa. Though counter-productive in terms of efficiency and modernisation,
this opposition to organised retail is easy to explain. Before Indias recently acquired image as an
economic powerhouse, it was sometimes disparagingly referred to as a nation of small shopkeepers.
Indeed, there are currently over 12 million retailers in India, and the sector provides a livelihood for a
huge number of people. Most of these shops are tiny family-run businesses operating with meagre
capital. There is also an enormous number of retailers selling fruit and vegetables from carts or on
the roadside. Meanwhile, Indian corporate giants such as Pantaloon Retail, Reliance Industries and
RPG Group, seeking to profit from the forces of consumerism unleashed by economic growth and
liberalisation, have been scrambling to expand their retailing operations. Not unreasonably, small
retailers feel threatened by the big companies plans.
EXPECTATION IN FUTURE
a) Small scale industries and existing brands will not be able to compete with these behemoth
international players with enormous amount of capital:
Most of the economies have developed their industry, agriculture and services in order to increase
their pace of development. In case of India, manufacturing has seen hardly any growth since our
economy has opened up. This has lead to unemployment at one end, and at the other end it has lead
to huge setback to the existing industries. Many of the national brands have been lost, decreasing the
number of employment in manufacturing sector. When the retail chain takes over, it will have access
to all the products of the world, and will sell the best at the cheapest, leading to further closure of
existing industries which in turn will lead to loss of economy and massive unemployment. Small
scale industries will suffer the most in this present context, where at one end, MNCs are allowed to
have 100% FDI in small scale industries in SEZ and on the other hand cheap goods could be
imported by the retail giants. Our SSI is not properly organized, and suffers the economies of scale,
thus will never be able to compete with the retail giants on the price aspect, which seems to be a
matter of serious concern for the existence of SSI in India. In a situation where the existing SSI is
already going through a very tough time, this would serve as a fatal blow.
prices of the commodities fair. Moreover there is a government check on all the trading that happens
through mandi, so that no unfair practices can take place.
The Model APMC Act leads to de-democratisation of agricultural markets and therefore limits the
rights of the farmers to control agricultural markets. The experience world over and even in the states
where private yards have been allowed to be established by the companies, heavy profits have been
made by these companies without giving any benefit to the farmers. For instance the average price of
Soya paid by ITC to the farmers in Madhya Pradesh was around Rs. 1150/- per quintal, it was sold
by the company at an average price of Rs. 1555/- per quintal. Even the rules of contract farming,
given by Model APMC Act and adopted by various state governments also favour multinational
agribusiness firms. Small and marginal farmers, which constitute 90% of the farming community,
have been left at the mercy of these firms. Not only this, even the definition of an agriculturist have
been changed to suit the best interests of these corporations. In earlier Acts agriculturist was defined
as one whose livelihood depends directly on farming. Now a change in the definition of agriculturist
is contemplated as - A person who is a resident of the notified area of the market and who is engaged
in production of agricultural produce himself or by hired labour or otherwise.
In the case of these huge retail chains, there is lesser possibility of transparency of prices paid and
the amount stocked. They are permitted to stock huge amounts of food supplies, as per their business
model, without having mechanisms for transparence. In such conditions it is not very difficult for
them to hoard and act unfair. For example let us see two commodities wheat and apple. Private
corporations had bought huge quantities of wheat from the farmers directly last year and we had to
import wheat from other countries and all of us know about the hike in the price of wheat this year.
Similar is the case of apple, in last season, these companies had bought around 30% of the apple
production straight from the local mandis of Himachal and Kashmir, and we can see the prices of
apple this year are very much higher compared to earlier years, even though there was good
production of apples last season.
ii) Consumer
In due course of time if these retail outlet completely overtakes the traditional system, we would see
a series of change. First if the traditional system is gone, we will have only one mega retail outlet in
the vicinity, and the choices given by the outlet, has to become choices of the consumer. In such a
case there is an expectation of formation of cartel amongst the chain and the prices of the
commodities will shoot up. But at that time we will have no other option but to procure our goods
from one of these outlets, at whatever prices they demand from us. We have seen this in the case of
UK, where the average spending on food and beverages as a percentage of the total income of an
average household has shot up since these giant corporations have come into retailing. Moreover the
choices the consumers are left also decrease with the coming up of these stores; every thing is
standardized the personal choices of the consumers are not taken care of. This is a system where the
consumer adjusts himself to the product and not the vice versa.
traditional retailers. As a result, many traditional retailers of groceries, fruit and vegetables have
found themselves competing directly with a nearby Reliance store.
