Final SR RP

7/31/2019 Final SR RP

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Societal Retailing -The Futuristic Retailing

Author1: -Prof Ramkishen.Y Author 2: -Anand Thakkar *

Author 3: - Isha Maru *

Abstract:

Indian retail at its nascent stage is subjected to many factors like varied culture and shopping

behaviour with different styles and habits. Each customer has a different rationale for

purchasing a product and sometimes it is just impulse. The whole concept of shopping has

changed over a period of time right from barter until today when retail has gone online onlyone thing, which has remained constant, is that retailers have to be different to build their

strong customer base. As a differentiation strategy marketers came up with social marketing,

which proved to be a successful toll. However with advent of more and more competition

retailers have to be innovative and when it comes to retail every customer contributes to sale.

As a new concept societal retailing has been initiated which aims at giving back to the society

by providing value.

Societal Retailing aims at creating Sustainable competitive advantage by working in tandem

with changing norms of society and benefiting society by implementing various related

activities which makes retailer more responsible towards his duties. New entrants and that too

operating in niche segments will carry out societal retailing. Big retailers will copy the same

format and try to compete in the market.

Keywords Social Marketing, Social Retailing, Green Stores, Societal Retailing.

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Introduction: -

The term Societal Retailing is derived from 2 terminologies i.e. Social Marketing and Social

Retailing. First we will separately understand what these terminologies mean and then define

Societal Retailing.

Social marketing was "born" as a discipline in the 1970s, when Philip Kotler and Gerald

Zaltman realized that the same marketing principles that were being used to sell products to

consumers could be used to "sell" ideas, attitudes and behaviors.

Social marketing is defined as differing from other areas of marketing only with respect to the

objectives of the marketer and his or her organization

- Kotler and Andreasen.

Social marketing seeks to influence social behaviors not to benefit the marketer, but to benefit

the target audience and the general society." This technique has been used extensively in

international health programs.

Like commercial marketing, the primary focus is on the consumer on learning what people

want and need rather than trying to persuade them to buy what we happen to be producing. The

planning process takes this consumer focus into account by addressing the elements of the

"marketing mix." This refers to decisions about 1) the conception of a Product, 2) Price, 3)

distribution (Place), and 4) Promotion. These are often called the "Four Ps" of marketing.

Social marketing also ads a few more "P's viz.

Publics--Social marketers often have many different audiences that their program has to

address in order to be successful. "Publics" refers to both the external and internal groups

involved in the program. External publics include the target audience, secondary audiences,

policymakers, and gatekeepers, while the internal publics are those who are involved in some

way with either approval or implementation of the program.

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Partnership--Social and health issues are often so complex that one agency can't make a dent

by itself. You need to team up with other organizations in the community to really be effective.

You need to figure out which organizations have similar goals to yours--not necessarily the

same goals and identify ways you can work together.

Policy--Social marketing programs can do well in motivating individual behavior change, but

that is difficult to sustain unless the environment they're in supports that change for the long

run. Often, policy change is needed, and media advocacy programs can be an effective

complement to a social marketing program.

Purse Strings--Most organizations that develop social marketing programs operate through

funds provided by sources such as foundations, governmental grants or donations.

Retail today has become much more organized. It is not merely restricted to selling goods and

services. Retailing will survive only if it contributes to the society. A retailer has to prove him

to be a responsible citizen.

The concept of Social Retailing was first unveiled at National Retail Federations (NRF) BIG

show in 2007 when Icon Nicholson launched Interactive Mirror. The interactive mirror

provides on the spot feedback and ambient aura animation while beaming the customers in-

store experience across the Web via live video feed.

The main idea is to facilitate the following among their customers:

Discover new things from people with similar taste and style

Recommend and discuss customers favorite products and stores

Simplify customers life with wish lists and shopping lists

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Retailers have an indispensable role to play in terms of advancing the cause of

sustainability. They function as both the industrys interface with the community, and at

least potentially, as the consumer conscience of the community. They are positioned to

acquaint their customers with those companies doing good on behalf of people and planet,

and also to buy conscientiously on behalf of the highest values held by their customers.

