MODERN RETAIL AND HOW TO OWNING
BUSINESS RETAIL IN INDONESIA:
INSIGHTS FROM RETAIL MANAGEMENT
WHAT WOULD WE LEARN AND GOT TODAY
THE WORLD OF RETAILING
WHAT IS RETAIL
THE STORY OF RITEL MODERN IN INDONESI
STRATEGIC PLANNING IN RETAILING: OWNING OR
MANAGING A BUSINESS
THE CONTEMPORARY CHALLENGES FACING RETAILRES
INDONESIA CONSUMERS
1. DR. ZULKARNAEN, MM, MBA
2. ALREADY 20 YS AS PROFESIONAL IN
RETAIL SECTORS
3. VICE PRESIDENT IN RETAIL COMPANY
4. DIRECTORE AND OWNER OF FUTSAL
AND FOOD CENTER
5. RESEARCHER IN RETAIL BUSINESS
WHO AM I
THE WORLD OF RETAILING
ENVOLVING IN
TO A GLOBAL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
RETAIL
HIGH TECHNOLOGY
Retailing is such a part of our everyday lives that it’s often taken for granted.
STORY OF INDONESIA RETAILERS
Ritel adalah industry kedua terbesar
tempat rakyat Indonesia menggantungakn
hidupnya setelah pertanian
Sumber: Presentasi KPPU kepada anggota AP3MI 2009
THE STORY OF INDONESIA FOOD BUSINESS RETAIL
1970 : DICK GELAEL open GELAEL supermarket 1st
store on Jln. Falatehan, Kebayoran
1970 : BOB SADINO open KEMCHIK 1st store in Kemang
1971 : MS KURNIA open HERO 1st store on Jln. Falatehan in Kebayoran
FROM ZERO TO HERO IN INDONESIA FOOD RETAIL
Driverconstruction
laborersEggs Seller Vegetables Kemfood KemChik
Tokokelontong
kecil di dekatGlodok
Pedagangbarang untuk
ekpatriat
Hero Supermarket
Suba Indah
Toko MainanGiant
Penjual pakaiananak-anak di
Pasar BaruMickey Mouse Matahari
Matahari
Hypermart
Foodmart
Boston
Rumah Matahari, Bakery, Rekreasi,
Bodyshop
THE EARLY MODERN RETAIL BUSINESS IS TRADITIONAL MARKET
RETAIL MODERN (MINI, SUPER &
HYPER)
GENERAL TRADE + MODERN TRADE
GENERAL TRADE ? WET
MARKET/Traditional market
INTRODUCTION OF RETAILING
INTRODUCTION OF RETAILING
WHY RETAIL MODERN GROWING VERY FAST
PP NO.118 TAHUN 2000 PASAL 1, AYAT 1
PERUBAHAN PRILAKU BELANJA
PERTUMBUHAN JUMLAH PENDUDUK
PERTUMBUHAN MIDDLE CLASS INCOME
BOOMING PROPERTY
TINGKAT KEPERCAYAAN KONSUMEN NO.1
Sumber: A.C Nielson, 2015
SALES GROWTH RETAIL MODERN 2008 - 2015TOTAL SALE
2015
189.82 T
6.28%
THE GROWTH OF TOTAL STORES
THE TOP INDONESIA RETAILERS
•CARREFOUR
•GIANT
•HYPERMART
•SUPER INDO
•HERO
•FOOD HALL
•SINAR SUPERMARKET
•KEM CHICKS
•YOGYA SWALAYAN
•BORMA
•RANCH MARKET
•LOTTE MART
•PUNCAK SUPERMARKET
•TIP TOP SUPERMARKET
•FOOD MART
•SRI RATU
•TOSERBA YOGYA
•MACAN YAHOAN
RETAILING MANAGEMENT
BUSINESS ACTIVITIES INVOLVED IN THE SALES
OF GOODS AND SERVICES TO
CONSUMERS FOR THEIR PERSONAL, FAMILY, OR
RETAIL MANAGEMENT
THE WORLD OF RETILING AND
INDONESIA OF RETAILING
RETAILING STARTEGY
1. Retail market strategy
2. Financial Strategy
3. Retail Locations
4. Site Location
5. Organizational Structure and HR Mgt
6. IT and SCM
MERCHANDISE MANAGEMENT STORE MANAGEMENT
ITS IMPACT ON THE
ECONOMY
BENEFIT OF RETAIL
BROAD RANGE OF CAREER
OPPORTUNITIES
ITS RELATIONSHIP VENDOR AND
RETAILRES
ITS FUNCTION IN DISTRIBUTION
ITS IMPACT ON THE
ECONOMY
Annual U.S retail stores sales : $3.5 Trillion = Rp.39.500.000.000.000.000 (in USA)
Telephone, mail order sales, non store = $200 billion= Rp. 26.600.000.000.000 (in USA)
Annual Indonesia retail sales 2015: Rp.200 trillion.
