Emerging Retail Trend: Store-As-Medium Gaining Velocity

November 28th, 07
In 1964, communications theorist Marshall McLuhan forwarded the notion that
the, “Medium is the message.” His theory seems clearer today as we see in-
store merchandising activity receiving more attention as a medium unto itself,
rather than the recipient of benefits derived from other media. Two recent
studies and one about to be released major study have made the idea of store-
as-medium their major focus.

An article appeared in the Cincinnati Business Courier on September 21,

2007 that reported on a major research investment being made by Procter &
Gamble, Kroger and dozens of other major retailers. All-in-all, 40 companies
have invested tens of millions of dollars in the project called PRISM, or
Pioneering Research for an In-Store Metric. In the study, hundreds of infrared
sensors were utilized over the last five months to count the number of people
who walked down a particular aisle or specific product category, and purchases
were tracked. This level of investment is clear evidence of the importance being
placed on in-store as the emerging marketing medium of this century.

According to a report by Deloitte Consulting for the Grocery Manufacturer’s of

America, the overall marketing budgets of 19 CPG companies include an increase
from 3% to 6% on in-store marketing this year. The companies think that
amount will reach 8% by 2010. That compounded annual growth rate is 21%,
greater than internet advertising at 15% and traditional media (TV, print, radio)
at 2%. The report states that retailers are spending at an even faster rate of
26% compound growth annually. According to Advertising Age, the previously
mentioned P&G is spending $500 million of its $ 8 billion in global ad spending
on in-store marketing.

In a recent Times & Trends report, Information Resources Inc. (IRI) seems to
triangulate the notion of Store-As-Medium. IRI says that manufacturers are
indeed turning more-and more to in-store marketing as traditional advertising
seems to be on the decline. IRI suggests that, if the medium is the message, the
message will have to be constantly tweaked and strategies sharpened as
merchandising activity and effectiveness are already on the decline. As always,
closer communication between the manufacturer and retailer is the prescription
against any future slippage.
Emerging Retail Trend: The Role of Packaging
September 24th, 2007
One area I’ve been paying a lot of attention to in the past five years is
packaging. More often than not, packaging is the reason for the success or
failure of the product, not the actual product itself. It’s been proven that the
design of the the package is one of the top 3 reasons people buy something, just
behind the price and the primary need the product fulfills.

Take, for instance, Wrigley’s recent introduction of their new gum “5”. The effort
they have put into the package design and positioning of it is another very visual
example of the importance of packaging. Think for a minute about the issue in
rolling out a new gum. In a category that is very mature, with numerous brands
and no real value proposition to offer, Wrigley is introducing “5” with one of the
key attributes being the package itself. They designed it to be “cool” and
something a person would not hesitate to put on a conference room table next to
their Blackberry or iPod.

Emerging Retail Trend: In-Store Media and C B S

September 20th, 2007

Yesterday, we saw the key purchase of an in-store media company by the

broadcasting giant, CBS. This is just another demonstration of the growing
importance of in-store media. As reported in the Wall Street Journal, Sept. 7,
2007, CBS paid $71.5 million for SignStory, which had in-store video montiors in
1,400 supermarkets.

I’ve mentioned previously the increasing importance of in-store advertising and

this is just another confirmation of this trend. Mainstream news sources have
been talking about how companies are running from traditional media such as
network television, etc., and moving their spending to in-store activities. This is
an understatement. The real problem is that there are not enough viable
vehicles to absorb the movement of advertising dollars. I’m very bullish on this
and I believe very strongly that in the next 5 years, we’re going to see the
emergence of a number of new ”consumer-specific” advertising vehicles. I’m not
sure exactly how these will appear or where, but I do know that there will be a
lot of money spent developing new advertising mediums.

In the words of the vintage broadcast networks, “Stay tuned. We’ll be back
shortly.”
Emerging Retail Trend: Pricing and Wal-Mart
September 15th, 2007

This past week, Wal-Mart unveiled their new tagline, “Save More, Live Better”,
replacing their old slogan, “Always Low Prices, Always.” The fact that Wal-Mart
is changing their slogan confirms what I first began saying 4 years ago: Wal-
Mart is in trouble. The move also signals what the trend they have been
establishing in the past several years of increasing their prices on select items.
Wal-Mart is not the low price leader on every item. They are clearly moving to a
strategy of being the low-price leader on key items and taking a higher marging
on other items.

This move by Wal-Mart is going to force every retailer to improve the quality of
their price message. It doesn’t mean retailers are going to have to lower
prices. It merely means they’re going to have sharpen their message. For
retailers that choose not to compete on price, it means they will need to
emphasize service, selection, experience, or whatever their niche is.

In the long-term, the move by Wal-Mart is another signal of their problem in

finding a way to satisfy Wall Street. As we move into the 4th quarter, watch
Wal-Mart become even more aggressive in terms of merchandising select items
in categories such as consumer electronics, toys, and small appliances.

