Final Shoppers

8/14/2019 Final Shoppers

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Case Study on Supply Chain

Management of Shopper Stop

For Prof S.Paul

By

Priyanshu

Amandeep Kumar


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What Is the Supply Chain?

Also referred to as the logistics network Suppliers, manufacturers, warehouses, distribution centers and retail outlets

facilities

and the

Raw materials Work-in-process (WIP) inventory Finished products

that flow between the facilities

What Is Supply Chain Management (SCM)?

A set of approaches used to efficiently integrate Suppliers Manufacturers Warehouses

Suppliers

Manufacturers

Warehouses &Distribution

Centers

Customers

MaterialCosts

Transportation

Costs

Transportation

Costs Transportation

CostsInventoryCosts

ManufacturingCosts

Plan

Source

Make

Deliver Buy


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Distribution centers So that the product is produced and distributed

In the right quantities To the right locations And at the right time

System-wide costs are minimized and Service level requirements are satisfied

Why Is SCM Difficult?

Uncertainty is inherent to every supply chain Travel times Breakdowns of machines and vehicles Weather, natural catastrophe, war Local politics, labor conditions, border issues

The complexity of the problem to globally optimize a supply chain is significant Minimize internal costs Minimize uncertainty Deal with remaining uncertainty

The Importance of Supply Chain Management

Dealing with uncertain environments matching supply and demand Boeing announced a $2.6 billion write-off in 1997 due to raw materials

shortages, internal and supplier parts shortages and productivityinefficiencies

U.S Surgical Corporation announced a $22 million loss in 1993 due tolarger than anticipated inventories on the shelves of hospitals IBM sold out its supply of its new Aptiva PC in 1994 costing it millions in

potential revenue Hewlett-Packard and Dell found it difficult to obtain important

components for its PCs from Taiwanese suppliers in 1999 due to amassive earthquake

U.S. firms spent $898 billion (10% of GDP) on supply-chain related activities in1998

Shorter product life cycles of high-technology products Less opportunity to accumulate historical data on customer demand

Wide choice of competing products makes it difficult to predict demand The growth of technologies such as the Internet enable greater collaborationbetween supply chain trading partners

If you dont do it, your competitor will Major buyers such as Wal-Mart demand a level of supply chain maturity

of its suppliers Availability of SCM technologies on the market


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Firms have access to multiple products (e.g., SAP, Baan, Oracle, JDEdwards) with which to integrate internalprocesses

Supply Chain Management Key Issues

ISSUE CONSIDERATIONSNetwork Planning Warehouse locations and capacities

Plant locations and production levels Transportation flows between facilities to

minimize cost and time

Inventory Control How should inventory be managed? Why does inventory fluctuate and what

strategies minimize this?

Supply Contracts Impact of volume discount and revenuesharing

Pricing strategies to reduce order-shipment

variabilityDistribution Strategies Selection of distribution strategies (e.g.,

direct ship vs. cross-docking) How many cross-dock points are needed? Cost/Benefits of different strategies

Integration and Strategic

Partnering

How can integration with partners beachieved?

What level of integration is best? What information and processes can be

shared? What partnerships should be implemented

and in which situations?Outsourcing &

Procurement Strategies

What are our core supply chain capabilitiesand which are not?

Does our product design mandate differentoutsourcing approaches?

Risk management

Product Design How are inventory holding andtransportation costs affected by productdesign?

How does product design enable masscustomization?

Supply Chain Management Operations Strategies


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STRATEGY WHEN TO CHOOSE BENEFITS

Make to Stock standardized products,relatively predictabledemand

Low manufacturing costs;meet customer demandsquickly

Make to Order customized products,many variations

Customization; reducedinventory; improved servicelevels

Configure to Order many variations onfinished product;infrequent demand

Low inventory levels; widerange of product offerings;simplified planning

Engineer to Order complex products, uniquecustomer specifications

Enables response to specificcustomer requirements

SHOPPERS STOP;

Setting up a shop in 1991 with its flagship store in andheri mumbai,and shoppers stop isthe member of the k.raheja corp.of companies .shoppers stop is the first retail venture bythe k.raheja corp. Promoted by the Mr.Chnadru L.Raheja, Mr. Ravi C.Raheja and Mr.Neel C.Raheja , the K.Raheja Corp. Have been leaders in the construction business forover 48 years.

with its wide range of merchandise, exclusive shop-in-shop counters of internationalbrands and world class customer service,shoppers stop brought international standards ofshopping to the indian consumer providing them with a complete shopping experience.

