Retail Management

Chapter 1:

Introduction

Page | 1

Retail Management

The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry.

In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations.

GROWTH OF RETAIL SECTOR IN INDIA

Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of Indias largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry. . The trends that are driving the growth of the retail sector in India are

Low share of organized retailing

Page | 2

Retail Management

Falling real estate prices Increase in disposable income and customer aspiration Increase in expenditure for luxury items (CHART)

Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. INDUSTRY EVOLUTION

Traditionally retailing in India can be traced to The emergence of the neighborhood Kirana stores catering to the convenience of the consumers

Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission

1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches

The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

Post 1995 onwards saw an emergence of shopping centers Mainly in urban areas, with facilities like car parking Targeted to provide a complete destination experience for all segments of society

Page | 3

Retail Management

Emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume

Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid.

At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000 crore

RETAILING FORMAT IN INDIA

Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, and Pantaloon. Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non-perishable goods. Department Stores:

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.

Page | 4

Retail Management

Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop.

Hyper marts/Supermarkets:

Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium

MBO

Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

Page | 5

Retail Management

Chapter 2:

Introduction to Walmart

Page | 6

Retail Management

Wal-Mart is the worlds largest retailer with more than 4,300 stores in the United States and over 8,000 worldwide, with global sales topping $400 billion in 2009. It is the largest retailer in the U.S., where more than half its revenue comes from grocery sales. Wal-Marts formula for financial success includes: low-wage labor, limited health benefits, and leveraging of government subsidies Hundreds of studies, reports, and articles have been written about the negative impacts of WalMart. This document represents a thorough review of key literature between 2002 and 2010, and points to many of the retail giants negative impacts. It examines over fifty studies conducted over the past seven years on Wal-Marts impact on both local and national economies. It represents research encompassing all fifty states, including the first research conducted regarding Wal-Mart in a major U.S. City: Chicago. Since opening its first store in Bentonville, Arkansas in 1962, Wal-Mart has steadily spread from its base in the South and Midwest to dominate the suburban and rural retail market across the U.S. Having effectively saturated these markets, Wal-Marts most lucrative opportunities for growth are now outside the U.S.. However, the company has also begun to move aggressively into those more densely populated central cities that have so far been off limits, either for lack of space in which to shoehorn the mall-size Wal-Mart outlets or due to local antipathy to the company because of its negative impact on small businesses and the local economy. Wal-Mart is addressing the first obstacle store size by changing its standard big box model to a more flexible one involving stores of widely varying sizes, perhaps even as small as a few thousand square feet, the size of many local grocery stores. According to Garrick Brown, Vice President of Research at Colliers International, Smaller designs, in the twenty thousand squarefoot range, and mostly groceries thats where the money is. For example, four stores are planned for the Washington, DC area, including multi-story buildings in both central city and suburban settings. Twenty-four new stores are planned for the San Francisco Bay Area. Several years ago the company opened its first store in Chicago and is planning a dozen more. Bharti Walmart is a B2B joint venture between Bharti Enterprises and Walmart for wholesale cash & carry and back-end supply chain management operations in India to serve small retailers, manufacturers, institutions and farmers. The company operates Cash & Carry stores under the Best Price Modern Wholesale brand. A typical cash-and-carry store stands between 50,000 and

Page | 7

Retail Management

100,000 square feet and sells a wide range of fresh, frozen and chilled foods, fruits and vegetables, dry groceries, personal and home care, hotel and restaurant supplies, clothing, office supplies and other general merchandise items.