Emerging Retail Trend: January / February 2008 Retail Bankruptcies

September 2nd, 2007

With the continuing mortage saga moving further and further upstream in terms
of the types of mortages being impacted, I’m expecting to see fallout in early
2008. It is going to come from several retailers filing for bankruptcy at the
beginning of the year. Because of that, vendors need to consider how much
credit to extend now through the end of 2007. I’m not going to state specifically
who I expect to fall by the wayside, but there will be casualties. Stay tuned to
this blog over the next month or so as I’ll be talking more about this critical
subject and the implications it will have on the entire retail landscape.

Emerging Retail Trend: The Sell-Off of Brands

August 13th, 2007
Every couple of years, we go through the cycle of major companies selling off
brands they deem no longer worthy of their focus. The cycle never ends, and
with the amount of hedge money in the marketplace, looks for some interesting
moves in the next couple of months. The announcement by Unilever is just the
start. I believe Kraft will sell off some brands and SaraLee will sell even more.
The end result is that it will create significant opportunities for some smaller
companies to pick up some brands. The downside is that these brands will come
with so much debt connected to them that it will be difficult for any of them to
mount anything significant in terms of a long-term marketing push.

Emerging Retail Trend: The Pet Economy - Business Week Magazine

August 13th, 2007

I can’t pass up the opportunity to comment on the recent cover story in Business
Week magazine (August 6, 2007). The headline read “The Pet Economy”, with a
picture of a pampered dog on the cover. The article talks about how the the pet
industry has been booming and is continuing to grow. If you’ve been following
my annual Emerging Retail Trends reports, you’ll know that I first said this
more than 3 years ago. I’d agree that the pet economy is showing no sign of
slowing anytime soon. Thanks Business Week for commenting on whatEmerging
Retail Trends first reported on 3 years ago!

Emerging Retail Trend: Secondary Sourcing

August 13th, 2007

Several years ago, I talked about the need for companies to have secondary
suppliers and sources for goods and services. With all of the supply chain issues
coming out of China, the need for companies to have alternative sourcing is
more important than ever. The problem with China is only the tip of the iceberg.
The on-going issues with the transportation grid are only going to get worse. In
the next 15 months, we will be facing potential strikes on the west coast ports
and the implementation of new Homeland Security rules regarding the
movement of containers. These factors are not to be taken lightly, and
depending on how they all play out, could cause major disruptions even before
we call into play the usual issues surrounding weather, currency valuations,
energy, etc. Retailers and manufacturers alike need to be paying more than lip-
service to this issue because if and when supply-chain disruptions do occur,
there will be those who cannot recover from them and will ultimately be forced
out of business.

Emerging Retail Trend Update: Wal-Mart Discounting Strategy

August 13th, 2007

Wal-Mart’s announcement today of price cuts on as many as 20,000 items in a

back-to-school push really shouldn’t surprise anybody. They are in a tough spot
and the only way out is to dive deeper with their pricing. I’ve talked about this
on several occasions in earlier blogs (Feb. 18 and Dec. 04, 2006 to name just a
couple).

Wal-Mart has to keep their real estate productive and the only proven method
they have to build sales is through discounting. The vast majority of their other
attempts to go upscale have backfired. For vendors, it means the ride is going to
get rough. However, there is light at the end of the tunnel (although it is still
probably 10 years away).

I firmly believe Wal-Mart is now in a mature state of existence in the US. In my

opinion, there are only a handful of things that will save them:

1. Spin off Sam’s

2. Build up Neighborhood Markets

3. Open a new, small deep-discount format

4. Begin to move away from the SuperCenter concept

If you’re in the real estate end of the retail business, you are going to see major
shifts in space. Hang on! It’s going to be a wild ride for the next few years and,
as a result, it’s a great time to be part of the retail industry.

Emerging Retail Trend: Decline of Television Shopping

August 13th, 2007

HSN and other television-driven, shop-at-home formats are going to start rapidly
declining in the next 3 years. They are already becoming very frayed around the
edges. I’m basing this on the following reasons:
1. There has always been a very high return rate on their products which have
served as a damper on their profits.
2. When compared to the speed at which people can shop online for anything at
anytime, the format moves too slow.
3. The ability to use the Internet to seek out a lower price for something that is
being shown on the television shopping channel is quickly turning these
programs into nothing more than a product showcase for the manufacturer.
4. Cable capacity / competition is forcing every cable operator to increase the
fees they charge their content providers. The continued upward spike in these
fees is another cost that must be passed along to the consumer.

I know there has been a lot of money thrown at these formats in recent years
from very smart investors like Barry Diller, but, in the end, they are going to lose
out to the flexibility of the Internet.

Emerging trends in Retail sector

The single most important evolution that took place along with the retailing
revolution was the rise and fall of the dotcom companies. A sudden concept of
`non-store' shopping emerged, which threatened to take away the potential of
the store. More importantly, the very nature of the customer segment being
addressed was almost the same. The computer-savvy individual was also a sub-
segment of the `store' frequenting traffic.