India 2000 & beyond :

Expanding its operations to bangalore, hyderabad, jaipur, delhi, chennai, ghatkopar, puneand most recently calcutta, shoppers stop is today recognized as indias premiershopping destination. It was awarded the most admired apparel retailer at the imagesfashion awards 2000. With a customer entry about 20,000 customers a day, a nationalpresence with over 3,00,000 square feet of retail space and stocking over 450 brands ofgarments and accessories, shoppers stop has clearly become a one stop shop for allcustomers.

Customer profile :


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Shoppers stops core customer represent a strong SEC A and B+ skew. They fallbetween the age group of 16 to 40, the majority of them being families and youngcouples with a monthly household income above Rs. 10,000.

Range of the merchandise :

The stores offer a complete range of apparel and lifestyle accessories for the entirefamily. From apparel brands like provogue, colour plus, arrow, levis scullers, zodiac, tocosmetic brands like lakme, chambor, le teint ricci etc. Shoppers stop caters to everylifestyle need. Shoppers stop has also introduced its own line of clothing in the classicand value fashion segments. These are life, stop, karrot and kashish that are availableacross different categories. The mercjandise at shoppers stop is sold ata quality and priceassurance backed by its guarentee stamp on every bill.

Shoppers stop has 4 division the mens apparels, ladies apparels, kids wear and the nonapparels. Following is their contribution to the turnover.

Mens 43% of sales

Womens 18% of sales

Kids 8% of sales

Non apparels 31% of sales

It operates with 90 departments handling around 450 brands managing a combinedfootfall of over 20,000 customers each day.

Shoppers stop motto :

we are responsible for the goods we sell.

Top mangement :

Shoppers stop is headed by mr b.s. nagesh, customer care associate, managingdirector and ceo. The company has recruited top line professionals with hardcoreretail experiencefrom the leading companies in india and uk.

Heirarchy in the logistics department :

Director buying and merchandising

Supply chain management head


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Manager logistics and distribution

Distribution coordinator (link between ss and dcs)

Four distribution centres

Operating costs :The logistics cost equals to 1% of the total turnover and includes the followexpenses warehousing (oh, rents, staff, facilities), transportation, handlingcharges, allocated expenses, re-packaging.

Swot analysis of supply chain :

o Strengths suppliers, efficient logistics, partners

o Weakness less control over inbound logistics

o Opportunities floor ready, ready to sell garments

o Threats competitors, rapidly changing systems

I. Buying channel :

Shoppers stop has 4 regional distribution centres. Previously eachstore had its warehouse(dc) but that turned out to be a wrong strategyas the flexibility was being affected and costs were building up. Therewas also a lot of inventory pile up in each of these stores and henceadded to cost in inventory and transportation from one store to

another to transfer excess inventory.

II. Procurement strategy :

Shoppers stop has centralized procurement and no regional buying,the following are the benefits of centralized procurement:

Target profile same across the country

Manufacturer

Mumbai DC Delhi DC Bangalore DC Calcutta DC

6 stores 3 stores 3 stores 1 store


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Better cost controls

Better bargaining power

Better inventory management

100% inventory control

100% tracking of inventory (whats selling whats not?)