Every retailer has the opportunity to engage his or her customers on issues of sustainability

(as well as local environmental and social issues, if desired), in a non-invasive way. The

idea is to nurture an upward spiral of values that is good for the environment, good for your

community and good for your store!

Definition: -

Societal Retailing includes all the activities of consumer profiling, retail research,

merchandise management, category management and visual merchandising in

collaboration with store operations and supply chain management so as to serve societys

needs, aspirations so as to benefit the retailer, the consumer and the society.

-Prof Ramkishen.Y (2008)

From the above-mentioned definition we can infer that: -

Societal Retailing encompasses all the regular activities like merchandising, VM etc.

It also dwells into the role of retailer as a caretaker to the society at large, so as to

mutually benefit all the stakeholders.

Societal retailing is more about co-creation and coo petition rather than competition. In

co-creation the vendors, the customers and the retailer will participate in the design of

the store and the merchandise.

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Social

Marketing

Retailing

Societal

Retailing


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Factors influencing Societal Retailing

Changing Consumerism: -The consumers today are well educated and they have all the

sources to access the information they require. The traditional customers used to go to a

particular store inquire and purchase it directly, but today's consumer will search information

on the Internet, will find substitute of that product and when he finds value he will purchase it.

Consumers today have started giving importance to the environmental friendly products.

Competition: -Retail sector is considered as the sunrise sector; so all the major players have

to make sure that they make their presence feel in the market. So a retailer has to make sure he

is following current trends and fashion, which the competitors are carrying out. Secondly he

has to make sure he provides valuable goods t right price in order to sustain himself in the

market. Retailer will have to face fierce competition in near future and if he follows SocietalRetailing which is considered to have potential scope in future of retail, he will be able to keep

himself ahead in competition.

Corporate Social Responsibility: - The retailer uses it as a strategic tool. He earns profit

from the society, so it is his responsibility to make sure the society also benefits from the

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Retailer

Changing

Consumerism

Competition

Corporate social

Responsibility

Media

Pressure

NGOs

Pressure from

Government


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retailer. The return which retailer gets after undertaking CSR cannot be quantified, but it

definitely enhances the reputation of the retailer in the form of long lasting good will.

Media Pressure: - A retailer has to make sure that he doesnt come into much limelight of

the media for wrong reasons. If media describes the retailer as a threat to the small kirana or

unorganized sector, then it can be a threat for retailer to carry out his operations smoothly.

Retailer through his societal marketing activities can be rest assured of his positive image in

front of media.

NGOs: - NGOs today have become active partners in working for benefit of the society and

they take up different issues which posses as harm to the society. Retailers have to be very

careful about their activities, which can go against the interest of the society. As a part of

Societal marketing activity retailers can tie up with NGOs where in they indirectly support

poor people by providing them with basic necessities like food or clothing.

The example of the retailer would be Hyper city wherein at the end of the day they sell their

fruits and vegetables to the NGOs at no profit/ no loss basis and these Ngo's further

distribute it to the beggars who fight hard for their daily survival.

Pressure from Government: - Retailer has to abide by the rules and policies laid down by

the government. He cannot run the business on his own. Even though there is no government

body to govern the operations of retail in India, the govt is planning to setup a regulatory body

with the entry of foreign players in the Indian market, so as both of them carry their functions

smoothly and properly. He has to make sure that he as to pay his taxes on time and if

government introduces a new law for the retailers, he has to make sure that also follows the

law. Societal Retailing will definitely help to reduce the pressure from the government because

it is a direct give and take relationship and it will help to reduce the pressure from the

government.

PROPOSED MODEL FOR SOCIETAL RETAILING

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Need For Societal

Retailing

Government

Regulations

Design of New

Formats

DesigningMerchandise/Category

Possibility of Brand

Communication/

Distribution

Enhances Value and

Enduring Relationships

Consumer Society Retailer

Consumers Are

Getting Environment

Conscious


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Consumers are getting Environment Conscious: - The green trend no longer simply

concerns environmentally friendly packaging, it has evolved into an entirely new mindset and

approach to doing business that more and more retailers are embracing. This trend also affects

the purchasing decisions of a growing population, with consumers increasingly demanding

greener products from retailers and brands that have adopted green practices throughout the

entire supply chain. Consumers and retailers are becoming increasingly conscious of where and

how products are produced, to the amount of energy consumed during production and

distribution, to the energy efficiency of retail outlets in which the goods are sold.

