RETAIL INDUSTRY

1. OVERVIEW OF RETAIL INDUSTRY IN INDIAN

CONTEXT
• Size of Indian retail market (In terms of retail sales) - US$ 353 billion
rd
(According to BMI India Retail Report for the 3 Quarter of 2010).
• India is the 39th most preferred destination for retailers in the world
(According to realty consultant firm CB Richard Ellis )

1.1. Classification of the Indian market into Organized and

Unorganized Market
Still a major chunk of the retail market is ruled by the unorganized players. The
organized retail penetration is slowly catching up with more number of foreign players
entering the market as well as the growth of Indian retail companies and changing
income and standard of living of the people.

Competition from the traditional retail sector will continue to be a major issue for
international firms entering the Indian market, whether directly at the wholesale level or
indirectly through local firms. Traditional shops are mostly owner-operated, have low
labor and property costs, and generally pay little or no tax. New entrants to the
organized retail sector will also face higher labor and property costs than traditional
firms and must bear the additional expense of back-up power supplies. Other
impediments include high intermediation costs, expensive and often inadequate supply-
chain infrastructure, inflexible labor laws, complicated property codes, multiple licensing
requirements and a shortage of skilled managerial staff.

1.2. Top 10 Global Players by 13th annual Global Powers of Retailing

by Deloitte Touche Tohmatsu

This report identifies the 250 largest retailers around the world based on
publicly available data for the companies’ 2008 fiscal year (encompassing
fiscal years ended through June 2009).
1.3. Top Indian Players in The Retail Market
Future Group/ Pantaloon Retail India Ltd
K.Raheja Group
Tata trent
RPG Retail
Relaince Retail
Aditya Birla
Landmark Group
Piramal Group
Vishal Retail
Bharti Walmart

1. 4. Retail Formats

Format Brand Name

 Department Store Pantaloon, Shoppers Stop,
Westside, Lifestyle, Piramyd
Hypermarket Big Bazaar, Star India Bazaar,
Spencers, Reliance Fresh,
Reliance Mart
Supermarket Food Bazaar, Fashion Station,
Blue Sky, Shoe Factory, E-
zone, Food World, More,
Madura Garments
Specialty Stores Crosswords, Inorbit Mall,
Hypercity,Café Brio, Music
World, Health and Glow
Discount Stores True Mart

1.5. Preferred Locations for Retailing in India

 Mumbai emerges as the preferred location for retailing

 Northern region – most popular among these companies .They denoted

their preference to have their retail stores in the northern region.

 Reason for the preference

 This region has been riding high on the success of the IT and ITeS-BPO
companies operating in the region.
2.2. Job Roles
Entry Level:
 Stock and Inventory Associate

 Bagger

 Retail Sales Associate

Middle Level:
 Retail District Manager

 Loss Prevention Manager

  Store Manager

 Assistant Store Manager

 Management Trainee

 Merchandising Trainee

 Sales Manager

 Retail Buyer

 Assistant Retail Buyer

 Warehouse Manager
Senior Level:
 Group Manager

 Divisional Merchandising Manager

 Vice President and General Merchandising Manager

 Senior Vice President Stores

 Executive Vice President

 Chairman

 CEO

3. Career in Retail
Organized retail segment has better job prospects for the younger generation.
The Dun n Bradstreet survey revealed :
 56% of the employees are under-graduates.
 Graduates 36%
 Post-graduates 8%
3.1. Career Path

 While there are many jobs in retail for those without college degrees, a degree
makes it possible for you to enter the retail work force at a higher level—
management trainee for example, instead of sales clerk.

 Typical career paths in the industry include management and buyer positions.

 Management trainees generally work within a department for one to two years to
gain experience and qualify for promotion to department manager.

 In some retail operations, the management trainee can move into an assistant
buyer position, gaining experience in buyer functions—merchandise selection,
order writing, receiving, and related responsibilities. Store manager, division
 manager, buyer, merchandising manager, divisional merchandise manager, and
other upper-level positions can follow.

3.2. Retail Training Institutes in India

 Integrated Learning in Management (IILM),
 Indian Retail School,
 Loyola Institute of Business Administration (LIBA),
 Mudra Institute of Communications,
 S P Jain Centre of Management,
 Welingkar Institute of Management's Centre for Retail Studies
 K J Somaiya Institute of Management Studies & Research.
From our observations we inferred that most of the retail institutes in India do
not have exclusive courses on IT used in Retail.