Political Pitfalls
Protests by local fruit vendors and vegetable shop owners slowed the expansion of corporate
retailers planning to set up new stores in the states where opposition has surfaced. However, most of
the announcements made by these state governments were designed to appease the anger of small
retailers and their political supporters, rather than to express strong ideological opposition to
organised retailing. In Uttar Pradesh, for instance, the closure of retail outlets has been restricted to
those selling fruit, vegetables and groceries in stand-alone stores. Reliance Fresh and Spencers
borne the brunt of the closure. Moreover, the shutdown is temporary and the state government has set
up a committee to examine this issue. Given the huge number of small retailers in democratic India,
no political party can afford to ignore their views. Reports indicate a major softening of the
governments stand on the nuclear deal to avoid a snap poll at that time and was hardly an
appropriate time to upset such a significant constituency, and relevant government agencies were
currently debating the introduction of various policies to protect small storessuch as licensing of
big retail outlets by local bodies in cities and towns. Nevertheless, there were enough supporters of
organised corporate retailing in India to ensure that no permanent roadblocks are created. Obvious
beneficiaries of organised-retail growth include the corporate sector, consumers and farmers, but
there is also widespread support among (non-leftist) politicians, policymakers and intellectuals, who
realise that a modern and efficient retail sector is an important part of economic development. As a
result, it is likely to be just a matter of time before the government actually relaxes its restrictive
policy on foreign investment in retailing by permitting foreign companies to invest freely in the
sector. Reliance Retail put on hold its expansion plans in the states where opposition to organised
retailing has surfaced. Reliance is known for the speed and aggression with which it enters new
businesses, as demonstrated by its blitzkrieg marketing campaign when it began mobile telecom
services in 2002, catalysing a sharp reduction in Indian mobile call tariffs. But now the company has
painfully realised that in politically sensitive sectors like retailing a much more cautious approach is
advisable.
wafer-thin margins because they rely on family or cheap, untrained labour; incur low rental costs (or
operate from their own property); and spend very little on display and interiors. These practices
enable neighbourhood retailers to keep prices low and offer attractive discounts. Neighbourhood
retailers are also willing to sell tiny quantities of loose (unpacked) grocery items, which is a major
attraction for poor families. Given these factors, its not surprising that corporate retail continues to
account for only a tiny proportion (estimated at less than 4%) of retail sales in Indiaeven though
they began operations many years ago
To sum up and what would support our business plan following is the reality
Given their respective strengths, however, corporate and traditional retailing can co-exist and
growin India for a long time to come. In fact, many customers already frequent both types of stores;
much of corporate retails growth may represent enhanced consumption as a result of rising incomes
and the growing variety of consumer goods, rather than the decline of traditional retailers. Until
recently, moreover, Indian corporate retailers have faced little popular opposition, which indicates
that most traditional retailers have not felt seriously threatened by them. In this light, the recent
upsurge in protests against corporate retailing has come as a bit of a surprise
The retail revolution that has ushered in modern retailing is yet to make significant in-roads
into almost 15 million kirana outlets (small mom-and-pop shops) throughout the length and breadth
of the country. The diversity of population in terms of demographics (income ranges included),
shopping patterns of different segments of consumers, the "every day" shopping mindset of a
majority of consumers, the dominance of groceries and food purchases of consumers in the total
retail purchases and the infeasibility of modern retail outlets in diffusing themselves to completely
replace kirana outlets are some of the reasons why retailing in India needs to be probed with
insightful consumer behaviour
Reliance is leaving no stone unturned and is poised to hit back aggressively and is taking following
steps and adopting policies to turn itself into a profitable venture and compete effectively with its
competitors
Recently in August 2011 Mukesh Ambani did a 3rd rejig of his top management at Reliance Retail.
Rob Cissell of Walmart will be taking over as chief executive officer (CEO) of Reliance Retail.
Cissell has been with Walmart in China for several years and has recently resigned.
He will be accompanied by one of his former colleagues from Walmart China called Shwan Gray.
He will be taking over as chief operating officer (COO) of the Reliance Retail business. Their
mandate is to turn the business around and make it profitable within the next two years.Initial
contract has been signed for two years only. They will have to focus primarily on food, FMCG and
electronics business. Secondly, they will also have to focus on the big plans for the cash and carry
segment that Mukesh Ambani announced during his speech in the last AGM. These core focus areas
which are expected to turnaround the retail business for Reliance.