Internationally, the concept of Net shopping is yet to be proven. And the poor
financial performance of most of the companies offering virtual shopping has
resulted in store-based retailing regaining the upper hand. Other forms of non-
store shopping including various formats such as catalogue/mail order shopping,
direct selling, and so on are growing rapidly. However, the size of the direct
market industry is too limited to deter the retailers. For all the convenience that
it offers, electronic retailing does not suit products where `look and see'
attributes are of importance, as in apparel, or where the value is very high, such
as jewellery, or where the performance has to be tested, as of consumer
durables. The most critical issue in electronic retailing, especially in a country
such as ours, relates to payments and the various security issues involved.

The sunrise Retailing Sector – Emerging trends and challenges.

(A comparative study of multi-national chains V/s local players in
retailing)
The term "Retailing" refers to any activity that involves a sale to an individual
customer. In India, the unorganized retailing sector comprises of 96.5% while
that of organized sector just 3.5% that is mainly in major metropolitan and
urban areas. Indian retailing traditionally dominated by a small family run
"Kirana" store. Retailing in India is the second largest untapped market after
China. Professional management and strong customer focus characterize
organized retailing. Despite the huge size of the industry, only 8% of the
country's population is engaged in retailing while that in United States of
America it is 20%. The positive factor such as increased purchasing power, rise
in number of double income families and demanding customers, due to change
in life style and paucity of time, customers are increasingly looking for
convenience. To woo the customers to the store retailers are providing a wide
product range, quality and value for money, apart from creating a memorable
shopping experience.

If economy continues to register a growth of 7- 8 %of the GDP annually,

estimated by 2010, retailers will comprises of $300bn industry .retailing is the
last stage of distribution process. Retailing is one of the fundamental building
block of the Indian economy. Indian retail market has undergone an immense
transformation in the post liberalization & witnessing tremendous growth. Indian
retail growing at the rate of 30% per annum and provides the highest
employment after agriculture in India. The growing sophistication in retailing like
A.T Kearney & Kurt Salmon Associates have become active in India. Industrial
houses take to Retailing and set up retail chains like R.P. Goenkas, Nandas, K
Rahejas,Tata, Birlas, Piramals, ITC, Ambanis, find a place in the list. Many others
have worked out their plans and are likely to enter the line in the next couple of
months.

Concept- To Woo the customer to the store retailers are providing a wide range
of product, Quality,and value for money, apart from creating a memorable
shopping experience. Organized retailing has made a considerable headway in
product like food & groceries, clothing books, and music. Product like food &
groceries segment has undergoing a transformation with super market chain like
foodworld, nilgiris, apana bazaar, subhiksha. The apparel sector has seen the
emergence of store like pantaloon shoppers'stop, Westside, lifestyle, etc have
gained prominence in lifestyle\fashion segment & chain like archies,musicworld
and crossword cater the books & music market.

The leading Indian retail players are Westside (Tata), Pantaloon, Big Bazaar,
food bazaar(PRIL), Food world(RPG) and Shopper's stop(Raheja Group). Book
retailing by cross word, Landmark and Oxford bookstores, watches and jewelry
by Tanishq and Titan(Tata), luggage(VIP and Samsonite), footwear by the Loft
and Bata.

International players such as Wal mart is largest retailer in world annual sale and
as well as employer in the U.S.A.. Others include Carrefour Group (France), the
Kroger Company(U.S.), Metro AG(Germany), the home depot Inc. (U.S.A.).

INDIAN PLAYERS-
1- Pantaloon retail India limited (PRIL)- Renamed itself as "FUTURE
RETAIL'' in marach 2006, as part of its restructuring and expansion plans.
Headed by Kishore Biyani include pantaloons. Big bazaar, food bazaar, gold
bazaar and the central mall.the first menswear pantaloons outlet was set up in
1992. The company sold products under the bare denim, springboard, Lombard
and John miller brand names. Pantaloons offered a wide range of clothing
options to Indian consumers . It stocked garments, accessories and life style
products. The target audience for pantaloons was upper and middle class urban
population in India. Customer feedback and customer satisfaction were the key
focus at PRIL. Company relied heavily on IT for collecting customer data and
opinions .PRIL realized the potential of huge middle class population in India,
apart from retailing lifestyle products, it ventured in to BIG BAZAAR-in 2001
PRIL opened its first big bazaar, which had an area of 30,000 sq ft. in Kolkata
.the major USP of the big bazaar store was low prices and the best price
proposition being offered to customers. The caption used in the promotion – is se
sasta aur accha kahin nahin (cheaper and better than this ? nowhere else! )
indicating value for money stores. Big bazaar stocks over 2,00,000 products that
include apparel, food products, home appliances, and cosmetics. Product are
cheaper than the the market price by as much as 5-60 %, apparel are cheaper
by 25-60% . the success of PRIL comes from cheaper sourcing of products and
lower distribution costs . In addition to big bazaar, PRIL also started 'FOOD
BAZAAR'.in 2001 . The first food bazaar store was set up in the lower parel
region of Mumbai. Food represented PRIL's foray in to yet another value retailing
business, which focused on food and grocery products. The stores were designed
based on PRIL's understanding of the domestic needs of Indian housewives . the
caption used in the promotion campaign of food bazaar was –ab ghar chalaana
kitna Aasaan ( now, it is so easy to run a house ). It had over 50,000 stock
keeping units that covered a range of products like cereals, pulses, sugar, rice,
juices, milk products and FMCG products, besides stocking vegetables and fruits.
Most products were sold at Disounts ranging between 2- 20 % . Due to its
focused Mareting and merchandising strategies, the food bazaar stores soon
became popular among customers.

