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Urban Retail Studies: Modern Trade Formats
- 2. Organised Retail SectorUnorganised Retail Sector Source: KPMG, 2015 Indian Retail Industry Urban Retail In India Modern Trade Numbers That Count India has high market potential, low economic and political risk Ranks 11th in terms of market potential Net retail sales are quite significant among emerging and developing nations Vast middle class is driving retail in India India is the worlds fifth largest global destination in the retail space Rising need for consumer goods have made more people invest in the Indian retail space Modern trade can be observed in the form of shopping centres and multi-stories malls As of 2014, penetration of modern trade is 19% One-fifth of Indian shoppers regularly shop at modern trade stores. Retail industry accounts for 10% of Indias GDP It accounts for 8% of Indias employment By 2018, the Indian retail sector is likely to grow at a CAGR of 13 per cent
- 3. Established in 1865, Furtados is Indias leading online store for musical instruments, printed sheet music, music books and music accessories. It is Indias leading retail music brand with over 20 physical stores across the country. We visited the Furtados store in Alpha One Mall, Vastrapur.
- 4. Window Advertising Space Low MRP Products; Accessories and Care High MRP; Attractive Products Impulse Purchases, Care Products, Mid Range MRP Branding of Products Billing Counter Product Accessories Product Accessories Mid to High MRP Products Niche Products; Mid to High MRP Niche Products; Drum Sets, Cajons, Udus, Djembes, etc Complementary Products Low to High MRP High MRP, Attractive Low to High MRP; Low to High MRP; Product Accessories High Quality Ad On Window Entrance
- 5. Low to Mid Range Products High End Products Accessories Accessories Amplifiers; Fender, Vox, Line 6; Rs. 8,000-30,000 Acoustic; Fender, Cort, Granada; Rs. 5,000-20,000 Electric; Fender, Cort, GB; Rs. 10,000-25,000 Amplifiers; Fender, Vox, Line 6; Rs. 40,000-2,50,000+ Acoustic; Fender, Taylor, Gibson; Rs. 20,000-70,000+ Electric; Fender, Gibson, PRS; Rs. 25,000-1,50,000+ Acoustic; Kawai, Steinway, Yamaha; Rs. 25,000- 1,50,000+ Acoustic; Pearl, Sonor, Yamaha; Rs. 25,000-1,50,000+ Electric; Casio, Yamaha; Rs. 10,000-30,000 Picks, Strings, Cables, Pedals, Tuners: Rs. 10-10,000 Sticks, Cymbals, Heads, Pedals: Rs. 1,000-90,000
- 6. ADVERTISING Since Furtados is an old brand with high brand recall for people in the music industry, who are the target consumers for them They dont have television or newspaper advertisements In Store advertisements include banners, posters and danglers Other forms of advertising include distribution of pamphlets to music schools and teacher artist support.
- 7. MARKETING Marketing is done exclusively through sponsor ships and tie ups Furtados sponsors competitions like MTV launch pad by providing gear like drum kits, amps, and pianos Furtados has tie ups with shows like MTV Coke Studio and MTV Unplugged They also rely on word of mouth marketing.
- 8. CUSTOMER BASE Targets musicians and those who are interested in learning to play a musical instrument Customers who entered the store could be classified into three types: Those who came, looked around the store and left Those who came, tried various instruments, engaged with the products and then made a purchase Connoisseurs of music who knew exactly what they wanted and made a purchase 40% of the customers are first time learners
- 9. SHOPPER BEHAVIOUR All the instruments on display can be tried There is high engagement The products arent attached to wires that limit the space of engagement. No demo pieces in the store means that what you see and feel is what you get. Beginners and experienced users we witnessed, both tried the instruments. They browsed all the other instruments They purchased associated accessories. For example, a shopper who bought a guitar, also bought a guitar strap and strings.
- 10. CONSUMER INSIGHTS Life-Span: The life-span of an instrument will be a lot longer than that of its accessories. People would make repeat purchases for music instrument accessories like strings, picks, string cleaners etc., at regular intervals. Buying patterns: On weekends the sales were mostly made to college- going students and on weekdays, families used to come to make the purchase. Trial: Every customer would try the product, irrespective of the fact whether they buy it or not.
- 11. DISTRIBUTOR NETWORK Most musical instruments sold are imported Mumbai is the base point for all imports. From here they are shipped straight to one of the stores In some cases instruments are shipped from Goa There is no third party involvement For Gibson guitars, Furtados is the only licensed distributor in India
- 12. SALES, DEALS AND DISCOUNTS Some sales are made on MRP, but according to the store manager, Shalin Christian, 8/10 consumers ask for discounts Since prices of certain products like acoustic pianos can go up to INR 3,50,000, there are tie ups with banks for various EMI schemes
- 13. CONSUMER LIFECYCLE Amateur buyer Low-value investment in one product category Customer invests in accessories and care High-value investment in the same product category Customer invests in accessories and care
- 14. THANK YOU Aditya N Banerjee Brand Management, Section B