INTRODUCTION

A departmental store is a retail establishment which specializes in selling a wide range of

products without a single predominant merchandise line. Department stores usually sell products
including apparel, furniture, appliances, electronics, and additionally select other lines of
products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewelry, toys,
and sporting goods.

In our country, departmental stores have emerged as a major and prominently-recognized

organized retailing channel, especially for Indian and international fashion brands, targeted at the
upper middle and higher income segments. Apparel is the most important product category sold
by these retailers in India, accounting for nearly two-thirds of their sales. The major players in
this segment in India include Shoppers' Stop, Lifestyle, Pantaloons, Westside, Piramyd and
Globus.

Source: Indian Retail Report, 2007

 MAJOR PLAYERS
• EBONY

Ebony Retail Holdings Ltd., a part of the DS Group, is a Delhi-based retailer with seven stores in
seven North Indian cities spread across 1,50,000 sq.ft of total retail space. Having started off
with a store in New Delhi in 1994, Ebony has expanded its presence in the years since. The chain
also has an online B2C shopping portal (www.Ebonyclick.com) that offers customers a non-store
retail format to shop from.

In 2004 Ebony had nine operational stores in five cities, covering 167,000 sq.ft of retail space. A
few of its outlets were probably closed down and new outlets opened in two more cities since
2004. The sudden and sharp rise in competition in the Indian retail sector at present seems to
have taken this department store chain unawares. They have not expanded their retail operations
in any major way in the last couple of years. Ebony clocked a turnover of Rs.85 crore in 2004-
05. Sales realisation/sq.ft per annum stood at Rs.6,095 in 2005, an increase of eight per cent over
the previous financial year. The average transaction value in 2005 was Rs.l, 1 02, up from
Rs.l,009 in the previous fiscal.

Ebony sells menswear, womenswear, lingerie, kidswear, home fashion and accessories,
cosmetics, perfumes, books and music, personal care and cosmetics, jewellery and luggage. The
store's private label, ETC, contributed towards seven per cent of the chain's total apparel sales in
2005. In its efforts to facilitate customers, Ebony runs a customer loyalty programme, Ebony
Elite Club, which has approximately 52,000 members (up from 28,000 members in 2004-05.
It has also introduced a designerwear section, Studio Ivory, with collections for a middle-income
target segment. The department chain also runs the concept bookstore, Wordsworth, which sells
music too.

• GLOBUS

The Mumbai-based Rajan Raheja Group launched its first Globus department store in January
1998 at Indore and since then it has become a 20-outlet strong chain with a presence in 14 cities.
Apart from the Globus department stores, the chain also runs a second retail format with Globus
2, the factory outlet format. Globus' flagship store was launched in Mumbai in November 2001.
The department store chain's customer loyalty programme is called the Globus Privilege Club
card programme.

In 2004, the chain had seven outlets in five cities with a total space of 1,39,658 sq.ft by 2005
their retail presence had reached eight cities with 12 stores and a total retail space of 1,94,610
sq.ft. Today the chain runs 20 outlets in 14 cities with a total retail space of 2,90,000 sq.ft. Retail
expansion plans include having 30 outlets by 2007, 100 by 2008, and taking it to 120 by 2010
with a total retail space of 12,40,000 sq.ft.

The chain's in-store labels apparel labels, Globus and F21, contribute about 35 per cent towards
total retail sales. Frequent consumer promotions during peak sales periods like traditional festive
seasons bring in 25-30 per cent increase in average sales. From a retail turnover of Rs.82.0 1
crore in 2004-05 (and Rs.l 09 crore by 2005-06), the company targets to achieve a turnover of
Rs.180 crore in the current fiscal.
• LIFESTYLE

The Dubai-based Landmark Group'sdepartment store chain, Lifestyle, started operations in India
in 1998. It currently operates 19 Lifestyle departmental stores in nine cities with a total retail
space of 7,45,711 sq. ft. In 2004 the chain had seven stores in five cities with a space of 2,68,436
sq.ft, which grew to 10 stores in the same five cities with an increased retail space of 3,41 ,587
sq.ft. By 2010 they plan to have 41 stores in 16 cities with a combined retail space of 19,33,931
sq.ft. The average store size of a Lifestyle department store is 46,000 sq.ft, the largest of them
being the Chennai store with an area of 75,000 sq.ft. Lifestyle now plans to majorly expand into
the tier-II cities in the country.

