How should Shoppers Stop reorient its retailing to be relevant to the young?
|Strengths |Weakness |
|Sustained focus on operational format (department store) |Disengagement with younger customer segment |
|Loyal customer base (First Citizen) |Conflict in recognition of private label vs. stocking the best |
|Pioneer in modern retailing in India |brands |
|Available resources ...view middle of the document...
1% of total retail market |Loss of managerial talent to competitors |
|share with expected growth due to retail revolution | |
|Tier 2, 3 and 4 cities | |
|Increase of household income and shift in attitude from saving to| |
|spending | |
|Large young population (70% of population are 35 and younger) | |
|Consumer credit card low penetration | |
|India’s forecast to stay young for the next two decades | |
|Decrease in dependency rate | |
• Sustained focus on operational format (department store)
o SS has remained focus on their department store format that has resulted in a focused effort to drive results. It also kept them from failed attempts at other formats as seen by their competitors.
• Loyal customer base (First Citizen)
o This is key for customer retention and repeat sales.
• Pioneer in modern retailing in India
o First to initiate this format successfully in India which gives them a competitive edge
• Available resources for expansion
o Should the need to expand their operations the have the available resources to do so (foreign investment, credit, etc.)
• Good financial position
o Their good financial position of being under leveraged is attractive to investors as well as stakeholders
• Numerous retail outlet locations across Tier 1 cities
o With retail outlets in these larger metropolitan cities, SS is well positioned to capitalize on its key market segments.
• Projecting to increase retail presence in Tier 2 and 3 cities
o With a growing disposable incomes across India it is crucial to provide retail locations within relative proximity
• Vast vendor portfolio
o It provides customer with a variety of selection of high end products that play into their mindset of having social status.
• Private label
o SS Private label contributed to 23% of total revenues and 40% of its overall margins. Higher margins are made on private label.
• Solid operational management
o SS created separate SBU’s for new formats which allows for innovation without an overall change in business strategy
• Quality front end sales staff
o 65% of SS front-end sales staff are college graduates which is often...