Page | 8

Retail Management

Chapter 3:

Concept of Retail and Retailing

Page | 9

Retail Management

As per dictionary the word Retail means "Sale of goods or commodities in small quantities directly to consumers". As per the above definition, consumer plays an important role in whole transaction. Not only the location and product is important but how much a consumer is satisfied is more important. Retail business is repetitive in nature as customer loyalty is key factor to it. Once is customer is satisfied he would shop next time also from same retail store. The word Retailing is defined as "The set of business activities that adds value to the products and services sold to consumers for their personal or family use". From above definition, one can see that retailing is not only about selling goods in stores but also selling services. Retailing can be referred to all activities involved in marketing and distribution of goods and services. Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today. Retailing can be termed as value addition activity which adds services along with products or goods and then offer it to personal or family use. In both concepts of Retail and Retailing, customer is focal point, whether it being in aspect of offering small quantity or offering services along with product. Customer is end point of distribution channel. There is a need of middlemen or an intermediary who will supply goods or products from producers or wholesalers. Middlemen who occupy mid position between wholesalers or producers and consumers are known as 'Retailers'. Retailers are the one who comes in direct contact with end users of the product. Immediate reactions, buying behavior about a certain product can be studied by retailers promptly.

Page | 10

Retail Management

Chapter 4:

Retailing Strategies

Page | 11

Retail Management

4.1 Introduction:
Retailer operates in a complex and competitive environment and because of this retail managers need to be aware of the need to seek market opportunities and develop long term sustainable relationships with partner organizations. The term strategy is frequently used in retailing. For example, retailers talk about their merchandise strategy, promotion strategy, location strategy and private brand strategy. Retail strategy isnt just another expression foe retail management. There are 3 main elements of retail strategy: 1) Retailers target market. 2) Retail format. 3) Building a sustainable competitive advantage.

Page | 12

Retail Management

Wal-Marts strategy
Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Marts superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. High Volume: Industry analysts watch Wal-Marts growth of sales figure very closely. WalMarts prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (10 ft rule, sundown rule) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, Wal-Marts aims at creating a loyal customer base by lowering their cost of living through offering quality and other products at significantly lower prices, while surprising them on the convenience and service level side. Its worth mentioning that Wal-Mart acquired volume through a careful consideration of locations, away from competition. Today, however, Wal-Mart is experimenting with extending its original strategy. There are three avenues being considered: internationalization, different formats (neighborhood stores) and expanding the product range to offer more complete customer solutions like travel, insurance and banking services. These growth options are discussed in Section 6. Still, in terms of strategy, we can say here that the internationalization option is essentially an extension of Wal-Marts traditional strategy to different countries (which is no doubt why Wal-Mart is pursuing it so aggressively), whereas the other two options are new ground for Wal-Mart (which explains why they are being much more tentative in those areas).

Page | 13

Retail Management

The attractiveness of the discount retailing industry

We have analyzed the market attractiveness from the perspective of an existing player in the discount retailing industry (as opposed to from the perspective of an entrant). We conclude that, for the average retailer, the industry is unattractive principally because of the intense internal rivalry among the principal retailers and the low switching cost for end-customers. Suppliers: weak power

The suppliers are the consumer goods manufacturers (both food and durables) and they have little power. In the first place, with very few exceptions, the consumer goods are commodities (or at least, acceptable substitutes are readily available, both from other manufacturers and from inhouse private labels). The availability of alternative suppliers puts the retailers in a strong position. In addition, retailers have high power of negotiation due to the high volumes purchased (and the projected growth of the discount market). Who wants to put off a retailer who supplies 15% of a growing market? The limited number of big discount retailers also creates an imbalance in the importance of the accounts for the retailers and the suppliers. A Wal-Mart or Target account is enormously important to a supplier, but Wal-Mart can easily live without this or that supplier. (Of course, the suppliers have more power vs. smaller or newer entrants.) Buyers: average power The end-consumer has significant power, because of (a) the ready availability of substitutes (for the most part you can shop elsewhere), (b) the ease of switching between different stores (customers are not locked in) and (c) the lack of real differentiation among the retailers. Since all the retailers explicitly compete on value, shoppers can easily compare the offerings. The transparency of any price advantages on what are generally commodity products decreases consumer loyalty. As a result, any retailer that underperforms on day 1 (being out of stock on milk for example) can find himself losing customers on day 2.