Ginger, Baby Doll and JRS Active are the three major private labels of Lifestyle, besides
segment-specific brands like 2xtremz for women and Juniors for infants. These private labels
contribute approximately towards 10 per cent to the total revenue. Its customer loyalty
programme is called The Inner Circle, which contributes 40 per cent to total sales. Each of the
stores has a Coffee Island managed by Qwiky's.

Lifestyle International has announced investments to the tune of Rs.400 crore in the next five
years to fund its expansion in India. This includes plans to bring in its concept stores into the
country, including the Max Hypermarkets and Lifestyle Centres. The Max chain of value stores
and Home Centres have already been launched. Landmark is also working on a Lifestyle Centre
store to be opened in Bangalore late next year, which will include a Home Centre and a high
value food retail store.
Lifestyle International, with expertise in retail chains specializing in fashion and home
furnishings, has also set up a new division for the international brands business for apparel labels
such as Bossini and Kappa. The department chain's profitability grew by 70 per cent in 2005;
while realisation of sales per sq.ft stood at Rs.7,187 per annum. The total turnover of the
department store chain stood at Rs.306 crore in 2004-05 (Rs.340 crore in 2005-06), with targets
of reaching Rs.525 crore in the current fiscal and Rs.l ,500 crore by 2010.

• PANTALOONS

Back in 1987, India's first branded trouserscompany, Manzwear Pvt Ltd, was launched by Future
Group CEO, Kishore Biyani. Later the company's name was changed to Pantaloon Retail (India)
Ltd in 1999. Pantaloons, the department store venture of Pantaloon Retail, operated 21 outlets in
15 cities with a total retail space of 4,85,000 sq.ft in 2005-06, with plans to open a total of 42
outlets by 2007. From 12 outlets in nine cities with a retail space of 2,88,000 sq.ft in 2004, the
Pantaloons chain targets to launch 80 stores in 30 cities with a total retail space of20,00,000 sq.ft
by 2010.

Pantaloons has positioned itself as an affordable fashion retail outlet chain and is now beginning
to focus on the premium-end of the market. Pantaloons' loyalty club membership grew to
2,10,000 in 2005 from 1,40,000 in the previous year; loyalty club members contribute around 38
per cent to the total sales. The chain's average sales/sq.ft per annum stood at Rs.8,900 in 2005.
The chain recorded a turnover ofRs.213 crore in 200304, and targets to achieve Rs.l,500 crore by
2010.
Mumbai-based Piramal Groups' Piramyd Retail & Merchandising Pvt Ltd, currently operates
with 11 stores in eight cities with a total retail space of 6,60,000 sq.ft. In 2004 Piramyd had three
stores in three cities with 1,80,000 sq.ft of retail space; by 2010 the group plans on operating 30
stores in 14 cities with a total retail space of 18,00,000 sq.ft. The latest outlet was launched in
Jaipur covering 50,000 sq.ft of retail space. Other tier-II cities that it retails through include
Ahmedabad, Nagpur and Pune.