III. Buying process :

Illustration :

Purchase order for 5000 shirts of arrowPurchase order is a guarantee from shoppers stop that they will buybut supplier cannot dispatch goods on po. Po helps is reducinginventory cost as the goods are ready and stocked at themanufacturers place, so no inventory pile up at the dcs or stores. 4

purchase orders are sent by the buying and merchandising managerfor 4 dcs.For eg vendor abc gets 4 purchase orders from shoppers stop, for fourdcsMumbai dc 2500 shirts catering to 6 storesBanglore dc 1000 shirts catering to 3 storesDelhi dc 1000 shirts catering to 3 storesCalcutta dc 500 shirts catering to 1 store

Purchase Order Sent to the manufacturer

Delivery Authorization

Manufacturer Dispatches merchandise to the DC

DCs check the merchandise and confirms through its systems

Accounts Department receives the confirmation

Payment to the manufacturer

DC transports weekly requirements to the store

Stocks updated in-store

Pre-retailing team displaysthe merchandise


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Delivery authorisation for 500 shirtsDelivery authorization is an international system followed by all majorretailers. Da is prepared on the projected sales for that week. So if the

po (6monthly for 2 seasons) for all 13 stores is 5000 and for aparticular week shoppers stop sells 500 shirts, it will send a da for 500shirts. Thus with delivery authorization system shoppers stop can placeorder according to the demand assessment with the condition that itwould pick up a fixed amt every week. Thus it doesnt have to stockgoods at his place and block money in inventory. It also helps in betterinventory management as it is based on weekly projections. It is anassurance for both the shoppers stop as well as the manufacturer.

Manufacturer dispatches the weekly requirements to the 4 dcs

according to the das

Dcs checkthe details (date, number) of the product and match itwith the invoice. Anything not matching even if it is one piece isrejected. If accepted it causes a mis-match between the purchaseorder and delivery authorisation. Hence the po has to match with theinvoice carried by the manufacturer.

Accounts department receives confirmation in the system for the

pieces physically accepted. The accounts department can makepayment that very second, in which they receive confirmation. Thisprocess is so stable and fast because of being connected and fullyintegrated.

Once the confirmation is sent by the dc, the stocks are transported tothe stores. Dispatches are always made early morning. There is apre-retailing team that receives the stocks and their duty is to putthem on display before 10.30 when the store opens, so that when thecustomer enters everything is on display.

Stocks are updated in the store


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IV. Warehousing :

o Regional warehouses

o No in-store warehouses

o Number of warehouses - 4

o Location metros (mumbai, delhi, banglore, calcutta)

o Floor area 20,000 to 22,000 sq.ft

o Transportation from warehouse to store done by the dcs

Distribution centers :

Distribution centers for s.s are 100% outsourced to another company.Each of the distributions centers has a floor area of around 22000sq.ft.. The dc is divided in to zones and1000 based on the brands orvendors. When a delivery comes in the person in-charge feeds in thedetails like merchandise type, brand name, size, color, batch number,date, etc. The system give him a ticket describing where themerchandise has to be kept. It gives a detailed description of the pileand rack number. Thus, even if the person is unacquainted with theslots of the dc, the system will tell him where to keep the merchandise.The systems are thus not dependant on any person and can work

independently. This whole activity is outsourced to another companywho acts as a internal supplier for ss. The delivery transportation fromthe dc to the stores is the dcs task.

Advantages of having outsourced theactivities :

Cost benefit

No labor problems handling labor unions

No liability for pilferage by own staff and damages

Specialized expertise of the company

Dictate terms to the outsourced company 24 hours delivery,etc

V. Inventory management :


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Ss has a system of checking stocks on a continuous basis. There are 90departments at ss each day one department is frozen after closinghours and the staff is made to scan the tags and feed in the stocklevels in the system. The staff is completely unaware of the stocklevels according to the system. The system then compares the actual

to the customary and gives a variance reports. Thus there is stockmatching done everyday and the entire store completes a cycle in 3months. That means ss conducts 4 cycles of stock taking each year.This has helped them get the pilferage to its minimum. As each day isaccounted for and there is a complete match on a constant basis.in the day inventory levels get collated store wise. While in the night

this information gets polled in the server and is integrated at thenational level. Thus, each day the information on stocks available forthat day and at which store is made accessible to each and everystore.