Page | 14

Retail Management

Internal rivalry: strong Of the 15 top discount stores shown in Exhibit 3 to the 1993 case, three were in Chapter 11 proceedings in 1993 and at least one more has declared bankruptcy since then (Kmart). Enough said? Obviously, competition is fierce among discount retailers. The reasons are (a) the lack of differentiation in product offerings, (b) low switching costs for end consumers and (c) volume-driven strategies that aim at grabbing market-share at the expense of profitability (which creates a potential for price wars). The heavy pressurevfor increases in volume arises because only volume allow the retailer to generate cost efficiencies, whichvcan then be passed on to the consumer in the form of price discounts, thereby creating even more volume in terms of both basket size and visit frequency. Launching yourself into this upward virtuous spiral is an essential ingredient of success for a discount retailer. Substitutes: moderate A number of substitutes are available for consumers, principally from retailers having different formats: food-supermarkets, local grocery stores, department stores, specialty stores, etc. Generally speaking, these other formats offer more convenience at higher prices. Discount retailers have to keep track that their price discounts remain sufficiently large to justify the extra effort for consumers to come to them. An interesting second substitute is the direct sales channel. Manufacturers like Dell who sell directly to the consumer may be a growing rival for discount retailers. As consumers become more used to purchasing relatively large items over the internet (the sort of items for which the price savings offered by a discount retailer would have justified the effort of making the trip), online sellers will be an increasing threat to the traditional discount retailers. However, of course, none of these online sellers can offer the one-stop convenience of a discount retailer: none of them will be able to offer a comparable range of products in the immediate future. Barriers to entry: high As explained above, volume is essential to survive as a discount retailer. A new entrant must achieve substantial market share to reach minimum efficient scale. Ingredients for volume selling are

Page | 15

Retail Management

(a) a complex and expensive distribution network, (b) a base number of stores to justify the distribution network, and (c) a data management system matching supply and demand. High capital expenditures are therefore a prerequisite. Even if this money can be raised (which is unlikely given the overall unattractiveness of the industry), there is a scarcity of desirable property, at least in the U.S.: the country is already carpeted with large retail discount centers (Wal-mart itself has run out of space) and so it is hard to find locations without head to head competition with one or more incumbents. As a result, incumbents will almost inevitably retaliate and attempt to squeeze out the entrant through price wars (which the entrant will lose because of its lack of economies of scale). (An additional reason for retaliation is the large exit barriers for the current players created by the enormous amount of capital tied up for them in their existing operations.)

Page | 16

Retail Management

Chapter 5:

Retail Mix Of Walmart

Page | 17

Retail Management

1. TYPE OF MERCHANDISE SOLD

Walmart Discount Stores The founder, Sam Walton, opened his first Walmart discount store in 1962. Today, there are 629 stores offering a pleasant and convenient shopping experience across the United States. The size of an average store is 108,000 square feet. Each store employs about 225 associates. The stores feature wide, clean, brightly-lit aisles and shelves stocked with a variety of quality, value-priced general merchandise, including:

Family apparel Healthy and beauty aids Electronics Toys Lawn and garden items Jewelry Automotive products Home furnishings Hardware Sporting goods Pet supplies Housewares

Walmart Supercenters Our Supercenters were developed in 1988 to meet the growing demand for convenient, one-stop family shopping featuring our famous Every Day Low Prices. We save you

Page | 18

Retail Management

time and money by combining a full grocery and our general merchandise under one roof. There are 3,029 Supercenters nationwide, and most are open 24 hours. Supercenters average 185,000 square feet and employ about 350 or more associates. Supercenter groceries feature:

Bakery goods Meat and dairy products Fresh produce Dry goods and staples Beverages Deli foods Frozen foods Canned and packaged goods Condiments and spices Household supplies

Most Supercenters also have many specialty shops such as:

Vision center Tire & Lube Express Brand-name restaurants Portrait studio and one-hour photo center

Pharmacy Health clinic Employment Agency Hair salon

Page | 19

Retail Management

Walmart Neighborhood Markets Walmart Neighborhood Markets offer a quick and convenient shopping experience for customers who need groceries, pharmaceuticals, and general merchandise all at our famous Every Day Low Prices. First opened in 1998, there are now 168 Walmart Neighborhood Markets, each employing about 95 associates. A typical store is about 42,000 square feet. Walmart Neighborhood Markets feature a wide variety of products, including:

Fresh produce Meat and Dairy products Frozen foods Dry goods and staples Health and beauty aids Stationery and paper goods Drive-through pharmacy Deli foods Bakery items Canned and packaged goods Condiments and spices Pet supplies Household supplies One-hour photo center

Page | 20

Retail Management

Walmart Express Stores The first two Walmart Express test stores opened in June 2011 in Northwest Arkansas. Walmart Express has been created to offer low prices every day in a smaller format store that provides convenient access for fill-in and stock-up shopping trips. The stores give Walmart flexibility in serving customers, especially in rural and urban areas where shoppers may not have access to larger stores.

The Walmart Express test stores average 15,000-square-feet and offer groceries and general merchandise, including an assortment of fresh produce, dairy and meat, dry goods, consumables, health and beauty aids, over-the-counter medicines and more. Many have pharmacies as well. Walmart.com Founded in 2000, Walmart.com brings the convenience, great merchandise selection, friendly service and Every Day Low Prices of your neighborhood Walmart to the Internet. Walmart.com features more than 1,000,000 products, plus easy-to-use music downloads and digital one-hour photo services. And were adding more great products every day. During the holidays, Walmart.com features many special offers available only online. Its also a convenient place to find out about our exciting in-store holiday specials. With our innovative Site to Store program, you can purchase items at Walmart.com and then have them shipped free to your local store for pickup.

Page | 21

Retail Management

2. VARIETY OF MERCHANDISE SOLD

Major Brands Sams choice Sam's Choice, originally introduced as Sam's American Choice in 1991, a retail brand in food and selected hard goods. Named for Sam Walton, founder of Walmart, Sam's Choice forms the premium tier of Walmart's two-tiered core corporate grocery branding strategy that also includes the larger Great Value brand of discount-priced staple items. Compared to Great Value products and to other national brands, Sam's Choice is positioned as a premium retail brand and is offered at a price competitive with standard national brands. It typically offers either competitive items in a given product category, or items in categories where the market leader is an "icon" (for example, Coca-Cola in the soft drink category). Great Value Great Value was launched in 1993 and forms the second tier, or national brand equivalent ("NBE"), of Walmart's grocery branding strategy. Products offered at Walmart through the Great Value brand are claimed to be as good as national brand offerings, but are typically sold at a lower price because of minimal marketing and advertising expense. As a house or generic brand, the Great Value line does not consist of goods produced by Walmart, but is a labeling system for items manufactured and packaged by a number of agricultural and food corporations, such as ConAgra, Sara Lee which, in addition to releasing products under its own brands and exclusively for Walmart, also manufactures and brands foods for a variety of other chain stores. Often this labeling system, to the dismay of consumers, does not list location of manufacture of the product. Wal-Mart contends that all Great Value products are produced in the United States otherwise the country of origin would be listed. Equate Equate is a brand used for consumable pharmacy and health and beauty items, such as shaving cream, skin lotion, over-the-counter medications, and pregnancy tests. Before its takeover by Walmart, the formerly independent Equate brand sold consumer products at both Target and Walmart at lower prices than those of name brands. Equate is an example of the strength of

Page | 22

Retail Management

Walmart's private label store brand. In a 2006 study, The Hartman Group marketing research firm issued a report which found that "Five of the top 10 "likely to purchase" private label brands are managed by Wal-Mart including: Great Value, Equate, Sam's Choice, Wal-Mart and Member's Mark (Sam's Club), per the study." The report further noted that "...we are struck by the magnitude of mind-share Wal-Mart appears to hold in shoppers' minds when it comes to awareness of private label brands and retailers."

Special Kitty Special Kitty is Walmart's store brand of cat food.

Parent's Choice Parent's Choice is the Walmart store brand for baby products, including food, diapers, formula, and accessories. Like other Walmart store brands, its design and packaging was relaunched in 2010. The brand has pages on both Facebook and Twitter, for mothers to interact and share opinions about the brand.