Piramyd offers branded merchandise in men's apparel, ladies fashion, unisex casuals, kids
apparel and toys, apparel accessories, footwear, perfumes and cosmetics. The chain operates a
loyalty programme and offers members with privileges like discount offers, home delivery, home
shopping, tickets for movie premieres, plays or music concerts, ete. As of 2004-05, sales
realisation per sq.ft stood at Rs.5,500 per annum; while sales realised during 2003-04 was Rs.80
crore, an increase of about 43 per cent over the last financial year.
 • SHOPPERS'STOP

Shopper's Stop Ltd from the K Raheja Group, opened its first Shoppers' Stop department store in
Mumbai in 1991; and over the last 16 years has established itself as the largest player in the
department store category in India. From 16 stores in nine cities with an area of7,52,848 sq.ft,
the chain today operates 26 outlets in 12 cities with a total retail space of 15,07,126 sq.ft, with
plans to have 34 stores by 2007. By 2010 Shoppers' Stop plans to have nearly 50 outlets in 20
cities across a total retail space of 36,26,899 sq.ft. Shoppers' Stop was the first retailer in the
country to have Bar-coded garments, Co-branded credit card; and Retail ERP Shoppers' Stop,
unlike Pantaloon and Westside where the chunk of sales are driven by private labels, houses a
large number of external brands.

The chain is today the largest retailer for popular brands like Levi's Strauss, Pepe, Arrow, Zodiac,
Ray-Ban, Swatch, ete. The launch of Buzz (the designer pret wear section) and Kasba by
Raghavendra Rathore were some new additions. Some of the chain's private labels include Stop,
Life, Vettorio Fratini, Haute Curry, indi-vidual and Acropolis, sales from which grew by 44 per
cent in 2005, over the previous year. Shoppers' Stop customer loyalty programme, First Citizen's
Club has approximately 4,40,000 members, who contribute to over 50 per cent of the total sales.

Shoppers' Stop, which has tied up with Mothercare, the global brand for infants and children,
will be opening 40 Mothercare outlets over the next five years. It currently has 11 Mothercare
outlets. The bookstore section, Crossword; as well as food and beverages outlets such as Cafe
Brio and Desi Cafe have also been launched within the department stores. In 2006, Shopper's
Stop Ltd signed a MoU with UK-based Nuance Group, a leading airport retailing company, for
setting up a 50:50 joint venture to enter the duty-free retail market at Indian airports.

Shoppers' Stop registered sales worth Rs.5,071 crore in 2004-05, with an increased turnover of
Rs.6,775 crore in 2005-06. The chain is targeting a turnover of Rs.750-850 crore by 2008. Sales
realisation per sq.ft per annum stands at around Rs.6,903; while the average transaction value is
approximately Rs.1 ,278.

Apparel Brands for Women

✔ ELLIZA DONATEIN ✔ PROVOGUE

✔ ENAMOR ✔ SEPIA
✔ HAUTE CURRY ✔ SLEEP-INS(CONSG)
✔ KASHISH ✔ STOP
✔ KRAUS ✔ SWEETDREAMS
✔ LEE ✔ TRIUMPH
✔ LIFE
✔ LOVABLE

Accessory Brands for Women

✔ BLUE AND BLUES ✔ IMAGES

✔ CASIO ✔ INFINITY
✔ CROSS ✔ LIFE
✔ DKNY ✔ PIERRE CARDIN
✔ ESPRIT ✔ POLAROID
✔ FASTRACK ✔ PUSH AND SHOVE
✔ FERRARI ✔ RAY BAN
✔ FOSSIL ✔ SAMBENA
✔ GIORDANO ✔ SHEAFFER
✔ HIDESIGN ✔ SKAGEN
 ✔ SUNWAYS ✔ VAN HEUSEN
✔ TITAN ✔ XYLYS
✔ TOMMY HILFIGER ✔ ZAVERI

Apparel Brands for Men

✔ ACROPOLIS ✔ PARK AVENUE

✔ ALLEN SOLLY ✔ PEPE
✔ ARROW ✔ PROVOGUE
✔ AUSTIN REED ✔ SHAPES
✔ BLACKBERRYS ✔ SPYKAR
✔ DOCKERS ✔ STOP
✔ GIOVANI ✔ STORI
✔ INDIAN TERRAIN ✔ TANTRA
✔ JOCKEY ✔ TOMMY HILFIGER
✔ JUST NATURAL ✔ VAN HEUSEN
✔ KASHISH ✔ VETTORIO FRATINI
✔ LEE ✔ WARRIOR
✔ LIFE ✔ WRANGLER
✔ LOUIS PHILLIPE ✔ ZODIAC
✔ MARIO ZEGNOTI
✔ MUFTI

