SHOPPERS STOP CASE STUDY

Shoppers Stop Case Study



Shoppers Stop Case Study

About Shoppers Stop

Shoppers Stop is one of the first retail chains started in India in 1991 by the Raheja Group. It now boasts of 27 retail outlets across the country and is one of India's largest retail chains, having expanded from apparel and accessories to home furnishings and books under the Home Stop and Crossword Brands. Other Brands under the Shoppers Stop umbrella are MotherCare, Desi Cafe, Brio, Nuance, Arcelia, Timezone and Hypercity.

Range of the Merchandise

The stores offer a complete range of apparel and lifestyle accessories for the entire family. From apparel brands like Provogue, Colour Plus, Arrow, Levi's, Scullers, Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci etc., Shoppers' Stop caters to every lifestyle need. Shoppers' Stop has also introduced its own line of clothing in the classic, value classic and value fashion segments. These are LIFE, STOP, KARROT and KASHISH that are available across different categories. The merchandise at Shoppers' Stop is sold at a quality and price assurance backed by its guarantee stamp on every bill. (Martocchio and Baldwin, 2007)

Shoppers' Stop has 4 division the Men's apparels, ladies apparels, kids wear and the Non-apparels. Following is their contribution to the turnover.

Men's 43% of sales

Women's 18% of sales

Kids 8% of sales

Non-Apparels 31% of sales

It operates with 90 departments handling around 450 brands managing a combined footfall of over 20,000 customers each day. Shoppers' Stop Motto: "We are responsible for the goods we sell".

Top Management

Shoppers' Stop is headed by Mr. B.S. Nagesh, Customer Care Associate, Managing Director & CEO. The company has recruited top line professionals with hardcore retail experience from the leading companies in India and the UK.

Buying Channel

Shoppers stop has 4 regional distribution centres. Previously each store had its warehouse (DC) but that turned out to be a wrong strategy as the flexibility was being affected and costs were building up. There was also a lot of inventory pile up in each of these stores and hence added to cost in inventory and transportation from one store to another to transfer excess inventory. (Martell and Carroll, 2008)

Procurement Strategy

Shoppers Stop has Centralized Procurement and no regional buying, the following are the benefits of centralized procurement:

Target profile same across the country

Better Cost Controls

Better Bargaining Power

Better inventory management

100% inventory control

100% tracking of inventory - (what's selling what's not?) (Mabey and Ramirez, 2005)

Buying Process

The Challenge

Executives at the Shoppers Stop Group noticed their sales falling into the 80:20 pattern with loyalty card customers despite being only 15% of the base contributing over 70% of the revenues of Shoppers Stop.

Sales forecasting is done for each brand then built up to the category then the division then store and then the entire organization. For example the men's division head decides how much business Arrow can do this year and thus similarly for its other brand similarly the other division heads build up the figures for each brand and then each division arriving at a common figure at the ...