UNIVERSAL BUSINESS

SCHOOL

Karjat, Mumbai

Program name: Individual Retail Visit Report

Professor and Tutor: Prof. Bibhas Sir

Student Name: Surbhi Jindal

Roll Number: 1416

Batch: PGDM1

Date of Submission: 10th April, 2015

Assignment: Research Report on

Observation and Analysis of the Retail

Store Spencer the Hypermarket.

Brand Philosophy

Spencer’s has continually helped reshape the retail landscape in India,

introducing a host of innovations to make shopping an even more

convenient and enjoyable activity for the consumer, by creating an

ambience that the consumer appreciates.

Spencer’s brand positioning – Makes Fine Living Affordable –

embodies its philosophy of delighting shoppers with the best products and

services that

Enable a fine living at reasonable prices,

While providing them with a warm, friendly

And educational retail environment.

Socio-Economic Importance of Spencer Hypermarket in Dahisar

West, Mumbai

Spencer’s offers the widest assortment of food and lifestyle (fashion, home,

entertainment), dealing both, with brands and private labels. It has

different special sections within its hypermarkets to delight the customer.

Spencer’s stores have contemporary and international interiors, and it's

extensively trained staff strive to make customers feel at home while they

shop, with a welcoming and trusted attitude. There are some advantages

and disadvantages of this located.

Advantages

Single hypermarket inside the mall.

Owning huge space for retail.

Good transportation availability.

You can get everything at one place, saving time, energy and

money in searching.

Big parking space are available.

Specific facilities are available.

Disadvantages

Location.

High competition with other hypermarkets.

Low advertising.

High rental costs.

Less control over pilfering.

Most of the customers believe that stock is not updated and no offer

schemes are provided by Spencer’s on the old stock. Same price is charged

for both the fresh stock and old stock. Respondents feel offers should be

provided on the old stock, as is done in other retail stores.

Product Range available to Customers

Shopping in enormous hypermarkets is ordinary nowadays. Various

concerns build their shops in every town. They seem to have become the

most popular place for shopping. Although hypermarkets certainly make

our lives easier, there are also some obvious drawbacks involved.

The main advantage of hypermarkets is the price of products which

customers can buy. Not only can we find the cheaper food or

cosmetics there but also we are offered many attractive promotions.

Out of 400 respondents who answered the questionnaire, 57.75% respondents give their view regarding Convenience of Parking somewhat important, 26% respondents extremely important, 5.57% respondents neutral during selecting a Supermarket.

Spencer’s

Big Bazaar

Vishal MegaMart

Identifying the Retail Type and its Product /Private Labels

Spencer is a multi-format retailer providing a wide range of quality products across

categories such as food, personal care, fashion, home essentials, electrical and

electronics to its key consumers.

Spencer’s own brands, commonly referred to as private label, offer a wide range

of products ranging from food to personal care to fashion to home utility items.

Spencer- The Hypermarket Store

Big Box Multi Format Retailer

Food

Personal Care

Home

Electronics

Fashion

Speciality

Differently they do:-

Patisserie

Gourmet

Wine & Liquor

Fruits & Vegetables, Staples, Beverages,

Processed Food, Dairy, Fish & Meat, Spices &

Condiments.

Beauty, Skin care, Hair Care, Oral Care, Baby

Care, Men’s Groom

ing, Personal Hygiene.

Fruits & Vegetables, Staples, Beverages,

Processed Food, Dairy, Fish & Meat, Spices & Condiments.

Home Décor, Home Furnishings, Bathroom

Essentials, Kitchen Essentials, Dining

essentials, Travel Needs, Toys & Stationary.

Home Appliances, Kitchen Appliances,

Electrical Fitting & Accessories, Digital

Equipment & Accessories.

Men’s Casual, Men’s Office Wear, Women’s

Casual, Women’s ethnic, Inner Wear,

Accessories, Footwear

Organic Food, Diet Food, Pet Food, Baby Food,

Nuts & Dry Fruits, Party Delights.

Tobacconist

Epicuisine

Nutty Delights

Private Labels

Spencer’s operates 2 distinct retail formats:

1. Convenience stores: These are neighbourhood stores that cater to the

daily and weekly top-up shopping needs of consumers. Ranging from 1,500

to 15,000 sq. ft. in size, they stock an assortment of fruits and vegetables,

food and non-food FMCG products, staples and frozen foods. The larger of

these stores, having a floor area of more than 10,000 sq., usually also offer

a selected range of baked goodies, frozen foods, personal and home care

products, baby care essentials, basic wear, and electrical equipment.

2. Hypermarkets: Spencer's hypermarkets are megastores that combine

a supermarket with a department store. Ranging from 15,000 sq. ft to over

50,000 sq. ft. in size, they stock a wide and deep assortment of food,

fashion, home and personal care, general merchandise, electrical and

electronics, staples, frozen foods, and specialty sections, all under one

roof.

