The road to future: high end or low end? September 29, 2006
Posted by kk in Retail Analysis, Retail Views.1 comment so far
America’s shrinking middle class is forcing retailers to aim for the high end or the low end and to skip the middle, according to Platt Retail Institute, which reports that Wal-Mart is headed up market writes Carol Carter in Business Advisors
But going up market can be challenging, warns Platt: “Ten years ago, J.C. Penney, the mid-market retailer, ran into problems when it introduced pricier designer clothes and home furnishings. It has since regained its footing as the retailer of fashion-forward clothing to the mid-market mall shopper within its price points.”
Retailers that are positioned in either the upper or lower segment, Platt says, will need to find growth within their market or look for growth elsewhere. For example, Platt explains, Home Depot has experimented with high-end stores and continues to consider overseas expansion.
Retailers at the low end will drive out system costs and frills, according to Platt, which cites self-checkouts as an example.
Finally, Platt says, strong retailers in either camp will aim to extend their range of services. As an example, Platt notes that Best Buy created the Geek Squad, which goes to customer homes to install large screen TVs or set up wireless networks.
Likewise, Home Depot hires kitchen designers and offers roof repair. Walgreens is offering in-store medical exams, and Wal-Mart has begun adding SmartCare family medical clinics to some stores.
Whatever the tactic, the message from Platt is to pick the high end or the low end and stay out of the shrinking middle.
Organised retail to contribute 20% of GDP in India September 28, 2006
Posted by kk in Retail India, Retail Industry, Retail News, Retail Views.add a comment
Organised retail is showing signs of traction, a sign of coming of age said Raghu Pillai, President and Chief Executive of Operations and Strategy, Reliance Retail, according to a report published in the Economic Times.
Pillai who was a participant at the CII’s Marketing Summit also said that organised retail would move from the current level of 10 per cent of the country’s GDP to 20-25 per cent of GDP in the next 5-10 years.
Pillai, however, stressed that while retail was essentially urban-centric, the rural population could not be ignored. He was alluding to famous economist C K Prahalad’s theory of wealth at the bottom of the pyramid. He stressed: “We need to start with respect for the bottom of the pyramid”. Pillai cited several examples where companies both in India and abroad have reaped financial windfalls by catering to the poorest of the poor. He considered that a shift in mind-set combined with innovation and design to suit the lives of the poorer members of society would be instrumental in accessing this very large consuming class. (more…)
Combating retail shrinkage with RFID September 28, 2006
Posted by kk in Retail Consumer/ Behavior, Retail India, Retail Knowledge, Retail Software, Retail Tech, Retail Views.1 comment so far
Retail shrinkage is the difference between book stock and actual stock. It is the unaccounted loss of retail goods. Its main causes are theft by employees, administrative errors, shoplifting by customers or vendor fraud.
Rakesh Biyani, Director, Pantaloon feels that as India enforces the MRP (Maximum Retail Price) system, the retailer has very little profit margin. Large retail outlets such as Big Bazaar and Pantaloon have investments in RFID, CCTV and antennas to reduce retail shrinkage reports Network Magazine. RFIDs in particular are being adopted widely by these retail majors. “If somebody steals goods without paying, it is the public who ends up paying for it. We identify compulsive shoplifters and often catch them three or more times in the same month. We try not to involve the police especially when teenagers are involved. This is where RFIDs are useful in protection of goods,” explains Biyani.
Dharmesh Lamba, Country Head, Checkpoint echoes the sentiments. He points out that India’s organised retail is only 3 percent while 97 percent is unorganised. “India is the second largest growing economy in retail, after China. Around 300 plus shopping malls are coming up in 2006 alone. New products launched globally are now launched simultaneously in India as well,” says Lamba. (more…)
