Trends in Retail & Fmcg Industry

8/4/2019 Trends in Retail & Fmcg Industry

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CHANGING TRENDS INRETAILING AND FMCG

INDUSTRY IN INDIASubmitted by-Vikas Upadhyay (64)Neha Dua (89)Swapnil Singh Tomar (60)

Vaibhav Rai (63)Sukhminder Singh Lamba (100)Apoorva Gupta (204)Varun Gupa (73)Megha Chauhan (188)


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Dominance changed from unorganized sector

to organized sector with the entry ofcorporate groups such as Tata, RPG, ITC andBennett Coleman & company.

Liberalization made Indian customers

witnessed new domestic & foreign products.

INTRODUCTION


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FOOD RETAILING


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Food WorldFW Objective: To offer the Indian housewife the freedom to

choose from a wide range of products at a convenient locationin a clean, bright, and functional ambience without a pricepenalty.


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4500 sq. ft. of selling spaceThe FW supermarket has been one of the pioneers

in organized food retailing in India.

FW carried out a survey and found out that there isan absence of organized retailing.The main challenge for FW was to alter the existing

mindset of Indians with respect to price and valueand add excitement to grocery shopping.

FW


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FW chose Chennai, Hyderabad and Bangalore

as initial locations for FW stores due to thereason of low real estate cost. A uniform look was adopted for all the stores

and the colours red and yellow(as used in FWlogo) were used liberally while designing the

stores.To give the outlets an up-market look, the

interiors were kept completely visible to thepublic by using huge glass panes for thefrontage.

All the outlets were air-conditioned and playedpopular music continuously.

FW


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Majority of its product were sold at MRP but certain

items were sold at 5-10% below MRP.Target customers were upper middle and rich class

customers. A school of retailing was started for the training

purpose of salesperson, namely NIR(NationalInstitute of Retailing).

A newsletter was launched containing thepromotional schemes.

FW


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Subhiksha was an Indian retail chain with 1600

outlets selling groceries, fruits, vegetables,medicines and mobile phones.

Subhiksha focused on the middle class customersegment.

Emphasized mainly on hygiene, quality andreasonable pricing.

Discounting pricing was the USP of Subhiksha. Flat discount of 10%.

Subhiksha


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Expanding rapidly without sufficient funds in

hand. October, 2008 the company ran out of

enough funds to ran the organization. Advertising dues not clear. Disruption in supplies by wholesale suppliers. Inadequate system control and IT support.

Failure of Subhiksha


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Government Intervention: Maharashtra FDA, asked

Subhiksha to suspend operations at it warehouse inBhiwandi.

Lack of strong HR policy and Staff. Many wholesaler suppliers in Azadpur Sabji Mandi,

have stopped supplying fruits and vegetables. Long credit periods.

Subhiksha


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RETAILING OFLIFESTYLE

PRODUCTS ANDBOOKS


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Shoppers stop is the pioneer in Indias retailingrevolution.

SSL set up its first outlet in Mumbai, with a floorspace of 4000 sq. ft.

Now the floor space varies b/w 18,000 to 60,000sq. ft.

85% of SSLs merchandise is branded & it stocksmore than more than 150 national & International

brand.

Shoppers Stop


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SSL emerged as the largest single retailer for Levis,Pepe, Lee, Arrow, Zodia, Reebok, Nike, Parker, Ray-Ban, Swatch, Revlon, Lego etc.

The company closely monitors the movement of all

the brands & if any brand fails to meet customerexpectations, it got phased out. SSL also launched a range of private labels like

Life, Kashish, Karrot.

Shoppers Stop


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Only retailer in India to become a member of

the Intercontinental Group of DepartmentalStores (IGDS).

Only graduate people are kept as salespersonat the stalls.

Shoppers Stop


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WESTSIDE

Established in 1998 as part of TataGroup.

Tata acquired Littlewoods, a Londonbased retail chain. It includes mens wear, womens wear,

kids wear, footwear, cosmetics,perfumes, bags, household accessories,lingerie, gifts etc.

Company has 49 departmental stores(measuring 10000-20000 sq. feet each)


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Categorized into two divisions-

Apparel. Products.


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Furniture & household goods like cabinets,

trays with antique wooden frame. Customer feedback in order to retain their

customers. Removed outdated & unsold items. Research & surveys to understand consumer

behavior, helped in building customer loyalty. Employed smart employees after training.

What they had introduced

later-


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New computerized system which enables to

access information about colors & fashions inthe store, helped in serving their customersfaster.

Launched Clubwest in May 2001 (classic &

gold). Mail to customers six to eight times in a year.

contd


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Founded by Hemu Ramaiah 1987 atNungambakkam, Chennai.

