Abstract
Indian cities are witnessing a paradigm shift from traditional form of retailing, to modern outlets. Store atmospherics emerging as key stimuli is explored in the paper.
Keywords: Organised retailing, Store Atmospherics, Visual Merchandising, Store patronage
Store Atmospherics of a specialty store
The study undertaken looks at importance of store atmospherics in retailing. Indian retail is fastest growing sector in India, growing at a rate of 49%.Retail industry alone contributes to approximately 10% of the G.D.P and constitutes to around 8% of the employment. The new age malls and retail stores are showcasing the new face India, the emerging superpower.
Atmospherics refers to the sum total of the physical characteristics of a store. Atmospherics help build a store image and attract consumers. Atmospherics describes the physical elements in a store’s design that appeals to consumers and hence encouraging them to make purchases.
The study has been conducted in association with Reliance timeout, a wholly owned subsidiary of Reliance Retail Ltd at Bangalore. Reliance timeout is a unique specialty store handling varied categories including books, movies, music, stationery, toys fragrances etc. The study helps gain insight into the finer impacts of visual merchandising and store layout.
Effectively increasing the per sqft earning of retail space is the primary objective of the study seconded by understanding shopping influences from store atmospherics. Research conducted includes descriptive studies from around 200 customers, interview and observational techniques. Comprehensive data analysis using Spss and ms excel has been undertaken. The study would help in brand building and customer retention.
For more information contact
Suraj Kumar Plakkote
surajearly@gmail.com
Monday, November 17, 2008
Sunday, November 16, 2008
RETAILING
Retailing can be defined as all activities that adds value to the products and services sold to consumers for their personal or family use. A retailer plays an integral part in the distribution channel. Retailers functions to provide the consumers with a wide assortment of products and services and forms and sizes that can be easily consumed. Retailing in India is undergoing a paradigm shift from the mom and pop shops to heavy organized retail. India holds the record number of retail outlets in the world numbering 12 million, with almost 85% of it in the unorganized sector. Indian organized retail is growing at a brisk pace of around 49%. Indian retail is expected to employ around 3.5 million employees in the year 2008-09.
Understanding the huge potential posed by Retailing , we a team of young and dynamic students from SCMS-COCHIN have chosen Retailing as our specialization for our post graduation and this blog is a forum to share our views and discuss latest trends in retailing.
Understanding the huge potential posed by Retailing , we a team of young and dynamic students from SCMS-COCHIN have chosen Retailing as our specialization for our post graduation and this blog is a forum to share our views and discuss latest trends in retailing.
AMBUSH MARKETING
Ambush marketing a new innovative counter marketing strategy that is very prominent in today’s global environment.
Ambush can be defined as concealing yourself and waiting to attack by surprise.
Ambush marketing is a marketing campaign that takes place around an event but does not involve payment of a sponsorship fee to the event. For most events of any significance, one brand will pay to become the exclusive and official sponsor of the event in a particular category or categories, and this exclusivity creates a problem for one or more other brands. Those other brands then find ways to promote themselves in connection with the same event, without paying the sponsorship fee and without breaking any laws.
Ambush marketing is very prevalent in the sports world; prominent ambush marketing strategies have been witnessed in India namely Coke sponsoring the ICC Cricket World Cup and Pepsi coming out with “nothing official about it” ad campaign.
Ambush marketing arises out of the fact that there is a huge hype surrounding mega events like the Olympics, cricket and football world cup’s. The huge marketing potential for such events arises out of the fact that such events have huge customer viewership.
Ambush Marketing take two forms namely
• Association Ambushing- Where in the non-sponsor gives the impression of being an official sponsor by using words or symbols associated with the event
• Intrusion Ambushing- Where in the non-sponsor rides along with the main sponsor by gaining access to the exposure of the event, eg: advertising in near by areas.
Ambush Marketing can be identified as follows
1. Sponsoring media coverage of an event
2. Sponsoring a sub-category within a event
3. Sponsoring the physical elements like people associated with the event
Thus we understand that ambush marketing is a problem faced by some marketers who are not able to reap the full benefits from certain marketing strategies. We understand that there are legal loopholes that have to be rectified. Sponsorship to events should be restricted and regulated for we should understand that today’s advertiser could be tomorrow’s ambusher.
SURAJ KUMAR PLAKKOTTE
Ambush can be defined as concealing yourself and waiting to attack by surprise.