White Stag White Stag is a brand for women's clothing, footwear, and basic jewelry. Originally founded in 1931 as a skiwear manufacturer in Portland, Oregon, the company was purchased by theWarnaco Group in 1966, which after the company exited bankruptcy, later sold the brand to Walmart in 2003.

George George is a brand of more formal clothing for men, women and children. It also consists of dress shoes, wallets, belts, and neckties. It was created by the British retailer Asda in 1990, and since Walmart acquired Asda in 1999, it has maintained and expanded it to other markets, notably the United States, Canada, and Japan. The George brand was named after George Davies, who was

Page | 23

Retail Management

its original chief designer. Davies is no longer associated with the brand, although Asda and Walmart have aimed to remain true to the low price business model that he established. Dr Thunder Dr Thunder is a brand of soft drink produced for Wal-Mart stores. Dr Thunder was originally called "Southern Lightning," but the name was changed to reflect its similarities to Dr Pepper. Since 2009, Wal-Mart has sourced their store brand sodas from multiple companies, having previously exclusively used Cott Beverages as its manufacturer. The soda, as with all Wal-Mart store brands, is also carried by Asda stores in the UK.

Additional brands Apparel

Baby George is a clothing brand for children, organically manufactured for Wal-Mart. The brand is popular because it is organically produced in a chemical free environment.

Faded Glory is a brand for basic men's, women's, and children's clothing and footwear. It is Walmart's primary clothing brand.

No Boundaries, usually abbreviated as NOBO, is a line of apparel targeted at teenagers and young college students.

Simply Basic was previously a brand used for health and beauty items, but is now used primarily for women's sleepwear.

Homelines

Better Homes and Gardens is a product line with designs inspired from the popular magazine of the same name.

Canopy is a home product line that features coordinated solutions for rooms and other domestic goods. Some Canopy products are made with organic cotton.

Page | 24

Retail Management

Hometrends products include small furniture, tableware and various home decor accessories, such as rugs and faux plants.

your zone is a home product line that tailors toward teenagers and college students

Others

@ the Office is a brand used for office supplies and stationery. Best Occasions is a brand used for party decorations and accessories, such as candles and hats.

Clear American is used for carbonated and flavored water. Was previously known as Sam's Choice Clear American.

Color Place is the brand used for paint and painting tools. Color Place paint is made by AkzoNobel.

Douglas is the brand used for budget priced tires. Models include Xtra-Trac and Touring. Some models are made in a Goodyear plant.

EverStart is the brand for automotive and lawn mower batteries. The brand is also used for battery related accessories, such as jumper cables.

Fire Side Gourmet is used for pre-cooked burgers and steaks, and was previously under the Sam's Choice label.

Gold's Gym is used for athletic and exercise equipment such as weights. Named after and licensed from the chain of fitness centers.

Holiday Time is used for Christmas items such as Christmas trees, decorations, and wrapping paper.

Kid Connection is used primarily for children's toys, but was also used for children's clothing and shoes.

Marketside is a brand of fresh foods usually found in Walmart's deli, produce, and bakery departments, such as salads, soups, breads, and sandwiches.

Oak Leaf is a brand of low cost wines produced and bottled for Walmart selling at approximately $3 a bottle.

ONN is a brand used for entry-level electronics (mice, speakers, cables, etc.).

Page | 25

Retail Management

Ozark Trail is a brand used for outdoor equipment and footwear. (The Walmart Home Office is located in the Ozark mountain region in northern Arkansas.)

Protege is a brand consisting of luggage and travel accessories. ReliOn is a brand of diabetes care products including blood glucose and blood pressure monitors.

Special Kitty is a brand of cat food and litter. SuperTech is Walmart's brand of motor oil. The brand is also used on other consumable automotive products, such as oil filters, windshield wiper fluid, and transmission fluid.

Walmart Family Mobile is Walmart's exclusive cell phone (postpaid) service provided through the T-Mobile cellular network.

