RETAILING MANAGEMENT PROJECT ON SHOPPERS STOP

SUBMITTED BY: PRIYANKA YADAV GROUP B JIMS,KALKAJI

COMPANYS PROFILE
Setting up shop in 1991 with its flagship store in Andheri, Mumbai, and Shoppers Stop is a member of the K. Raheja Corp. of Companies. Shoppers' Stop is the first retail venture by the K. Raheja Corp. Promoted by Mr. Chandru L. Raheja, Mr. Ravi C. Raheja and Mr. Neel C. Raheja, the K. Raheja Corp. have been leaders in the construction business for over 48 years. With its wide range of merchandise, exclusive shop-in-shop counters of international brands and world class customer service, Shoppers' Stop brought international standards of shopping to the Indian consumer providing them with a complete shopping experience.

Customer Profile Shoppers' Stop's core customers represent a strong SEC A and B+ skew. They fall between the age group of 16 to 40, the majority of them being families and young couples with a monthly household income above Rs. 10,000.

Shoppers Stop Motto: "We are responsible for the goods we sell".

Shoppers Stop's sister stores are :

Crossword Bookstores
Crossword Bookstores is the largest chain of bookstores in India with 52 branches. Shoppers Stop acquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as a lifestyle bookstore with their spacious, well laid out stores which encourages customers ease in browsing through the merchandise of books, music, stationary and toys.

HomeStop
HomeStop is premium home furnishings home concept store, which offers products in home decor, furniture and accessories, bath accessories, bedroom furnishings, mattresses, draperies, carpets, modular kitchens and health equipment.

[Brio
Brio has 20 outlets in select cities. Caf Coffee Day (CCD), the retail division of Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run its BRIO outlets.

Desi Cafe
Desi Caf and their operations have been taken over by Caf Coffee Day (CCD), the retail division of Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run its Desi Caf outlets.

HyperCity
HyperCity provides customers a wide variety of range of products for shopping in a large and modern retail environment. It offers a contemporary range of products, sourced from both local and international markets. The product range covers: Foods and Grocery, Homeware, Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Fashion.

M.A.C.
M.A.C. and Shoppers Stop Ltd. entered into a non exclusive retail agreement with cosmetics major Estee Lauder to open up M.A.C. Cosmetics stores in India. M.A.C. Makeup-Art Cosmetics - the professional brand of choice, is the first brand under the Estee lauder Group of Companies portfolio to enter the Indian retail market. Currently there are 9 M.A.C. stores operating

Arcelia
Arcelia is a new retail concept aiming at the growing accessories and cosmetics segment, with a strong emphasis on experience and indulgence and primarily caters to discerning women shoppers. It retails cosmetics, fragrances, fine jewelry, footwear, handbags.

MotherCare
MotherCare and Shoppers Stop come together to introduce products for infant and toddler care which stocks a variety of products for mother and babies, toddlers and

children till eight years of age with the focus being on style, function and safety.The UKbased maternity and kidswear brand has nine standalone and 13 shop-in-shop formats.

Nuance Group
Nuance Group with Shoppers Stop makes an entry into airport retailing. The alliance is marked with a joint venture with The Nuance Group AG of Switzerland, the worlds leading airport retailer. Shopper's Stop Ltd. is handling the retail operations at the duty free zones in international terminals. The joint venture company, called Nuance Group (India) Private Limited. is operating outlets at the International airports at Bengaluru and Hyderabad.

HyperCity-Argos
HyperCity-Argos and Shoppers Stop, the two retail ventures of K Raheja group had signed a memorandum of understanding with UKs leading retail chain Home Retail group to develop the Argos (retailer) retail format stores in India.Two years later, Shoppers Stop Ltd has informed Bombay Stock Exchange shall wind down and discontinue its catalogue retail operations under the Hypercity-Argos brand.

Timezone
Shoppers Stop forayed into the Entertainment sector by acquiring 45% stake in Timezone Entertainment Private Limited which is in the business of setting up and operating Family Entertainment Centres (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi Mumbai and Mumbai.