PRIL,s central malls are targeted towards the up-market segment of urban
population . In 2005 PRIL had three central malls located at Hyderabad,
Bangalore & Pune . Each central mall has different departments for home
Products, fashion, leisure, food, health, restaurant, beauty parlours, a pub and a
nightclub.

PRIL also ventured in to online retailing by launching its e-retail portal,

futurebazaar.com, in may 2006 .with the launch of this online shopping portal,
PRIL planned to invest Rs 150mn and hoped to earn Rs 3 bn from the venture.
To counter competition from leading e-commerce portals in India like e Bay,
Rediff, Fabmall and Indiatimes.

2- RPG Group- the Ramah Prasad Goenka group – one of the entrants in to the
organized retail sector in India . They launched the 'FOOD WORLD' chain of
grocery stores in 1999. By 2005, there were more than 90 Food world stores
across India, making it the largest food & grocery retail chain. Food world has
been growing at an annual growth rate of 30 % over last 5 years. Food world
stocks almost 5000 items. In each outlet. Suppliers can deliver products directly
to warehouse, from warehouse the products than be distributed to individual
food world. This shortens the distribution channel, resulting saving and saving
passed on to the customer, providing quality goods at lower costs.

RPG too used IT for running operation smoothly and also hi- tech

Cash registers and bar – code scanners.

RPG also owns spencer's hyper market – a chain of retail hyper market in India.
Spencer's hypermarket stock a wide range of products right from groceries, food
items, home needs, fresh food, garments and consumer durables.

MUSIC WORLD- launched in 1997 is another RPG retail venture, largest music
retail chain in India with over 170 outlets. It stocks music videos, audios,
accessories etc. the store ambience and presentation of products have
contributed strongly to music world's success.

'Health & Glow'- joint venture between RPG & Dairy farm international. Launched
in 1997- it is the first retail chain catering exclusively to the health and beauty
requirement .the health & glow outlets offer cosmetic and medicinal products
and services, all under one roof.

3- Tata Group

The group started its Retail Bussiness in 1998 with the purchase of the little
woods Retail stores, originally owned by a UK based firm. The company was
renamed Trent limited and the littlewoods store was called westside. As of 2005,
there were 16 west- side stores across India about 20,000 sq ft in size. The
Westside outlets are in apparel stores a cross India about 20.000 sq .ft in size.
The Westside out lets are in appored and accessories retailing and offer
international shopping experience with value for Money. Offer quality products
with latest designs. Each Westside store has two divisions, one apparel division
and other product division. These divisions are further classified in to seven
departments (catering to men, women, kid's wear and needs)

Trent launched a hypermarket 'STAR INDIA BAZAAR' in 2004. To further

consolidate its position in retail market, Trent bought a 76 % stake in landmark,
a leading book and music retailer in India.

Titan industries established in 1984- it is India's leading watch manufacturer and

retailer. Titan market its range of watches under the 'Titan' and 'sonata' brands
and hold a 25% market share in watch industry . Titan's series of watches
included Fastrack, Edge, Nebula, Raga, Sonata, Regalia, Bandan and Steel.
Sonata was targeted at middle class consumer, who is both price conscious and
quality conscious. Competitors of Titan are HMT and TIMEX.

Titan entered in to jewelry segment under the brand name 'Tanishq' in 1995.
Tanishq jewelry is sold exclusively by 69 outlets spread over 53 Indian cities and
also exported to US, Europe, Australia, and Middle East.
4-K.Raheja Corp. Group of Companies-

India's largest real estate players. They launched Shopper's Stop in 1991 & its
outlets stock apparel, accessories, household items, perfumes and cosmetics,
coffee shops and book stores to give consumers a complete shopping
experience.

Crossword Bookstores Ltd- a subsidiary of Shopper's Stop in book retailing

business has 22 stores across India.

5-RRL (Reliance Retail Limited)-

On june 26, 2006, mukesh Ambani, C & MD, Reliance industries limited,
announced his plans to foray in to the retail sector with an initial investment of
US$ 5.6 bn. RRL was expected to have its presence across India withdifferent
retailing formats such as warehouse clubs, hypermarkets, supermarkets,
specialty stores and convenience storess . Reliance also had plans to open
restaurant outlets within its stores.

In Nov 2006, RIL launched its first retail store 'RELIANCE FRESH' at Hyderabad.
The store catered to consumer needs by providing fresh fruits, vegetables,
groceries and dairy products.

6- A.B.Birla Group- which has acquired supermarket chain TRINETHRA has

ruled out partnering foreign firms in its bid to be among the country's top
retailers.

