Retail Branding in India: Past, present and future

 | May 07,2014 11:38 am IST

Retail branding is different from just branding because here the store has to match the branding with performance. Thus retail branding has to deliver both tangible and intangible benefits all in one and all at once.


Retailing and India
Consider success stories like Shopper's Stop, Subhiksha, Foodworld etc. and the following statistics:
 

Retail is India's largest industry, largest source of employment after agriculture, has the deepest penetration in rural India, and generates more than 10% of India's GDP.
In India the retail market is large with sales amounting to $180 billion and accounting for 10-11% of the GDP.
India has largest retail outlet density in the world with close to 10 million outlets today
 

All these points together collaborate to prove that Retailing is going to go from strength to strength in the future.
 

In India the retail segment is still in the growth phase. Most of the retailers are new entrants. Most of the growth has been in the big cities and slowly the same cult will catch up in other cities.
 

Important Criteria in Retail Branding
 

In today's customer driven economy the power has shifted from the manufacturer to the retailer. He has gained prominence and the entire economy is becoming retailer-driven.
Supply chain management is a very important criterion for successful retail branding. It is the core of retailing and firms like Walmart have successfully used IT to improve their vendor management
 

Different Branding Strategies
 

1. Integrated branding:
Here the retailer is in direct link with the manufacturer. He is required to possess complete knowledge about the possible developments in the product in the future. The retailer is involved in process beginning from idea generation to branding the product.
 

2. Contract Branding:
The retailer outsources from an existing supplier. The supplier is completely responsible for the product. The participation of the retailer is limited to the specifications regarding quantity, price and brand.
 

3. Independent Branding:
Here the retailer simply procures from the supplier at the lowest possible cost and the entire branding investment is his own. The retailer is like the owner of the brand and holds complete responsibility for it's performance. Such brands are known as 'Private Labels'.
 

Private Labels
Today since retailer margins are falling all over the world, they are looking for alternative sources of income. Private labels are one such source due to which they are gaining prominence. In the article we have developed a checklist for what is important for successful Private Labeling.
 

Different Pricing Strategies for Private Labels
 

1. Copycat pricing: Here the retailer simply prices his brand lower than the other existing brands
2. Parallel pricing: Here the retailer prices his brand equal to the other competing brands
3. Premium pricing: Here the retailer prices his brand higher than the other competing brands since he wants the brand to have a snob value attached to it
 

Positioning Strategies
Retailers can adopt different positioning strategies based on product, price, experience and service. Each of the strategies has been discussed with examples in the paper.
 

RETAIL BRANDING IN INDIA
 

1. Branding and Retail Branding:
 

Brand is a product that provides functional benefits that some consumers value enough to pay a premium price.
Brand is a mark that represents a unique set of both tangible and intangible benefits in the mind of the consumer.
Brand is a name that identifies a particular product and differentiates it from its competitors.
 

In case of branding, companies build the brand name on the basis of what they want to communicate about what the brand stands for. In case of retail branding the store has to match the branding with performance. Thus retail branding has to deliver both tangible and intangible benefits all in one and all at once.
 

The development of the "whole branding view"* entails creating the store as brand and enforcing this "retail brand" at every point of contact between the prospect and the store. The very essence of this concept is that branding is not merely a synonym for marketing a product, but it is rather the whole host of activities that define and deliver a purchasing experience.

 

2. Retailing and India
Let us look at the following examples of retailing in India **:
 

Foodworld - 190 crore business-Belonging to the RPG group
Shopper's Stop - 180 crore business- Belonging to the Raheja's
Crossroads - A brain child of the Piramals
Vivek's - 150 crore, 40 yr old Chennai chain selling consumer durables
Pantaloons - 50 crore, into apparel retail business
Margin Free - a discount chain in Kerala dealing in groceries and also the largest retail chain in India
Subhiksha - Dealing in groceries, pharmaceuticals and the second largest retail chain in India

 

The above examples show the importance Retailing and Retail Branding has been gaining importance in India. Now consider the following statistics: -

 

Retail is India's largest industry, largest source of employment after agriculture, has the deepest penetration in rural India, and generates more than 10% of India's GDP.
In India the retail market is large with sales amounting to $180 billion and accounting for 10-11% of the GDP.
India has largest retail outlet density in the world with close to 10 million outlets today.***

 

All these points together collaborate to prove that Retailing is going to go from strength to strength in the future.

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