HIERARCHY IN THE LOGISTICS DEPARTMENT

Director Buying and Merchandising

Supply chain management head

Manager logistics and distribution

Distribution Coordinator (link between SS and DCs)

Four Distribution Centres

SWOT ANALYSIS of SHOPPERS STOP

STRENGTH Loyal Customer Base of 782000 First Citizen members Efficient logistics Strong and Well Established Management Team Systems and Processes Suppliers

WEAKNESS Employee Retention Inadequate Promotional Strategies Follows Low Risk Strategy Less control over inbound logistics

OPPORTUNITY Geographical Reach Preferred Partner for Foreign Players Hyper city An entry into Value Retail Ready to sell garments

THREAT Threat of New Entrants Competitive Rivalry in the Industry Economic Slowdown Rapidly changing systems

BUYING CHANNEL
Manufacturer

Mumbai DC

Delhi DC

Bangalore DC

Calcutta DC

6 stores

3 stores

3 stores

1 store

Shoppers stop has 4 regional distribution centres. Previously each store had its warehouse(DC) but that turned out to be a wrong strategy as the flexibility was being affected and costs were building up. There was also a lot of inventory pile up in each of these stores and hence added to cost in inventory and transportation from one store to another to transfer excess inventory.

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 Better Cost Controls Better Bargaining Power Better inventory management 100% inventory control 100% tracking of inventory (whats selling whats not?)

Range of the Merchandise

The stores offer a complete range of apparel and lifestyle accessories for the entire family. From apparel brands like Provogue, Colour Plus, Arrow, Levi's, Scullers, Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci etc., Shoppers' Stop caters to every lifestyle need. Shoppers' Stop has also introduced its own line of clothing in the classic, value classic and value fashion segments. These are LIFE, STOP, KARROT and KASHISH that are available across different categories. The merchandise at Shoppers' Stop is sold at a quality and price assurance backed by its guarantee stamp on every bill. Shoppers Stop has 4 division the Mens apparels, ladies apparels, kids wear and the Non-apparels. 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 combined footfall of over 20,000 customers each day.

(A) MERCHANDISE

Is there any difference between the merchandise sold at Shoppersstop.com and Shoppers Stop physical stores? a) Shopperstop.com offers the same quality of merchandise as sold in Shoppers Stop stores, and the prices are also typically the same. However, we are currently not offering the complete range of products available in our store, on our website, though we are continually expanding the range. Most of the categories available in the stores, with few exceptions like suits & jackets, are available online as well. What type of products do you sell on-line? a) We sell apparel, accessories (for Men, Women and Kids), fragrance & beauty, home, travel and gifting related products

Can you arrange for the delivery of a product which is available in our physical store but not available online? a) We can only deliver products which are featured on the website and available in stock How do I understand which size will fit me? Do you have size charts? a) All branded products usually have standard sizes, and we provide size information for many brands on our website.

What are the wash care instructions for the product I have ordered? a) Wash care instructions wherever applicable can be found on the product details page. This is the page from where you added the product to the shopping bag. Alternately, most garments come with wash care labels. I searched, but I cant find the item which I saw in one of your stores. It is possible that you may not find an item you saw in the store, since it could have gone out of stock, or it may not be a part of our online range at present.

I am looking for a particular brand how can I find it? a) You can search for the brand through the search box provided on every page. Alternatively, if you want to shop for a particular brand in a category, you can click on the brands listed on the left side of the page under the heading Shop by Brand

Where can I find / search a particular product? You can directly search for the product you are looking for through the search box provided on every page. Alternatively you can navigate through our site map for categories in which you are most likely to find your desired product.

