Published on February 20, 2014
Big Bazaar and Aditya Birla Retail More: A Comparative Study
Objectives of the Project Organized Retail in India is still in its nascent stages and like any other burgeoning industry, this industry too has its own grave challenges but it still is very promising With few big organized retailers deciding to exit the industry, others who have still managed to sustain have to remain highly competitive in order to survive Each of the retail companies has their own unique strategies and offerings in order to sustain and grow their business. The retail outlets to be compared in this report are: Big Bazaar (Future Group) and More (Aditya Birla Retail). The retail chains would be compared on a number of factors, as described in the rest of the presentation
The Indian Retail Sector The Indian retail industry has experienced high growth over the last decade with a noticeable shift towards organized retailing formats. The industry is moving towards a modern concept of retailing The Indian retail market, currently estimated at USD 490 billion, is projected to grow at a CAGR of 6% to reach USD 865 billion by 2023 The opportunities in food and grocery retail in India are immense, given that it constitutes about 69% of India’s total retail market Consumers shopping at modern trade have grown from 54% in 2012 to the current 68% (2013), driven by increasing consumption, comfortable shopping experience, new categories, wide variety of brands under a single roof and attractive prices A whopping 55% of the modern trade shoppers actively seek promotional deals, 35% of them make bulk purchases, of which 30% are male customers Mass media has a big role in bringing the rural market to the center-stage, which is setting the actual consumer aspiration. The key element to be focused on is the supply chain and infrastructure in the Tier-II cities The country is moving at a fairly fast pace and consumers are creating their own opportunities and are becoming exposed to information There is a huge aspiration level among the people in Tier-II and Tier-III cities which the retailer has yet to tap
The Companies Selected Big Bazaar is the largest hypermarket chain in India It was started by Mr. Kishore Biryani, the Group CEO and Managing Director of Pantaloons Retail, in September, 2001 Today, there are over 292 Big Bazaar stores in 93 cities and 60 rural locations across the country The current formats include: Big Bazaar, Food Bazaar, eZone, Home Town, Central, Planet Sports, aadhaar, KB’s Fairprice and futurebazaar.com Big Bazaar caters to roughly 300 million customers each year and they select products and services supplied by over 30,000 small, medium and large suppliers across India. Currently, about 35,000 people are employed with the firm Big Bazaar claims to guarantee the best products at the best prices They completely value ‘The Indian Dream’ and their stores reflect the look and feel of Indian bazaars. More is a pan-India retail chain operated by the Aditya Birla Group company, Aditya Birla Retail Ltd. The Group entered the retail space in December, 2006 At present, there are 490 ’More’ supermarkets and 15 ‘More Megastore’ hypermarkets across the country. The company plans to increase these numbers to 1,300 supermarkets and 65 hypermarkets respectively by 2016 The company has its own set of private label brands like Feasters, Kitchen's Promise and Best of India ‘More’ supermarkets are neighborhood stores with the core proposition of offering value, convenience and trust to the customers, averaging 2,500 square feet area The hypermarkets are self-service superstores offering value and range in food and non-food products and services at a single location
Comparison of the two Retail Chains
Mission, Vision and Core Values (1 of 2) Mission Big Bazaar More Customers and stakeholders shall be served only by creating and executing future scenarios in the To deliver superior value to their customers, consumption space leading to economic shareholders, employees and society at large development They will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses They shall infuse Indian brands with confused and renewed ambition They shall be efficient and cost-conscious and committed to quality in whatever they do Vision Big Bazaar More To consistently provide the Indian consumer To deliver Everything, Everywhere, Every time to complete and differentiated shopping experiences Every Indian Consumer in the most profitable and be amongst India's Top retailers, while delivering manner superior returns to all stakeholders
Mission, Vision and Core Values (2 of 2) Core Values Big Bazaar More Indianness: Confidence in themselves Integrity Leadership: To be a leader in thought and business Commitment Openness: To be open in and receptive to new ideas, knowledge and information Passion Adaptability: To be flexible adaptable, to meet new challenges and Seamlessness Speed
Positioning Big Bazaar More Big Bazaar is an aspirational brand targeted ‘Hamesha Extra’ is the core essence of More mainly at the Indian middle class Big Bazaar’s positioning shifted from being a one-stop shop for buying quality goods at really cheap prices (‘Isse Sasta Aur Accha More’s ‘everyday lowest price guaranteed’ is a Kahin Nahin’) to a more emotional appeal critical component of their USP (‘Naye India Ka Bazaar') to commemorate completing 10 years of operations They aim at offering the best value for money The new positioning reflects the changing to their customers ethos of Indian shoppers The freshness and range of their products is used to attract customers Their core proposition includes offering value, convenience and trust to their customers