World Table is a brand consisting of foods inspired by international cuisines, such as sauces, snacks, and frozen foods.

Former brands

Athletic Works was a brand for athletic clothing until mid-2010, such as gym shorts and running shoes, and has been partially replaced by the Gold's Gym brand and Starter. The brand was also used for sports equipment and watches. The brand was also on men's and women's socks, and men's underwear.

Durabrand was a brand used for home electronics such as televisions and DVD players. The brand was also used on various small kitchen appliances.

ilo was another brand of home electronics, consisting of more upscale items such as televisions, small electronics and digital music players.

Metro 7 was an upscale brand of women's apparel, that was originally released in the fall of 2006, and eventually phased out.

Puritan was a brand for men's basic clothing including shirts, pants, undergarments, socks, ties, and some accessories. In late 2010, the brand was phased out completely and replaced by Faded Glory (with undergarments and socks and casual clothing) and George (with ties, shirts, and pants and formal clothing).

Page | 26

Retail Management

3. CUSTOMER SERVICE

When Sam Walton started Wal-Mart in 1962, he felt that each Wal-Mart needed to reflect the vision of the community and the values of each customer. This way of doing business became the Wal-Mart organizational culture. Organizational culture is what a company values and this value reflects on how companies conduct their business. According to Time magazine's website, Sam Walton believed that if you work toward excellence and show passion with your work, you will gain a loyal customer base. Wal-Mart trains employees on how to problem solve and develops each employee to focus on pleasing the customer. The slogan of "satisfaction guaranteed" is something that Wal-Mart says it takes seriously. Wal-Mart says it trains employees to ask customers if they need assistance or tutorials on how a particular product functions. Another function of Wal-Mart customer strategies is having greeters at the door of every store. Wal-Mart management feel that if customers are greeted by a friendly face, this enhances their shopping experience. Employee training

Wal-Mart says it spends time and money on its employees to ensure that the philosophy of Sam Walton is instilled into each new employee. According to the Wal-Mart website, Wal-mart trains its employees on excellent customer skills. Wal-Mart believes that if customers gets what they want at a good price, this will keep them coming back to the store.

Wal-Mart Philosophy

Wal-Mart takes pride in the belief that most employees are also Wal-Mart customers. When Sam Walton started his chain of stores he purposely set up shop in small-town America to help provide jobs to those individuals who had no access to employment. Wal-Mart says it gives back

Page | 27

Retail Management

to the community and its customers. Wal-Mart gives to children's hospitals, has created educational scholarships and educates communities on environmental issues such as recycling.

Page | 28

Retail Management

Chapter 6:

Role Of IT In Walmart

Page | 29

Retail Management

The use of information technology has been an essential part of Wal-Mart's growth. A decade ago Wal-Mart trailed K-Mart, which could negotiate lower wholesale prices due to its size. Part of Wal-Mart's strategy for catching up was a point-of-sale system, a computerized system that identifies each item sold, finds its price in a computerized database, creates an accurate sales receipt for the customer, and stores this item-by-item sales information for use in analyzing sales and reordering inventory. Aside from handling information efficiently, effective use of this information helps Wal-Mart avoid overstocking by learning what merchandise is selling slowly. Wal-Mart's inventory and distribution system is a world leader. Over one 5 year period, WalMart invested over $600 million in information systems. Wal-Mart use telecommunications to link directly from its stores to its central computer system and from that system to its supplier's computers. This allows automatic reordering and better coordination. Knowing exactly what is selling well and coordinating closely with suppliers permits Wal-Mart to tie up less money in inventory than many of their competitors. At its computerized warehouses, many goods arrive and leave without ever sitting on a shelf. Only 10% of the floor space in Wal-Mart stores is used as an inventory area, compared to the 25% average for the industry. With better coordination, the suppliers can have more consistent manufacturing runs, lower their costs, and pass some of the savings on to Wal-Mart and eventually the consumer. Some 3,800 vendors now get daily sales data directly from Wal-Mart stores. And 1,500 have the same decision and analysis software that Wal-Mart's own buyers use to check how a product performs in various markets. Aside from computers and telecommunications equipment, the technical basis of the point-ofsale system is the bar code scanner. Bar code scanners make it possible to record the sale of each item and make that information available immediately for both reordering and sales analysis. The first use of bar code scanners occurred in the 1970s. After two decades of experience, accurate inventory tracking using bar code scanners is a competitive necessity for large grocery stores and retailers.