7- Gati- a cargo management and logistics solutions provider, on Jan 07

launched its foray in to the retail sector, opening the first of its retail store, 'Cafe
d'eliver' in Hyderabad on 6 Jan 07. Gati has targeted the opening of 100 'Cafe
d'eliver' by march 2008 to offer various services like fax, document
photocopying, calling and printing, internet browsing in addition to own cargo
services.

8- SUBHIKSHA- is a chain of food and pharmacy discount retail stores. It is

based in Chennai and has a strong presence in southern India.

9- MARGIN FREE- is a Kerala based chain of discount stores.

10- CALVIN KLEIN, MURJANI GROUP-

Calvin Klein Inc., the clothing design and marketing studio formed in 1968, is to
set up a retail operation in India. The clothing empire and Murjani India Ltd.
have announced an agreement for the latter to market and distribute the brand's
various labels throughout India and open dozens of retail stores planned for the
subcontinent.

The agreement authorises Murjani to market the Calvin Klein lineup through
exclusive retail outlets and select department stores approved by the company.
It includes the original Calvin Klein Jeans line and the unisex ck Calvin Klein
label, which the company introduced in the mid-1990s.

Murjani India, a subsidiary of the Murjani Group, focuses on attracting

international brands and retail concepts to India. Murjani forged a separate deal
with The Warnaco Group, a New York-based apparel company, granting Warnaco
exclusive rights to distribute the Calvin Klein Underwear line of products in India
and supply Calvin Klein Jeans to Murjani.

The broad plan is to open at least 40 Calvin Klein-branded stores during the first
five years of the operation, with construction beginning as early as March 2007.

11- DISNEY ARTIST STORES-

The Ravi Jaipuria held company RJ Corp has signed an exclusive master
franchise agreement with Disney Consumer Products to source and market
Disney character branded cards, stationery, arts, crafts and party products
through exclusive Disney Artist stores in India . The first of the stores is to open
in Mumbai in January 2007.

Under the Disney Artist brand in India, RJ Corp will sell as vast range of Disney
character-led products aimed at the kids and youth categoryThe Ravi Jaipuria
held company RJ Corp has signed an exclusive master franchise agreement with
Disney Consumer Products to source and market Disney character branded
cards, stationery, arts, crafts and party products through exclusive Disney Artist
stores in India . The first of the stores is to open in Mumbai in January 2007.

Under the Disney Artist brand in India, RJ Corp will sell as vast range of Disney
character-led products aimed at the kids and youth category

12 -Vishal Group - launched their first hyper market Vishal Mega mart in
Udaipur this month. Spread over 25,000 sq.ft, the store offers extensive range
of men's, women's and kids' range of fashion clothing. Beside fashion attire, it
will also have separate sections and counters for watches, sunglasses, fashion
accessories, gifts and novelties, electrical appliances, digital diaries, perfumes,
cosmetics and grocery items etc. Currently, Vishal Mega Mart operates 29 fully
integrated and self-owned stores spread over a total shopping area of 5,70,000
sq.ft in 21 cities across India

FOREIN PLAYERS IN RETALING—

1- Wal-Mart Stores Inc- is the largest retailer in the world and is based in
Bentonville, Arkansas, USA. For the year ended Jinuary 2006, Wal-Mart had
revenues of US$ 315.65 bn and a net income of US$ 11.23 bn (source:
finance.google.com).it tied up with Bharti mittal group to launced its product in
India. It is also the largest employment provider in USA.

2- CARREFOUR SA - is a French retail group that operates networks of

hypermarkets, supermarkets, discount store, convenience stores and cash- and
– carry outlets. for the year ended december 2005, Carrefour had revenues of
74.49 a net income of 1.58 bn (source: finance.google.com)

3- TESCO Plc- is the largest retailer in UK. For the year ended February 2006,
the group's sales were 57.93 bn and a net income of 2.31 bn (source:
www.hoovers.com)

4- Rosy Blue Group - the world's largest Diamond manufacturer is planning to

invest Rs.900mn in setting up 40 exclusive ORRA Diamond Jewelry showrooms
in India.

5- LVMH Group - Dior, the well known watch brand from the Louis Vuitton Moet
Hennessy (LVMH) Group is planning to include India among its top 12 world
markets, most global players were opting for the franchisee route.

However, despite the restriction on FDI, Foreign retailers had other modes of
entry in to the Indian retail market. This included franchising, strategic alliances
and the wholesale trading. It was reported that Tesco had plans to enter the
Indian retail market through a joint venture through Homecare Retail Mart
Pvt.Ltd. for opening 50 stores by 2010.

Challenges - The competition from the unorganized sector is formidable.

Change in consumer behavior, intensification of competion with the emergence
of new players & rapid technological advances have made it difficult to achieve
success in the retail industry. Unorganized retails enjoy higher margin due to low
operational cost, Taxations, logistics, lack of trained workforce, high cost of real
estate, limited land available at prime locations, FDI investment in Retaling
industry has been an issue of debate for over a decade, poor inventory turnover
& stocks availability measure, perception of customer that retail stores are more
expensive etc., poses significant challenges for the retail market.

Facts-

* India is 2nd fastest growing economy in the world.