Every day auto replenishment:

Shoppers stop has determined its minimum stock keeping units and assoon as the stocks in the store touch that level, the dc is triggered tosend the replenishment. Thus the system automatically checks forstock out and replenishes it. The lead time for replenishment is 1 day.Every night data is collated and a store-wise list of merchandise isgenerated. During the day the dispatched is made ready and the next

day morning 6.00am the truck leaves reaching the store in an hourstime. The pre-retailing team displays the stock and by 11am when thestore opens their work has to be complete.

Stock keeping units :

Stock keeping units are determined on the basis of moving averages.The system generates averages of the required quantities for the lasttwo weeks. As the process is concurrent to the market conditions theygo up with the demand and fall with the slump. The minimum units arefixed which are based on the past lows and highs.

How does the organization handle product discrepancies?

Saturdays and sundays account for 40% of the weeks business hencemost fluctuations are expected on these two days. Inventory is stockedup on friday based on the weekly forecast. But demand is never really


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unpredictable at shoppers stop. Product discrepancies takes place veryrarely.

VI. Sales forecasting :

Sales forecasting is done for each brand then built up to thecategory then the division then store and then the entireorganization. For example the mens division head decides howmuch business arrow can do this year and thus similarly for its otherbrand similarly the other division heads build up the figures for eachbrand and then each division arriving at a common figure at the top.After further deliberation and discussion with the ceo and divisionhead the company finalises its sales forecast.

Sales forecast for the spring summer season (1st april to 30th

september) is done on 1st october, six months in advance. This salesif broken down division wise and further brand wise.

For example:Shoppers stop has targeted a business of 1crore with arrow for itsandheri branch for the year 2003-04.For its spring summer business it targets a sale of 50,00,000

Season 50lakhs

Monthly - 8.33 lakhs Weekly 2.08 lakhs

They keep a cover of 7 weeks hence need a stock of 14.56lakhs.

On an average a arrow shirts costs rs.1000/- and a arrow trousercosts rs.1200/-. And the ratio of shirts to trousers is 70:30That means it needs to stock shirts worth 1.46lakhs and trousersworth 0.62lakhs of trousers for a week. This is equivalent to 146shirts and 52 trousers. Shirts are in the ratio of 1:2:3:1 for sizes38:40:42:44.

At the store arrow shirts are kept at their average required units,that is 2 of size 38, 3 of 40, 4 of 42 and 2 of 44, and trousers too intheir respective ratio. As soon as one shirt of arrow of size 38 issold, the system alerts the dc to send one shirt of size 38 of arrowfor the specific style and option. Thus the stocks are automaticallyreplenished.


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The dc also follows the same system. The dc stocks with a cover of7 weeks so as soon as its stocks are at its minimum levels it sends ada to the manufacturer to dispatch the order already kept ready forthem. Shoppers stop give a 10 days delivery time to themanufacturer. If the good dont reach in 10 days the order is

cancelled. Thus they are very stern on the execution of theirpolicies.

VII. Payment models :

Payment systems:shoppers stop uses 3 models for payments.

1. Outright model:In this model the company picks up the total merchandise on thepayment of cash or on credit terms depending on the terms decided in

the contract. They buy on outright 100% payment depending on thenormal credit terms of 10 to 15 days. The main advantage in thismodel is they can avail discounts but if the stocks are unsold theyincur losses as the last stage is that they have to be sent to charity!

2. Consignment model :in this case the company pays only for the number of products they

sell & the unsold are given back to the vendor. Pay only for sale. Theyhave this model with arrow shirts, wherein they put arrow shirts ondisplay but pay only for the ones that are sold and the rest arereturned. The benefit here is, no inventory cost and no risks, but the

margins are very low in this model.

3. Concession model :in this case space is given to another co. For opening a store within s.s

something like shop in shop. Eg: nali saree. The advantages are fixedrentals and commission but it suffers from low margins.

VIII. Systems :

o Secondary (update records) erp jd edwards

o

Merchandise management system and front endo Warehouse management system

o B2b website - s.s has around 400 vendors supplying

around 450 brands. Most of the vendors are connected tos.s b2b site. Each vendor can check the stocks andmovement of his merchandise. They can track whichproduct is selling best in which city and which one is not.