Ambush marketing is a marketing campaign that takes place around an event but does not involve payment of a sponsorship fee to the event. For most events of any significance, one brand will pay to become the exclusive and official sponsor of the event in a particular category or categories, and this exclusivity creates a problem for one or more other brands. Those other brands then find ways to promote themselves in connection with the same event, without paying the sponsorship fee and without breaking any laws.
Ambush marketing is very prevalent in the sports world; prominent ambush marketing strategies have been witnessed in India namely Coke sponsoring the ICC Cricket World Cup and Pepsi coming out with “nothing official about it” ad campaign.
Ambush marketing arises out of the fact that there is a huge hype surrounding mega events like the Olympics, cricket and football world cup’s. The huge marketing potential for such events arises out of the fact that such events have huge customer viewership.
Ambush Marketing take two forms namely
• Association Ambushing- Where in the non-sponsor gives the impression of being an official sponsor by using words or symbols associated with the event
• Intrusion Ambushing- Where in the non-sponsor rides along with the main sponsor by gaining access to the exposure of the event, eg: advertising in near by areas.
Ambush Marketing can be identified as follows
1. Sponsoring media coverage of an event
2. Sponsoring a sub-category within a event
3. Sponsoring the physical elements like people associated with the event
Thus we understand that ambush marketing is a problem faced by some marketers who are not able to reap the full benefits from certain marketing strategies. We understand that there are legal loopholes that have to be rectified. Sponsorship to events should be restricted and regulated for we should understand that today’s advertiser could be tomorrow’s ambusher.
SURAJ KUMAR PLAKKOTTE
INDIAN FOOD RETAIL STORY IS A HIT
The Indian organized retail growth is the talk of the hour today, apart from every obstacle it’s growing 49.73% annually with a penetration of 8%, which was 1% in 2006 and it is expected to go up to 25% till 2011, which is a unbelievable figure and that’s why it is the most attractive market for last three years according to AT Kearney’s. In this growing retail segment the biggest share holder is the food industry which is nearly 75% out of that 14% belongs to organized sector and why it should not be, India’s population are worlds second highest, out of that population most of the people are young and having 20-30% disposable income which they like to spend on food mostly and other reasons like changing life style, increasing women working population, nuclear family in urban sector etc. The main reason why it is growing so fast is due to experiential marketing with a price conscious nature that it provides.
Traditionally the food retail is dominated by local kirana stores who sell dry foods and pushcart vendors who sell fruits and vegetables as it was protected from foreign players for long years. This scenario will be clear if Indian scenario will be compared to our neighbours, share of organized sector in Malaysia is nearly 50%, Thailand 40%, Philippines 35%. Also another major difference we found is the consumer consumption pattern, people here prefer more freshly cooked food rather than packed foods due to reasons like dietary patterns, low penetration of refrigerators, family structure are the primary reasons. Coming to rural segments the rural segment is worth US$ 45 Billion market by 2010 and it’s expected to grow at 36%.
So there is a need of understanding of changing pattern and trends in consumer behaviour and the future challenges for retailers. Impact of foreign retailers on Indian and analysis of the industry closely.
The factors why Indian consumer are heading for a change in there buying behaviour-
- Growing number of nuclear families, with male and female both working, changed the food preference of the family. Now they prefer packed food rather cooked food.
- Consumers are now more urban and more conscious for healthy and hygienic foods so this may go for packed foods.
- Due to lack in time consumer may prefer more shelf life packed food available in super markets.
- Convenience, large product line, quality and availability may result in shift from unorganized to organized retailing.
- Changing family structure, westernisation, up word trend in use of credit cards made it a attractive place for supermarkets.
- Increasing number of middle class families and increasing number of mortar cycle users is another reason for changing in buying pattern.
The above are about the changing consumer behaviour and in bellow I will be telling about what the benefits consumer are really getting from the organized food retailing-
- Now the Indian consumer is going through a transformation, they are now getting better shopping experience.
- Low price, easy accessibility and fresh vegetable is the main reason for heading for retail shops.
- New definition for retail shops like family outing and recreation centres for busy couples, so they can shop and spend time together.
- Multiple service and product under one roof.
- The friendly nature and behaviour of staffs made the shopping more lively for Indian consumers.