Revenue generated by Different Departments

Findings

Wide Range of Glass made and metal products.

Stock is sufficient to satisfy the customers.

Exclusively for certain income level.

Maximum products are unreachable.

Very Low CD’s/DVD’s Like Moser Bear.

Gaining the Competition Business at the age of Piracy.

Good Collection of Games at a Low Price range.

Suggestions

Should introduce affordable Product Range for the medium level

income Group.

Earning more revenue by its Music Section.

Demand for educational and Movies of CD-DVD’s.

Rupees

Garment Department Gifts Department Music Department Total

Strategic Drivers for Spencer

Strategies are shaped by both external and internal forces. External drivers

include competition, markets, laws, taxes, customer needs and

technological change. Internal drivers include profit goals, mission and

office politics.

Core Values

Execution Excellence Put your Heart and Soul

Into your actions

Customer Happiness Bring a smile on the face of

Your customer.

Credibility

Instil trust and confidence

With your actions.

Strategic Driver

Change A chain of DVD rental shops must adapt to digital

media formats.

Profits Profit currently is going down but Earning per

share is going good, which is healthy for the

company.

People Job of the customer is to know what the consumer

wants and to provide the customer with the

product of his/her choice.

Planet An energy company faces pressure from

employees, customers, partners and regulators to

move towards sustainable.

Mission Spencer’s has been a consumer-centric brand,

constantly innovating, pioneering formats,

evolving over time but always keeping consumer

needs and satisfaction centre-stage.

Ethics An organic food company establishes a set

of sustainability principles that drives its strategy.

Politics Spencer has a culture of intense office politics that

are the primary force that shapes its strategy.

Corporate

Culture

Corporate culture is rooted in an organization's

goals, strategies, structure, and approaches to

labour, customers, investors, and the greater

community.

Rewards &

Incentives

The executive management team of a software

company seek strategies that maximize their

incentive bonuses.

Regulations &

Taxes

New regulations force an energy company to

improve risk management practices.

Markets The unique style of promoting and advertising for

discounts, free gifts and exchange offers from

your competitors.

Competitive

Forces

An electronics manufacturer ensures that its

strategy prioritizes research & development to

keep pace with the competition.

New Technology Spencer adjusts its strategy when a competitor

reveals new energy efficient technologies.

Customer Needs Spencer keeps a pulse on ever changing fashion

trends.

Opportunities &

Risks

Spencer identifies a new type of investment

product with significant market potential

The following characteristics distinguish the Spencer's brand and create

memorable 360 Degree shopping experiences for consumers:

Products - we offer the widest range of food and lifestyle (fashion,

home, entertainment) brands, with a special expertise in food

Quality - we lay a huge emphasis on all-round quality: in products,

stores, service standards, and customer engagement programs and

that too since our inception at 1863

Heritage - we are India's oldest retailer, with many firsts to our

credit

Multiple Formats - from daily to weekly and specialty shopping,

we fulfil every need and provide maximum convenience

Promotions - we seek to offer the right products at the right time

at the right price, with promotions carefully designed to suit the

buying cycle and shopping basket of the consumers

Brand Imagery - our stores and staff seek to make our customers

feel right at home, being international, contemporary, accessible,

empathetic and trusted

Technology in Retail adopted by Spencer Hypermarket

The ERP Initiative at Spencer’s Retail Ltd. Over the years, during the turn

of twentieth century as the consumer demand increased and the retailers

geared up to meet this increase world over, technology evolved rapidly to

support this growth. The hardware and software tools that have now

become almost essential for retailing can be classified into 3 broad

categories:

Customer Interfacing Systems

1. Bar Coding and Scanners

Point of Sale (POS) systems use scanners and bar coding to identify an

item, use pre- stored data to calculate the cost and generate the total bill

for a client.

2. Payment

Payment through credit cards has become quite widespread and this

enables a fast and easy payment process. Electronic cheque conversion, a

recent development in this area, processes a cheque electronically by

transmitting transaction information to the retailer and consumers bank.

Internet

Internet is also rapidly evolving as a customer interface, removing the need

of a customer physically visiting the store.

Operation Support Systems

1. ERP System

Various Enterprise Resource Planning (ERP) vendors have developed retail-

specific systems which help in integrating all the functions from

warehousing to distribution, front and back office store systems and

merchandising. An integrated supply chain helps the retailer in maintaining

his stocks, getting his supplies on time, preventing stock-outs and thus

reducing his costs, while servicing the customer better.

2. CRM Systems

The rise of loyalty programs, mail order and the Internet has provided

retailers with real access to consumer data. Data warehousing and mining

technologies offers retailers the tools they need to make sense of their

consumer data and apply it to business.

3. Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all

the way from raw material suppliers, right through to the retail shelf.