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The vendor need not call ss for information when all thathe wants is available by click of a mouse

Realizing the role of it way back in 1991, shoppers' stop was amongthe first few retailers to use scanners and barcodes and completelycomputerized its operations. Today it is one of the few stores in india

to have retail erp in place which has now been integrated with oraclefinancials and the arthur planning system, the best retail planningsystem in the world. With the help of the erp, they are able to replicatestores, open new stores faster and get information about merchandiseand customers online, which reduces the turnaround time in takingquick decision. Shoppers' stop has also set up a wan system to link allunits and distribution centers and facilitating seamless operationsacross all the outlets.

Supply chain management :

Realizing the importance of distribution and logistics in ensuring theavailability of merchandise on the shop floor, shoppers stop hasstreamlined its supply chain. The company has developed processmanuals for each part of the logistics chain. These modules includevendor management, purchase order management, stock receivingsystems, purchase verification and inventory build up, generation andfixing of price and store tags, despatch of stocks to the retail floor andforwarding of bills for payment. The company now has an off locationwarehouse and has also streamlined the layout of its distributioncentre. Shoppers stop has also tied up with sembcorp logistics (p) ltd.

As its logistics partner.

IX. Transportation :o Manufacture to dc manufacturer handles

o Dc to store dc handles

o Dc to vendor (reverse logistics) afl

o Dc to dc afl

o Internal transfers between stores - afl

o Modes of transportation - tempos

Reverse logistics :Reverse logistics comes in to action for 3 reason return due to

Manufacturing defects

Laying defects

Consignment stocks : stocks purchased on consignement basis need to be sent back if

they are unsold

Line defect :


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here the no. Of complaints are more & the problem is also sameacross all the sections so the product line itself is withdrawn fromthe stores across the country. For eg. There is a constantcomplaint for arrows blue checks shirt. The entire stock for bluechecks in all the sizes is removed from the store and sent back to

the manufacturer.

Process for reverse logistics :1. Physical transfer of goods from stores to dcs2. Dc makes rtv(return to vendor)3. System debits the vendor

X. Future plans :Shoppers' stop aims to position itself as a global retailer. The companyintends to bring the world's best retail technology, retail practices andsales to india. Their goal is to increase sales and cross the rs 800 cr.Mark by the year 2005-06. To achieve the set target, they plan toexpand their family by opening 4 new stores every year. The latestaddition to their family is the calcutta store.

Internalize in-bound logistics :To exercise more control and efficient planning. Today themanufacturer takes 1% as cost for transport which may or may not be

the actually cost. Shoppers stop ran a pilot and concluded that thereare definite cost advantages and the cost can be lowered to as low as .80% if done internally.

It system for reading manufacturers tags : shoppers stop has tore-tag all the merchandise because their systems cannot acceptmanufacturers codes. This involves re-packing expenses, expenses fortags and plastic holders, labor cost, etc. All these cost could becompletely done away with if the system could understand themanufacturers codes. Ss is in the process of buying a system whichreads these codes.

The reasons for sales and markdowns :Sale is the best method to increase sales volume or to get rid of theexcess stock piled up. But the reasons for shoppers stops sale aredifferent.


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Wrong predictions of fashion :Fashion is highly unpredictable! Knowing what a sec a customer of 25years of age would want to buy six months from now is rather adifficult task. And this task lies in the hands of the buyer and themerchandiser at shoppers stop. They are together responsible for the

bad performance of a certain style or option. Sales at shoppers areusually to get rid of this failed merchandise or out of fashion styles.

High sale forecasting :Sales forecast is rather aggressive than conservative. Sales forecastare purposely kept higher than achievable to push sales and keep thepressure on the employees. Thus it is not realistic and the deviation isexpected. Shoppers stop needs to have a more realistic sales forecastand it their aggressive selling strategy should not be only based onstocking up the stores but by concurrent promotions and programs tomake customer buy more and have a higher rate of conversion.

