Report on OJT done with Shoppers Stop with an essence of VM

Udit Bhatnagar PGDM RM2013-15 Roll number 13RM956

Human Resources The Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes and taking new initiatives to further align its Human Resource policies to meet the growing needs of its business. People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Human relations remained cordial throughout the year. During the year, your Company organised various training programmes. As on date of the Balance Sheet, the Company had a total of 6,052 Customer Care Associates. Indian Retail The Indian retail market is amongst the largest and fastest growing in the world. With a population of over 1.2 billion and household size of 4 to 5 on an average, it is not difficult to see the potential attractiveness that this market offers. Indian retail business has grown by 16% Compounded Annual Growth Rate (CAGR) over the past two years and expected to accelerate to 18.8 % over the next few years, according to The India Retail Report 2013. India has emerged as the fifth most favourable destination for consumption driven by Choice instead of need will grow significantly. Modern Retail - Today Modern retail has been in existence for some time now. In India, modern retail constitutes 7.8 % of the total retail market. According to The India Retail Report findings, modern retail in India is growing at a rapid rate of 26.8% CAGR and is expected to grow even faster by 2015. By 2015 the share of modern retail in India is expected to rise to more than 10 % of total retail in India. With the young demographics that India is blessed with, it can be assumed that modern retail will be trendy, fashionable, in demand and buzzing with hives of promotion and opportunities. With an increasing number of men and women working and being independent, disposable income is increasing. The easy availability of financial instruments is also playing its part in growing the modern retail space and consumption. Modern retail is expected to mushroom in smaller towns in the next 3 years and also make a foray in to the rural heartland of India to , which in turn will determine the direction and extent to which penetration in rural towns would happen. With modern trade gaining ground in India, the opportunity for strong and continuous growth is immense. A simple comparison with other developed and emerging economies in Asia indicates room for a manifold increase in modern trade density. With a modest six modern trade stores per million customers, even matching the pace of countries like Thailand and Indonesia points to an inflection point that is yet to occur. Contrasted with the density of traditional trade outlets, the lower density of modern trade is certainly poised to change. Modern Retail - Challenges Ahead The Indian economic sector, including retail, has weathered an uneven ride. Changes in policies and markets have caused investors in this market to draw caution and adopt wait-and-watch policies. Rising inflation, even when disposable income has risen, has left a dampening mark on retail sales and consumption. Brands have decided to ensure an effective presence strategy while speculation markets have dropped. Big malls that were assured of complete occupancy just a few years back are having to resort to price-leading strategies to woo in tenants and consumers. Retailers in India are struggling to strike a balance between choosing available retail space in desired location and rentals. The next challenge is that of human capital. With attrition still very high in the industry, human capital management continues to remain one of the top three agenda points for the retailer. The cost of training and retraining staff to replace people who leave, is high specifically for larger retailers who want to maintain a particular standard in their operations. Skill development, hence, is a critical factor to achieve scale and is an area which needs investment.

Risks and Concerns: Over the next 36 months and the timely execution of this expansion will be critical. The Company has a strong execution team and we believe it has the capability to execute varied retail formats experienced personnel in modern retail will only increase in the near term and long term. Your Company believes that this problem will persist until the industry reaches a steady growth phase for the Company. Power cost and service tax is also a matter of concern as they put substantial pressure on profits. the business which are proving to be a very large burden as there are no modes for the industry to recover or pass on these levies. Delay in the roll out of the GST regime is also a matter of concern impact on the cash flows and consolidated results of the Company Customer Entry: Retailers measure entry as footfalls, which is the number of people entering the stores. This is computed through manual count in all stores during trading hours

Conversion Ratio: Conversion is the ratio of the number of transactions (Cash Memo) versus the total customer entry into the stores. Tracking conversion helps the retailer understand the productivity of his front-end store employees and the attractiveness of the merchandise and services. Apparel: The Apparel contribution to total sales of the Shoppers Stop Departmental store business was 59.9% in 2012-13 as compared to 58.7% in 2011-12. Non-Apparel: This category includes Cosmetics, Personal Accessories, Jewellery, Leather goods, Home Wares, Electronics, Books and Music. These lifestyle products have high aspiration value, and as the consuming class increases, there will be a big surge in the demand for this category.

Customer Satisfaction: At Shoppers Stop we strive to provide our customers with the best overall experience of shopping with us. To measure the customer experience we conduct customer satisfaction surveys to evaluate a range of parameters including merchandise range and quality, store environment, staff, transaction efficiency, loyalty programme, schemes and promotions to name a few and undertake improvements in various areas. We also include select competition stores in our surveys in order to measure experience in our stores as compared to competition. Overall Customer Satisfaction Index: November 2007 February 2009 April 2010 June 2011 August 2012 63 81 80 79 80 Loyalty Programme: Company runs the famed First Citizen Loyalty Programme. The First Citizens programme now has a base of over 28.8 lacs customers. During the current year, the First Citizens contributed 71% of the Companys annual sales. The First Citizen programme has 3 tiers Classic Moments (entry level), Silver Edge and Golden Glow. Members fall into the various tiers on the basis of their spends with us. Shoppers Stop has also taken the First Citizen experience mobile, by updating the exclusive First Citizen Mobile application on Blackberry, Android and iPhone platforms. This year, the Company continued with the exclusive promotion for First Citizen members - First Citizens Fiesta. Under this promotion the member earned 3 times the reward points besides lots of other special offers and deals. The promotion was very well received and it helped us further reinforce our strong relationship with this member community.

