Page 128 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 6: Retail Planning and Environment

Operational Excellence: The operation needs to be set up to support customers’ needs for product, Notes
pricing, range, delivery and service. This may involve the use of new supply chain business
models. The marketing department needs to develop competencies for engaging the customer
into the sales journey using the rapidly developing Web 2.0. Excellence in the execution of
delivering the customer needs sets integrated multi-channel retailers apart.
Integrated Technology and Data

A multi-channel retailer will have a single view of the customer, a single view of inventory and
one source of product data. Retailers need to harness master data management and integrated
systems to support this. Integration beyond the retailer to include suppliers and third-party
logistics partners will further increase the competitive advantage.
A Business Intelligence (BI) platform is a springboard to effectively working with this data.

6.8 Retail Formats and Merchandise

Development of Retail Formats

It is difficult to fit a successful international format directly and expect a similar performance in
India. The lessons from multinationals expanding to new geographies too point to this. For
example, Wal-Mart is highly successful in USA but the story is different in Asian countries like
China. Therefore, it is important for retailer to look at local conditions and insights into the
local buying behavior before shaping the format choice. Considering the diversity in terms of
taste and preferences existing in India the Leading Spanish fashion retail chain operates the
eight store formats – Zara, Berschka, Massimo Dutti, Pull & Bear, Stradivarius, Kiddy’s Class,
Oysho and Zara Home. By the end of November 2005 it had a total of 2,643 stores in 60 countries.
Gap Inc. is one of the world’s largest specialty retailers, with more than 3,000 stores and fiscal
2005 revenues of $16 billion. The retailer offers clothing, accessories and personal care products
for men, women, children and babies under the Gap, Banana Republic, Old Navy and Forth &
Towne brand names. Gap brand includes Gap, Gap Kids, baby Gap and Gap Body. The company
also operates Gap Outlet, Banana Republic Factory Outlet and Old Navy Outlet stores. Retailers
may go for experimentation to identify the winning format suited to different geographies and
segments. For example, the taste in south is different from that in north and this brings challenges
to the retailers. Therefore, most of grocery retailers are region-centric at this point in time. Now
a number of retailers are in a mode of experimentation and trying several formats which are
essentially representation of retailing concepts to fit into the consumer mind space. Apart from
geography even rural and urban divide poses different kind of challenge to the retailer. Pantaloon
Retail India is experimenting with several retail formats to cater to a wide segment of consumers
in the market. Some of the new formats are Fashion Station (popular fashion), Blue Sky (fashion
accessories), aLL (fashion apparel for plus-size individuals), Collection i (home furnishings),
Depot (books & music) and E-Zone (Consumer electronics). The retailer is trying to segment the
market with the help of format. The retailer developed another new format in the form of
Wholesale Club to sell a segment of consumer who purchase on bulk and look out for discounts
and offers. The new format is going to be kind of wholesale club which is likely to be located
close to Food Bazaar. Consumers who are interested to purchase on bulk can take benefit from
this format. Similarly the Land mark group also operates multiple formats such as hypermarket
(Max), departmental store (Lifestyle), Shoemart, Funcity, etc. Such experimentation and
identification of an appropriate format for the local conditions would separate winners from
losers in India, possibly implying multiple formats could be the reality in the long run.

LOVELY PROFESSIONAL UNIVERSITY 123