Early last year Gwyn Sundhagul who was with Tesco team in Thailand was hired to takeover
Reliance Retail business. He along with 20 senior managers moved in from Tesco Thailand to take
over the business. They restructured the entire value format and started focusing on the big format of
Reliance Retail. However, things did not match up to the expectations of the top management of
Reliance Industries. So lets see how much success the new management team could bring to the loss
suffering chains of Reliance Retail
Competitors Move:
The following are the reasons for changes in Reliance Freshs Strategy and some of the
highlighting news articles related to the competitor: Future Groups Big Bazar
MUMBAI: At a time momentum is building to allow foreign players into front-end retail, senior
officials of the Future group and Walmart have met at least five times in the past four months, raising
the possibility of an alliance between India's largest retailer and the world's largest retailer. If the
alliance fructifies, it could reconfigure organised retail in India.
Four executives from the two camps with knowledge of the talks confirmed that Future Group owner
Kishore Biyani visited Walmart's headquarters in Bentonville, US, last December where he met
Doug McMillon, president and CEO of the American company. Biyani was accompanied by B
Anand, director of finance, and Damodar Mall, director of integrated food strategy at the Future
group. Since then, Hong Kong-based Leigh Hopkins, vice-president (M&A Asia) of Walmart, has
visited the Future group's office in South Mumbai at least thrice, the latest being last week, said three
of those officials. Biyani declined comment on the talks with Walmart saying, "There are too many
issues". "There is nothing there," he added. Walmart India President Raj Jain denied the talks. "At
the moment, we are not in any alliance talks with the Future group," he said after a long pause,
carefully measuring his words. Walmart US did not respond to an email sent last Friday.
The meetings between the two sides could have an impact on their respective partnerships in India
an existing one for Walmart and a prospective one for the Future group, both of which have been
beset by issues. Walmart has had an equal joint venture with the Bharti group since 2006: Bharti
Walmart. However, this partnership is 'non-exclusive' in nature, which means Walmart can forge
other alliances in India. Bharti Walmart operates in the wholesale and back-end segments the two
areas in retail where foreign players are currently allowed. Walmart, the world's largest company
with revenues of $408 billion in 2010, has reportedly been frustrated by the joint venture's slow pace
of expansion. So far, it has opened five wholesale stores under the brand name 'Best Price Modern
Wholesale'. In calendar 2009, according to data from the Registrar of Companies, the JV lost Rs 151
crore on revenues of Rs 198 crore.
"Maybe Bharti is not investing so much as Walmart would like it to do," said Harminder Sahni,
founder, Wazir Advisors, a boutique consultancy. "So, there is a possibility of Walmart bringing
another equity partner to ramp up."
Big Bazaar special offers for different events (Cricket World Cup)
VIJAYAWADA: With the aim of connecting cricket lovers to the ICC Cricket World Cup 2011',
retail major Big Bazaar unveiled a range of merchandise at a fashion show held on Wednesday. Ranji
cricketer Swaroop unveiled the collection during the show.
Store manager K. Bhanuprakash said that lovers of cricket around the world were gearing up for the
ICC Cricket World Cup 2011 with just about 44 days to go for the start. We are delighted to be
associated with the ICC as the authorised retailer for the World Cup merchandise. Through our range
of offerings in apparel, home and personal care, we attempt to cement a strong relationship with our
customers by enabling them to express their appreciation and cheer for cricket by sporting the fan
look, he said.
Cricketer Swaroop said: It has been a pleasure to be associated with this event at Big Bazaar. I
would like to invite all cricket lovers to show their spirit for their favourite team and the player by
wearing the authorized ICC CWC 2011 fan merchandise available at Big Bazaar stores.
Mr. Bhanuprakash said Big Bazaar offers specially designed cricket merchandise for men, ladies and
kids. The range includes sports tees, active dry tees, track pants, shorts, sweatshirt, caps, head bands
and more.
As we know market research takes a time till then following actions could be taken by Reliance
Fresh in order to revamp itself
WAREHOUSES
A lot need to be done to create a brand image about the chain and as talked earlier also about the
value generation, so if Reliance fresh is successful in doing it by some value to the society it would
have a lasting effect and position our brand in customers mind
Though our plan for this value creation might seem aggressive but is absolutely feasible keeping in
mind the potential of Reliance group as a whole.
As we all are aware about the fact there is shortage of warehouses in India which every year result in
wastage of thousands of tonnes of wheat, rice etc and also somewhat a cause of food inflation in
India. So Reliance could collaborate with government that is a PPP model and set up warehouses in
various parts of the country where government would let the farmers and even other local retailers
store their grains in exchange of a minimal charge. In return the government would give the grains to
Reliance at subsidised rates which it would sell to people below poverty line people through their
special counters in front of Reliance Fresh stores and people above poverty line will also get grains at
discounted prices.