Hypermart forecast sales 2016: Rp. 20 trillion with EBITDA Rp.1.2 trillion.
WHY IS RETAIL ?
SALES RETAIL IN INDONESIA 2016 : RP. 200 TRILLION
ITS FUNCTION IN
DISTRIBUTION
Manufacturer Wholesaler RetailerFinal
consumers
A Typical channel of distribution
ITS RELATIONSHIP VENDOR AND
RETAILRES
Exclusive Distribution
Intensive Distribution
Selective Distribution
Number of retailers
Potential Conflict
Support from suppliers
Supplier sales
Retailer assortment
Product range
Competition among retailer
Medium/low
Highest
Comparing exclusive, intensive and selective distribution
BROAD RANGE OF
CAREER OPPORTUNITI
ES
Organization of a Big retailers
CEO
FINANCE & ACCOUNTING
DIRECTORE
OPERATION DIRECTORE
HRD DIRECTORESTORE
DEVELOPMENT DIRECTORE
DC DIRECTORE IT DIRECTOREMERCHANDISING
& PROMOTION DIRECTORE
Vice President
General Manager
Category Manager
Buyer
ASSISTANT CEO SECRETARY
Billion of employees are
working on retailers
Salary range from UMR to 1.1
Billion/monthOr 13.3 Trillion
one year
Type of Food Retailers
SUMBER : PERATURAN PRESIDEN NO. 112 TAHUN 2007
URAIAN MINIMARKET SUPERMARKET HYPERMARKET
Barang yang
diperdagangkan
Berbagai macam
kebutuhan rumah
tangga termasuk
kebutuhan sehari-hari
Berbagai macam
kebutuhan rumah
tangga termasuk
kebutuhan sehari-hari
Berbagai
macam
kebutuhan
rumah tangga
termasuk
kebutuhan sehari-hari
Jumalah item <5.000 5.000 – 25.000 >25.000
Jenis produk Makanan kemasan
dan barang-barang pokok
Makanan dan
barang-barangrumah tangga
Makanan,
barang rumah
tangga,
elektronik,
pakaian dan alat olahraga
Model penjualan
Secara eceran,
dilakukan langsung
pada konsumen
akhir dengan cara swalayan.
Secara eceran,
dilakukan
langsung pada
konsumen akhir
dengan cara swalayan.
Secara eceran,
dilakukan
langsung pada
konsumen akhir
dengan cara swalayan.
Luas lantai usaha
Maksimal 400M2 400M2 – 5000M2 >5000M2
Luas lahan parkir
Minim Sedang Sangat luas
Modal s/d Rp.200 juta 200. ta – 10 Milyar >10 Milyar
Sumber : Peraturan Presiden No. 112 tahun 2007
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
Donley’s Old West Steakhouse and Buffet in Illinois,is run by brothers Randy and Mike Donley. The Restaurant abuts Donley’s Wild West Town, a museum and theme village founded by Randy andMike’s father. The huge 270-seat restaurant, reminiscent of a saloon, was an immediate hit with both tourists and local residents when itopened in 1994
Yet, even though restaurant revenues were close to $2 million in 1995 and it was usually crowded, the Donleyslost money. According to Randy, “The busier we were, the more we lost.” The losses, amounting to
$250,000 in 1995, occurred despite the two brothers each working 18-hour days.
Only after hiring a restaurant consulting firm, did the Donleys begin to better grasp the reasons for their losses and revamp their strategy.
By enacting several tactics recommended by the consultant, they reduced annual food costs by $280,000. The tactics
included offering cheaper cuts of meat on the buffet (saving $2,500 per week), homemade desserts instead of ready-
made (saving $500 per week), and decorating the buffet with unused kale, a type of cabbage, instead of throwing it out (saving $2000
per year). The consulting firm also recommended that employees purchase their meals at cost (rather than be given free meals
as a fringe benefit), that supply cabinets and freezers be locked to control employee theft, and that the food purchasing contractbe renegotiated.
In addition to cost controls, the Donleys learned to refine their overall business skills. They now screen job applicants better (e.g.,
they will no longer hire temperamental chefs). Also they are more aware of the value of human relations skills in managing
employees.
As a result of these changes, the restaurant turned its first monthly profit ($12,000) in March 1996. This compared
quite favorably with losses of $25,000 in March 1995. It was really nice that the profit was earned without the restaurant having to substantiallyraise prices (only the price of a Sunday buffet was increased---from $10.95 to $11.95).
Now that cost controls and a more professional management style have been implemented, the brothers plan to boost revenues byattracting additional customers from the Chicago suburbs with such features as a casino night or cigar night. They are
also considering opening to new units.
