Private Labels

vs National Brands
 Introduction
• Shoppers' Stop Limited is a chain of Retail stores in India owned by
K. Raheja Corp.
• Group - The Company houses a host of many international &
domestic brands across various categories such as apparel,
accessories, cosmetics, home & kitchenware as also its own private
brands.
• SS started in 1991 with its first store in Andheri, Mumbai.
• SS has built robust management systems to capitalize on the growth
potential in the organized retail space, particularly the department
store segment.
• With a Gross Retail Turnover of Rs. 8996 million, Shopper's Stop has
become the highest benchmark for the Indian Retail Industry.
Shoppers’ Stop Represented Across Most Retail Segments

RAHEJA
GROUP
 What is a private label?
• A private label brand, often referred to as an in-house brand or
store brand, is that which is owned by the retailers themselves.
• They have almost all the elements of a big label—a brand name and
exclusivity.
• Private labels are a way for retailers to improve operating gross
margin.
• Pricing: These products were priced substantially lower than the
other brands.
• Differentiating factor: these brands are exclusively available at that
retail outlet only. So a customer, for example, may want to revisit
the store if they find the quality comparable to others at a more
affordable price point.
• The retailers also believe that private labels give them more control
over their shelves.

• As they compete head-on with brand manufacturers, private labels

offer retailers better negotiation power with suppliers.

• Store Loyalty: In other words, with private labels not available

anywhere else, if it clicks, then consumers return to the store.

• For the customer: Store brands most often mean products of

reasonable quality at lower prices.

• For the retailer: Private labels translate into better margins, greater
clout with the manufacturers and the ability to fill value gaps in the
consumers requirements.
Shoppers’ Stop Private Labels

Source: Company Data

 Private Labels

• Of the 204 brands stocked by the Rs 400-crore (Rs billion) Shoppers'

Stop, only five are private tags.
• These include :
 Stop: the oldest and the strongest of the in-house brands, caters to
the youth segment
 Mario Zegnoti: Men’s Casual Wear.
 Austin Reed: International brand, exclusively sold in SS
 Life: for youth and the mid segment
 Kashish: the premium ethnic ladies wear
 Vittorio Fratini: a premium men's wear
 Elliza Donatein: an exclusive brand for ladies formal and casual
wear
• Interestingly, the private labels account for 18 to 20 per cent of
turnover.

• Price tag: These products are priced substantially lower than the
other brands.
 
• Depth of assortment: The private labels are not limited to a
particular category, it is extended from apparel for men, women to
children.

• Store Space: These products are not differentiated from the other
brands in terms of store space. They operate in 18-20% space only. 
Merchandise Assortment
& Pricing
 STOP Lowest Price Highest Price
Men’s Formal Shirts Rs. 599 Rs. 1199
Men’s Tee Shirts Rs. 399 Rs. 599
Men’s Formal Trousers Rs. 999 Rs. 1299
Men’s Briefs Rs. 99 Rs. 199
Men’s Handkerchief Rs. 199 Rs. 199
Women’s Formal Shirt Rs. 649 Rs. 699
Women’s Office Wear Rs. 699 Rs. 799
Women’s Trousers Rs. 499 Rs. 899
Women’s Casual Wear Rs. 299 Rs. 599
Classics Ladies Kurti Rs. 599 Rs. 899
Classics Ladies Suit set Rs. 1199 Rs. 2199
Ladies Churidar Rs.499 Rs. 499
 KASHISH Lowest Price Highest Price
Casual Wear Men’s Rs. 299 Rs. 599
Kurta
Occasional wear Ladies Rs. 899 Rs. 1499
Kurta
Churidar Rs. 1999 Rs. 3299
Occasional Wear Sarees Rs. 1799 Rs. 6999

VETTORIO FRATINI Lowest Price Highest Price

Men’s Formal Shirt Rs. 1199 Rs. 1599

Men’s Casual Shirt Rs. 799 Rs. 1199

Men’s Sport Collection Rs. 599 Rs.659

 LIFE Lowest Price Highest Price
Men’s Casual Shirt Rs. 599 Rs. 999
Men’s Casual T-Shirt Rs. 199 Rs. 999
Denims Rs. 1299 Rs. 1599
Shorts Rs. 699 Rs. 999
Cargos Rs. 899 Rs. 899
¾ th’s Rs. 999 Rs. 999
Ladies Casual Top Rs. 299 Rs. 999
Ladies Jeans Rs. 699 Rs. 1099

ELLIZA DONATEIN Lowest Price Highest Price

Women’s Formal Shirt Rs. 799 Rs. 799
Ladies Casual Tops Rs. 299 Rs. 999
Ladies Trousers Rs. 999 Rs. 999
Marketing Strategy
• As these brands create an identity for the retailer, there is a lot of
work that goes into the pre-launch phase.

• Salil Nair, customer care associate and chief operating officer,

Shoppers Stop, explains,

“We have a very large base of loyal members, called First Citizens.
Before we launch, we give a preview to First Citizens. We collect
their feedback, so that we can study their likes, their sensitivity to
price, their sensitivity to colors, silhouettes etc. We even put it for
re-sampling if required, and then we launch it.”