Government Regulations: - Another important factor is the government, and companies

have lived through a generation where the market has been paramount, eclipsing the role of the

government. Whether its through global trade agreements and the WTO or whether its their

own enforcement of laws or smart regulation that looks at creating incentives to engage the

business community as a partner, the government remains an incredibly significant actor and

can be a net negative, net positive, or neutral in terms of influencing the kinds of decisions that

businesses make.Hence a retailer has to change his way of functioning with the changing

norms of government and societal reatiling is the solution to have a postive image in the eyes

of law.

Design of New Formats :- With the changing consumer preference ,threat to sustainability

and government regulation retailers have to change the format of the store by making it more

enviornrmental friendly causing least threat to the sorrounding and giving maximum returns to

the society.

Designing Merchandise Category: - Designing a merchandise mix becomes very critical

for a retailer. He has to use Raw materials and finished goods which are environment friendly

and do not have any side effects when the consumers consume it. It will definetely attract

consumers becuase they will feel that they are consuming goods which are harmless.

Merchandise should be easily degradable and easily disposable which does not pollute the

environment as well. Plastics as we know cant be recyclyed and cant be degraded, so

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materials like plastics should not be used. Usage of chemicals should be reduced and in terms

of food items.

Possibility of Brand Communication and Distribution:-Brands and branding are of

great importance in today's marketing. As a key component of branding, brand communication

determines whether a brand is successfully established and eventually turns a profit.

Conventional forms of brand communication via advertising, and public relations have

achieved great success in the past, but their effectiveness is declining dramatically in todays

more customer-dominated business climate. The traditional forms of advertising reach fewer of

the targeted customers. Yet brand placement, being a new form of brand communication, can

compensate for the setbacks experienced by advertisements due to its innate advantages.

Besides, it can also work seamlessly with other marketing communication methods such aspublic relations in order to achieve the branding success.

Enhances Value: - Societal Retailing enhances the value to the society. Whatever it takes

from the society in terms of profits it has to return to the society by contributing money for

social cause and upliftment of the society. It has to provide value by not harming or destroying

the environment, by not cutting trees and making less usage of chemicals.

Today the retailer looks for Customer Satisfaction but by using this model the retailer will be

able to provide Customers Delight, which will exceed customer expectations. It will definitely

increase its share of business and also form positive Word of mouth communication from his

delighted consumers. It will provide value in terms of long-term goodwill.

Hence this model will help the retailer in having an edge over his competitors as well as will

prove to have satisfied all the elements of society in which he practices.

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Scope for future research: -

Societal retailing is relatively a new term which has been derived by us by the combination of

retailing and social marketing. More exploratory research and empirical studies have to be

carried out both at primary and secondary research level. Societal retailing can earn goodwill,

foster relationships and enhance the brand image for a retailer there by increasing his GMROI

(Gross Margin Rate of Return) and satisfying the needs of consumers and society alike.

Conclusion:-

Retail is succumb to change and the pace of change is so fast with regards to public attitudes in

some areas such as modes of consumption that retailer must respond to and anticipate. Retailerhas to anticipate in advance and plan his strategy and only then can he cater to different and

varied markets. Thus it stands very important to understand customers and cater them.

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ANNEXURE 1

CASE STUDY

GREEN STORES BY TESCO: -

UKs retail giant Tesco is greening up its image and making progress with its emissions and

environmental impact. Sir Terry Leahy has a new mission for Tesco. He wants his supermarket

to turn the masses green.

Tescos Commitment: Recycling/packaging/plastic bags

Make all Tesco carrier bags degradable from September 2006.

Double the amount that customers bring back to stores for recycling by 2008.

Tescos Commitment: Local sourcing and more British seasonal produce

Tesco says it will:

Increase the amount of local sourcing to give its customers more local lines than they

will find in any other retailer.

Make it easier for small suppliers to gain access to Tesco.