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
I. Situation analysis
II. Objectives
III. Identification of consumers
IV. Overall strategy
V. Specific activities
VI. Control
Mass marketing Concentrated marketing Differentiated marketing
Organizational mission, Ownership and management
alternatives Goods/services category
Sales Profit Satisfaction of public image
Controllable variable Uncontrollable variable
Evaluation Adjusment
Daily short-term operation Responses to environment
Element of a
Retail Strategy
Ownership and management alternative
SOLE PROPRIETORSHIP
PARTNESHIP
A CORPORATIO
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
Durable
goods stores
Nondurable
goods stores
Personal
Service
Amusement
Service
Repair
Service
Hotel Service
• Automotive group
• Furniture and appliance group
• Lumber, building and hardware group
• Jewelry stores
• Laundries and dry cleaning
• Beauty/Barber shops
• Video shooting
• Funeral services
• Health-care services
• Automobile repairs
• Car washes
• Consumers electronic repairs
• Appliance repairs
• Watch and jewelry repairs
• Apparel group
• Food group
• Eating and drinking place
• Gasoline services stations
• Drug and proprietary store
• Coffee shop
• Movie theatres
• Bowling alleys
• Futsal Center
• Skating rinks
• Dance halls
• Amusement parks
• Karaoke Cennter
• Hotels
• Motels
• Trailers parks
• Camps
Selected kinds of retail gods and services establishments
THE CATEGORY PRODUCT LIFE CYCLE
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
SOME OF THE TYPICAL FINANCIAL INVESTMENTS FOR A NEW RETAIL VENTURE
Use of Fund Source of Funds
Land and building (lease or purchase Personal saving, bank loan, commercial finance company
Inventory Personal saving, bank loan, commercial finance company sales revenue
Fixtures (display cases, freezer, storage etc. Personal saving, manufacturer credit, bank loan, commercial finance company
Equipment (cash register, office equipment etc. Personal saving, manufacturers credit, bank loan, commercial finance company
Personnel Personal saving, bank loan, sales revenue
Promotion Personal saving, sales revenue
Personnel drawing account Personal saving, life insurance loan
Miscellaneous: Personal saving, manufacturer, wholesaler credit, bank • Equipment repair credit, bank loan, commercial finance company• Credit sales (bad debts)• Professional services• Repayment of loan
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
OBJECTIVES
1. SALES : GROWTH, STABILITY, MARKET SHARE
2. PROFIT : TIME PERIOD, A YEARLY, CONSIDESERING LAND, BUILDING, EQUIPMENT AND GOODS, ROI
3. SATISFACTION OF PUBLICS: STOCKHOLDERS, CONSUMERS, SUPPLIERS, EMPLOYEE, AND GOVERNMENT
4. IMAGE : POSITIONING (MASS MERCHANDISING & NICHE RETAILING)
STRATEGIC PLANNING IN RETAILING: OWNING OR MANAGING A BUSINESS
How Chicago Retailer Are positioned in the women’s fashione market
Wo
me
n’s
W
ear
fas
hio
nab
ility
Women’s wear Value for the money
*Norman Marcus
*Saks
*Express
*Nordstroms
*Lerner
*Marshal Fields
*Ann Taylor
*Mont.Ward
*Venture
*Kmart
Walmart
*Lord & Taylor
*Lane Bryant
T.J.Maxx
J.C Penney
Target
*Talbots
Worst value (left) Best value (right)
Co
nse
rvat
ives
vs
Cu
rren
t vs
Ver
y la
tes
IDENTIFICATION CUSTOMERS & MARKETING TECHNIQUES
TARGET MARKETING TECHNIQUES AND THEIR STRATEGIC IMPICATIONS
TARGET MARKET TECHNIQUES
StrategicImplications
Mass Marketing Concentrated Marketing
DifferentiatedMarketing
Location Near a large population base
Near a small or medium population
base
Near a large population base
Good and ServiceMix
Wide assortment of medium-quality
items
Deep assortment of high quality or low-
quality items
Distinct goods/services aimed at each
market segment
Promotion Efforts Mass advertising Direct mail, subscription
Different media and messages for each
segment
Price Orientation Popular price High or low High, Medium, and low – depending on
market segment
Strategy One general strategy directed atlarge homogeneous
(similar) group of consumers
One specific strategy directed at
a specific, limited customers
Several specificstrategies, each
directed at different (heterogeneous)