The above was all about the consumers of India what is there perception and the benefits they are going to get out of the deal then what about the Impact of foreign players on Indian retail industry –
As we know Indian market is a very lucrative market after all so all foreign players will be interested to enter it, this will open up new opportunities -
- Due to foreign players entrance efficient supply chain method will be practiced so that the gap between prices receive by farmer and price paid by consumer will be decreased. Benefit for both.
- Indians almost pays 4-5 time more than farm-get price compared to in developed countries consumer pays only 1.5 times more.
- Productivity gain will generate more employment and more income opportunities.
The foreign player entrance may close up so many opportunities in the industry like-
- Due to entrance of big giants small players will be pushed out of the business.
- Also it is seen that the big retailers are the main reason for down in wages.
- Also may lead to creation of monopoly condition where there are one or few buyers.
- Farmers may be pushed to produce single crop with the help of genetically modified crops which may kill the fertility of land.
- Following trend of big giants where bottom employs get salary bellow poverty level and top ones get millions may increase the division between haves and have not.
- Big players more prefer cheap source of goods from china, Thailand may lead to unfair competition and loss of livelihood in India.
As a retailer student I should analyse the industry so that organisation may use it in there strategic planning process, so there is a need of a SWOT analysis-
Strength of Indian retail food sector –
- Latest technology kept organized retailers one step ahead of unorganized once, like the use of cold chain process helps retailers to deliver foods fresh.
- International players experience in this field of supply chain process and technology is an added advantage.
- Shifting affinity towards supermarkets of young Indian consumers is another advantage.
- Efficient use of supply chain made big retailers to supply foods at very cheaper compared to unorganized once.
Weakness of Indian retail food sector –
- Stand alone shops were established long time back and have large loyal customer base. New giants are just appearing now, they need to settle dawn, expand and grow.
- Trained man power shortage is another disadvantage, its time taking to train and retain them.
- Real estate is another barrier which will add more cost to the operation finally, which retailers have to tackle.
Opportunity of Indian retail food sector –
- Indian food retail segment is nearly 75% of all, out of that organized one is nearly 14%. So huge gap is left to fill up.
- Changing consuming pattern of people.
- Growing potential of tire II & III cities opened up new opportunity.
- More disposables income made people to spend more basically on food.
- FDI allowed in single brand retailing up to 51% made a huge opportunity.
- Growing economy in rural sector and still it is untouched by big retailers is the future potential opportunity for all.
Threat of Indian retail food sector –
- Unorganized once are getting together to fight big giants.
- Shopping culture is just new for Indians.
- Indians mostly prefer cooked food rather packed and there is a huge need to bring dawn the packed food price to make it affordable to all.
- Lack in retail space and high real estate price is making a tough task for big giant.
Conclusion-
To sustain in the growing food market of India retailers have to look up on basic two factors – infrastructure development and change the mindset of people. Many people still think it’s expensive to shop in a air-conditioned room. The 70% rural Indians also need to be catered instead of concentrating on urban India. Also need to take feed back from consumers seriously, some complains coming frequently about food segment is the foods available in big retail units are not fresh, this factor made a way for unorganized retailers to come back and so many are coming back . The cold chain System has to be efficiently operated in India to supply fresh vegetables daily. Once these factors will be taken care nothing can stop organised sector growth.
SOME PLAYERS WHO IS PLAYING-
1. Pantaloon
2. Reliance Retail
3. Subhiksha
4. Jubilant Retail
5. RPG group.
SAMBIT KUMAR SAHOO
RETAIL, SCMS-COCHIN
PH- 09995218696
Traditionally the food retail is dominated by local kirana stores who sell dry foods and pushcart vendors who sell fruits and vegetables as it was protected from foreign players for long years. This scenario will be clear if Indian scenario will be compared to our neighbours, share of organized sector in Malaysia is nearly 50%, Thailand 40%, Philippines 35%. Also another major difference we found is the consumer consumption pattern, people here prefer more freshly cooked food rather than packed foods due to reasons like dietary patterns, low penetration of refrigerators, family structure are the primary reasons. Coming to rural segments the rural segment is worth US$ 45 Billion market by 2010 and it’s expected to grow at 36%.
So there is a need of understanding of changing pattern and trends in consumer behaviour and the future challenges for retailers. Impact of foreign retailers on Indian and analysis of the industry closely.
The factors why Indian consumer are heading for a change in there buying behaviour-
- Growing number of nuclear families, with male and female both working, changed the food preference of the family. Now they prefer packed food rather cooked food.