* India, in 2003-2004 grew at 8.2%.
* More English speaking people.
* 2nd most attracting developing market, head of china.
* AT Kearney has estimated India's total retail market at US $ 202.6 billion
which is expected to grow at a compounded 30 % over the next five years.

Conclusion- Due to rise in the per capita income, augmented product

availability, exposure to international lifestyle brands& media explosion all adds
to the booming retail industry investment in this area is poised to reach Rs
40000 crore by 2006.

REFERENCES-

* "Emerging market priorities for global retailers", www.atkearney.com,2006

* EdMckinley, india's Top retailers ready to face off with foreign chains,
www.Icsc.org,2006
* Indian Retail sector- Tremendous Growth Potential.
www.smallbiz.nws.gov.au,2006.
* Indian Retail: on fast tract bridging the capability gaps, www.kpmg.com,2006.
* Pantaloon Retail ( India) ltd, www.sebi.gov.in, Oct 28, 2005.
* Spicing up food retailing, www.deccanherald.com, may03, 2004.
* www.hoovers.com)
* finance.google.com)
* Deccan chronicle, dated 29 nov, 2006, page 13 "centre to examine Bharti-Wal-
Mart deal".
* Deccan chronicle, dated 1\12006, page 15 "Reliance Retail adds six stores in
Hyderabad.
* www.imaesretail.com,2005.

Emerging Trends in Retail Marketing strategy

Retail Marketing
The essence of retail marketing is developing merchandise and services
that satisfy specific needs of customers, and supplying them at prices that will
yield profits. Thereby the concept is a philosophy, not a system of retailing or
retail structure. In today's CRM landscape the old analogy comparing the rifle
and shotgun approaches to message and / or offer delivery is perhaps more
appropriate than ever, as more retail organizations struggle to achieve one-to-
one marketing-communications with customers and prospects.
Targeting allows a retail enterprise to channel its marketing budget4ere
there is the greatest (and fastest) possibility of Return On Investment (ROI)

Retail Marketing mix

Retail Marketing mix is the term used to describe the various elements
and methods required to formulate and execute retail marketing strategy.
The mix may vary greatly according to the type of market the retailer is
in, and the type of products / services.

Marketing strategy
 A marketing strategy is a process that can allow an organization to
concentrate its
limited resources on the greatest opportunities to increase sales and achieve a
sustainable competitive advantage'. A marketing strategy should be centred
around the key concept
/ that customer satisfaction is the main goal.
A strategy consists of a well thought out series of tactics to make a
marketing plan more effective. Marketingstrategies serve as the fundamental
underpinning of marketing plans designed to fill market needs and reach
marketing. Plans and objectives are generally tested for measurable results.

Today’s retail Marketing Managers Must :

Understand the connections between the lifestyle and expenditure
characteristics of customers, their propensity to purchase one product or brand
over another, and leverage this understanding for competitive advantage.

Improve direct marketing response by ensuring they are targeting the

right households at the right time, using the right media with the right message.

Leverage current consumer data to make better strategic decisions

about products, marketing and locations.

Increase customer loyalty and retention with a scientific, data driven

approach to analytical CRM.

Retail marketing managers can implement the following projects to

understand their customer, market and store locations better; achieving a very
strong ROI for their retail marketing efforts in the process.

Customer and Market Potential Estimates:

Estimate the revenue potential of your customers to determine their
current, potential and life-time value

• Estimate your market potential for more effective acquisition

initiatives

• Quantity and qualify your market opportunities.

Customer and Market Profiles:
• Develop more effective communication strategies through a better
understanding
of who your customers are
• Identify your market potential through a better understanding of
your targets.

Customer and Market Segmentation:

• Develop more effective communication strategies through a better
understanding
of different customer groups and your market segments
• Customize your product offers by different customer and market
segments.

The nature of retail Marketing:

• The key aspects of retail marketing is an attitude of mind.

• In making retail marketing decisions, retailers must consider the needs of

the customers.

• Retail marketing decisions are driven by what the shoppers need and
want.

• Retail marketing is therefore a philosophy and is all about satisfying the

customers

• What the customers regard as value and what they buy is decisive.

• What the customers buy determines the nature of the retailer's business.
• The essence of retail marketing is developing merchandise and services
that satisfy
specific needs of customers, and supplying them at prices that will
yield profits.

• Retailers must take the customers' needs into consideration in retail

operation.
 • Retail marketing is stimulating, quick-paced, and influential.

• The retail marketing concept is the acceptance by the retailer that it is the
"customer"
and not "demand" that lie at the core of the retail organization.

The Emerging Sectors:

Retailing, one of the largest sectors in the world economy, is going
through a transition phase, not only in India but the world over. For the long
time, the corner general store was the only choice available to the customer,
especially in the urban areas. This is slowly giving way to global format of
retailing.

The emergence of new retail sector have accomplished by changes in

existing formats as well as the beginning of new formats.

The changing Retail Environment:

Profound changes are taking place, and will continue to occur, in the
retail industry. In terms of sales, the retail landscape is moving away from
specialty stores and department stores toward discount retailing.