Background of store
Outlet situated in: Ambience Mall ,Vasant Kunj,New Delhi

Stores Faade:

Mall Location: Contact No: Website:

Anchor +91-11-40870400 www.shoppersstop.com

Email:

anil.dawer@shopperstop.com

Hours of Operation Monday, Tuesday, Wednesday, Thursday, Friday: 11:00 am to 09:30 pm Saturday, Sunday: 11:00 am to 10:00 pm

Shoppers Stop, India's premier fashion and lifestyle destination is the largest chain of large format department stores in the country. Shoppers Stop has a national presence with 30 stores in 13 cities viz. Mumbai (8 stores), Delhi (3 stores), Kolkata (3 stores), Bangalore (3 stores), Hyderabad (3 stores), Jaipur (2 stores), Pune (2 stores), Gurgaon, Chennai, Ghaziabad, Lucknow, Noida and Amritsar. With an unparalleled assortment of the leading international and national brands in clothing for men, women, and kids; accessories, fragrances, cosmetics, footwear; home furnishing and decor products, our stores aim to provide shoppers a truly international shopping destination. At Shoppers Stop emphasis is given to customer convenience with customer friendly signage, alteration desk, customer service desk with gift wrapping service, exclusive First Citizen Members, lounge ,baby changing room, Physically challenged trial rooms to name a few. The stores offers a complete and wholesome shopping experience for the family, and has the best available for those looking for a better lifestyle and fashion experience. All in all, the new store is breathtaking in all its grandeur and houses the trendiest and most fashionable brands in town.

Inside mall layout of Shoppers stop: Level 1 mall layout with Shoppers Stop in the extreme right bottom:

Level 0 mall layout with Shoppers Stop in the extreme left bottom:

Study of present and potential customers:

The present customer base of Shoppers Stop and multi-brand fashion retailing is upcoming & techsavy. Shoppers Stop situated in Ambience Vasant Kunj is in the type 1 localities of national capital and also is the destination shopping of high business families, working young professionals and also foreign citizens as nearby Chanakyapuri is situated which hosts all the foreign embassies. The present customer base of Shoppers Stop comprise of men and women16 - 35yrs earning Rs50000 to 1,00,000 per month, spending Rs1000 - 5000 on formal wear.& experimental in making purchases. . Shoppers Stops core customers represent a strong SEC A skew. They fall between the age group of 16 years to 35 years, the majority of them being families and young couples with a monthly household income above Rs. 20000 and an annual spend of Rs.15000. A large number of Non - Resident Indians visit the shop for ethnic clothes in the international environment they are accustomed to.

The potetntial customers India also has 500 million Indians under the age of 25. Young Indians are friving purchases in moblie phones,fashion,accessories etc.Young Indians have access to more money than before and with this has come independence ,aspirations and a demand for products.

Description of current situation

Vasant Kunj is a affluent and upmarket residential colony located in South West Delhi district of Delhi, India, on the hills of Aravali, which today has well over 100,000 residents. Most residents reside in flats built by DDA. The Vasant Kunj community is considered to be well educated and prosperous. Vasant Kunj is home to many intellectuals, prominent businessmen, celebrities, etc. Shoppers Stop, Vasant Kunj is an apogee of lifestyle distinction, it offers not only unprecedented scale in terms of its size but also an experience of unparalleled retail mix combined with the entertainment and leisure attractions that has changed the concept of shopping mall experience. Certain factors have led to a sizeable proportion of Crossover Shoppers shoppers who flit between modern and traditional formats. When the spends of these shoppers are analyzed by looking at how they claim they split their spending across formats, even a single percentage of spending transferred to modern retail across meta categories such as packaged foods, home care and personal care, translates into a quarter of a million dollars that Indias modern retail could gain. The implications of these changes and opportunities are clear for marketers who want to reenergize theirvstrategies. Merely understanding consumers in a generic manner will no longer be a complete method of converting insight into marketable opportunity. Developing a thorough and ongoing appreciation of the shopper decision journey along the path to purchase and all the extrinsic and intrinsic factors influencing it, will be a critical element in the marketing mix. Mapping the present and prospective shoppers for your brand across various retailing environments will be a necessary precursor to converting demand into sales.

Visuals of the store

Shoppers Stop has unique store design and visual aspect:

The visual attributes at Shoppers Stop may be seen through following images :

The Visual merchandising is implemented in a manner that it does not clutter the main purpose i.e. does not comes between a customer and his/her buying intent by not being loud. The lighting used are items to consider are consistency in store appearance, colors, assortment of displays and fixtures, and general cleaner merchandising. Mismatched

hangers, for example, never looks good and is an easy fix. Utilizing the store logo on signage, labels, shopping bags, and marketing materials create a cohesive look for overall image. Wall colors need to be examined with other visual elements throughout the store. Does the color scheme make sense? Sometimes hiring a visual merchandiser with an art background can help make sense of color choices.