So this will create a wave in India about Reliance as a valuable brand and point of sales being
Reliance fresh will revamp the image of chain and customer will definitely some other products also
will they come to buy grains at discounted prices
So this single activity could benefit Reliance Fresh in following ways
2. Good contacts and positive relations with government agencies and local vendors , the
main cause of shutdown of its various stores in 2008
3. Definitely a noble cause for BPL people and could be termed as a greatest CSR activity by
any company in recent past
Saved time
Now I would like to answer the possible questions which would come in your mind after reading this
point of ours
Everybody will order the goods to the helper standing there and will result in chaos?
But you should not forget that everybody have not decided exactly which product, brand ,size ,
quantity they have to buy so it is not meant for them , some people just come to these outlets for
these purposes only that the goods here are properly displayed and they properly compare the prices
and other features and then only buy
What type of customers are you targeting by this policy?
Who usually are tired after coming from their businesses or jobs and does not want to roam in
the store
Who have pre decided on the product, brand, size and quantity of product they want to buy
Who are too old to learn and does not fit themselves in this concept of buying product,
I would like to give my example of my parents itself. I am from Roorkee and recently an Easy Day
store opened there and my parents was quite satisfied with the availability of goods there, that time I
was with them and searched all the items what my mother told me she wants, now when I came to
hostel my mother said she never went there again as she does not want to search the products there
and just dont like the concept as she is used to her early habit of ordering the goods. So there is a
large class of people we are targeting here which is still left by almost every grocery and fruit retail
chains present in India
While I was writing this point an another concept came in my mind that is somewhat related to the
ordering thing only but its ordering pre ordering on the phone or through internet. It would again
save a lot of time and would be convenient for todays tech savvy generation for sure.
Customer could just order the products we want on the phone or internet and the store would keep
them ready in a bag and the they can pay for it while collecting the goods from the store or could just
pay also through their net banking accounts or debit/credit cards
In addition to this mobile application could be developed for ordering and even payment delivery. As
we know with changing lifestyle and increase in smart phones it is the most convenient method for
many nowadays.
Even the concept of mobile wallet has come in which you could have pay your various bills or avail
other facilities without having a banking account and just having balance in your mobile wallet . So
possible collaborations could be done in this field too.
Wi fi Enabled Stores
Again we are leveraging on the technology and targeting youth generation and office goers by
this policy
Though it may sound a very small policy but I am sure it would be again a first in a food and grocery
retail chain. Though for you and me internet might not be so important that it might urge you to go to
a Reliance Fresh store to access it but for some it is definitely
For someone access to share market is an essential every minute , for some an e-mail might change
their fortunes and more some just to update a status on Facebook or to see what people have
commented on the picture I recently uploaded on their facebook accounts..
So its for sure todays generation feel handicapped without Internet and we are their support or just a
motivating factor for a child to accompany his parents to a reliance fresh store
Now the reader have a question in mind that what if people would come to just access internet and
not buy anything??? Definitely it would happen but again on the positive side we sell hopes and even
if just 1 customer buys from 5 who just came to access internet it is a success for our chain and
definitely do not forget again the +ve word of mouth and brand value it would create
Tie up with big stores in semi urban areasIt is essential for any chain to widen its reach and expand itself to more and more cities
But according to us retail is all about Space and People. So with ever increasing property prices it is
not feasible for any chain to keep buying land in which ever city they want to enter, even getting land
on lease at appropriate place is not always easy in a city /town
So they could have a tie up with the popular store of a town which should have following criterias
fulfilled
They get to use the name of Reliance Fresh which is a big brand in itself in return of a
margin they have to give to Reliance
Renovation of shop and new paint and boards free of cost
They would have a flexibility to use supply chain of Reliance Fresh or he could his own
suppliers
Management tips from Reliance on various aspects of business
He would be able to sell the goods at cheaper rates compared to other stores in the town
Feedback System
As said in service sector a dissatisfied customer never complaints but does not returns back
So a proper feedback system needs to be there to ask people
Whether they are satisfied with the services given by the chain or not ?
What all could be improved in our existing model?
What is the most important factor you consider in a while going to a particular grocery and vegetable
retail chain?
References
www.ril.com
www.economictimes.com
www.financialexpress.com
www.ibef.com
www.premium-papers.com/post/retail
www.ehow.com/pricing-strategy
www.businessknowhow.com/marketing
www.va-interactive.com/inbusiness/editorial/sales