These brands are then re-invented every year through consumer and
competitor surveys.
"The key investments for developing a
private label are in design resources,
hiring of buying and merchandising
personnel, travel to industry fairs,
sampling activities and brand
development activities such as the cost
of promotions." 

- Govind Shrikhande, Customer Care

Associate, President and CEO, Shoppers
Stop. Also responsible for design and
development of all private labels of the
company.
August 26, 2010
• Since private labels are not advertised as much as the other brands
the costs of the private labels are lower enabling the store higher
margins as well as permitting them to offer their customers quality
products at lower price points.

• Shirkhande explains, “Getting a product is easy, but the

fundamental objective of a private label is to expand the category
per se and not take market share from established players.”

• Shoppers' Salil Nair says, "The objective is not to outsmart

competition. We have to give value to the consumer."
Sales Contribution
• Shoppers' Stop says its five store brands together account for
approximately Rs 50 crore or 20 per cent of its turnover.

• Private labels accounted for 18% of the sales in the fiscal year 2010
(source: www.fashionunited.in)

• According to Salil, Private labels are highly profitable. The profits

earned from them are almost double than those from the third
-party brands.

• He says, “Five years back, our private label brands were around 13%
in terms of sales and today they are almost 18%—a 5% increase. So
now we have started dedicating a bigger space for this. All our
brands have good representation in our stores so that they have a
visual impact. The treatment that our in-house brands get is equal
to what other brands would get at Shoppers Stop.”
 SS’s Stance
• According to Images Retail Report 2009, as quoted in "Indian Retail:
Time to Change Lanes" by KPMG; private label brands constitute 10-
12% of organized retail in India.

• Of this, the highest penetration of private label brands is by Trent at

90%, followed by Reliance at 80% and Pantaloons at 75%. Big
retailers such as Shoppers Stop and Spencer’s have a penetration of
20% and 10% respectively. 
 Survey
• To asses the differences between the Private Labels and National
Brands in Shoppers Stop a survey was conducted.

• Objective: To find out the consumer preferences between Private

Labels and National Brands in Shoppers Stop.
 Research Methodology
• The research is explorative and analytical in nature and involves the
study of relevant secondary and primary data which has been
analyzed.

Sources of data collection:

• Sample design: To study the consumer preferences the survey
administers a convenient sample size of 25 consumers and the
sample unit is universal in nature. The data was collected through
questionnaires.
• Questionnaire design: The questionnaire includes both open-ended
and close-ended questions.
 How often do you visit Shoppers Stop?

8%

32%
20%
Twide a month
Once in a month
Once in 3 months
Not sure

40%

Most of the respondents visit Shoppers Stop at least once a month. It shows that
Shoppers Stop is a famous shopping mall.
 How often do you shop for Casuals?

12%

28%

Frequently
Occasionally
Rarely

60%

Most of the people shop for casuals occasionally which implies that they might prefer other
exclusive brand outlets or malls.
 Where do you like to shop from?
16

14

12

10

0
EBO MBO

Most of the respondents prefer Multiple Brand Outlets compared to Exclusive Brand
Outlets for the abundance of choice of brands in the MBO’s.
 Which of the following private labels are you aware of?
14

12

10

0
Stop Life iJeanswear Mario Zegnoti Austin Reed Mustang

Most of the respondents are aware of Austin Reed as it is an International Brand exclusively
available in Shoppers. At the same time, the respondents are not as aware of Mustang even if it
is an International Brand.
Stop and Life are the Private Labels that respondents are aware of the most. They haven’t
heard about iJeanswear and Mario Zegnoti.
 More Value for Money (1-Lowest and 5- Highest)
7

5
3
4 4
5
3

0
Private Labels National Brands

It can be understood from the above graph that the value for money is found more in private
labels than national brands as the rating private labels have received come in the range of 4
-6
 Major Attracting Factor
Brand Loyalty Latest Designs
Visual Merchandising Offers

12

10 10

5 5
4

Private Labels National Brands

The respondents feel that they get more Offers in Private Labels than in National Brands.
They need to concentrate on increasing the brand loyalty of private labels, increase the
number of designs being offered and better their visual merchandising.
 Effect of Promotions

32%

Yes
No
Sometimes
56%

12%

In-store promotions do affect the respondent’s buying patterns dramatically.

 Age Group

4%
12%

below 19
36% 19-29
30-40
40-50

48%

The age group of 19-29 is the most prominent among the customers
 Monthly Income
16

14

12

10

0
Below 25000 25000-35000 35000-50000 above 50000

Most of the respondents fall in the monthly income scale of Rs.25, 000 – Rs. 35,000
followed by Rs. 35, 000
 The Road Ahead…

• Private labels are slowly becoming the protagonist in the big Indian
retail growth story.

• Taking cue from the West, Indian retailers are also churning out
newer ways to increase their profit margins—one such initiative is
the introduction of in-house brands.

• With Indian customers increasingly accepting these private label

brands, they would soon be major contributors to the profits of
Indian retailers.
SH PPERS ST P

THANK Y U
Presented By:
Biji Basheer
P. Shivram
Priyanka Khandelwal
Phirabhu Raghavan