RM_Archit
Transcript of RM_Archit
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1.0 Introduction
Videocon Industries Ltd. is a very large diversified company headquartered at Gurgaon, Haryana.
It is a very well-known Indian company which is very much focused on maintaining the highest
standards for ecellence as per the international guidelines through delivera!les of high
technology, innovation and quality. "he core !usiness areas for Videocon are consumer
electronics and home appliances. #ecently they have also diversified into various areas of $"H,
power, oil eploration. %rand !asket of Videocon includes &ansui, 'enstar and 'elvinator.
Videocon does its retailing through three retail !rands namely ()*", $igi+orld and lanet .
rimary focus of the report would !e on ()*" #etail India Ltd, Indias largest electronics retail
chain.
()*" started its functioning in /001 and speciali2es in organi2ed retailing of mo!ile phones,
small phone appliances and consumer electronics. It is a multi-!rand and multi-product retail
chain which has a range of consumer dura!les including 3"Vs, +ashing achines, 4ir-
conditioners, 5$s 65lat anel $isplays7,
()*" is a multi-!rand, multi-product retail chain which stocks an entire range of consumer
dura!les, Home "heatre &ystems to &"%s, #efrigerators, icrowaves, 6&et "op %oes7, Gaming
consoles, small home appliances, mo!ile phones and lot more. (et store deals in some of theworlds most popular !rands like8
+hirlpool
'elvinator
9rg
)lectrolu
9nida
&ansui
hilips
'enstar
Videocon 6 Home %rand7
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()*" currently operates over ::0 showrooms 6;/0 3939 stores 63ompany owned7 and . In the coming three years, ()*" is planning to epand and open around ;000
showrooms throughout the country and estimated turnover is around #s. :000 crores.
erformance of ()*" has increased tremendously, this can !e seen from their turnover !eing
dou!le in the current financial year. &hort term plan is to esta!lish ?00 stores in net year and
achieve an additional turnover of #s. /:00 crores.
(et stores are segmented into different regions, across /: states of India. $ifferent locations
may have different prices for the same product 6specific model7 !ased on the geography. "hus
the offline prices may differ store to store whereas the online prices are same for all the regions
throughout India. oreover there is no inventory integration at store and online level. %oth the
channels maintain their separate inventory and distri!ution. )commerce division does it in their
warehouse whereas the inventory management at store is done in the respective stores.
How motivated is the staff to promote sales@ +hat are the current incentives they are
receiving@ How is the store target divided@
roduct i
+hat were the reasons !ehind failure A closing down of multiple ()*" stores@
ricing- How the prices should !e decided for !oth online and offline channels.
Inventory planning B (o information availa!le to the offline store a!out the
approimate num!er of orders to !e received from the online team.
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"he (#6 (et #etail rice7 is updated even after the purchase of the inventory
which at times !ecome higher than the 6 aimum #etail rice7
opular !rands are not availa!le B (o Voltas, &ony, $aiken or &amsung.
3.4.2 NEXT Jail Road
"he &'C names for the same product are different under !oth the accounts which
further complicates inquiring the availa!le inventory. In order to tackle the price
difference !etween !oth the channels what company does is provide a different &'C
name to the same product availa!le online and offline. &o whenever a customer visits
a store and inquire a!out the price difference, sales representative tries to convince
him with different &'C name.
&chemes and free!ies on offer at the online and "ele platform are not availa!le at the
store when the customer asks for it. "here have !een instances where online
promotional schemes have not !een properly communicated to the retail stores. "his
creates a lot of confusion. In an eample there was a promotional offer for cross sales,
where a customer who !uys online gets a free discount coupon which can !e availed
at the offline store. "his was not communicated to the offline team properly !ecause
of which there was a lot of confusion and the scheme had to !e closed on immediate
!asis.
(o fied margin sharing model. +henever a stock is transferred from offline to
online inventory, it is still considered as an online sale and store does not even get a
margin out of it ecept for the amount that they have spent, that to on a yearly !asis.
&o all their initial investment and work on the proDect gets wasted.
"he pricing for products !eing sold from the store inventory is not done in
consultation with them which at times have also lead to selling of the product at a
loss. 9nline prices are generally lower than the store prices. &o In case of stock
transfer when an online sale is made its cost is lower than the actual !uying cost of
the item. 4s !oth the online and offline channels have their separate vendors.