Target Audience Big Bazaar More Big Bazaar targets the price-conscious More’s stores are conveniently located in middle class of India as their primary neighbourhoods and cater to the daily customers needs of families and young adults The large and growing youth of the country is aimed as the preferred target segment and strategies are adopted to attract such customers The hypermarkets are aimed at attracting families and small businesses to make large purchases on a weekly or monthly basis Working women and homemakers Working women and homemakers are (primary decision makers) form an the targeted segment important part of the target group
Retail Formats Big Bazaar Hypermarket Chain (Big Bazaar): Provides affordable and often discounted prices for a household’s every need Supermarket Chain (Food Bazaar): Provides a blend of a typical Indian bazaar and international supermarket atmosphere Futurebazaar.com (Online Store): Offers products ranging from apparel, electronic goods, jewellery to books, movies and food Other retailing formats: Home retailing (Home Town) and a consumer durables chain (eZone) More Supermarket (More for you): Conveniently located neighbourhood supermarket chain providing one-stop shopping solutions for customers’ grocery and other household products needs Hypermarket (More Megastore): Complete destination shopping area with a variety of national, international and house brands under one roof Clubmore (loyalty program): With a strong membership base of over 3 million customers, More offers exclusive promotional offers and schemes to them
Presence and Reach in India Big Bazaar More Currently, there are over 490 More There are 292 Big Bazaar stores in over 90 Supermarkets in just 10 states across the cities and 60 rural locations in India country 15 More Megastore Hypermarkets are situated in 8 cities namely Hyderabad, New Delhi, There are 22 Central stores in India Thane, Bangalore, Indore, Vadodara, Mysore and Nasik Home Town is present in 10 locations in key metros Ezone is a 55-store network Map showing presence of Big Bazaar stores in India
SKUs and Types of Products Maintained Big Bazaar More Big Bazaar offers 200,000 SKUs of A More Megastore Hypermarket maintains merchandize in a wide range of categories 25,000 SKUs of merchandize per store led by fashion and food products SKU breakup (revenue contribution):Food and groceries: 40% Fashion and apparel: 30% Electronics and other items: 30% More offers a significant number of private label products as well More Megastore Hypermarkets are driven by food and grocery SKUs (with lower margins) and the number of apparel SKUs are on the rise
Design, Layout and Size of Stores Big Bazaar More Big Bazaar stores are designed like More stores are bright and clean, with layouts convenience stores so that people feel like that allow ease of navigation they are shopping on the streets The design is like a planogram, providing The product display is well organized, ample space for customers to walk and see allowing ease of choice the products on display The average size of a Big Bazaar store is The stores have been designed by Fitch, the 50,000 sq. ft. and the Big Bazaar family leading international retail design firm center is 80,000-120,000 sq. ft. The minimum size of a More Supermarket is 2,500 sq. ft. and that of a More Megastore Hypermarket is 50,000 sq. ft. Inside a Big Bazaar Store Inside a More Store
Pricing Strategies Big Bazaar More Value Pricing: Big Bazaar offers its customers the lowest available price without coupon clipping or More’s private label products were marked down by comparison shopping (Promotional Pricing and a significant margin Every Day Low Price). It also adopts a Low interest pricing strategy Psychological Discounting: Involves setting an Pricing strategies used for private label products artificially high price and then offering the product were unique so that they could not be compared with at substantial savings usual products Differentiated Pricing: Difference in rate based on More promises best in market pricing as it sources peak and non-peak hours or days of shopping is a fresh fruits, vegetables and staples directly from pricing technique used aggressively used by Big farmers Bazaar Time Pricing: Big Bazaar charges different rates for a given product depending on the time, day or More also generally follows the Value Pricing month (Wednesday Bazaar, Festive Season Pricing, Strategy Special Offer Period pricing, Sabse Sasta Din, School Time, Seasonal Offers) Bundling Pricing Strategy: Offering multiple products for sale as one combined product Other Pricing Strategies: Buy More, Save More, Highlighting the savings possible, Cashing in on Sports events, The Price Challenge Offer
