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8 Ways to Win in Retailing
K. Dasaratharaman
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8 Ways to Win in Retail: The Pentagon & Triangle Model
Place (Size, Location , Layout & Design)
Product- Style & Fashion- Intensity- Assortment
Communication- Positional- Promotional
People ( Service, Knowledge, Climate)Value (Price, Quality)
Systems
Logistics Suppliers
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Pentagon elements - Place , Product, People, Value and
Communication
These are aspects that are external facing for the Retailer
These are the aspects that are Experienced by the
Consumer. These are the aspects that will get compared by
the
Consumer These are all connected to Strategic Design of the
Retail
format. Pentagon elements differentiate the Retail format
from
competitors. Need to DESIGN the strategies that will
differentiate the
Retail Brand.
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Triangle elements Systems , Logistics and Suppliers
These are aspects that are Internal facing for the Retailer
These are the aspects that have great impact on the Pentagon
aspects but are not seen by the Consumer.
How well these aspects are designed and managed result in
Consumer experience and retail success.
Triangle elements result in Cost Leadership These are all
connected to Strategic Design of the
Retail format.
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The Key questions for a New Retail brand
Pentagon elements : What are our strategies?
How Differentiated are they?
How Sustainable are they?
What COMPETENCIES do we need to Win?
Triangle elements: What are our strategies?
What COMPETENCIES do we need?
How to make it sustainable?
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The 5 Key questions for each Pentagon and Triangle Corner for an
ongoing
Retail brand
Do we Win?
By How much? (a little or a lot)?
Is it getting Better or Worse (direction )?
Does anybody Care?
Is it Sustainable?
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8 Ways to Win in Retail The SpencersExperience
Place (Size, Location , Layout & Design)
Product- Style & Fashion- Intensity- Assortment
Communication- Positional- Promotional
People ( Service, Knowledge, Climate)Value (Price, Quality)
Systems
Logistics Suppliers
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Place Locations in correct catchments basis research
Store design done to aid customer flow
Layout done as per customer category adjacencies
Fixtures customised to the category
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Product
Research leading to correct range OPPs, price laddering;
Differentiators thru special categories wine , gourmet,
pattisserie.
SKU pruning to suit purchase..
New product information to relevant consumers
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People / Processes Training as per moments of
truth meet and greet , service, cashiers
Stacking as per plannogram Customer service within the
bay Speed up check out time:
POS system, product masters, cashier training
Work with vendors on consumer insights
Empower and hold people accountable...
BUILDHappy
Shoppers
Retailer Insights
& Execution
Vendor Business
Insights & Strategy
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Price and Value
KVI / KVC, OPP = market right prices
Loyalty program: monthly sms on points accumulated and
redemption offers..
Basket analyses to determine who buys what and what are the
opportunities..
Pin point communication to lapsed users
Lost miles card points accrual thru the website / helpline
12 hours toll free helpline
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Communication Spencers- makes fine living affordable
Prices you can Trust
Quality since 1863..
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Triangle elements
ARS
Price benchmarking
Back end for F&V
Outsourcing of Fish & Meat
Put away vs Flow thru at the DC
Spaceman
Category Mgt
Plannogramming
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Increasing consumer aspirations, a growing middle class and a
younger demographic profile of our population is helping the growth
of the consumption economy. Modern retail is playing a vital role
as a catalyst in driving consumption- led growth in India.As modern
retail grows in India, Indian consumers will not only have more
choice and convenience but it will also have a broader social
impact of generating millions of jobs as well as creating markets
for domestic manufacturers, producers and service providers.
Kishore Biyani Group CEO , Future Group
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The opportunity
Market
Size
US$
billion
2007
% Share
2007
Growth
rate
(2007-
12)
Market
size
US$
billion
2012
% Share
2012
Growth
Rate
(2012-
17)
Market
Size
US$
billion
2017
% Share
2017
Food, Beverages & Tobacco 212.0 62% 8% 307.3 58% 7% 430.9
54%
Personal Care 15.4 5% 8% 22.6 4% 8% 33.2 4%
Apparel 26.4 8% 12% 45.5 9% 10% 73.2 9%
Footwear 3.4 1% 9% 5.3 1% 8% 7.7 1%
Furniture & Furnishings 10.3 3% 13% 18.5 3% 11% 31.2 4%
CDIT 15.4 5% 12% 26.5 5% 9% 40.8 5%
Jewellery & Watches 13.7 4% 12% 23.6 4% 10% 38.0 5%
Medical Care & Health Services 34.2 10% 13% 61.6 12% 12%
108.6 14%
Recreation 0.6 0.2% 15% 1.3 0.2% 24% 3.8 0.5%
Others 10.6 3% 11% 17.5 3% 13% 32.2 4%
TOTAL 342 100.0% 11.9% 530 100% 11.4% 800 100%
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Middle class to swell from 5% of population in 2005 to 41% of
population by 2025
The heart of the Diamond will look for Quality versus just Price
driven by needs
of Fashion, Convenience, Durability & Experience
Upgrading of the Consuming Class will be the
next inflection point
Market Place & BHPCs Vision
Middle Income
High
Income
Middle
Income
Low Income
50 Million
(5%)
583 Million
(41%)
2005 2015 2025
Source : McKinsey Global Institute
318 Million
(27%)
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Overall Retail to double in next 7 yearsModern Retail to
quadruple in the same period
342 373408 445
486530
800
12 18 2639 59 87
200
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2017
US
$ B
illio
n
Current Size & Future Projections for Indian Retail
Market
Total Retail Organized Retail
25% share
Source: Technopak Analysis : 2010
16% share
3.5% share
Market Place & Spencers Vision
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Consumer Behavior of the Middle Class
Bazaar shopping
Touch and feel shopping
Bazaar environment
Bargain hunters
Snacking during shopping
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Brand Big Bazaar..
Big Bazaar and the Indian bazaar concept ..
Reflected in : Locations : Sec B/C
catchments Range & Assortment: Pan
Indian + Local Bazaar Ambience:
Floor stacking, overspills Open gunny sacks,
Pickle counter, chaatcounter..
Managed chaos.. Unattended service
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Brand Big Bazaar..
Big Bazaar consumer understanding and the Indian bazaar bargain
idiom
Reflected in : Price points / Discounts : OPPs ,
KVI, Sabse Sasta / Maha Bachat:
Positional + Promotional communication