Although the future is difficult to predict, forthcoming trends in retailing

will focus on demographics, geographic convenience, time convenience increased
food expenditure away from home and rapid changes in information technology.
In addition, retailers will find a convergence of electronic methods and traditional
methods of Retailing.

Five pillars of Retailing:

Heoxard Berry describes five important actions for Retailers. These
actions, demand pillars, sound simple but are often difficult to implement.

1. Solve customer’s problems.

2. Treat customers with respect.

3. Connect with customer emotions.

4. Set the fairest (not the lowest) price.

 5. Save customer’s time.

Retailers should always keep these pillars in mind when conducting

business. As the work force becomes more diverse and the retail environment
continues to changes, consumer’s needs are rapidly changing.

Retailer’s Responses To the changing customer:

Retailers will need to alter their way of thinking to adjust to the
changing customer.

v Retailers that convey the appropriate level of respect will

experience an increase in customer loyalty and sales.

v Retailers must dig deep to learn who their customers are, so they
can develop Niable customer segments.

v The old marketing concept will need to be modified from

“satisfying” customers to “wowing” customers.

Global retailing:
The world has entered the digital information age. Retailers in a variety
of industries are now using advanced computer systems to enhance their ability
to understand, communicate with and evaluate their market place and to
anticipate and respond to their customer’s needs, Retail shops are using bar
code scanners at their check out point to gauge the types of product their
customers are buying.

E-tailing:
Retailing on the net is known as E- tailing. Internet has changed the way
we do shopping. It has brought the commerce will play a crucial role in shaping
the future of Indian retailing. The real challenge for retailing would be laurching
and managing a highly irnovative click business that works along with a more
stable bricks business. For shoppers and retainers it is increasingly a hybrid
world.

Merchants that reach consumers through different sales channels,

stores, websites catalogues, find that they enjoy key advantages over
competitors that operate in just one world. E-tailing is still a
nascent business model all over the world and it is to be seen how it emerges in
the future. E-tailing will also work best as an adjunct and supplement to brick
and mortar set up.
On the flip side, retail stores can make consumers more comfortable
with internet shopping since most traditional merchants allows customers to
return on-line purchase to their offline stores.

E-commerce in Retail marketing:

“With Electronic – commerce, we have reached the flash point” – says
Ferguson. The internet throws many exiting trends under an are light and
accelerates the transformation to web years. There is an occupational hazard in
the world of electronic commerce. There is an existing and confusing time. In
some ways electronic commerce has already had profound impact – just the Wall
Street brokers who have been watching their private clients flock to online
discount brokers.

Retailing in India – Trends and Opportunities:

Retailing – no marks for guessing this is the most active and attractive
sector of the last decade in India. While the Retailing industry itself has been
present through history in our country, it is only the recent past that has
witnessed hordes of players leaping onto it.

The Emergence of Retailing in India has more to do with the increasing

purchasing power buyers, esplically post- liberalization increases in product
variety and the increasing economies of scale with the aid of modern supply and
distribution management solutions.

The current retailing revolution has been provided an impetus from

multiple sources. The “Revolutionaries” include many commotional stores
upending themselves to modern Retailing, compainces in competitive
environment entering the market directly to ensure exclusive risibility for their
products and professional chain stores coming up to meet the need of
manufacturers. Attractiveness, accessibility and absorbability seen to be the key
offering of the Retailing chain.

Emerging Trends:
 The single most important evolution that took place along with the
Retailing evolution was the rise and fall of the dotcom companies, more
importantly, the very nature of the customer segment being addressed was
almost the same. The computer – Sawy individual was also a scale- sector of the
store.

Internationally, the concept of net shopping is yet to be proven. Now

ever, the size of the direct market industry is too limited to deter the Retailers,
for all comenience that it offers, electronic retailing does not suit products where
“look” and “see” attributes are of importance.

Retail Strategy:
According to the wheel of retailing theory, retail innovators often appear
as low – price operators with a low-most structure and low-profit margin
requirements. Over time, these innovators upgrade the products and become
high price orators. This meant enlarging the sales force, improving locations,
upgrading fixtures, carrying lower thrower merchandise and granting credit etc…
These improvements lead to higher cost which tern lead to higher prices.

Retail image:
Image refers to how a retailer is perceived by customers and others
succeed, a firm must communicate a distinctive, clear and consistent image.
Once its image is established in consumer mind, a retailer is placed in a riche
relative to competitors.

Future of Retail in India :

Customers are also looking for convenience in shopping. This would
continue more strongly in the next couple of years. In future the more dual
income families, the consumer’s ability to spend will increase, but at the same
time it is predicted that the time available for shopping will go down, in such
scenario, the retailers will have to take steps to develop shopping as an
experience, though the more successful retailers will be those that will provide
faster service.

Thereby to succeed in retailing, current and future retailers must be able

to adopt a constantly changing environment, successfully retailers are able to
anticipate and adapt to change.

Thus retail marketing strategy would not only yield benefits for
consumers. Manufacturers and wholesalers but also creates economic utility.