Akbarallys Profile

One of India's oldest retailers more than 100 years old company. Akbarallys has been apart of the retail landscape for a long time, with the Khorakiwala family at the helm. Themanagement style has been conservative all along and the core principle on which itreaches out to its customers is trust. The format so far: a department store that hasevolved as a family store over decades, with only three stores in Mumbai spread across

35,000 sq. ft. with each store on an average attracting 2,500 customers a day.

Number of stores: 3

No. of departments : 13

SKUs: Around 12000 in each of the stores.

No. of employees: 150

Average footfalls:

o 400-600(weekdays)

o 1000-2000(weekends)

Akbarallys operational structure


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They have a corporate office, which takes care of purchase, finance and human resources.For day-to-day management, they have store managers. They also have between 10,000and 12,000 stock-keeping units in each of our stores.

Hierarchy in the logistics department

CEO (Mr.Khorakhiwala)

Purchase Manager

Merchandise Manager

Store Manager

Department Manager

Akbarallys positioningPositioning is the key to communication. Akbarallys is a family store, where they cansatisfy the needs of the entire family. They have everything, from apparels and gifts tocosmetics, appliances, electronics, homeware, kitchenware, etc.

Akbarallys customer profile

Their departmental stores cater to the upwardly mobile socio-economic class (A1/A2/B1)of society.

I. Buying Channel

Manufacturer/Distributor

Godown (Chembur)Godown

(Fort)

Akbarallys (Chembur)Akbarallys

(Fort)

Godown(Crawford arket)

Akbarallys(Crawford Market)


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IV. WarehousingAkbarallys follows a decentralized warehousing strategy. Each store has its in-storewarehouse and they do not follow the hub system of warehousing.

Benefits of in-store warehouse Easy access

No internal transportation cost between warehouse and store

Low levels of stock at the display counter, providing more area for differentmerchandise

Disadvantages High warehousing costs

Weak logistics systems

High cost of internal transfers incase of discrepancies

V. Inventory Management

The Economic Order Quantity is normally based on the past trends andexperience.

When to replenish is decided by the Department head in the store.

This decision about when and how much to replenish taken by the departmenthead after consultation with the individual counter sales persons who afterworking at the same counter for some period become aware of the usual

momentum of a particular merchandise. For e.g. if it is observed that 6 units of betel fixed line phone brand sell in a month

the stock levels for betel fixed line phones are maintained at 6 units andaccordingly the replenishment is done.

In peak seasons like festival time, the stock replenishment is higher as comparedto other times. That is also decided on the basis of past trends of festival seasons.

Replenishment Process


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VI. Payment Models

Outright Model :In this model the company picks up the merchandise on cash payment basis. Thecredit period given by the manufacturers and distributors varies from product toproduct. Akbarallys enjoys as high as 60day credit also. But the normal terms are30 days or 60 days, depending upon the merchandise and the relations with thedistributor. The main advantage in this model is they can avail low prices anddiscounts but if the stocks are unsold they incurr losses as the last stage is thatthey have to be sent to charity.

VII. SystemsSystems at Akbarallys are primary level record keeping systems. Records of eachtransaction are maintained and inventory check is done when the management asks for it.Systems are not use efficiently to know the sales trends and the bottlenecks. Hence wecan say that IT is not used very efficiently in the procurement process.

VIII. Transportation

Manufacturer/distributor to the Akbarallys Warehouse Manufacturer/distributors responsibility

Warehouse to Store In store warehouse so no transportation costs Inter Store Transfers Courier

Communication between suppliers and the stores :The communication is through:

Phone

Fax

Counter Staff reports requirement

Store Manager prepares a memo

Purchase Manager checks

PM places order with the Manufacturer or Distributor

Distributor sends merchandise to the store


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Email

IX. Future Plans

By 2004 they will be opening another 20 mini supermarkets and three additional

departmental stores.