- Consumers are now more urban and more conscious for healthy and hygienic foods so this may go for packed foods.
- Due to lack in time consumer may prefer more shelf life packed food available in super markets.
- Convenience, large product line, quality and availability may result in shift from unorganized to organized retailing.
- Changing family structure, westernisation, up word trend in use of credit cards made it a attractive place for supermarkets.
- Increasing number of middle class families and increasing number of mortar cycle users is another reason for changing in buying pattern.
The above are about the changing consumer behaviour and in bellow I will be telling about what the benefits consumer are really getting from the organized food retailing-
- Now the Indian consumer is going through a transformation, they are now getting better shopping experience.
- Low price, easy accessibility and fresh vegetable is the main reason for heading for retail shops.
- New definition for retail shops like family outing and recreation centres for busy couples, so they can shop and spend time together.
- Multiple service and product under one roof.
- The friendly nature and behaviour of staffs made the shopping more lively for Indian consumers.
The above was all about the consumers of India what is there perception and the benefits they are going to get out of the deal then what about the Impact of foreign players on Indian retail industry –
As we know Indian market is a very lucrative market after all so all foreign players will be interested to enter it, this will open up new opportunities -
- Due to foreign players entrance efficient supply chain method will be practiced so that the gap between prices receive by farmer and price paid by consumer will be decreased. Benefit for both.
- Indians almost pays 4-5 time more than farm-get price compared to in developed countries consumer pays only 1.5 times more.
- Productivity gain will generate more employment and more income opportunities.
The foreign player entrance may close up so many opportunities in the industry like-
- Due to entrance of big giants small players will be pushed out of the business.
- Also it is seen that the big retailers are the main reason for down in wages.
- Also may lead to creation of monopoly condition where there are one or few buyers.
- Farmers may be pushed to produce single crop with the help of genetically modified crops which may kill the fertility of land.
- Following trend of big giants where bottom employs get salary bellow poverty level and top ones get millions may increase the division between haves and have not.
- Big players more prefer cheap source of goods from china, Thailand may lead to unfair competition and loss of livelihood in India.
As a retailer student I should analyse the industry so that organisation may use it in there strategic planning process, so there is a need of a SWOT analysis-
Strength of Indian retail food sector –
- Latest technology kept organized retailers one step ahead of unorganized once, like the use of cold chain process helps retailers to deliver foods fresh.
- International players experience in this field of supply chain process and technology is an added advantage.
- Shifting affinity towards supermarkets of young Indian consumers is another advantage.
- Efficient use of supply chain made big retailers to supply foods at very cheaper compared to unorganized once.
Weakness of Indian retail food sector –
- Stand alone shops were established long time back and have large loyal customer base. New giants are just appearing now, they need to settle dawn, expand and grow.
- Trained man power shortage is another disadvantage, its time taking to train and retain them.
- Real estate is another barrier which will add more cost to the operation finally, which retailers have to tackle.
Opportunity of Indian retail food sector –
- Indian food retail segment is nearly 75% of all, out of that organized one is nearly 14%. So huge gap is left to fill up.
- Changing consuming pattern of people.
- Growing potential of tire II & III cities opened up new opportunity.
- More disposables income made people to spend more basically on food.
- FDI allowed in single brand retailing up to 51% made a huge opportunity.
- Growing economy in rural sector and still it is untouched by big retailers is the future potential opportunity for all.
Threat of Indian retail food sector –
- Unorganized once are getting together to fight big giants.
- Shopping culture is just new for Indians.
- Indians mostly prefer cooked food rather packed and there is a huge need to bring dawn the packed food price to make it affordable to all.
- Lack in retail space and high real estate price is making a tough task for big giant.
Conclusion-
To sustain in the growing food market of India retailers have to look up on basic two factors – infrastructure development and change the mindset of people. Many people still think it’s expensive to shop in a air-conditioned room. The 70% rural Indians also need to be catered instead of concentrating on urban India. Also need to take feed back from consumers seriously, some complains coming frequently about food segment is the foods available in big retail units are not fresh, this factor made a way for unorganized retailers to come back and so many are coming back . The cold chain System has to be efficiently operated in India to supply fresh vegetables daily. Once these factors will be taken care nothing can stop organised sector growth.