Conclusion:

Retailing is a technology – intensive industry successful retailers today

work closely with their renders to predict consumer demand, shorter lead times,
reduce inventory holding and thereby save cost.

Wale-mart pioneered the concept of building a competitive advantage

through distribution and information systems in the Retailing industry.

The traditional Retailers will always continue to exit but organized

retailers are working towards revamping their business to obtain strategic
advantages at various levels – market, cost, knowledge and customer.

It would be important to note, however that the retailing industry in

India is still a “protected industry”. Given the current trend in liberalization, it
will not the long before the Retailing sector also thrown open to international
market. This will see a further segregation of international retailing brands.

Author : C. PAVITHIRA

M.Phil Commerce,Periyar university, Salem-11

Address for Communication:

57, Appasamy Street,

Shevapet, SALEM – 2.

Cell : 98425 – 50487 E-mail: pavithira01@yahoo.co.in

EMERGING TRENDS IN RETAIL MARKETING
Corporate entities in india today face three major challenges and Opportunities:

Globalization,

Advances in technology and

Deregulation.

RETAILING

Retailing includes all the activities involved in selling goods or services directly to
final consumers for personal and non business use. A retailer or retail store is
any business enterprise, whose sales volume comes primarily from retailing,

TYPES OF RETAILERS

Retail Organizations exhibit great variety and new forms keep emerging. Some
major types of retailers are specialty store, department store, Supermarket,
Convenience store, Discount Store, Off Price retailer etc., Some of the major
stores considered for the study are described below:

Department Store:

Several Product lines, with each line operated as a separate department

managed by specialist buyers or merchandisers.

Supermarket:

Relatively large, low – cost, low – margin, high volume, self - service operation
designed to serve total needs for food, laundry and household maintenance
products.

Convenience Stores:

Relatively small store located near residential area, open long hours, seven days
a week and carrying limited line of high turnover convenience products at slightly
higher prices. Many have added takeout sandwiches, coffee and pasties.

Discount Store:

Standard merchandise sold at lower prices with lower margins and higher
volumes. True discount stores regularly sell merchandise at lower prices and
offer mostly national brands. Discount retailing has moved into specialty
merchandise stores, such as discount sporting – goods stores, electronics stores
and books stores.

TYPES OF SERVICE OFFERED BY THE RETAILERS

New store types emerge to meet widely different consumer preferences for
service levels and specific services. Retailers can position themselves as offering
any one of the four levels of service.

1. Self Service:

Self service is the cornerstone of all discount operations. Many customers are
willing to carry out their own locate – compare – select process to save money.

2. Self Selection:

Customers find their own goods, although they can ask for assistance.
Customers complete their transactions by paying a salesperson for the term.

3. Limited Service:

These retailers carry more shopping goods, and customers need more
information and assistance. The stores also offer services such as credit and
merchandise – return privileges

4. Full Service:

Sales people are ready to assist in every phase of the locate – compare – select
process. Customers who like to be waited on prefer this type of store. The high
staffing cost, along with the higher proportion of specialty goods and slower
moving items and the many services, results in high – cost retailing.

TYPES OF GOODS

The vast array of goods consumers buy can be classified on the basis of
shopping habits as follows:

Convenience goods / FMCG’s:

Convenience goods can be further divided into the following as staples - these
are goods consumers purchase on a regular basis. Impure goods – these are
purchased without any planning or search effort. Eg; Candy bars, magazines etc.
Emergency goods - are purchased when a need is urgent eg umbrellas.
Manufactures of emergency goods will place them in many outlets to capture the
sale when the customer needs them.

Shopping Goods:

These are goods that the customer in the process of selection and purchase,
characteristically compares on such bases as quality, price and style, Eg .
furniture, clothing, electronic appliances etc.

Specialty Goods:
These are goods with unique characteristics or brand identification for which a
sufficient number of buyers are willing to make a special purchasing effect. Eg .
cars , stereo components, jewellery etc.

Consumer Buying Decision Process:

The steps involved are as follows:

Need recognition

Information research

Evaluation of alternatives

Purchase decision

Post purchase decision

The Indian retailing sector can be divided into unorganized and the organized
retailing sector. Its characteristics can be presented as follows:

Unorganized retailing sector

Typically small retailers

Evasion of taxes

Difficulty in enforcing tax collection mechanisms

No monitoring of labour laws

Organized retailing sector

Typically large retailers

Greater enforcement of taxation mechanisms

High level of labour usage monitoring

Drawing out consumer insights and understanding ,shopper behaviour have

always been a high priority for marketers; even though the efficacy of the
traditional consumer research remains inconclusive marketers have ploughed
ahead, investing money in data collection and analysis from a fragmented
market.

Further the rise in new channels like organized retailing have given marketers
fresh hope in understanding how consumers behave at the retail level and
precisely what triggers them to choose a store / brand. Research tools track
purchase behaviour and can help marketers alter packaging, pricing, promotion
and develop new strategies to influence at the point of purchase.

The future isn’t ahead of us. It has already happened” - Kotler on Marketing.
Bibliography : Various websites, books, journals and materials refered.