At the store level, Akbarallys is becoming more fashion oriented to attune itself to thechanging customer profile and to attract the younger generation which has a relativelyhigher propensity to spend. Thus, cosmetics and health-related products are being givenmore importance. The format itself is being revamped, as Akbarallys perceived the needto give people more reason to step into its stores. If Pyramid decided that it wanted tohave a supermarket in its store to offer convenience to customers, then Akbarallys, too,has done that. In fact, it has gone one step ahead and added a medicine corner, too, at theflagship store at Fort. Ironically enough, Akbarallys, years ago, had both these formatsin its store but decided to discontinue them in 1992, because they were not considered

appropriate in the mix.

Left to itself, probably Akbarallys would prefer to remain the same. The company hasbeen facing the issue of expansion and the reason why it has not expanded beyond thethree stores it has till now is the cost, when doing it alone. Going with someone else hasbeen an option and it has been getting offers, especially from outside parties to set up astore in partnership. It has been cautious on this front as it is quite wary about somethinggoing wrong and affecting its trusted image. But a changing market means thatAkbarallys has to remodel its strategy so that in the next five years, it can hold its own inwhat is certain to be a vastly different retail landscape.

Problem Identification

No bulk buying benefits

Akbarallys buying from distributors:

Loss of sale due to stock out

Pilferage in the warehouse due to bad handling, shoplifting

All of Akbarallys warehouses are at Prime Location, thus blocking premium areaand lowering per.sq.feet sales. The area allocated for warehouse can be madeavailable for merchandise display. Thus increasing the skus and options for

customer, leading to more foot falls.

The warehouses being at the prime location demand high rentals and capitalinvestments.

Akbarallys has 2 warehouses in a area of 10 kms.


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Once the merchandise reaches the in-store warehouse, the merchandise is labeledand stocked. There are people appointed for labeling and there is a cost attachedto this re-labeling.

Suggestions Buying Channel : An improvement in the buying channel is the need of

the hour. Akbarallys needs to have better systems to forecast its sales and thusavail bulk buying. They need to buy directly from the manufacturer to avail betterprices and no channel costs.

Centralized Warehousing : in the form of hub system would lower realestate cost and instill better efficiency. The combined stock levels maintained willbe lower to what is being stored in each store currently. Low stock levels mean

low inventory cost and low pilferage thus making warehousing more efficient. Ifthe organization plans to grow, they can outsource the warehouse operations onceits operations are stable.

Outsource Logistics : Akbarallys can outsource the logistics between thewarehouse and the store to ensure higher logistics efficiency level. At any pointdeviating from its core business of retailing would lead to opportunity loss.Outsourcing also instills a commanding position thus making sure that there is99% efficiency level. Damages in transit and carrying cost would now become thelogistics partners look out.

Buying from Manufacturer :as explained earlier, Akbarallys needs

to buy from the manufacturers rather than the distributor to avail better pricingand bulk buying benefits. Akarallys can also ask its manufacturers to do thelabeling thus saving the time and cost of labeling each and every sku.

Inventory Management system :

Better inventory management systems are the need of the hour. Simple need basedbuying and first level record keeping systems are not growth oriented. Akbarallys

Manufacturer

CentralWarehouse

Chembur Fort VT


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needs to develop a second level system which helps them in better inventorymanagement. One of the major benefits will be tracking merchandise and knowingwhats selling and what not. The other being prompt re-order level, thus avoidingstock outs and loss of sale.

ShoppersStop basically follows 2 marketing strategies:

1. Guerrilla marketing

2. Interactive marketing

1. Guerrilla marketing is an unconventional system of promotions that relies on time,energy and imagination rather than a big marketing budget. Typically, guerrilla marketingtactics are unexpected and unconventional; consumers are targeted in unexpected places,which can make the idea that's being marketed memorable, generate buzz, and even spreadvirally. Guerilla Marketing involves unusual approaches such as intercept encounters inpublic places, street giveaways of products, pr stunts, any unconventional marketing intended

to get maximum results from minimal resources. More innovative approaches to Guerillamarketing now utilize cutting edge mobile digital technologies to really engage the consumerand create a memorable brand experience.

Principles of guerrilla marketingGuerrilla Marketing is specifically geared for the small business and entrepreneur.