3.3. Retail Training Institutes Abroad

U.S. retail Degree Programmes and Advanced retail Education Courses are
available in:
 University of Arkansa
 University of Arizona
 University of Florida, Warrington Business College- David F. Muller
Centre of Retailing, education and research
 Texas A&M centre for Retailing studies
 University of Pennsylvania / Wharton School- Jay H. Baker Retailing
Initiative
 University of Santa Clara-Leavey School Of business Retail
management Institution
3.3. Top 10 Recruiters for Retail
Companies Number of Vacancies
Reliance Retail 79
Lilliput 30
Pantaloon Retail India Ltd 21
Shoppers Stop 17
Unisource Group 16
Welspun Retail Limited 16
Homestore India Ltd. 13
Express Retail Services 11
HAS Lifestyle Pvt. Ltd. 8
Wadhawan Food Retail (P) Ltd. 5

4. Expansion Plans of Indian Retail Players

Pantaloon Retail:
 Plans to hire around 4000
 To open 150 new store
Shoppers Stop:
 Will hire around 2000
 Plans to add 18 department stores
Aditya Birla Group:
 Plans to hire atleast 2000 sales staff
 To open a dozen hypermarkets

5. Challenges in Retail and some IT Solutions

 Under developed SCM
 Unavailability of products and high billing time (high shelf out)
 High price technology
 Shop lifting
 Poorly intergrated distribution channels
 Managing customer loyalty programs
 Key Challenges
Lack of distribution Hubs 32

Lack of National Distribution Networks 42

Fragmented Market 44

Distribution Costs 46

Infrastructure Constraints 59

Large Geographic area 59

0 10 20 30 40 50 60 70

Source: KPMG Market Survey

It took some time for IT vendors to realize the vast potential in retail. Vendors are
unveiling an entire range of IT products and solutions for the retail sector. Some of the
key innovations include:

 Customer identification using RFID: This involves identifying customers by

issuing them smart cards embedded with smart chips. These cards would be
RFID enabled and would give information regarding the customer like his
preferences, shopping behavior etc.
 E-Catalog based selling: Here a limited range of merchandise is available in-
store, while the range of a hyper format is made available through self browse
kiosks.
 Mobile Point of Sale (POS): This would enable the purchase of goods while
putting them in a shopping cart. The customer would be spared the hassle of
standing in long queues.
 Digital Signage: Static signboards have not proved beneficial in terms of helping
a customer track a product. Digital signboards integrated with an automated
tracking system can make this easier.
  Intelligent database: A detailed database of the customer is made available
online and helps the retailer understand a particular customer’s buying
characteristics.

In addition, retailers are even deploying applications such as CRM for loyalty programs
and personalized service and ERP, inventory management, supply chain management
and security solutions, POS, master data repository, data management etc to get the
basic infrastructure in place.

Large scale IT adoption is not equal across categories in the retail industry. There are
eight key segments in the retail sector, food/ grocery/ vegetables, garments,
electronics/electrical, cosmetics/medicines, home furnishing and furniture, lifestyle
products (jewelery, shoes, watches), office products and multi product outlets. “Lifestyle
and apparels are more open towards IT. Even grocers are thinking of deploying basic IT
solutions. On a whole every retailer is looking at a tailor made solution which meets his
needs.

6. Availability of Retail Skills in the IT Companies

Zensar Technologies
Major Clients: Somerfield, Giant, Food World
Retail is the second most revenue generating verticals
Pune – Hub for Oracle Retail professionals
Tesco
50% of employees in Retail
Supervalue
70% of Supervalue in Retail
WIPRO:

• 75-100 employees in Oracle Retail.

• Most of them are based in Chennai followed by Bangalore.

• Apart from this they also have employees from their acquisition of
the Portugal Company, Enabler.
 • They have their largest account with Pepsi Co followed by Nike
TCS:
 Most of the Retail vertical employees are in Chennai followed by
Bangalore.
 Approximately 700-800 people in the retail vertical in Bangalore
 In the North, Noida is the hub for almost all retail projects
 Employees in the retail vertical work on SPSS, SAS, Nitro and
Planogram (basically used in merchandising to design a retail outlet)
IBM:
 200 people in Bangalore in the retail vertical.
Accenture:
Approximately has 1500 people in this vertical