Page | 30

Retail Management

Consistent with the adoption of any information technology, development and acceptance of bar codes required agreements on standards. The idea of bar code scanning required that industry develop a universal product code (UPC) system, a standard method for identifying products with numbers and coding those numbers as the type of bar code shown in the photo. The UPC codes that we see routinely today were chosen from a number of alternatives developed by different companies. As happens with other uses of technology, the use of bar codes has brought a range of problems along with the benefits Wal-Mart and other retailers have realized. The use of bar code scanners made it unnecessary to stamp the price on every item (except in states that still require this for consumer protection). This reduced costs but also eliminated jobs of some of the clerks who formerly did the stamping. Other problems (not necessarily related to Wal-Mart) were uncovered when a UCLA study of 1,200 purchases at three retail chains in California found mischarges on 5% to 12% of the purchases. For example, a researcher was charged a scanner price of $21.99 for a pair of jeans that were marked on sale for $15.44. The ratio of overcharges to undercharges at one chain was as high as 5-to-1. In other words, the majority of the mistakes were overcharges, not undercharges. The Riverside, California district attorney who prosecuted three retailers for scanner overcharges said, "I don't believe scanners have helped the consumer at all." On the one hand, the productivity of modern retailing depends on bar code scanners; on the other, the system of updating the prices is imperfect and may even be an opportunity for dishonesty. Stepping away from the technology and back to Wal-Mart, even its tremendous success has brought some problems. The huge Wal-Mart stores on the outskirts of small towns have overwhelmed many merchants on Main Street. Wal-Mart is so large that it can sell products profitably at prices less than many small-town merchants' cost. Some feel that Wal-Marts have killed the traditional business districts of some small towns. If this is true, consumers in these towns receive the benefits of the best selection and pricing, but lose some of the benefits of living in a small town.

Page | 31

Retail Management

Chapter 7:

Merchandise Planning

Page | 32

Retail Management

Mass retailers are driven by marketing! Wal-Mart is as big as they get and its no secret they have a plan! Wal-Marts marketing plan drives purchasing, distribution, store operations, retail prices and their entire customer relationship.

Wal-Mart buys 50% or more of their inventory overseas. Buying so much abroad has completely changed the store merchandising and advertising dynamics over the years. They were forced to adapt a very long lead time for purchasing and shipping. In addition, Wal-Marts product requirement is so large (usually 15% of total domestic sales for U. S. consumer product companies) that in most cases they are not buying inventory but contracting for future production. They work closely with vendors to be sure that production can keep up with demand. Out of stock and lack of ad inventory produces lost sales and upset consumers.

Even though Wal-Mart is a huge organization, they compete locally. The average U.S. citizen is no more than twenty minutes from a Wal-Mart. Therefore the merchandise mix must fit exactly to the needs of every town in America. They have plans for twenty two temperature zones for snow shovel and mitten sales, fifteen shelf assortment plans for bird seeds in Tennessee alone, fifty stores impacted by Disney, 200 stores with beach items, stores that need Green Bay Packer gear or Southern Illinois Salukis sweatshirts.

So you see that they need LEAD TIME and a lot of it. Most Wal-Mart merchandise categories have sales plans that project one year ahead. But rather than render the chain inflexible and vulnerable to competitors they have turned lead time into a huge advantage.

Here is what it has done for them.

1.) Increased lead time means increased creativity. There is time to explore every good idea. 2.) Allows time to visit with all suppliers and negotiate to help drive costs down. 3.) Increased lead time = fewer errors and no rush charges for artwork or printing. 4.) Long lead time means perfect execution in store.