Frangrance Brands

✔ DKNY ✔ CALVIN KLEIN

✔ DAVIDOFF ✔ FERRAGAMO
✔ BVLGARI ✔ NAUTICA
✔ ADIDAS ✔ RALPH LAUREN
✔ ARAMIS
Cosmetics
 ✔ CHAMBOR ✔ L’OREAL
✔ MAYBELLINE
Home segment
✔
✔ CORELLE
✔ IVY
✔ MAGPPIE
✔ ARTD’INOX
✔ SERVEWELL
✔ PROGRESSIVE INTNL FNS

Watch brands

✔ CASIO ✔ PIERRE CARDIN

✔ DKNY ✔ POLICE
✔ ESPRIT ✔ SKAGEN
✔ FASTRACK ✔ TITAN
✔ FOSSIL ✔ TOMMY HILFIGER
✔ GIORDANO
✔ KENNETH COLE

• WESTSIDE

Westside, the lifestyle store by the Tata’s that caters to the upper middle class segment, has built
its customer base through its USP of affordable style. There are 23 Westside stores in 14 cities
Price is crucial in the Indian retail scenario and Westside’s focus on this factor is part of the
reason. If customers are looking for style, they will probably go to Westside and buy something
for Rs 400 rather than go to Mango (a UK-based chain). Another issue is convenience of parking
space. Almost everyone in major metros has a car and doesn’t want to go through the hassle of
finding parking space.

Westside has worked on moulding its outlets along the snazzy, well-designed, hands-on
ambiences and coffee shop displays typical of Lacoste, Nike and Switch retail stores in the West,
and personalized its offerings by offering style and accessory guides to its customers.

Westside houses a collection of the finest merchandise for the entire family. There are spacious
shopping areas for the various sections - women’s wear, men’s wear and the children's and the
household sections occupy the floor level. Café West from the Taj group on a level above is an
ideal place for a coffee break on a shopping spree. Westside offers customers the very best and
latest international shopping experience. Westside has a team of dedicated stylists,
merchandisers, helpful and courteous store staff and talented in-house designers. The
combination of the very latest in-style fashion with affordability is highlighted in all of
Westside’s merchandise.

Westside stands out from the competition for a variety of reasons. One is that a majority of the
brands the chain stocks and sells are its own, unlike retailers who store multiple labels. About 90
per cent of Westside’s offerings are home-grown, and they cater to different customer segments.
The other 10 per cent includes toys, cosmetics and lingerie.

However, recently Westside has recently expanded its range of merchandise by offering outfits
from some of India’s best-known fashion designers, among them Wendell Rodericks, Anita
Dongre, Krishna Mehta and Mona Pali. This is an interesting marketing shift, since it means
moving away from the chain’s only-our-own-brands concept. The designers create collections
exclusively for the store, and the prices for these are hardly eye-popping (the Wendell Rodericks
range starts at Rs 600). Westside has managed to obtain this exclusivity at a lower price because
it has multiple outlets.
 • CLUBWEST

It is an extraordinary rewards program designed exclusively for Westside regulars. It is a two-tier

program, which comprises Clubwest Classic and Clubwest Gold. A purchase of Rs 2000 on the
same day entitles you to a complimentary membership into Clubwest Classic. Alternately, you
can enroll by paying a nominal one-time fee of Rs 150. A purchase of Rs 5000 on the same day
entitles you to a complimentary membership into Clubwest Gold. Earn points every time you
shop at Westside. These points can be exchanged against subsequent purchases made in the store.
A dedicated Clubwest desk for a member's assistance is at each of the stores. There are exclusive
shopping hours only for members during sales. Customers also have unprecedented access to a
host of privileges and services through their exclusive tie-ups from time to time. They provide
advance intimation of all in-store promotions and special offers through direct mailers. Also
Special discounts on dining at select restaurants round the year.

