India’s Retail Evolution

The era of rural retail industry could be categorized into two formats: weekly markets and village fairs. Primarily weekly formats catered to the daily necessities of villagers. Village fairs were larger in size with a wide variety of goods sold from food, clothing, cosmetics and small consumer durables. The traditional era saw the emergence of the neighborhood ‘Kirana’ store to cater to convenience of the Indian consumers. The era of government support saw indigenous franchise model of store chains run by Khadi & Village Industries Commission. The KVIC has a countrywide chain of 7000 plus stores in India. This period also witnessed the emergence of shopping centers with car parking facility. The Modern era has a host of small and large formats with exclusive outlets showcasing a complete range of products. The department stores and shopping malls targeting to provide a complete destination experience for all segments of the society. The hyper and super markets are consistently trying to provide the customer with the 3 V’s. (Value, Variety and Volume)

Over the last three years, this sector has witnessed an exorbitant growth due to the establishment of numerous international quality formats to suit the Indian purchase behavior, the improvement in retail processes, the development of retail specific properties and the emergence of both, domestic and international organizations.

Retailing sector is the second largest employer in the country with almost over 12 million retail outlets in India and only 4% of them being larger than 500 square feet in size. Although retailing in India is fairly fragmented, organized retailing is gaining momentum rapidly growing at almost 25-30% per annum and is forecasted to touch a figure of Rs I,50,000 crore by 2010. The economy is projected to grow at 8.1% in 2005-2006 having grown at a steady pace of around 6% over the last 10 years.

Organized retailers are the contemporary formats by which shoppers have the edge of a world class shopping experience. Fine examples of these formats are Pantaloon, Shoppers Stop and Trent. Organized retail may broadly be classified into the following formats-

• Malls. The largest form of organized retiling today. Malls are located mainly in metro cities, in proximity to urban outskirts, this format ranges from approximately 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof.
• Hypermarkets. They are typically large, starting from 40,000sq. ft plus are usually located outside the city limits. This format comprises of a multiple division layout, and usually has an” industrial- look” interior. Hypermarkets generally provide daily necessities and grocery like items. Pricing is competitive and they also offer volume discounts.
• MBO’s. 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.
• Super Markets. Large self service outlets, catering to varied shopper needs are termed as Super markets. 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 a size of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.
• Discount Stores. As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.
• 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.
• Departmental Store. Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.
• Exclusive Store. Ranging from a size of 500 sq ft to 5,000 sq ft. & above, this format is owned/ managed by the Company or through its franchise. These can offer single brand as well as multiple bands.
• Specialty Store. These formats focus on a specific product category, Medium sized layout in strategic location. Specialty stores provide a large variety base for the consumers to choose from.

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For Further Information please contact:
Jaya Duggal
Manager- Marketing
Dynamic Vertical Software Pvt. Ltd.
Vatika Towers, Block A, 1st Floor, Sector 54, DLF Golf Course Road,
Gurgaon – 122002, India
Ph: +91-124-4581000 / 4581036
Fax: +91-124-4581026
jaya.duggal@dynamicverticals.com
Website: www.dynamicverticals.com

LS Retail Suite a Probable Solution

The Retail Market is in a state of explosive growth. One needs to see the mushrooming of malls and shopping complexes in the metros and small towns in India to grasp the enormity of this growth. For many years the retail industry in India has been disorganized and consisted mostly of single- store outlets, a few retail chains and a large number of the friendly-neighborhood “Kirana” shops. These outlets had pre-historic supply chains, inefficient inventory management , very few were customer focused and most were in the small to medium category. The sudden spurt in demand and a greater awareness amongst buyers for quality products and services, created a vacuum that could only be met by an organized retail sector, with fine-tuned supply chains, efficient inventory management and a totally customer focused view that was alien to India.
One of the key factors in achieving an organised and efficient retail operation is the use of technology as an enabler. IT is the key enabler to improving customer satisfaction, operational efficiencies and by extension profitability. A typical pan-national retail operation would have multiple regional warehouses, offices and retail outlets. In such an operation how does the headquarters know the daily turnover at each of its outlets, how does it know which products are selling the most in which region at which outlet, how does one store know if a stock-out item in its own inventory is available at another store location for whom it is slow moving item. Most of these issues can be solved by the appropriate use of technology. The ability to have current information on a real time basis and analyzing that data for better forecasting are some of the payback provided by technology.
Retailers all across the country believe that shrinkage due to inventory recording, handling and administrative errors costs retailer’s millions. In an intensely competitive, cost-conscious industry, appropriate IT and telecommunications infrastructure can make a vast difference, and can result in improved productivity and major cost savings through more accurate supply chain forecasting and better inventory management.
For example, given a situation where a retailer wants to increase its loyalty customer base, an organization with relevant IT systems in place, has a ready customer database updated at every purchase, which can be used to send mailers or promotional catalogues. Another example where IT can be beneficial is a store management system that alerts out-of-place or stock-out items. An in-store system that uses magnetic strips or barcodes or RFID to monitor actual versus intended product location on the floor or in the stockroom. By using RFID-encoded shelf edge labels with embedded shelf readers, a grid could be set up for verifying planogram compliance for standard shelving and promotional displays, with a corresponding alert for misplaced items sent to store personnel. Big payoffs could be realized for frequently moved and misplaced items, such as apparel, shoes, CDs and DVDs.
Appropriate investment in technology can impact the business positively through improved operational efficiencies, increased profitability, happier customers and providing a competitive advantage.
LS Retail is an end-to-end retail solution that covers everything from POS to back office and head office. The setup can range from a single store with one POS to a complex, multi-store environment that integrates with your overall business operation.
Landsteiner Strengur is one of the principal companies developing retail and hospitality solutions in the international arena with over 10,500 stores in 130 countries, translated into 30 languages, and is used by customers like IKEA, Adidas, NAAFI, Debenhams, Pizza Hut and Booths Supermarket. An internationally proven retail software solution like LS Retail can provide:

• Increased store efficiency
• Improved Data Integrity
• Streamlined inventory control
• Reduced shrinkage, pilferage and losses
• Comprehensive business analytics
• Reduced paperwork
• POS for Multi-tier Retail
• Complete integration with backend systems

With LS Retail Suite of solutions, localized for the Indian Industry, one can reduce the total cost of ownership & inventory, improve profitability, recognize current consumer trends and prepare one for changes in both, business and customer behaviour. LS Retail provides the ability to make up-to-the minute decisions with fewer mistakes. LS Retail can.

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For Further Information please contact:
Jaya Duggal
Manager- Marketing
Dynamic Vertical Software Pvt. Ltd.
Vatika Towers, Block A, 1st Floor, Sector 54, DLF Golf Course Road,
Gurgaon – 122002, India
Ph: +91-124-4581000 / 4581036
Fax: +91-124-4581026
jaya.duggal@dynamicverticals.com
http://www.dynamicverticals.com/