SOME PLAYERS WHO IS PLAYING-
1. Pantaloon
2. Reliance Retail
3. Subhiksha
4. Jubilant Retail
5. RPG group.
SAMBIT KUMAR SAHOO
RETAIL, SCMS-COCHIN
PH- 09995218696
A New Wave of Merchandising – Indian Retail
Since the introduction of retail store format, merchants have always placed like items together for quick and efficient service. In both full service and self service stores, customers have liked to see the entire range of a product before deciding on a purchase. The customers felt they were making sure they got the best deal and the full value of a product when they shopped in this way. This method of merchandising or organising a store is called Category Merchandising. All items are placed together on one aisle or in one section of the store to get maximum exposure.
Changes in the demographic profile and the majority of women entering the workforce have altered much than just the obvious. Consumers have drastically less time to shop than before and shopping is seen as a pleasure and more as work, thus shopping habits have changed too. Stores that are attuned to their customers’ need are able to select a limited range of products and focus only on these, as they are confident about their customer’s choice. For example, Wal-Mart might stock an aisle full of lamps but Pottery Barn in the US or Kian in India will probably offer only 3-4 styles, which they are sure their customers will love, and incorporate them in their displays throughout the store. All the merchandise is displayed in a lifestyle setting so customers can imagine how it would look in their homes. Most of these stores have no separate sections for different items. Instead, the entire store is organised and displayed like a home, with living room furniture displayed with accessories, bedrooms with beds made in assorted linens complete with nightstands and sleeping attire. This method is called Lifestyle or Solutions Merchandising as it provides solutions to consumers. Consumers are not always looking for products; instead they often looking for solutions and might not have identified what exactly they want to buy.
Retailers who can provide consumers with products that simplify their lives will be winners. Today’s consumers don’t have time to decipher or even absorb all the marketing and the advertising information they are bombarded with. In these circumstances, retailer must do the job for them with solutions rather than too many options. A customer who has to decide between 10 types of floor lamps might just walk out of the store empty handed after being confused by too much information.
Customers are able to spend only a limited time on shopping, mostly on purchase of basic necessities. Shopping is no longer seen as a pleasure activity; most see it as a task that needs to be completed quickly to get back to more important things. Unless retailers are able to understand this distinction, they will lose out on an entire generation of consumers, especially women, who have learned to shop differently. In this scenario, these customers will be visiting stores that are able to provide them services and options that better fit their lifestyle.
With consumers lifestyles changing, shopping patterns have also changed. A smart retailers must keep up with these changes and may be even forecast what their customers will ask for next. Customers are quite willing to try new ways of buying products. the success of home delivery service for DVD’s is an example of how one retailer created a service that simplified customer’s live. On forecasting trends and moving with them, a retailer must not forget the target audience or they might move ahead of what their customers are ready for.
Lifestyle Merchandising besides being virtually more appealing to customers, is a more practical and modern approach. Customers are shown how products are best utilised and often solutions are found for problems that a customer wasn’t sure how to fix. They come to the store with a problem and they would like a retailer to find some solutions for them. Retailers must cautious on one front: they can practice this type of store organisation only they know their customers and their choices very well. If a retailer is not able to gauge the customer’s choice or they select the wrong items then they will end up not selling anything at all. These choices should be made carefully and cautiously.
These ways of organising retail store are not options any more. They are now the ground realities of running a successful business. Customers come to stores already quite knowledgeable on a number of products whether they are interesting in purchasing or not. They do not require instructive sales help like earlier days but instead some friendlier and hassle-free interactions. A retailer must adopt to this new wave of merchandising or be left in silence of empty cash registers.
SARIT HOTA
SCMS-COCHIN
Changes in the demographic profile and the majority of women entering the workforce have altered much than just the obvious. Consumers have drastically less time to shop than before and shopping is seen as a pleasure and more as work, thus shopping habits have changed too. Stores that are attuned to their customers’ need are able to select a limited range of products and focus only on these, as they are confident about their customer’s choice. For example, Wal-Mart might stock an aisle full of lamps but Pottery Barn in the US or Kian in India will probably offer only 3-4 styles, which they are sure their customers will love, and incorporate them in their displays throughout the store. All the merchandise is displayed in a lifestyle setting so customers can imagine how it would look in their homes. Most of these stores have no separate sections for different items. Instead, the entire store is organised and displayed like a home, with living room furniture displayed with accessories, bedrooms with beds made in assorted linens complete with nightstands and sleeping attire. This method is called Lifestyle or Solutions Merchandising as it provides solutions to consumers. Consumers are not always looking for products; instead they often looking for solutions and might not have identified what exactly they want to buy.