Once a store enters a good catchment area, its competition loses that advantage. Trent would
agree: When Westside first entered Mumbai in 2000, it opened shop in elite south Mumbai. At
the time, the suburbs were ruled out because Shoppers' Stop cast a long shadow over the western
suburbs. And even when Westside finally moved northwards into Andheri (where the first
Shoppers' Stop outlet is located), in end-2004, it chose Link Road, which is away from Stop's
line of vision. Being a quick mover and expanding fast brings in another advantage – of size.
And size brings bargaining muscle and, hence, economies in sourcing.
During 2005-06, the company witnessed a rapid expansion with the opening of six Westside
stores across the country. From 16 outlets in 10 cities across 2,20,000 sq.ft of space, the chain
today runs 23 stores with a total retail space of 5,50,000 sq. ft. Westside was one of the first retail
companies to position itself as a 100 per cent private label retail store. Its in-house brands
include Too Fast For You, Richmond, Urban Angels, etc, besides the store brand Westside and
Westsport. The contribution from these private labels is to the tune of respective segments.
SHOPPER’S LIFESTYLE GLOBUS WESTSIDE PANTALOONS
STOP
Store experience 76 68 68 70 65
Merchandise 67 51 56 70 52
Sales Personnel 62 57 58 66 55
Billing 64 51 57 63 47
Packaging 58 58 59 56 51
 Additional Service 54 57 54 62 50
Schemes & 57 49 54 53 51
Promotions
Loyalty 3317 29 3917 4025 6313
Programmes
Advertisements & 57 52 52 45 49
Communication
All figures are in percentages; Superscript: Percentage of people who are unhappy in these
parameters (Source: The Marketing White Book, 2007-2008)
 CONSUMER BEHAVIOR

The rise of departmental stores can be attributed to changing demographics. Branded apparels
form the strength of departmental stores and we will see how demographics affect their purchase
and challenges the departmental stores face.

Today, brands have started shaping buying behavior. A large young working population with a
median age of 24 years; growing numbers of nuclear families in urban areas; increasing working-
women population and emerging opportunities in the services sector have increased the average
consumer spend on branded clothing. Industry experts believe that apparel sales in retail stores
posted a growth of between 25-30 per cent in 2003 and according to an estimate by McKinsey,
the branded apparel market—is now worth nearly $ 1 billion. Now, across metros, apparel
buying is the second biggest consumption after food products. Without question, the consumer
boom is being driven by a new openness about using credit cards. Clothing, along with shopping
for jewellery and eating out, contribute 45 per cent to credit card spends, up from 21 per cent a
year ago.

The influence of fashion

Clearly, fashion has also played an important role in shaping apparel consumerism. As lifestyles
change, fashion in India is becoming more stratified, as in the West. Technology, ideas and
lifestyles are moving concurrently, and quickly. Companies and brands that offered monotonous,
mundane products for years have now tripled their product ranges and new appealing shapes and
forms are being launched each season.

The lure of foreign labels

The boom in domestic apparel, nevertheless, tells only part of the story. India has huge potential
as a market for foreign clothing, given its large population and growing household incomes. A
few significant foreign players—such as Levi Strauss, Benetton and Lacoste—have been selling
their branded apparel in India for a number of years. But now, just like their Indian counterparts,
global apparel brands are setting up their own apparel outlets, instead of just selling through
departmental stores.

For the purpose of understanding consumer behavior towards the major business of departmental
stores i.e. apparels we have broken the population into four groups. We have taken into
consideration their apparel buying behavior in terms of purchase frequency, spending, outlets
where the buying occurs, distance they are willing to travel and their loyalty towards apparel
brand outlets. The apparels for this understanding are categorized as western for this
understanding are categorized as western formals, western casuals, ethnic wear and fabrics.