It should be based on human psychology instead of experience, judgment, and guesswork.

Instead of money, the primary investments of marketing should be time, energy, andimagination.

The primary statistic to measure your business is the amount of profits, not sales.

The marketer should also concentrate on how many new relationships are made each month.

Create a standard of excellence with an acute focus instead of trying to diversify by offeringtoo many diverse products and services.

Instead of concentrating on getting new customers, aim for more referrals, more transactionswith existing customers, and larger transactions.

Forget about the competition and concentrate more on cooperating with other businesses.

Guerrilla Marketers should always use a combination of marketing methods for a campaign.

Use current technology as a tool to empower your business.

2. Interactive marketing is a strategies adopted by then retailers where they allow customersto customize the product as per their preference. This strategy is mainly followed by service

industries like hotels but Shoppers Stop is able to carve out this facility in a retail store.

The concept that has already made a debut at Shoppers Stop outlets in Mumbai, allowscustomers who are referred to as guests to go through various stages of activity increating their own teddy bear (or other stuffed toy), including choosing a stuffed animal,stuffing it, giving it a heart, stitching, fluffing, naming and dressing it. And though thetoys are priced at a premium level ranging between Rs 595 and Rs 1,295 for a stuffedanimal and add-ons such as sound chips, clothes and accessories coming at extra cost


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the interactive shopping experience also adds on an element of entertainment for youngcustomers and can turn into a family affair as well.

RECOMMENDATIONS & SUGGESTIONS

The footwear collection for the both men and women could be enhanced by bringingin more variety like sports, formal as well as causal wear. There is very little choice inthis case at present.

Interaction with customer could be increased by having various activities in the storefrequently and making customer part of these. First citizen could be invited so thattheir relationship with the store is strengthened and thus they could be retained andrepeat purchase could be induced.

Shoppers Stop has been first mover in this category in many services offered. Someinnovative ideas, which are not similar to what is already being done by competitors,

could be introduced to attract more customers and retain existing customers.

Shoppers Stop can be spending a little more on promotion. At present, there isvirtually no advertisement of the store continuously. It can go for ads in magazinesand also hoarding around the city, just to serve as a reminder to customers.Pantaloons and Big Bazaar do more sale promotion activity to create a familiarposition in young generation customers mind.

Cleanliness of rest area should be taken care of as frequently as required. Even thesehave an influence on the customer.

Items like fashion accessories, magazines could be kept near billing counters. Theseare items of impulse purchase and hence should be kept at these places.

Given below are some of the Recommendations/Suggestions to improve or modifyservice Standards and increase customer delight

The footwear collection for the both men and women could be enhanced by bringingin more variety like sports, formal as well as causal wear. There is very little choice inthis case at present.

Interaction with customer could be increased by having various activities in the storefrequently and making customer part of these. First citizen could be invited so thattheir relationship with the store is strengthened and thus they could be retained andrepeat purchase could be induced.

Shoppers Stop has been first mover in this category in many services offered. Someinnovative ideas, which are not similar to what is already being done by competitors,could be introduced to attract more customers and retain existing customers.

Shoppers Stop can be spending a little more on promotion. At present, there isvirtually no advertisement of the store continuously. It can go for ads in magazinesand also hoarding around the city, just to serve as a reminder to customers.


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Pantaloons and Big Bazaar do more sale promotion activity to create a familiarposition in young generation customers mind.

Cleanliness of rest area should be taken care of as frequently as required. Even thesehave an influence on the customer.

Items like fashion accessories, magazines could be kept near billing counters. Theseare items of impulse purchase and hence should be kept at these places.

Reference

Mr Nitin Kumar

[email protected]

9958546529

Books

Research methodologies-Naresh Malhotra

Consumer behaviour-Leon Schiffman, Lesile Lazar Kaunk

Retail management-Chetan Bajaj

Business research method-TATA McGraw Hill

Web-sites:

www.retailbiz.com

www.marketingnpv.com

www.eu.levi.com

www.shoppers stop.com
mailto:[email protected]:[email protected]

Date post:	30-May-2018
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