Retailers who can provide consumers with products that simplify their lives will be winners. Today’s consumers don’t have time to decipher or even absorb all the marketing and the advertising information they are bombarded with. In these circumstances, retailer must do the job for them with solutions rather than too many options. A customer who has to decide between 10 types of floor lamps might just walk out of the store empty handed after being confused by too much information.
Customers are able to spend only a limited time on shopping, mostly on purchase of basic necessities. Shopping is no longer seen as a pleasure activity; most see it as a task that needs to be completed quickly to get back to more important things. Unless retailers are able to understand this distinction, they will lose out on an entire generation of consumers, especially women, who have learned to shop differently. In this scenario, these customers will be visiting stores that are able to provide them services and options that better fit their lifestyle.
With consumers lifestyles changing, shopping patterns have also changed. A smart retailers must keep up with these changes and may be even forecast what their customers will ask for next. Customers are quite willing to try new ways of buying products. the success of home delivery service for DVD’s is an example of how one retailer created a service that simplified customer’s live. On forecasting trends and moving with them, a retailer must not forget the target audience or they might move ahead of what their customers are ready for.
Lifestyle Merchandising besides being virtually more appealing to customers, is a more practical and modern approach. Customers are shown how products are best utilised and often solutions are found for problems that a customer wasn’t sure how to fix. They come to the store with a problem and they would like a retailer to find some solutions for them. Retailers must cautious on one front: they can practice this type of store organisation only they know their customers and their choices very well. If a retailer is not able to gauge the customer’s choice or they select the wrong items then they will end up not selling anything at all. These choices should be made carefully and cautiously.
These ways of organising retail store are not options any more. They are now the ground realities of running a successful business. Customers come to stores already quite knowledgeable on a number of products whether they are interesting in purchasing or not. They do not require instructive sales help like earlier days but instead some friendlier and hassle-free interactions. A retailer must adopt to this new wave of merchandising or be left in silence of empty cash registers.
SARIT HOTA
SCMS-COCHIN
Non-Fuel Retail: An emerging Business Model
One can see conventional market places in high streets and malls, but apart from that retailers are also interested in non-conventional area such as airports and railway stations for their expansion. At present due to unique facilities provided by these retailers at these outlets enabled high density of footfalls. So retailers thought petrol pumps to be the better places for their business plan. In earlier nineties, Bharat Shell Ltd, joint venture between Bharat Petroleum and Shell Overseas Investments of Netherlands, launched the first convenience store at its outlets and given a sign of new emerging business model. So oil companies are concentrating on more customer needs and they are involved in activities in providing all necessary facilities.
Hence the days of what the petrol pumps was vehicle-related is slightly converting into new business model and coming up with facilities ranging over convenience store, laundry, courier, medicines, flowers, fresh fruits, insurance, fast food etc. The purchasing of petrol is totally uninvolved process, so by enhancing such facilities would add value. In India this model of transformation is going on and would definitely in coming days it would contribute more to the retail and have wide range of services. And this provided all the oil companies to enter into the tie-up with the convenience stores, so petrol destinations are now one of the preferred destinations. After filling their vehicles, customers have no time to wait and they prefer fast service. McDonald’s has tied up with HPCL and BPCL, Café Coffee Day has partnership with BPCL and HPCL. IOC has tied up with Domino’s Pizza and Nirula’s; hence these initiatives would definitely going to cater the needs of the customers.
Since retail in India is gaining momentum, this model would offer convenience to the customers and would be a profit center for the company. If you talk about outlets on highways, there the prime needr of the customers is the refreshment and people looj For food jnints and tohlets in hygienic conditions. And to fulfill those needs BPCL is g/ihg tk invect Rs. 6 ballion in the .ext five years to set up _50 Ghar’ outlets_on highways to provide hoMe-away-from-home experience tk truckers and highw`y tra4elers. These outlets will provide non-fuel facilities like shopping, eateries and entertainment. Due to the art of infrastructure facilities of oil companies will attract customers and restaurants in this outlet will provide relaxing destinations for the travelers. Apart by catering the exact needs of the customers will be profitable business, like Café Coffee Day by offering varieties of coffees also had additional items like pakoras, bread and omlette.