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3.4.3 NEXT Paschim Vihar
"here is no way for the store staff to check the online inventory which forces them to take
!lind orders many of which have to !e cancelled later. &tore staff is uncertain of the
availa!ility of the online inventory. &o this leads to pro!lems sometimes. 5or instance inthe aschim Vihar store, once they received a corporate contract for a firm where they
had to sell 1: "Vs which was availa!le In there warehouse !ut simultaneously online
stock transfer of ;0 "Vs took place, which lead to the delay in delivery of their order.
In case of limited inventory, there is no way to decide whether store or online customer is
to !e given priority. 5or instance a customer selected a product of which only ; item was
availa!le in store. %efore the customer ordered there was stock transfer !y online team
and it was a dilemma for the store manager who should !e given the priority.
$elay in delivery of online orders taken !y the stores leads to the customer coming to the
store and complaining. 3ustomer care services for !oth the channels work separately.
$ue to this ="he 'ing =, the customer has to suffer.
3.4.4 NEXT Burari
"he difference in product portfolio leads to the customer asking for products at the store
which are not availa!le with them.
4ll the catalogs and newspaper ads invite the customer to the nearest ()*" store which
actually dont even have the product.
"he stores are directed to keep the "ele shopping channel 9( in the panels which are
actually selling the same product at cheaper prices thus affecting the store sales.
#esponsi!ility for deliveries of online sales could !e given to the stores in that area whichwould help reduce logistics cost.
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Retail i!
4 well planned and integrated retail mi will provide a focused position in the marketplace anddifferentiate your retail esta!lishment from that of your defined competition. "he key element6s7
of your proposed competitive advantage should guide you in the design of your retail mi.
"tore #ocation)plain your location strategy. $o you propose locating in a free-standing !uilding, a downtown!usiness setting, or a planned shopping environment and why@ +hat specific site have you
selected and what is its EfitE relative to the trading area you intend to serve@ 5ollow this up with a
trading area analysis showing the num!er of target customers residing within the EdrawE of yourfacility.
"tore $%erations+hat are your epected hours of operations@ How many employees do you anticipate needing to
serve you customers adequately@ 4n outline of your proposed organi2ational structure and a
general description of the duties and responsi!ilities of employees will !e helpful. %e sure toinclude a typical weekly work schedule. lanned credit policies and amenities or service
dimensions should likewise !e discussed in this su!section.
erchandisin&+hat goods andFor services do you propose to offer@ $iscuss the general level of quality of the
goods you will carry, the depth and !readth of your offering 6num!er of "'(s7 as well as the
stock levels, epected inventory turnover, re-order policy, and anticipated vendor relationships.
Pricin&
+hat !asic pricing strategy do you propose to implement@ %ased on your investigation, what isyour anticipated cost-of-goods sold, on average@ )plain your markup strategy and its impact on
retail price. Here, !e sure to calculate your markup percentage !ased on retail price rather that
costs to !e consistent with the data provided in your upcoming pro forma statements.
"tore Ima&e$evelop a schematic of your proposed store layout and descri!e, generally, the atmospherics youplan to employ. 4lso, remem!er that the name and graphics associated with the store help set the
tone for the image you intend to convey.
Retail PromotionIn developing your promotional strategy, !e sure to consider what EroleE you epect each of the
promotional tools you employ to play in the consumer !uying process. lan to include eamplesof the tools 6advertising, personal selling, pu!licity, andFor sales promotional devices7 you epect
to utili2e and their scheduling. 4 promotional !udget with time schedule should !e developed
reflecting the allocation of dollars across the various elements.
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References
Accenture. (2012). Seamless Inventory Management.
(2012). CROSS-CHANNEL INTEGRATION.Power Retail.
Gallino, S. ; 4ntonio 6/0;17. Integration of Online and Oine !"annels in Retail.
Management Science manuscrit, 2#.
$indal, A. (200%). Clic!" n Mortar# Ac$ieving multi-c$annel integration.&iew'oint.
Oaura, $. (2012). %est &ractices in Cross C$annel Retailing.Oaura.
Online S$oing In'ia ( %uy Online - T)* Mo+ile &$ones* Camera* Re,rigerator* ater
&urier at Ne/t.co.in. (200*). Retrie+ed fro "tt'--www.net.co.in accessedon 1/-0/-201#
AA. (201).A'ating to t$e Multi-c$annel Customer.