The four groups of consumers are:

 Playful Pretenders (12-20 years of age)
 Corporate Climbers (21-30 years of age)
 Cautious Planners (31-50 years of age)
 Home Makers
  PLAYFUL PRETENDERS

Format Wester Western Ethnic

n casuals wear
formal
s
Purchased from
Small shops selling 39 40 42
local brands
MBOs 26 25 26
EBOs 25 23 18
Large department 10 10 10
stores
Location of the store
Popular, big shopping 51 50 43
market
Local 34 37 42
neighbourhood/colony
market
Markets popular for 12 9 11
selling that product
Shopping malls 5 5 4
Distance from home
Upto 1 km 26 27 32
1.1-2 kms 28 27 31
2.1-5 kms 35 33 27
More than 5 kms 12 13 9
All figures in percent
Loyalty to the store

% who say Western Western Ethnic Fabric

formals casuals wear
I buy only from one or few shops 52 52 51 47
that I like/trust
If I don’t find a brand at my 37 34 29 34
shop, I buy some other brand
from the same shop
All figures in percent
  CORPORATE CLIMBERS

Format Wester Wester Ethni Fabric

n n c
formal casuals wear
s
Purchased from
Small shops selling 37 35 43 47
local brands
MBOs 29 31 25 26
EBOs 25 23 19 20
Large department 8 7 8 5
stores
Location of the store
Popular, big 53 51 58 44
shopping market
Local 34 37 39 46
neighbourhood/colo
ny market
Markets popular for 7 8 4 7
selling that product
Shopping malls 7 8 4 8
Distance from home
Upto 1 km 29 31 34 39
1.1-2 kms 29 28 31 27
2.1-5 kms 28 27 25 24
More than 5 kms 14 13 10 10
All figures in percent
% who say Western Western Ethnic Fabric
formals casuals wear
I buy only from one or few shops 46 48 44 45
that I like/trust
If I don’t find a brand at my 36 33 34 31
shop, I buy some other brand
from the same shop
All figures in percent
Loyalty to the store
  CAUTIOUS PLANNERS

Format Wester Wester Ethni Fabric

n n c
formal casuals wear
s
Purchased from
Small shops selling 38 35 41 45
local brands
MBOs 39 30 28 27
EBOs 24 23 21 20
Large department 10 11 9 5
stores
Location of the store
Popular, big 45 44 48 38
shopping market
Local 41 42 40 51
neighbourhood/colo
ny market
Markets popular for 8 7 4 7
selling that product
Shopping malls 7 7 6 4
Distance from home
Upto 1 km 33 36 36 39
1.1-2 kms 28 28 33 30
2.1-5 kms 30 25 21 22
More than 5 kms 10 11 10 9
All figures in percent
 Loyalty to the store
% who say Western Western Ethnic Fabric
formals casuals wear
I buy only from one or few shops 49 52 46 45
that I like/trust
If I don’t find a brand at my 37 32 30 33
shop, I buy some other brand
from the same shop
All figures in percent
  HOME MAKERS

Format Wester Wester Ethni Fabric

n n c
formal casuals wear
s
Purchased from
Small shops selling 44 41 43 49
local brands
MBOs 24 28 30 27
EBOs 23 21 17 15
Large department 9 9 7 6
stores
Location of the store
Popular, big 45 44 45 41
shopping market
Local 41 41 44 49
neighbourhood/colo
ny market
Markets popular for 9 8 6 7
selling that product
Shopping malls 5 7 6 4
Distance from home
Upto 1 km 31 31 35 38
1.1-2 kms 30 33 34 31
2.1-5 kms 28 24 21 22
More than 5 kms 10 13 10 8
All figures in percent
% who say Western Western Ethnic Fabric
formals casuals wear
I buy only from one or few shops 48 51 45 43
that I like/trust
If I don’t find a brand at my 42 42 31 34
shop, I buy some other brand
from the same shop
All figures in percent
Loyalty to the store