A family store. Store includes books, greeting cards, toys,

music, office equipment, even has a caf. Focused on its store design, ambience &

customer service.

Landmark


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Major objective is to attract people to

reading, which had become very uncommonhabit by the turn of 20th century.

It places books at the entrance of the store,so that customers cannot avoid them.

cont..


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COFFEE PARLOURSAND VENDING

MACHINES

BARISTA AND CAF COFFEE


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BARISTA AND CAF COFFEEDAY

In the late 1990 Coffee drinking has increasinglybecome a statement of the young & upwardlymobile Indians, with coffee bars becoming a big

business for companies.

In 20th century the various coffee chains succeed inmaking coffee one of the most desirable beverages

in urban India.The coffee parlors such as Barista and Caf Coffee

Day were an instant hit across all major metros andcities in India because of the new kind of theexperience which they provide to the customers.


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BARISTA It positioned itself in the Indian coffee

market as a life style brand and targetedpremium segment youth.

It recreated the ambience and experience

of the typical Italian neighborhood espressobars in India , with bright, trendy and

comfortable interiors.To enable a superior quality of its product

offerings in uses Arabica bean to make

coffee and also invited brew masters from


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Barista enables customers to be himself/herselfunlike other traditional restaurants.

Barista began Italian Food at its outlets and also

entered tie-ups with various corporations toespresso corners at these places.


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CCD enterd the indian coffee retailing business of Indiain 1996.

Unlike the Barista, CCD targeted not only the premiumyouth but the whole mass and priced its offeringproducts at 20% lower than Barista.

CCD also offered an informal and relaxing environment

with a bright dcor and eye catching crockery whichmade the company coolest place to hang-out for all.

It also introduced caps, T-shirts, and coffee mugs and

displayed paintings on its walls.

CAF COFFEE DAY


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RETAILING OFPACKAGED FOODS


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Launched in 1924. Focus on ready-to-cook food. In 2003, revenue is Rs 1 bn & expects it to

increase to Rs 5 bn by 2006. In 2003, MTR food creates the worlds first

ever frozen Dosa. In 2003, MTR opened its food retailing outlet

Namma means our in Bangalore &Chennai.

MTR and Namma MTR


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BEAUTY ANDHEALTH CARE

RETAILING


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The Shahnaz Husain Group is India's leadingcompany in the field of natural beauty and anti-aging treatments. Started in the 1970s byShahnaz Husain in New Delhi.

It employs about 4200 people in 650 salonsacross 138 countries specially in Asia , US andmiddle East.

Shahnaz Husain, won India's highest honor, thePadma Shree, in the field of Industry and trade forbringing Ayurveda to the West.

The products have gone through aggressive R&Dand are environment friendly and no testing isdone on the animals.

Shahnaz Husain


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The group formulates and markets over 400 products based on

Ayurveda, which are ideal alternatives for the chemicalcosmetics. Natural ingredients like fruits, flowers, herbs,vegetables and honey are used as base for most of theproducts.

Activities Beauty training institutes i.e. Womens WorldsInternational.

It offers training in cosmetic therapy, practical skills ofmassage & make-ups. The group has established Ayurvedic Centers for Panchkarma,

Dhara and Kerala massage. It has also set up two healthresorts, one in Delhi and other in US island of Saipan.

CONTD


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Geographic :- All India.

Cities : Metro Cities, Class 1 cities, Class 2 cities. Urban India.

Demographic:- Age:- 20-50 Gender :- Females Income :- High

Segmentation


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Psychographic :- SEC :- A1, A2, B2.

Lifestyle:- Outdoor Oriented, Culture oriented. Personality :- Gregarious, Ambitious.

Behavioral:- Occasions:- Regular & on special occasions too.

Benefits:- Quality, No side-effects, better results. User status:- Potential user & regular users. Usage rate:- Both heavy as well as light. Readiness Stage:- Aware, Informed & interested. Attitude towards product:- Positive.

CONTD


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Shehnaz Husain is not just about beauty, itstreatment and cures. There is no European line

doing it. Dabur is only about health. Clarins is not into cures. It has a very limited

line. You cant mass market a cure.They dont advertise because they believe that

if a product is good & if customers like thetexture of the cream, theyll buy it. Becauselooking good is feeling good, and an ad wont

help.

Competitors


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Expansion of Shahnaz Husain Inc. to US and

other countries. Increase in the number of franchise salons

and maintain a quality of their franchiseventures and standard of services worldwide.

Recommendations


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FMCG CHANGINGRETAIL FORMATS

av n are


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av n are -Sachets

1. Cavinkare is a Chennai based companyproduce personal care product.

2. It is largest player in the rural market.

3. It has a market share of( 39.1%) of ruralmarket followed by national players Clinic

Plus(31%) and Lux (8%).