Page | 33

Retail Management

5.) Finally, sufficient lead time allows them to get the strategy right. The ad plan is coordinated with the brand message, competitive position, public relations and every component of their ad strategy.

How can you plan like Wal-Mart?

1.) Write out a rough annual plan with monthly or seasonal events. Include every marketing dollar direct mail, newspapers, web site & search words, signs and in-store banners, yellow pages, sponsorships, public relations, special events, email blasts and so on. Think through exactly what you are trying to accomplish. Determine the budget, target audience and financial payback plan. Begin ad events at least three months out. Remember to coordinate all messages. 2.) Schedule periodic marketing meeting to discuss each part of the plan. You will be amazed at the increase in creativity. 3.) Collect competitors ads. Note dates, themes and items. 4.) Occasionally, invite key marketing suppliers and share the rough plan. See how they can contribute fresh ideas and reduced costs. 5.) Pursue the big idea. Lead with your strengths and stay focused.

Page | 34

Retail Management

Chapter 8:

Store layout of walmart

Page | 35

Retail Management

A well-planned retail store layout allows a retailer to maximize the sales for each square foot of the allocated selling space within the store. Store layouts generally show the size and location of each department, any permanent structures, fixture locations and customer traffic patterns. Each floor plan and store layout will depend on the type of products sold, the building location and how much the business can afford to put into the overall store design. The Wal-Mart store are of different layouts depending upon the local needs and the type of the retail format. These are basically the combination of both the grid as well as the race track layout depending upon the products on display and the part of the store. For example the store layout in the above diagram.

Page | 36

Retail Management

Chapter 9:

Recommendations for Walmart

Page | 37

Retail Management

Recommendations 1. Must adopt a friendlier corporate attitude. 2. It needs to relax its anti-unionization policy 3. Improve public perception that Wal-Mart can destroy communities 4. International expansion should be done with the help of local retailers

Page | 38

Retail Management

Chapter 10:

Conclusion

Page | 39

Retail Management

CONCLUSION

1. Walmarts business model is not really low-price, it is creating perceptions that prices are lower than they really are. 2. All retail customers have five core needs that need to be met. 3. Low price matter much more to the customer because they think Walmart is really low price. 4. Consumers forgive walmarts poor quality, service and convenience because they think walmarts prices are so low 5. Consumers who shop at wal-mart become caught in a reinforcing loop that makes them keep shopping there. 6. Walmarts buying practices injure its vendors. 7. Vendors who sell to walmart are caught in a re inforcing loof that make them sell to walmart. 8. Walmart serves well only one stakeholder group, that is its shareholders.
9. Walmarts great weakness is serves four out of five stakeholders poorly.

Page | 40

Retail Management

Bibliography

1. Wal-Mart. Corporate Facts: Wal-Mart by the Numbers. March, 2010. http://WalMartstores.com/download/2230.pdf 2. Srikanth Parachuri, Joel A.C. Baum, and David Potere. The Wal-Mart Effect: Wave of Destruction or Creative Destruction? Economic Geography 85.2 (2009): 209-236 3. Wal-Mart and Bharti: Transforming Retail in India
http://hbr.org/product/wal-mart-and-bharti-transforming-retail-in-india/an/HKU845-PDF-ENG 4. Bharti-Wal-Mart Private Limited Not for retail customers http://www.labnol.org/india/corporate/bharti-wal-mart-private-limited-not-for-retailcustomers/1067/ 5. walmart.3cdn.net/dd4fd53b314948b9c1_98m6beokd.pdf

6. http://en.wikipedia.org/wiki/Bharti_Enterprises 7. Walmarts price wars

www.bkc/listoer/walmartspricewars

8. Wal-Mart and Bharti: Transforming Retail in India

http://hbr.org/product/wal-mart-and-bharti-transforming-retail-in-india/an/HKU845-PDF-ENG 9. walmart.3cdn.net/dd4fd53b314948b9c1_98m6beokd.pdf http://en.wikipedia.org/wiki/Bharti_Enterprises

Page | 41