Promises

Despite the populist rhetoric, Tesco has chosen to start acting on climate change in large

part because of pending UK carbon regulations.

Tesco has pledged to triple its recycling, cut in-store energy use per square foot by 50%

from the 2000 level by 2008 and halve greenhouse gas emissions by 2020.

Other plans include installing on-site renewable energy systems, launching a 100 million

climate technologies fund and carbon labeling products.

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Tescos new climate friendly policies anticipate plans in the UK governments energy

white paper to include supermarkets in an emissions trading scheme and introduce a

carbon-labeling scheme, which may one day be mandatory.

Tesco promises to meet emissions reductions targets by investing an estimated 500

million in environmentally friendly refits for its stores, as well as funding research.

A separate investment of 100 million will go into developing low carbon technologies.

Tesco plans to install ten combined heat and power systems this year.

A further 5 million will fund Tescos new Institute for Sustainable Consumption, set up

with the help of Oxford University. The institute will look at how carbon labeling and

recycling information influence consumer behavior.

Tesco has suggested it will roll out a carbon-labeling scheme in a few years time. The UK

government has announced plans to develop a carbon labeling methodology within 18

months in conjunction with the major supermarkets and the Carbon Trust.

While cutting emissions, Tesco is simultaneously building an average of one new store

almost every week. The two trends cutting emissions and business expansion could be a

lucrative combination for Tesco if its emissions caps increase with its size while emissions

from stores decrease.

Tesco calculates its energy and carbon cuts per square foot of floor space. Tesco owns

about 1,500 stores worldwide, amounting to about 27 million square feet.

Tesco has started tackling its direct emissions, having commissioned Environmental

Resources Management, a consultancy, to audit the companys carbon footprint. The recent

audit revealed that Tesco has a direct annual carbon footprint of 4.13 million tones of CO2

equivalent.

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The company has no plans to address the emissions of customers driving to its stores, for

example through offsets or encouraging shoppers to take public transport. Tesco estimates

that customers in the UK make 20 million car journeys to its stores every week.

A waiting game

It appears Tesco is waiting for carbon labeling to trigger a lowering of supply chain

emissions.

But carbon labeling could also be likened to Fair-trade labeling, which remains a niche

market in the UK despite years of saturation consumer marketing. It remains to be seen

whether low-carbon products will have mass appeal.

Being the UKs largest retail chain, Tesco has an obvious chance to lead the consumer

market on tackling climate change, and reap the financial rewards for doing so. How far

and how fast the company moves on supply chain carbon may prove to be a bellwether for

the rest of UK plc.

How Tesco has cut its energy usage

Introducing more energy-efficient ovens, refrigeration and air-conditioning the big users of

energy in stores.

Introduction of More efficient lighting, and timers and motion detectors that switch off the

lights when they are not needed.

It has redesigned fridges to keep more of the cold air in cutting energy use by 10%.

It has installed Equipment that retrieves cold air from chiller cabinets to use as an energy-

efficient alternative to air-conditioning on the sales floor.

Heat recovered from machinery to use as heating when needed.

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Green fridges

More than 20% of emissions reductions could be made from reducing HFCs, highly potent

greenhouse gases used in stores fridges.

The industry is preparing for an EU-wide ban on HFCs, expected to come into force by 2011.

Big wins

Tesco believes the market for attracting customers away from rival supermarkets is worth 10

billion .

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ANNEXURE 2

CASE STUDY

FAB INDIA STORES: -

In May 2008, India-based exporter and retailer of textiles and home accessories, Fabindia

Overseas Pvt. Ltd (Fabindia), announced that by the end of the year, about 20,000 weavers

from backward communities would become shareholders in about 35 of its subsidiary

companies.

John Bissell, who had worked as a consultant for Ford Foundation, founded Fabindia. In 1958,

he traveled to several small villages across India where he interacted with weavers and

craftsmen and discovered the rich heritage of Indian fabrics and textiles.

With the aim of showcasing Indian handloom and textiles in the international market and

providing employment to traditional artisans, he founded Fabindia in 1960 as an export house.