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It introduce small sachets of 8 ml for rural

market. Which was lowest in the market. leading brands offering the same quantity for

2.5 paisa per sachet and 100 ml bottel of

shampoo was for Rs 40-50 Chik offered the same quantity for Rs 17

Chik Shampoo


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Company introduced a single use sachets of

perfume at affordable price of Rs 2 for 0.4 ml. Company offered three variants of this

perfume named Fun

Freedom

Magic

Perfumes


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Cavinkare launched pickles under named

Chinni. Company used the same strategies and offer

pickles in sachets of Rs. 0.50 and Rs 1, aimedat rural and semi urban markets.

Pickles


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Cavinckare entered in beauty and health caremarket through subsidiary.

CavinKares Limelite salons targeted at thepremium-end, are the unisex salons which caterto the needs of entire family.

Targeting group age is 20-35These salons provide complete range of beauty

care solutions. Limelite chain has tied up with Wella, a leading

German multinational and beaubelle ,a leadingSwiss beauty care company.

CavinkaresHealth and Beauty Care


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Green Trend chain which include

separate mens and womens salonstarget at mid market.

Fyne Cut salon for men target the lowerend that offer value for money, which

basically aimed at replacing thetraditional barber shop.


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TVS Electronics its a hardware manufacturing

company of Chennai-based TVS Group.TVS E shop want to transform the face to face

kirana retailing. TVS e- shop is essential a complete point - of

sale automation solution aimed at automatingkirana retailing operation.

Its a PC like box called sprit, a key board , ascanner, data storage device, printer, UPS andautomation software.

TVS E-shop


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It not only help in quick billing but also help in

access to consumer behavior information thatcould help FMGC gain a better understanding ofthe need and changing preference of theconsumer.

E- shop also enable kirana store to get revenue by

charging fee to provide this information to FMCGcompanies

They can also earn by other services like windowdisplay space for advertisement.

Advantages of TVS E - shop


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HLLRURAL DISTRIBUTION INITIATIVES


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Project Streamline

Project Bharat Sangam Direct Project Shakti

PROJECTS UNDERTAKEN


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Addressed the problems of RDS, to enhance HLLs

control on the supply chain as well as to increasethe number of retail outlets from 50000 in 1998 to100000 in one year.

It targeted at places that had a poor marketdevelopment base.

Aims at providing higher quality services toconsumers.

This initiative helped HLL increased its Ruralmarket to 37% in 1998 from 25% in 1995.

PROJECT STREAMLINE(1988)


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Undertaken to address the issue of awareness,attitudes and habits of rural consumers andincrease the penetration level of HLL products.

Largest rural home-to-home operation in India. In the course of the operation, its vans visited

villages across the country and distributed samplepacks comprising a low-unit-price pack each of

shampoo, talcum powder, toothpaste and skincream priced at Rs 15.This not only generated awareness of its product

categories but also made way for availability ofaffordable packs.

PROJECT BHARAT (DirectMarketing)


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Sangam Direct is the home shopping service

from Hindustan Lever. High customer Service is the target of the

company. The company set-up a web-enabledcall-center to ensure delivery of the good

within 24hours. Other customer features were-Attractive

discount offers, guaranteed savings and100% money-back guarantee.

SANGAM DIRECT(Direct-to-home)


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Project Shakti was launched in the year 2001 in

the Nalgonda district situated in Andhra PradeshOBJECTIVE :To create income-generating capabilities for underprivileged rural women, by

providing a sustainable micro enterpriseopportunity, and to improve rural living standards through health and hygiene awareness

PROJECT SHAKTI


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During 2001, the rural cell within HLL worked

closely with SHGs, NGOs and Governmentbodies in Andhra Pradesh to put in place acomprehensive training programme for thesedistributors.

This project act as a win-win situation.Itprovided self-employment opportunities topoor villagers and also helped HLL increasethe reach of its products.

It served as a base for I-SHAKTI


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While Project Streamline focused on

extending distribution, Project Bharatconcentrated on raising penetration andawareness levels.

HLL started to focus on new products and

services formats.They forayed into healthcare and beauty care

segments.

FINDINGS


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They joined hands with LAKME and provided

customers with great value for moneythrough its special discount offers andinternational quality beauty care services.

Contd.


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LOOKING

AHEAD


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The burgeoning growth of the organized retail

market in India drew attention of globalretailers like Wal-mart, Seven-eleven etc.The entry of foreign players increased the

level of competition in the Indian market.

Industry players focused on devising newstrategies to provide value for customers.Traditional supply chain methods became

obsolete.


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Trends in Retail & Fmcg Industry

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