They enable consolidation of activities such as long term budgeting,

monthly forecasting, weekly factory scheduling and daily distribution

scheduling into one overall planning process using a single set of data.

Strategic Decision Support Systems

1. Store Site Location

Demographics and buying patterns of residents of an area can be used to

compare various possible sites for opening new stores. Today, software

packages are helping retailers not only in their locational decisions but in

decisions regarding store sizing and floor-spaces as well.

2. Visual Merchandising

The decision on how to place and stack items in a store is no more taken

on the gut feel of the store manager. A larger number of visual

merchandising tools are available to him to evaluate the impact of his

stacking options

Marketing Mix Strategy applied by Spencer

Product:

Spencer offers a wide range of products which range from apparels, food,

farm products, furniture, child care, toys, etc. of various brands like

Levis, Allen Solly, Pepsi, Coca- Cola, HUL, ITC, P&G, LG, Samsung, Nokia,

HP etc.

Spencer also promotes a number of in house brands like:

DJ & C

Tasty Treat

Clean Mate

Sensei

Care Mat Koryo and 44 other brands.

Pricing:

The pricing objective at Spencer is to get “Maximum Market Share”.

Pricing at Spencer is based on the following techniques:

Value Pricing (EDLP – Every Day Low pricing): Spencer

promises consumers the lowest available price without coupon

clipping, waiting for discount promotions, or comparison shopping.

Promotional Pricing: Spencer offers financing at low interest rate.

The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is

also used to attract customers. Spencer also caters on Special Event

Pricing (Close to Diwali, Gudi Padva, and Durga Pooja).

Differentiated Pricing: Differentiated pricing i.e. difference in rate

based on peak and non-peak hours or days of shopping is also a

pricing technique used in Indian retail, which is aggressively used by

Spencer.

Bundling: It refers to selling combo-packs and offering discount to

customers. The combo-packs add value to customer and lead to

increased sales. Spencer lays a lot of importance on bundling.

e.g. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22)

5kg oil + 5kg rice + 5kg sugar for Rs 599

Place:

The Spencer stores are operational across three formats — hypermarkets

spread over 40,000-45,000 sq. ft., the Express format over 15,000-20,000

sq. ft. and the Super Centres set up over 1 lakh sq. ft. Currently Spencer

operates in over 34 cities and towns across India with 116 stores. Apart

from the Metros these stores are also doing well in the tier II cities. These

stores are normally located in high traffic areas. Spencer aims at starting

stores in developing areas to take an early advantage before the real estate

value booms. RPG is planning to invest around Rs 350 crore over the next

one year expansion of Spencer. In order to gain a competitive advantage

Spencer has also launched a website www.spencer.com, which helps

customers to orders products online which will be delivered to their

doorstep. This helps in saving a lot of time of its customers.

Promotion:

The various promotion schemes used at Spencer include:

Exchange Offers “Junk swap offer”

Future card(3% discount)

Shakti card

Advertisement (print ad, TV ad, radio)

Brand endorsement

FOR EVERY RS.100 YOU SPEND AT SPENCER'S, YOU EARN 10

POINTS.

People:

Well trained staff at stores to help people with their purchases

Employ close to 10,000 people and employ around 500 more per

month.

Well-dressed staff improves the overall appearance of store.

Use scenario planning as a tool for quick decision making multiple

counters for payment, staff at store to keep baggage and security

guards at every gate, makes for a customer-friendly atmosphere.

Process:

Spencer places a lot of importance on the process right from the purchase

to the delivery of goods. When customers enter the stores they can add

the products they which to purchase in their trolley from the racks. There

are multiple counters where bill can be generated for purchases made.

Spencer also provides delivery of products over purchases of Rs. 1000.

Physical Evidence:

Products in Spencer are properly stacked in appropriate racks. There are

different departments in the store which display similar kind of products.

Throughout the store there are boards/written displays put up which help

in identifying the location of a product. Moreover boards are put up above

the products which give information about the products, its price and

offers. Spencer stores are normally ‘U shaped’ and well planned &

designed.

Conclusion

1. I have found that Spencer need to address a few problems before

opening chains in international grounds.

2. They need to fully address ‘Plan A’ in order to achieve maximum

efficiency within the UK.

3. In addition, Mintel, (2013) suggests that there is a new age sector

emerging within the market. This age group will be the sector to be

setting trends as the under 25 age group is squeezed on finance.

4. And to gain back investor trust classical methods can be employed to

get back lost share price.

5. Moreover, Spencer need to use Ansoff’s Matrix to their advantage so

they can see what areas need improving.

6. After careful analysis, the report has found that there is a need for

market development as well as product development as new age

segmentations are found.

7. Furthermore, Investors, (2013) states that ‘we need to see clear

progress in clothing, store layouts and customer service before we

upgrade our recommendation’.

This implies that major work needs to be done within the non-food

section of Spencer as well as customer service section.

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