Retail Assignment Sakshi Sharda

Retail Management
Assignment
Sakshi Sharda ROLL NO:- 20192341 CORE 1

Q1) Discuss various new retail business models.
Retail sector is passing through a change where traditional balance between buyer and
seller is changing day to day. Technology and the modes of communication which made it
simple for the competitors to enter in to open market globally, given customers wide
opportunities to select from choices available. These developments had opened for the
design of business models by enabling them to change the way they organize and engage in
economic exchange within the firm and industry boundaries. Business model is a new area
of analysis, which deals with how the firms design to do their business and focused on the
activities of the firms they operate their business. It is more of value creation among the
customers. So, the new retail business models are as follows: -
The omnichannel movement
Another business model that can gain traction in 2019 is digital centralization. The
customer being at the center of all touchpoints is the standard, but once retailers achieve
customer centricity, another challenge around centralization will arise. Typically, it
starts with merging store operations with ecommerce operations and the wholesale
business (B2B) with the direct-to-customer business. It’s the emergence of the
omnichannel platform. A centralized business model for retail involves investment in
digital transformation for new end-to-end processes such as:
 Deliver to delight – Developing services to better serve the customers
 Order to delivery – Making goods available as close as possible to the customer
 Route to market – Transforming sales and marketing omnichannel operations (in-
store and online)
 Market to order – Driving conversion with expertise, intelligence and trust between
customers and sales agents
Customer-centric retail in Business-to-Home (B2H)

Going direct-to-customer (B2C) or business-to-business (B2B) are well known business
models, but a new trend is slowly emerging in the retail market: business-to-home. One
such concept which has been featured in the media recently is the intelligent fridge, which
allows customers to replenish their monthly or weekly groceries.
Unique Innovation Proposition (UIP)

A unique selling proposition (USP) is not enough anymore to create differentiation.
Retailers must strive to design a unique innovation proposition (UIP) and make deeper
connections in context, focusing on the experiences and feelings that products can evoke.
Customers are marketing, sales and service capabilities into one single data base. These are
some of the most critical technical core attributes that can enable retail innovation:
Sharing is caring
The sharing economy is increasing in traction in the retail space, with economic, peer-to-
peer (P2P) models for access to goods and services through online platforms. For
traditional retailers this model is highly disruptive, but there is a reason why this should be
a priority for investment – millennials are not aiming to own material goods as the previous
generations were; they simply want access to products and services when they need, and
move on to the next thing the minute after.
Q2. Interview a few customers and find out the factors that influence a customer when
choosing a store.
The various factors that influence the store preference were identified and reduced into 5
factors which are named store ambience, services, convenience, merchandise options and
sales promotion.
 It is found that store ambience is the major determinant of the store preference, which
includes Store design and layout, availability of Refreshment / Entertainment facilities,
Store ambience (lighting, scent, sound) and Ease of driving trolleys.
 Followed by the component Merchandise Options, which includes Quality of
merchandise, Availability of well-known branded merchandise, Availability of wider
choice/selection of merchandise and Display of merchandise.
 Then is the component Services which includes factors Availability of merchandise at
reasonable prices, Exchange Guarantee, Responsive sales personnel and Convenient
payment options.
 And then is the component Sales Promotions which includes factors Promotional Offers
and Coupons, Frequency of special sales and Availability of Parking facilities.
 The last component Convenience includes Queue for billing and Express checkout and
prompt service.
Q3. Select any store of your choice and find out the in store digitalization techniques.
Discuss various digitalization techniques used by the store.
Sephora, a multi-national chain of personal care and beauty products has built an empower
through digital innovation and come out as the winner in the cosmetics retail space. It’s
commitment towards digital has not only made it successful in the beauty space but has set
an example for all brands looking to transform through technology. Here, we explore some
of the digital initiatives that the company has successfully executed and how they’ve helped
them create and capture value.
Sephora was an early e-commerce player when it launched its first website in 1998. Along
with the launch of the Innovation Lab came multiple digital offerings from Sephora –
1. Pocket Contour, a mobile-app feature that provided contouring tutorials based on
the user’s face shape
2. Using beacons (IoT location-broadcasting device) in stores to provide
personalized notifications to users as they walked past certain events, sales,
services, etc.
3. Sephora Flash, an Amazon prime equivalent for free and fast shipping.
Virtual Artist uses augmented reality for users to virtually try on makeup. Sephora
partnered with ModiFace (augment reality tech provider for beauty) to create mobile and
in-store versions. The company doubled-down on its AR investments by launching other
products such as ColorIQ (to find foundation and concealers that match user skin-tone) and
Skincare IQ (quiz to provide recommendations for user’s specific skincare needs). Sephora
was quick to identify skincare as a major growth category and through the launch of
Skincare IQ, has generated sales that have surpassed makeup sales.
Other digital initiatives that have helped drive the exponential growth at Sephora:
 Sephora Assistant: Messenger chatbot using AI that allows users to book