SPECIAL DEALS Mens Topwear Bottomwear Watches Sunglasses Footwear Womens Topwear Bottomwear Ethnic Fine Jewellery Fragrances & Beauty Sunglasses Watches Kids Apparel Home & Travel Home Mothercare Maternity Kidswear Accessories

GIFT IDEAS
For Him Watches Perfumes and Deos for Men Cufflinks Ties Pens Wallets Sunglasses For Her For Home Crystals Vases Aromatic Products Accessories Flower Idols, Frames & Leaf cards Clocks Gift Voucher

Fine Jewellery Artificial and Fashion Jewellery Pens Watches Handbags Perfumes and Deos for Women Sunglasses HOME AND TRAVEL Home Bed Bath Kitchen Home and Personal Appliances Home Dcor Home safety Travel Luggage Travel Bags Accessories Kids travel accessories Sports & Fitness Cricket Football Carrom Baseball Boxing Treadmills Cycles FRAGRENCES AND BEAUTY Cosmetics, Skincare and Haircare Cosmetics and Makeup Skincare Haircare Fragrances Perfumes and Deos For Women Perfumes and Deos for Men

KIDS Kid's Apparel Girls Boys Baby Apparel Socks Watches Toys Early Learning Center Action Figures Soft Toys Dolls Wheels Activity & Games Stationery Mothercare Baby Boyswear Girlswear Travel Feeding Toiletries Toys & Gifts Bath time Bedding Footwear Socks Home Safety Maternity

WOMEN Women's Apparel Salwar and Churidar Suits Kurtas Churidars,Salwar and Dupatta Sarees T-Shirts & Tops Office Wear Skirts & Dresses Jeans & Casual Bottomwear Trousers Lingerie Night wear Winterwear Maternity wear Women's Accessories Handbags Fine Jewellery Artificial and Fashion Jewellery Watches Sunglasses Pens Socks Women's Footwear Sandals and Slipons Evening Wear Shoes and Boots Featured Brands Hidesign noi Sparkles Maybelline Van Heusen AND W

MEN Men's Apparel Shirts Trousers Jeans T-shirts & Polos Kurta,Pyjamas& Stoles Men's Accessories Wallets Belts Watches Sunglasses Pens Featured Brands Mustang Jeans United Colors Of Benetton

Ties Innerwear Shorts & Cargos Winterwear

Cufflinks Socks & Handkerchiefs Men's Jewellery Men's Footwear Formal Footwear Casual Footwear

BUYING PROCESS

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 DC transports weekly requirements to the store

Payment to the manufacturer

Stocks updated instore

Pre-retailing team displays the merchandise

ILLUSTRATION
Purchase order for 5000 shirts of Arrow Purchase order is a guarantee from shoppers stop that they will buy but supplier cannot dispatch goods on PO. PO helps is reducing inventory cost as the goods are ready and stocked at the manufacturers place, so no inventory pile up at the DCs or stores. 4 purchase orders are sent by the buying and merchandising manager for 4 DCs. For eg Vendor ABC gets 4 Purchase orders from shoppers stop, for four DCs Mumbai DC 2500 shirts catering to 6 stores Banglore DC 1000 Shirts catering to 3 stores Delhi DC 1000 shirts catering to 3 stores Calcutta DC 500 shirts catering to 1 store

Delivery Authorisation for 500 Shirts Delivery Authorization is an international system followed by all major retailers. 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 a particular week shoppers stop sells 500 shirts, it will send a DA for 500 shirts. Thus with delivery authorization system Shoppers Stop can place order according to the demand assessment with the condition that it would pick up a fixed amt every week. Thus it doesnt have to stock goods at his place and block money in inventory. It also helps in better inventory management as it is based on weekly projections. It is an assurance for both the Shoppers Stop as well as the manufacturer.

Manufacturer dispatches the weekly requirements to the 4 DCs according to the DAs

DCs check the details (date, number) of the product and match it with the invoice. Anything not matching even if it is one piece is rejected. If accepted it causes a mis-match between the Purchase Order and Delivery Authorisation. Hence the PO has to match with the Invoice carried by the Manufacturer.

Accounts department receives confirmation in the system for the pieces physically accepted. The accounts department can make payment that very second, in which they receive confirmation. This process is so stable and fast because of being connected and fully integrated.

Once the confirmation is sent by the DC, the stocks are transported to the stores. Dispatches are always made early morning. There is a PRE-RETAILING Team that receives the stocks and their duty is to put them on display before 10.30 when the store opens, so that when the customer enters everything is on display.