Advertising and Brand Building Activities Big Bazaar More Big Bazaar generally uses mass media such as television, print, radio and outdoor for advertising. It has now extended its presence on social media as well More uses mass media such as print, radio and outdoor to advertise its promotional schemes. Television ads are scarcely aired. Social media presence is very limited Big Bazaar also makes use of innovative cross- Its most popular advertising campaign was selling and up-selling strategies ‘Hamesha Extra’ for which it received many accolades Popular advertising campaigns include ‘Saal ka More displays large-sized promotional offers and Sabse Sasta Din’, ‘Isse Sasta Aur Accha Kahin Nahin’, special offers near the entrances of its stores ‘Naye India ka Naya Bazaar’, etc. It has roped in celebrities like MS Dhoni, Asin There is audio-visual promotion of private label Sakshi Tanwar and now, Shikhar Dhawan to endorse products inside the stores the brand Other promotional activities include weekend discounts, exchange offers, point of purchase More has colour slips based on product pricing promotion, promotion of schemes on the loudspeaker within the stores Brand endorsement also takes place through positive word of mouth and the Future Card Change in logo
Footfall and Rentals Big Bazaar More Footfall: 3.5-4 million per week, which averages out to around 15,000 per store Footfall: 2-2.2 million per week per week Rentals: On an average, More pays INR 35The footfall increases substantially on offer 40 per sq. ft. as rent in bigger cities and INR days and in the festive season 20-22 per sq. ft. as rent in Tier-II cities Rentals: On an average, Big Bazaar pays INR 35-40 per sq. ft. as rent in bigger cities and INR 20-22 per sq. ft. as rent in Tier-II cities
Relationship Management Program Big Bazaar More PAYBACK: Big Bazaar has tied up with PAYBACK, India’s largest and one of Europe’s most successful multi-partner loyalty programs. This program enables customers to collect thousands of points across online and offline partners, with a single card Clubmore: Its 3 million members enjoy a range of exclusive promotions and offers. Becoming a member is as simple as filling a form. Each time such a customer shops, he earns reward points which can be redeemed at a later stage T24 Program: Big Bazaar has tied up with Tata Teleservices Ltd. and rolled out its T24 program through which customers will be rewarded with free talk-time for every purchase at Big Bazaar stores starting at INR 10 to a maximum of INR 350 Big Bazaar Profit Club: A unique membership program where one can pay INR 10,000 and can shop for INR 1000 per month for the next 12 months i.e., INR 12,000 over a period of 12 months. This card can be used across 215 + Big Bazaars, Food Bazaars and fbb- Fashion at Big Bazaar stores across the country. It can also be used as a gift card and an employee incentive mechanism
Conclusion and Recommendations
Conclusion Based on the comparison of the stores on the above 11 factors, the following points can be arrived upon: Though Big Bazaar and More are not direct competitors of each other, they do intrude into each other’s space in multiple ways, and hence, they have to remain competitive The retail chains have positioned themselves differently over the years; yet, the target audience of both firms does intersect They have similar retail formats and both companies enjoy a panIndia presence More stores are more spacious and their layout allows better ease of navigation Pricing and promotional strategies are quite different from each other Big Bazaar does have a superior relationship management system in place
Recommendations (1 of 2) Though Big Bazaar plays prominently on price, it should not compromise on quality. The moment the quality of products sold at Big Bazaar starts deteriorating, customers will start shifting to other retail chains as there are a plethora of options available in the organized retail segment these days Big Bazaar should adopt a High-Low pricing strategy (along with its existing pricing strategies) rather than a Every Day Low Pricing strategy Crowd management is a major matter of concern, especially on offer days and on weekends. The number of staff should be increased in each section to handle the crowd. A proper queue management system is pivotal More needs to work on its customer loyalty program and come up with innovative methodologies to retain its customers. Big Bazaar is leagues ahead of More in this regard More also needs to develop a more aggressive advertising campaign given the fact that it is now beginning to find its foothold in the Indian retail space after a prolonged lean phase
Recommendations (2 of 2) More enjoys a wide range of private label products and it should go all out in promoting these products and offering attractive schemes on them More should also work on training its staff adequately because a lot of customers complain about the lack of knowledge/courteousness with regard to the staff Both stores should work on making their customers aware of their loyalty programs because a lot of them have no clue about such rewards and incentives which the retail chains are making available to them As both retail chains are in the expansion mode, they must ensure that they do not intrude too much into each other’s space so that their existing customers do not leave them and shift over to the competitor retail chain as and when the competitor offers them something more attractive than the former
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