makeover appointments, which saves administrative costs.
 Beauty Board: A social-media platform created for collaborative browsing
and connecting & creating with the community
 Google Assistant app: A voice-enabled application for users to book
services, take quizzes and listen to beauty podcasts
Q4. Find out the influence of digitalization techniques on customer store preference.
The digital transformation facilitates and enables new ways of value creation because it
allows for the fulfilment of longstanding consumer needs in unprecedented ways. As
sources of value creation, automation, individualization, ambient embeddedness,
interaction, and transparency and control combine a plethora of activities and processes.
The basic premise is that customers will likely prefer to interact with players that best
accomplish value creation on these dimensions. Although digital transformation has the
potential to impact virtually every aspect of business, it will likely have the most significant
impact on customer experience. After all, many of the advances we’ve already seen, like e-
commerce shopping, personalization, and new communication channels have been mostly
for the benefit of consumers. And companies are on board with this focus. In fact, the HBR
survey found that 40% of respondents named customer experience their top priority for
digital transformation.
 While businesses used to primarily save data locally, advances in storage and
security have made it common practice to use online methods. This makes it much
more convenient for customers to find the information they want, and often
eliminates the need to speak with an employee. For example, many online retailers,
like Sephora, now allow customers to access details on all of their past purchases on
the company’s website. If a customer wants to track, cancel, or return an order, they
can do so on their own — without waiting for assistance from the company’s
customer service team. This is not only more convenient for the customer but frees
up support agents’ time to help customers with more complex questions and issues.
 In one survey by Accenture, 84% of respondents said they preferred interacting with
computer-based applications rather than human advisors due to their 24/7
availability.
 The more relevant your offers are to each of your individual customers, the more
likely they’ll be to take advantage of those offers. That’s why many companies now
use customer data to provide personalized content and recommendations. For
example, if you’ve ever shopped on Amazon, you’ve likely seen a section of
recommended products. Instead of merely featuring products that are popular with
other shoppers, the site shows custom lists tailored to each user’s browsing history.
 It’s essential to be transparent about the data you collect. Today’s consumers know
that their personal data is being collected and 87% believe it’s important to be able
to control and review it.
Q5. Explain the Merchandising process of the retail store selected.
Sephora has captured the hearts of millions of beauty shoppers and is aggressively
expanding across the globe. Imagine walking into a cosmetics store with racks of makeup,
shelves of perfumes, aisles of every beauty product imaginable but you can’t touch any of it.
Thanks to Sephora, beauty shoppers no longer have to face this scenario. Founded in 1970
by Frenchman Dominique Mandonnaud, Sephora pioneered the concept of try-before-you-
buy for cosmetics, which has been widely replicated across beauty retail. Diversity of the
products available ranks as one of the highest priorities for Sephora customers. When
you’re merchandising in an environment as tailored to beauty gurus as Sephora is, display
your entire collection for the makeup connoisseurs who think they’ve already seen it all.
When you walk into a back-lit, booming Sephora store, you feel more than welcomed, you
feel empowered. Sephora’s approach to merchandising has contributed immensely to
their success as they identified all the hurdles of purchasing makeup and promptly tossed
them out the door. Sephora knows that customers are exhausted by the grab-bag quality of
pharmacy makeup aisles and the competitive product-pushing found in traditional
department stores. The Sephora alternative offers a more accessible shopping experience
that’s designed to be low-pressure. Retail assistants are taught to refrain from the hard sell
that department stores rely on and instead work with each customer holistically to find the
products that match them best while stepping back as needed. This gives Sephora
customers the power to choose both their products and their service; they have the freedom
to explore the store as they would a pharmacy without sacrificing department store-quality
brands, tutorials, and assistance.
Customers are increasingly demanding customization as part of their shopping experience

—especially if they’re shelling out for luxuries like makeup. Whether it’s primer for oily
skin or moisturizer for dry, Sephora recognizes that their customers require a unique and
personalized approach, and they offer this through in-store swatch samplings and makeup
demonstrations that allow shoppers to test different brands to be sure they’re buying the
right product at the right place. But Sephora doesn’t stop there: their personalized shopping
experience extends to the web, which has been a major key to their success in keeping
customers loyal to their brand.
Q6) Also find out if the retailer uses any advanced analytics to make offers and
decisions that are targeted and localized, as well as delivered in real time. Discuss how
he makes the use of analytical tools with a well-illustrated table along with
interpretation of the data depicted.
Sephora is the world’s leading specialty beauty retailer, and a pioneer in the field of
predictive analytics, topping the Retail Personalization Index two years in a row. The
brand’s experience, famed for its playful and customer-centered approach, spans online and
offline channels, with 2.3 million visits monthly to its site, a top-ranked Shopping app in
the App Store, over 1 million downloads in the Google Play store, and 2,300 physical stores
worldwide.
From personalized email offers, to “you might also like” product carousels on its product
display pages, the company committed early on to an experience interwoven with machine
learning, giving it an edge. Sephora’s digital experience is highly individualized, with
product-discovery tools and loyalty rewards that are customized 1:1. The site homepage
showcases products “recommended for you”, a selection chosen based on a mix of past
purchase and browsing activity. Sephora also recognizes various loyalty tiers based on how
much consumers spend per year, and sends customized streams of email with product
recommendations based on purchase patterns from this “inner circle”. These efforts have
garnered success, with 80% of surveyed Beauty Insiders professing complete loyalty to
Sephora.
Numerous user experiences are ripe for the application of this new strategy. In-store,
customers can opt for a Pantone ColorIQ test, in which a specialized camera device snaps a
picture of their skin tone, matches the exact color from the Pantone library, and
recommends products that suit their unique coloring. Sephora analyzes ColorIQ inputs in
concert with individual shopping behavior and omnichannel trends to determine product
suggestions. Another innovative feature from the brand is Virtual Artist, which enables
users to apply makeup in AR, and seamlessly shop products. Today this tool is for
individual experimentation, but long-term there are clear AI applications, in which the
screen could pre-populate with looks that someone with similar hair color/skin tone/or style
preference (natural vs. glam) has ordered in the past.
Their aim is to use analytics to understand how users travel from offline to online and back
in one continuous journey, and then engineer or stimulate that behavior to make existing
customers more valuable to the brand.

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Retail Management

Sakshi Sharda ROLL NO:- 20192341 CORE 1

Customer-centric retail in Business-to-Home (B2H)

Unique Innovation Proposition (UIP)

 Sephora Assistant: Messenger chatbot using AI that allows users to book

Customers are increasingly demanding customization as part of their shopping experience

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