The biggest advantage of this business model is the ever-increasing price of real estate and such retail venues become more reasonable options. Also maintenance cost is cheaper compare to outlets in mall and busy market. And more importantly such tie-up would result in cross-promotion of both the brands.
The retailing format will vary from place to place like in heart of city ATM and STD can be a good option, in highway as already discussed. But in rural areas since people are mostly engaged in agriculture, so company offer products according to their needs like HPCL has tie-up with Godrej Agrovet Ltd and the outlets offer fertilizers etc and also IOC has Kisan Seva Kendra where agro-based products like seeds, fertilizers and pesticides are made available.
If one is talking about the revenue share and the profit which both party will get from this model is that a certain percentage of turnovers will go to companies share and also the rentals. And for retailers since the retail space is cheaper, they would have better return on investment.
So in future this model is definitely going to serve the purposes of the customers by providing best services and will be more convenient for them. As such food joints have good future as well as impulse goods and car care products. So beverages, chocolate, ready to eat items, personal care products and diet products which is in demand, can serve better for the customers. Items not popular in these business format are electronic goods, music, cassettes, cosmetics, toys and gifts will face challenges. But overall the business format has good future and in coming day’s better implementation can be done. So if we analyze Oil Company could have strategies in three models- one is non-fuel retailing at their retail outlets, second is fuel at malls and the third is whether they should look at entering non-fuel retail as a business model.
VIKASH SAHU
Hence the days of what the petrol pumps was vehicle-related is slightly converting into new business model and coming up with facilities ranging over convenience store, laundry, courier, medicines, flowers, fresh fruits, insurance, fast food etc. The purchasing of petrol is totally uninvolved process, so by enhancing such facilities would add value. In India this model of transformation is going on and would definitely in coming days it would contribute more to the retail and have wide range of services. And this provided all the oil companies to enter into the tie-up with the convenience stores, so petrol destinations are now one of the preferred destinations. After filling their vehicles, customers have no time to wait and they prefer fast service. McDonald’s has tied up with HPCL and BPCL, Café Coffee Day has partnership with BPCL and HPCL. IOC has tied up with Domino’s Pizza and Nirula’s; hence these initiatives would definitely going to cater the needs of the customers.
Since retail in India is gaining momentum, this model would offer convenience to the customers and would be a profit center for the company. If you talk about outlets on highways, there the prime needr of the customers is the refreshment and people looj For food jnints and tohlets in hygienic conditions. And to fulfill those needs BPCL is g/ihg tk invect Rs. 6 ballion in the .ext five years to set up _50 Ghar’ outlets_on highways to provide hoMe-away-from-home experience tk truckers and highw`y tra4elers. These outlets will provide non-fuel facilities like shopping, eateries and entertainment. Due to the art of infrastructure facilities of oil companies will attract customers and restaurants in this outlet will provide relaxing destinations for the travelers. Apart by catering the exact needs of the customers will be profitable business, like Café Coffee Day by offering varieties of coffees also had additional items like pakoras, bread and omlette.
The biggest advantage of this business model is the ever-increasing price of real estate and such retail venues become more reasonable options. Also maintenance cost is cheaper compare to outlets in mall and busy market. And more importantly such tie-up would result in cross-promotion of both the brands.
The retailing format will vary from place to place like in heart of city ATM and STD can be a good option, in highway as already discussed. But in rural areas since people are mostly engaged in agriculture, so company offer products according to their needs like HPCL has tie-up with Godrej Agrovet Ltd and the outlets offer fertilizers etc and also IOC has Kisan Seva Kendra where agro-based products like seeds, fertilizers and pesticides are made available.
If one is talking about the revenue share and the profit which both party will get from this model is that a certain percentage of turnovers will go to companies share and also the rentals. And for retailers since the retail space is cheaper, they would have better return on investment.
So in future this model is definitely going to serve the purposes of the customers by providing best services and will be more convenient for them. As such food joints have good future as well as impulse goods and car care products. So beverages, chocolate, ready to eat items, personal care products and diet products which is in demand, can serve better for the customers. Items not popular in these business format are electronic goods, music, cassettes, cosmetics, toys and gifts will face challenges. But overall the business format has good future and in coming day’s better implementation can be done. So if we analyze Oil Company could have strategies in three models- one is non-fuel retailing at their retail outlets, second is fuel at malls and the third is whether they should look at entering non-fuel retail as a business model.
VIKASH SAHU
Subscribe to:
Posts (Atom)