Stocks are updated in the store

WAREHOUSING
o o o o o o Regional Warehouses No in-store warehouses Number of warehouses - 4 Location Metros (Mumbai, Delhi, Banglore, Calcutta) Floor Area 20,000 to 22,000 sq.ft 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 22000 sq.ft.. The DC is divided in to zones and1000 based on the brands or vendors. When a delivery comes in the person in-charge feeds in the details like merchandise type, brand name, size, color, batch number, date, etc. the system give him a ticket describing where the merchandise has to be kept. It gives a detailed description of the pile and rack number. Thus, even if the person is unacquainted with the slots 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 company who acts as a internal supplier for SS. The delivery transportation from the DC to the stores is the DCs task. Advantages of having outsourced the activities 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

INVENTORY MANAGEMENT
SS has a system of checking stocks on a continuous basis. There are 90 departments at SS each day one department is frozen after closing hours and the staff is made to scan the tags and feed in the stock levels in the system. The staff is completely unaware of the stock levels according to the system. The system then compares the actual to the customary and gives a variance reports. Thus there is stock matching done everyday and the entire store completes a cycle in 3 months. That means SS conducts 4 cycles of stock taking each year. This has helped them get the pilferage to its minimum. As each day is accounted 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 the national level. Thus, each day the information on stocks available for that day and at which store is made accessible to each and every store. Every day Auto Replenishment: Shoppers Stop has determined its minimum stock keeping units and as soon as the stocks in the store touch that level, the DC is triggered to send the replenishment. Thus the system automatically checks for stock out and replenishes it. The lead time for replenishment is 1 day. Every night data is collated and a store-wise list of merchandise is generated. During the day the dispatched is made ready and the next day morning 6.00am the truck leaves reaching the store in an hours time. The Pre-retailing team displays the stock and by 11am when the store 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 last two weeks. As the process is concurrent to the market conditions they go up with the demand and fall with the slump. The minimum units are fixed 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 hence most fluctuations are expected on these two days. Inventory is stocked up on Friday based on the weekly forecast. But demand is never really unpredictable at shoppers stop. product discrepancies takes place very rarely.

SALES FORECASTING
Sales forecasting is done for each brand then built up to the category then the division then store and then the entire organization. For example the mens division head decides how much business Arrow can do this year and thus similarly for its other brand similarly the other division heads build up the figures for each brand and then each division arriving at a common figure at the top. After further deliberation and discussion with the CEO and Division head 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 sales if broken down division wise and further brand wise. For Example: Shoppers Stop has targeted a business of 1crore with Arrow for its Andheri 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 trouser costs Rs.1200/-. And the ratio of shirts to trousers is 70:30 That means it needs to stock shirts worth 1.46lakhs and trousers worth 0.62lakhs of trousers for a week. This is equivalent to 146 shirts and 52 trousers. Shirts are in the ratio of 1:2:3:1 for sizes 38:40:42:44. 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 in their respective ratio. As soon as one shirt of arrow of size 38 is sold, the system alerts the DC to send one shirt of size 38 of arrow for the specific style and option. Thus the stocks are automatically replenished. The DC also follows the same system. The DC stocks with a cover of 7 weeks so as soon as its stocks are at its minimum levels it sends a DA to the manufacturer to dispatch the order already kept ready for them. Shoppers stop give a 10 days delivery time to the manufacturer. If the good dont reach in 10 days the order is cancelled. Thus they are very stern on the execution of their policies.

(B) SALES

(a) No of sales person 10 sales persons on each floor Each section is adequately staffed. (b)Dress of the sales persons They are formally dressed in Black shirt and trousers along with their Name Badge. (c) Approach of salesperson Once we enter the store we were greeted. Products are well displayed so they give time to cutomers to evaluate and then approach . (d) Product knowledge of the sales person They have adequate knowledge about the products being displayed. They even provide information about availability of a particular product if that product is not available into their store. They suggested us about various patterns and colors available.

(e) Fitting rooms : Are at the corner of the store They are Properly furnished. They are properly supervised by the staff. Proper care of material tried is checked and supervised.