With the growing acceptance of handlooms and handicrafts by urban Indian consumers in the

1970s, Fabindia turned the focus from exports to the domestic market. Its retail operations

began in 1976, when it opened its first retail outlet in New Delhi.

By 2008, Fabindia had emerged as a retailer selling a wide range of products from Indian

handicrafts to organic foods, with 84 stores in India and one store each in Rome, Dubai, and

Guangzhou. Fabindia had a turnover of Rs.4.5 billion in 2007

Analysts attributed its success to its unique marketing practices. Fabindia procured products

from different corners of India and sold them across the world. The products were priced

reasonably and were sold through its exclusive stores. It did not advertise much. Fabindia

operated in a niche market and did not try to compete with mainstream manufacturers or

retailers.

Fabindia worked closely with artisans and villagers located across India, and provided inputs

related to design, color, production techniques, and raw materials, in order to obtain high

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quality products. Fabindia's product range comprised textiles and non-textile items.

The textile range, which accounted for a major portion of Fabindia's products, included ready-

to-wear garments and accessories, upholstery fabric, and furnishings.

The garments included Indian and western wear for men, women, and children, which were

made of natural fabric and vegetable dyes and showcased designs that were international in

style and cut.

Education is beyond the reach of most girls in the central regions of Rajasthan, with only five

per cent of them being able to complete secondary school. Fulfilling what would otherwise be a

wild dream is a possibility thanks to the Fabindia School.Started 10 years ago in the town ofBali, in Pali district, the school is a non-profit private school established by William Bissell,

the half-Indian, half-American, Delhi-based entrepreneur who heads the Fabindia Group, a

leader in marketing handloom home furnishings and clothing. His idea was to create a

prototype school, empowering rural youth of diverse backgrounds from the poor districts to

`shape their own lives and transform the state of Rajasthan'.

From its inception, the Fabindia School has been committed to educational opportunities for

girls, even subsidizing their tuition. Girls are given positions of leadership and are encouraged

to hold their own among their male schoolmates. A picture of dignity and self-confidence, girls

top in the class, excel in science and mathematics and have a lead role in the winter's school

play. In addition to becoming fluent in English, they also get a strong grounding in other

subjects.

The Fabindia School stresses environmental education, exposing students to issues of the larger

world through workshops conducted by expert visitors. It also teaches its students to take pride

in their local heritage, instilling a sense of responsibility in them for the future of rural

Rajasthan. Students are encouraged to consider working nearer home, and staying connected to

their birthplace.

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With the 250-student `core school' in Bali now well established, the plan is to open more

Fabindia schools elsewhere in Rajasthan. In June, the first satellite school opened in nearby

Ghanerao. Hopefully, some day, hundreds of students will play a part in the transformation of

rural Rajasthan.

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References: -

Research Papers

1.) Charles B. Weinbergand and Robin J.B. Ritchie, Cooperation, Competition and Social

marketing.

2.) Deborah Alden. Environmentally conscious consumers driving Earth-friendly retail

trends

3.) Lekha Klouda, Charity Retailing: The future of sustainable shopping

4.) Lynn Mac Fadyen, (1999), A Synopsis of Social Marketing.

5.) Social Marketing: A resource guide.

6.) Social Marketing and Consumer Policy (2004)

7.) Sudeep Chatterjee, Do successful companies value Social Responsibility and Ethics in

Marketing in India?

Websites

www.tesco.com

www.fabindia.com

www.walmart.com

www.retaildude.com

About Authors:-

1. Prof Ramkishen.Y:- is Faculty of Marketing at K J SomaiyaInstitute of Management Studies and Research, Mumbai. He has close to 6 years of teaching

experience and 4 years of corporate experience. His consulting areas are Rural Marketing,

Retail management, Sales and Distribution and Management of Co-operatives. He has written

two books: Rural and Agricultural Management and Management of Co-operatives both

published by Jaico Books and has submitted his PhD Thesis on Rural Advertising E-mail:

[email protected]

2. Anand Thakkar: -Student of Somaiya Institute of Management

Studies and Research is pursuing Post Graduate Management in Retail.

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3. Isha Maru: - Student of Somaiya Institute of Management

Studies and Research is pursuing Post Graduate Management inRetail.

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