What is Retailing?What is Retailing? All the activities involved in selling goods

or services directly to final consumers for their personal, non business use.

Retailers - businesses whose sales come primarily from retailing.

Retailers can be classified as:Store retailers Non store retailers

What is Organized Retail ?What is Organized Retail ?Any retail outlet chain (and not a one shop outlet) which is professionally managed, (even if it is family run) has accounting transparency (with proper usage of MIS and accounting standards) and organized supply chain management with centralized quality control and sourcing can be termed as an organized retailer in India.

(Dept. of Company Affairs)

Classification By Product LineClassification By Product Line

Specialty StoresSpecialty Stores

Department StoresDepartment Stores

SupermarketsSupermarkets

Discount storesDiscount stores

Narrow Product Line, Deep Assortment e.g. Food world, Music world, Health and Glow

Narrow Product Line, Deep Assortment e.g. Food world, Music world, Health and Glow

Large retail space, Wide Variety of Product Lines e.g. West side, shoppers stop, lifestyle, pantaloons,

Spencer's

Large retail space, Wide Variety of Product Lines e.g. West side, shoppers stop, lifestyle, pantaloons,

Spencer's

Self service, Wide Variety of Food, Laundry, & Household Products e.g. food world, Trinetra, Ponnu, Modern, Nilgiris

Self service, Wide Variety of Food, Laundry, & Household Products e.g. food world, Trinetra, Ponnu, Modern, Nilgiris

Less than retail price, profits through volumes e.g. Subhiksha, Margin free, Supply co., Pantaloons, Big bazaar, Gaint

hyper market

Less than retail price, profits through volumes e.g. Subhiksha, Margin free, Supply co., Pantaloons, Big bazaar, Gaint

hyper market

HypermarketsHypermarketsHuge Superstores, wide variety of product range e.g. Giant Hyper market, Number one shoppers city, Sahara mall etc.

Huge Superstores, wide variety of product range e.g. Giant Hyper market, Number one shoppers city, Sahara mall etc.

Store Type Length and Breadth of Product Assortment

PRIVATE BRANDS/MERCHANDISE BRANDS Introduction :- Private brands also known as store

brands, own brands and merchandise brands. Private brands are products developed by

a retailer and available for sale only from that retailer.

Private brands products that carry the name of the seller, not the manufacturer

These are available in a wide range of industries from food to cosmetics to web hosting.

They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.

Some of the retail players having private brands in India are as follows:

Shoppers' Stop Westside Big bazaar Globus Spencer's Daily Reliance fresh Sahara – Sahara mall Music World

Types of Private Label

Generics Copy cats Value Innovators Premium Store Brands

GENERICS private brands Generic – very low promotional , very low

margin. Same or better quality at better price ,

average 20-40% less than national brands. Eg.- Big bazar

“LOOKS” = “LUX”

(6) = (10)

Both Lux & Looks are kept in same shelf for sale.

COPY CATS private brands In this category only the brand name will be

copied (which almost sounds like original). The copycats are mostly manufactured

within the company by the retailer him self.

VALUE INNOVATORS

A little bit of innovation happens & brand provide something more than national brand at affordable price.

Eg - Croma offers its own AC & TV under brand name CROMA.

PREMIUM STORE BRAND Premium store Private Labels are more

expensive than national brand & will have superior quality, good features & design.

Eg.- In Globus F21 is very superior quality wise & offers better features & design especially for women segment.

In west side 80% of the merchandise are own brand & they are far superior in quality as compared to national brand.

Private brands in India: Private brands in India in a growing

stage. It will be difficult to get the details of sales in India because of the highly unorganized structure of Indian retailing.

Private labels become national lifestyle brand

Eg- globus , west side Biggest threat to national brands

A recent survey conducted by Ipsos MORI for the Private Label Manufacturers Association found that 41% of shoppers now identify themselves as "frequent" buyers of store brands or private labels. Almost seven out of ten of those surveyed agreed that the private-label products they buy are as good as, if not better than, their national brand counterparts.

Private labels started as cheap, inferior products and more recently became copycats. Today, best-practice retailers are using "premium store brands" to help position the retailer as a "brand." The emergence of the new premium private labels is the hottest trend in retailing.

Costing of National Brand Vs Private Label

Advantages More margin for retailers

Eg.- Shoppers stop have only five private brands and it accounts to 20% of their annual turnover.

Private labels can offer huge discounts which the national brands cannot offer.

Eg.-Big Bazzar offers noodles, pasta, soups under their label “TASTY TREAT”. They introduced cornflakes for Rs 99 with free bowl worth Rs 60.

o Rise of customized products.

Eg- Spencers daily’s private label “EKTAA” has food items based on cultural and geographical considerations.

Some time private label will be priced more than national brand by offering superior quality & can even attack national brand.

Eg.- John miller is a private label by pantaloons which competes John players.

Food Bazaar's private label in snacks category is dominant with 16% share overcoming ITC’s Bingo.

Consumer report survey compared 21store brands with premium brands and ‘3 times store brands won outright and 11 times it was a tie’.

Walmart’s great value potato chips tied with Lay’s potato chips.

Private Label Pros & Cons

PROS Exclusivity & differentiation Bring customer loyalty Better margin Better control in deliveries Brand equity Freedom in pricing strategy Increase bargaining power

with both national brands and PL factories

CONS Inventory risk Higher R&D expense Higher marketing expense No markdown or return

allowance from branded suppliers

If product fails, will create negative image

Quality control, complex production & import issues

PRIVATE LABELS IN VARIOUS PRODUCT LINE

IN APPARELS Pantaloons:

Bare – Denim : Agile – Sports wear

Rig - Weekend Wear Westside:

Gia – For women

Stone river classic – Teens

Too fast for u – Young men

PRIVATE LABELS IN VARIOUS PRODUCT LINE

IN COSMETICS

Pantaloons: Star and Sitaara

IN GROCERIES True Mart – Uttam (Cereals, Masala Powder, Dry

Fruits ) Big Bazaar – Tasty Treat

FDI in Multi Brand Retail Trade

40% of products sold in Wal-Mart are store brands, or products offered by Wal-Mart and produced through contracts with manufacturers. It had 38 stores operating with 1,500 employees and sales of $44.2 million The proposed site of Walmart India is 2,24,000 Sq ftThey will be composed of Super star, discount store, neighborhood stores

CONCLUSION

Retailer private labels have come a long way. Banish the old image of cheap products. Today's sophisticated retailers are successfully experimenting with premium store brands.Rather than perceiving them as a poor cousin to manufacturer brands, many consumers can be persuaded to pay more for top quality private labels.