retailing
DESCRIPTION
This is a short presentation related to Retailing with an special emphasis on Private Labels / Store Brands.TRANSCRIPT
What is Retailing?What is Retailing? All the activities involved in selling goods
or services directly to final consumers for their personal, non business use.
Retailers - businesses whose sales come primarily from retailing.
Retailers can be classified as:Store retailers Non store retailers
What is Organized Retail ?What is Organized Retail ?Any retail outlet chain (and not a one shop outlet) which is professionally managed, (even if it is family run) has accounting transparency (with proper usage of MIS and accounting standards) and organized supply chain management with centralized quality control and sourcing can be termed as an organized retailer in India.
(Dept. of Company Affairs)
Classification By Product LineClassification By Product Line
Specialty StoresSpecialty Stores
Department StoresDepartment Stores
SupermarketsSupermarkets
Discount storesDiscount stores
Narrow Product Line, Deep Assortment e.g. Food world, Music world, Health and Glow
Narrow Product Line, Deep Assortment e.g. Food world, Music world, Health and Glow
Large retail space, Wide Variety of Product Lines e.g. West side, shoppers stop, lifestyle, pantaloons,
Spencer's
Large retail space, Wide Variety of Product Lines e.g. West side, shoppers stop, lifestyle, pantaloons,
Spencer's
Self service, Wide Variety of Food, Laundry, & Household Products e.g. food world, Trinetra, Ponnu, Modern, Nilgiris
Self service, Wide Variety of Food, Laundry, & Household Products e.g. food world, Trinetra, Ponnu, Modern, Nilgiris
Less than retail price, profits through volumes e.g. Subhiksha, Margin free, Supply co., Pantaloons, Big bazaar, Gaint
hyper market
Less than retail price, profits through volumes e.g. Subhiksha, Margin free, Supply co., Pantaloons, Big bazaar, Gaint
hyper market
HypermarketsHypermarketsHuge Superstores, wide variety of product range e.g. Giant Hyper market, Number one shoppers city, Sahara mall etc.
Huge Superstores, wide variety of product range e.g. Giant Hyper market, Number one shoppers city, Sahara mall etc.
Store Type Length and Breadth of Product Assortment
PRIVATE BRANDS/MERCHANDISE BRANDS Introduction :- Private brands also known as store
brands, own brands and merchandise brands. Private brands are products developed by
a retailer and available for sale only from that retailer.
Private brands products that carry the name of the seller, not the manufacturer
These are available in a wide range of industries from food to cosmetics to web hosting.
They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.
Some of the retail players having private brands in India are as follows:
Shoppers' Stop Westside Big bazaar Globus Spencer's Daily Reliance fresh Sahara – Sahara mall Music World
Types of Private Label
Generics Copy cats Value Innovators Premium Store Brands
GENERICS private brands Generic – very low promotional , very low
margin. Same or better quality at better price ,
average 20-40% less than national brands. Eg.- Big bazar
“LOOKS” = “LUX”
(6) = (10)
Both Lux & Looks are kept in same shelf for sale.
COPY CATS private brands In this category only the brand name will be
copied (which almost sounds like original). The copycats are mostly manufactured
within the company by the retailer him self.
VALUE INNOVATORS
A little bit of innovation happens & brand provide something more than national brand at affordable price.
Eg - Croma offers its own AC & TV under brand name CROMA.
PREMIUM STORE BRAND Premium store Private Labels are more
expensive than national brand & will have superior quality, good features & design.
Eg.- In Globus F21 is very superior quality wise & offers better features & design especially for women segment.
In west side 80% of the merchandise are own brand & they are far superior in quality as compared to national brand.
Private brands in India: Private brands in India in a growing
stage. It will be difficult to get the details of sales in India because of the highly unorganized structure of Indian retailing.
Private labels become national lifestyle brand
Eg- globus , west side Biggest threat to national brands
A recent survey conducted by Ipsos MORI for the Private Label Manufacturers Association found that 41% of shoppers now identify themselves as "frequent" buyers of store brands or private labels. Almost seven out of ten of those surveyed agreed that the private-label products they buy are as good as, if not better than, their national brand counterparts.
Private labels started as cheap, inferior products and more recently became copycats. Today, best-practice retailers are using "premium store brands" to help position the retailer as a "brand." The emergence of the new premium private labels is the hottest trend in retailing.
Costing of National Brand Vs Private Label
Advantages More margin for retailers
Eg.- Shoppers stop have only five private brands and it accounts to 20% of their annual turnover.
Private labels can offer huge discounts which the national brands cannot offer.
Eg.-Big Bazzar offers noodles, pasta, soups under their label “TASTY TREAT”. They introduced cornflakes for Rs 99 with free bowl worth Rs 60.
o Rise of customized products.
Eg- Spencers daily’s private label “EKTAA” has food items based on cultural and geographical considerations.
Some time private label will be priced more than national brand by offering superior quality & can even attack national brand.
Eg.- John miller is a private label by pantaloons which competes John players.
Food Bazaar's private label in snacks category is dominant with 16% share overcoming ITC’s Bingo.
Consumer report survey compared 21store brands with premium brands and ‘3 times store brands won outright and 11 times it was a tie’.
Walmart’s great value potato chips tied with Lay’s potato chips.
Private Label Pros & Cons
PROS Exclusivity & differentiation Bring customer loyalty Better margin Better control in deliveries Brand equity Freedom in pricing strategy Increase bargaining power
with both national brands and PL factories
CONS Inventory risk Higher R&D expense Higher marketing expense No markdown or return
allowance from branded suppliers
If product fails, will create negative image
Quality control, complex production & import issues
PRIVATE LABELS IN VARIOUS PRODUCT LINE
IN APPARELS Pantaloons:
Bare – Denim : Agile – Sports wear
Rig - Weekend Wear Westside:
Gia – For women
Stone river classic – Teens
Too fast for u – Young men
PRIVATE LABELS IN VARIOUS PRODUCT LINE
IN COSMETICS
Pantaloons: Star and Sitaara
IN GROCERIES True Mart – Uttam (Cereals, Masala Powder, Dry
Fruits ) Big Bazaar – Tasty Treat
FDI in Multi Brand Retail Trade
40% of products sold in Wal-Mart are store brands, or products offered by Wal-Mart and produced through contracts with manufacturers. It had 38 stores operating with 1,500 employees and sales of $44.2 million The proposed site of Walmart India is 2,24,000 Sq ftThey will be composed of Super star, discount store, neighborhood stores
CONCLUSION
Retailer private labels have come a long way. Banish the old image of cheap products. Today's sophisticated retailers are successfully experimenting with premium store brands.Rather than perceiving them as a poor cousin to manufacturer brands, many consumers can be persuaded to pay more for top quality private labels.