The all too important window display is a complete statement on its own. Windows are normally the most dramatic of the overall store's visual statement. They can be funny or dramatic. Windows often feature video art, animation, posters, dramatic lighting, holograms, or other special effects. There are two distinct window themes, special event windows and fashion message windows. Special event windows convey the spirit of the holiday season, tie in a store event or special promotion. Fashion message windows feature the latest fashion trends and how to coordinate accessories or feature the latest designer collection.

Focal points
In Shoppers Stop focal points were there in all sections i.e. menswear or womenswear, western wear and in ethnic section as well. Focal points were evenly distributed all round the store ,with latest apparels that were in shelves or fixtures and were relly matching with each other with the section. When creating a focal point you need to consider the look you need to achieve to attract the customer you want. If it is fashion ideally you need to include mannequins or bust forms. Then support the display with appropriate props.In this instance the props are oil drums pretty clean ones as this product is not distressed denim.If you have key brands, make sure their signage is prominent these brands help sell the product

Focal point in Shoppers Stop

A focal point attracts customers to an area, supports the product on offer and sells the outfits.Ideally position centrally on the wall. In this example we used a couple of strips of wallpaper in the center of the wall to create a backdrop for the display and positioned a mannequin in front of it. We also used framed car prints at high level. All the supporting material/props supporting the streamlined, suiting look.

Conclusions
First Citizens: Our First Citizens Club has continued to be one of the main strengths of our business. In the year gone by the programme has exceeded the 2.5 million mark in memberships, making it one of the largest loyalty membership programs in the country across sectors. The Company continues to believe that its loyalty program is not only a source of substantial competitive advantage, but is also a very strong strategic tool. Your Company believes that its First Citizens will continue to drive its growth by increased average expenditure in our stores which will be aided by targeted promotional activities. Strong focus on Systems & Processes: We continue to invest in our front and back end processes and systems. The Company believes that continuous investment in people, process and technology will drive sustainable and profitable growth for the Company.

We have in the past year, undertaken a number of new investments in the back end and continue to upgrade our current information technology capabilities and processes. Strong distribution and logistics network and supply chain: We have created a strong distribution and logistics network, with our four Distribution Centers covering more than 400,000 square feet handling over 400,000 SKUs per year, and working 24x7. The Company believes that the hub and-spoke model followed by it for its distribution network, will stand it in good stead for the expansion envisaged in the forthcoming years. Enhancing our Human capital: We continue to assess our Customer Care Associates (CCAs) across all levels through assessment centres for promotion decisions, career planning and succession planning. Individual and organisational development is the primary objective of the assessment centre. We also conduct associate satisfaction survey every year and derive ASI scores, which helps us in identifying the trust index scores of respect, credibility, fairness, pride with the organisation. We continue to benchmark our compensation and benefits through consultants, with the best in the industry to pay our associates accordingly. Strong understanding of the real estate business: We benefit from our Promoters association with the real estate business and their relationships with developers, which have helped us acquire preferred properties at competitive rates. Shopping Experience: The Company pioneered the departmental store format in the Indian market when the Indian consumer was deprived of choice. Customers were drawn by the shopping experience. This is the differentiation that the Company continues to bank on. Price is not essentially a differentiator for the Company, the shopping experience is. The Company imparts special training to its employees to ensure that service is not compromised on. The companys store positioning in the bridge to luxury segment clearly sets apart its stores from those of the rest of the industry players. Management Strength & Corporate Governance: The Company has a professional and w

Recommendations
Geographical reach: Your Company continues to increase its Pan-India footprint and is expecting to launch into its next expansion phase in the next 36 months. The Companys strategy to increase the number of departmental stores, and therefore improve city wise penetration in new cities, increase market share in existing cities through additional new stores in those cities, and new stores in Tier-II cities, remains unchanged. During the year, your Company achieved its 50 department stores milestone with the opening of department store at Bengaluru. First citizen membership and Facebook fans also crossed 2.5 million and 2 million mark respectively of 27.5% and like to like sales growth of 9% for the year.Format diversification and expansion: Your Company, in its constant endeavor to capture wallet share, has diversified into multiple formats viz, M.A.C. and Estee Lauder which retails high end cosmetic products, Clinique which retails skin care products, Mothercare which retails infant and kids merchandise and airport retailing, by tying up with The Nuance Group AG of Switzerland. The Company has also made a successful foray into internet retailing through its e-retailing portal.Preferred partner for foreign players: Your Company believes that by virtue of its presence across a ll lifestyle categories in the departmental format, its strong brand value and its presence in the books and music segment, it is best placed to bring in international brands into the country, thereby enriching the product bouquet for its customers and in turn increasing opportunities for product diversification and profit enhancement.