Shopper's Stop Limited - Securities and Exchange Board of India

Global Retail Business …changing Key Success Factors
Globally, the key success factors in retail have changed over the years:
Key success factors – changing with time
Geography
(Location)
Till
1980
Merchandise
(Product)
1980-1990
Knowledge &
Information
Source: David Oliver, Partner, Kurt Salmon Associates, UK
Beyond 2000
• Location – Location provided a strong source of competitive advantage in the pre-1980s (before the
proliferation of computers into business management, and adequate infrastructure to travel long
distances).
• Merchandise – Merchandise planning became a critical success factor in retailing in 1980s as
infrastructure bottlenecks were removed the location became less of a constraint. Hence,
merchandise became a key success factor in addition to a good location.
• Knowledge and Information – Knowledge about customer tastes and preferences and information
on inventory management to efficiently run the business has now become one of the most important
success factors. Therefore, efficient knowledge and information systems have become necessary for
success while location and merchandise continue to be important conditions.
Evolution of the Indian Retail industry
The Indian retail industry is evolving in line with changing customer aspirations across product groups,
with modern formats of retailing emerging. This is in line with what has been observed in other developed
markets.
Organised retailing in most economies has typically passed through four distinct phases in its evolution
cycle. In the first phase, new entrants create awareness of modern formats and raise consumer
expectations. In the second phase, consumers demand modern formats as the market develops –
thereby leading to strong growth. As the market matures, intense competition forces retailers to invest in
back-end operating efficiency. In the final phase, retailers explore new markets as well as inorganic
opportunities as growth tapers off.
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