Background -

US retail is organized to the extent of 80%, while the share of organized retail in Western Europe is about 70%.

Share of organized retail in countries like Malaysia, Thailand, Brazil, Argentina, Philippines is between 30- 50%. However, share of organized retail in India is about 3% and is still at a nascent stage.

Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households.

Growing urbanization leading to a variety of customer needs.

Significant increase in the number of brands in the Indian market leading to a larger option set for the Indian customer.

Media boom leading to an increased level of awareness and exposure to the international trends and concepts.

Changing demographics propelling the growth of retail industry.

There has been a shift from Hi-street shopping to malls or hypermarkets.

Shopping is becoming an outing or a way of family entertainment that means that families now spend greater time in shops.

Formats Size

Hyper market is largely a function of product mix, assortment and size. Broadly, they are driven by the following -

Store size – up to 40,000 sq ft

Assortment - Food, Grocery, Basic Range of General Merchandise

General Merchandise – Home, Apparel and Hardlines .

Customers look for value/ deals or promotions.

Store is managed by limited sales associates.

Brands have their own equity and so, help retailer in getting more footfall.

Brands understand their products and domestic market well and can use their knowledge and market understanding to their advantage.

Understanding of seasonality. Help in putting together “Home fashion concepts” and increase their sales volume.

Consistent and focused approach.

 

Multiple drivers leading to a consumption boom:

Changing Paradigm

9

Home Textile - Category Mix

Bed, 48%

Bath, 18%

Kitchen & Table, 5%

Curtains, 7%

Upholstery, 10%

Floor, 12%

Bed Bath Kitchen & Table Curtains Upholstery Floor

2010

Bed, 45%

Bath, 16%

Kitchen & Table, 5%

Curtains, 4%

Furnishing & Upholstery,

18%

Floor, 12%

Bed Bath Kitchen & Table Curtains Furnishing & Upholstery Floor

2007

Source – Technopak

Impulse Vs Planned Purchase – Home Textiles

46

48

19

13

47

24

54

52

79

87

53

76

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

B E D L I NE N

B A T H L I NE N

C U R T A I NS

U P HOLST E R Y

K I T C HE N L I NE N

C A R P E T S A ND R U G S

I mpul s e P ur c has e C ons i der ed P ur c has e

Source – Technopak

Replacement Cycle of Home Textile Products Products Replacement Cycle

Five Things Differentiate Manufacturers in the Eyes of Retailers –

Retailers view leading manufacturers as those:

Who are best aligned with their marketing plans and strategies; With whom they have highly productive and cohesive relationships;

Who possess advanced shopper marketing competence;

Who develop unique and exclusive programs; and

Who can deliver powerful insights on the consumer and the shopper

“Build Private label program” How does it help to retailer –

Differentiate the products for retailer Enhance margins Retailer completely owns the property; so promote it

How does it help to manufacturer –

Commitment of retail space Limited but continuous volume production Enhance understanding of retail business

  Does customer get a feel that our products are affordable. How can I create more fun and excitement for the customers.

Is she saving some money when buying from us

How can I provide all Essentials with some value add-ons.

Can we demonstrate some fashion or decorative concepts in the store so that customer can relate to.