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 the payment of cash or on credit terms depending on the terms decided in the contract. They buy on outright 100% payment depending on the normal credit terms of 10 to 15 days. The main advantage in this model is they can avail discounts but if the stocks are unsold they incur 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. They have this model with Arrow Shirts, wherein they put arrow shirts on display but pay only for the ones that are sold and the rest are returned. 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: Dior Perfumes . The advantages are Fixed rentals and commission but it suffers from low margins.

SYSTEMS
Secondary (Update Records) ERP JD Edwards Merchandise Management system and front end Warehouse Management system B2B website - S.S has around 400 vendors supplying around 450 brands. Most of the vendors are connected to S.S B2B site. Each vendor can check the stocks and movement of his merchandise. They can track which product is selling best in which city and which one is not. The vendor need not call SS for information when all that he wants is available by click of a mouse Realizing the role of IT way back in 1991, Shoppers' Stop was among the first few retailers to use scanners and barcodes and completely computerized its operations. Today it is one of the few stores in India to have retail ERP in place which has now been integrated with Oracle Financials and the Arthur Planning System, the best retail planning system in the world. With the help of the ERP, they are able to replicate stores, open new stores faster and get information about merchandise and customers online, which reduces the turnaround time in taking quick decision. Shoppers' Stop has also set up a WAN system to link all units and distribution centers and facilitating seamless operations across all the outlets. o o o o

Supply Chain Management

Realizing the importance of distribution and logistics in ensuring the availability of merchandise on the shop floor, Shoppers' Stop has streamlined its supply chain. The company has developed process manuals for each part of the logistics chain. These modules include vendor management, purchase order management, stock receiving systems, purchase verification and inventory build up, generation and fixing of price and store tags, despatch of stocks to the retail floor and forwarding of bills for payment. The Company now has an off location warehouse and has also streamlined the layout of its Distribution Centre. Shoppers' Stop has also tied up with Sembcorp Logistics (P) Ltd. as its logistics partner

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- Here the no. of complaints are more & the problem is also same across all the sections so the product line itself is withdrawn from the stores across the country. For eg. There is a constant complaint for arrows blue checks shirt. The entire stock for blue checks 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 DCs 2. DC makes RTV(return to vendor) 3. System Debits the vendor

FUTURE PLANS
Shoppers' Stop aims to position itself as a global retailer. The company intends to bring the world's best retail technology, retail practices and sales 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 to expand their family by opening 4 new stores every year. The latest addition to their family is the Calcutta store. Internalize in-bound logistics to exercise more control and efficient planning. Today the manufacturer takes 1% as cost for transport which may or may not be the actually cost. Shoppers Stop ran a pilot and concluded that there are 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 to re-tag all the merchandise because their systems cannot accept manufacturers codes. This involves re-packing expenses, expenses for tags and plastic holders, labor cost, etc. All these cost could be completely done away with if the system could understand the manufacturers codes. SS is in the process of buying a system which reads these codes.

The Reasons for Sales and Markdowns

Sale is the best method to increase sales volume or to get rid of the excess stock piled up. But the reasons for Shoppers stops sale are different. Wrong predictions of fashion: Fashion is highly unpredictable! Knowing what a SEC A customer of 25 years of age would want to buy six months from now is rather a difficult task. And this task lies in the hands of the Buyer and the Merchandiser at Shoppers Stop. They are together responsible for the bad performance of a certain style or option. Sales at Shoppers are usually to get rid of this failed merchandise or out of fashion styles. High sale forecasting: Sales forecast is rather aggressive than conservative. Sales forecast are purposely kept higher than achievable to push sales and keep the pressure on the employees. Thus it is not realistic and the deviation is expected. Shoppers stop needs to have a more realistic sales forecast and it their aggressive selling strategy should not be only based on stocking up the stores but by concurrent promotions and programs to make customer buy more and have a higher rate of conversion.

SUGGESTIONS
They should introduce more schemes, discounts, sales to increase the sales. They should introduce Low rate Brands which will attract the middle class customers also or brands for masses. The stores becomes a bit messy because of a large footfall & small size of stores so they should have larger outlets Shoppers stops competitors used aggressive medium of advertisement like television commercial ads, thus to gain a competitive advantage over the competitors Shoppers Stop should also use such medium of marketing.