consumers
RETAIL PROMOTION MIX
Objectives
*Inform
*Persuade
*Remind
Sales People
Store atmosphere and Visual
Merchandising
Advertising
Public Relation
Sales Person
RETAIL PROMOTION MIX
WEEK END
AND
WEEKDAYS
NEWS PAPERS
RETAIL PROMOTION MIX
BE WEEKLY KATALOG
RETAIL PROMOTION MIX
INSTORE PROMOSI
1. PRICE DISCOUNT
2. GIFT PACK
3. BUY ONE GET ONE
4. BUY 2 GET 1
5. BUY MORE SAVE MORE
6. 2ND PURCHASE DISCOUNT
7. ETC
1. AND INSTORE ACTIVITIES
2. FREE TESTING PRODUCT
3. DEMO COOKING
4. COLOURING & DRAWING
COMPETITION
5. WHEEL OF FORTUNE
6. KIDS STORE TOUR
7. ETC
OVERALL STRATEGY
Retail Strategy
Controllable variables
*Location
*Managing business
*Merchandising management
*Pricing
*Communicating with consumers
Uncontrollable variables
*Consumers
*Competitions
*Technology
*Economic condition
*Seasonality
*Legal restrictions
The Contemporary Challenges Facing Indonesia retailers
3. Lokasi, Lokasi, Lokasi
Market Percentage
Hong Kong 93%
Indonesia 93%
Singapore 90%
South Korea 89%
Philipines 88%
Malaysia 88%
Thailand 84%
UAE 84%
China 83%
Sumber: Nielsen
OVERALL STRATEGYControllable variables
*Location
*Managing business
*Merchandising management
*Pricing
*Communicating with consumers
MANAGING BUSINESS
RETAIL ORGANIZATION &
HUMAN RESOURCES MGT
TASK, POLICIES, RESOURCES, AUTHORITY, RESPONSIBILITY,
REWADS & PUNISHMENT
HIRING, TRAINING, COMPENSATION, SUPERVISION
OPERATION MANAGEMENT
ASSET MANAGEMENT, BUDGETING, RESOURCE
ALLOCATION
STORE FORMAT, SIZE, SPACE ALLOCATION, PERSONNEL USE,
STORE MAINTENANCE, INVENTORY MANAGEMENT, STORE SCURITY, INSURANCE,
CREDIT MGT, COMPUTERIZATION AND CRISIS
MANAGMENT
OVERALL STRATEGYControllable variables
*Location
*Managing business
*Merchandising management
*Pricing
*Communicating with consumers
MD MANAGEMENT & PRICING
MD MANAGEMENT
QUALITY GOOD AND SERVICE
WIDHT & DEPTH OF ASSORTMENT
PRICING
LEADING/FOLLOWING, COST-PLUS/DIMENT-
ORIENTED,
EVEYDAY LOW PRICE OR HIGH LOW PRICE
OVERALL STRATEGY
Controllable variables
*Location
*Managing business
*Merchandising management
*Pricing
*Communicating with consumers
Building & maintaining a
distinctive image
Physical attributes
•Atmosphere
•Store front
•Store inside
•Layout & display
•Wall & floor colors
•Lighting
•Music
Promotion Techniques
•advertising
•Personel selling
•Sales promotion
•Li
Customer service
•Parking
•Gift wrapping
•Return policy
•Extended hours in busy season
•credit, phone and mail sales
•Donations to charity
Communication with consumers
OVERALL STRATEGY
Retail Strategy
Uncontrollable variables
*Consumers
*Competitions
*Technology
*Economic condition
*Seasonality
*Legal restrictions
Inflation, consumer
unemployment,
interest rate, tax
amnesty, tax levels,
GDP,
New entry, existing
retailer create
competition
OVERALL STRATEGY
Retail Strategy
Uncontrollable variables
*Consumers
*Competitions
*Technology
*Economic condition
*Seasonality
*Legal restrictions
Control Uncontrol
Location Zoning law, Environment law,
Local ordinance, Leases ets
Managing Business Personel law, Antitrust law,
Franchise agreement, Business
tax, Delivery laws
MD & Pricing Trademark, Licensing
agreement, Merchandising
restrictions, Warranties & Sales
tax, Collusion
Communication
with the Customer
Truth in advertising,
Telemarketing laws, Inventory
laws, Labelling laws,
The Contemporary Challenges Facing Indonesia retailers
1. Regulasi, Permit dan Strategi
2. Infrastruktur Sebuah Pilar
3. Dampak Lingkungan
4. Dampak Ekonomi
5. Dampak Sosial
Consumers of Indonesia
1. Pasar Muda dan Ekspansif
Italia Congo Indonesia
Populasi 2008 59.9 million 66.5 million 239 million
Populasi 2025 62.0 million 109.7
million
292 million
% Growth 3.5 65 22
% populasi <15 14 47.1 29
% populasi 65+ 19.9 2.6 6
Annual births 568.120 2.900.000 5.077.000
Annual deaths 575.300 800.000 1.521.000
Natural population
increase
-7.180 2.100.000 3.556.000
Life expectancy at birth 81 53 70
Pembagian Demografi
Consumers of Indonesia
4. Pasar Tradisional: Belanja segarsetiap hari
Consumer Confidence Index
Sumber: Nielsen Global online consumer confident survey 2015
Showing general pattern of increased
optimism
The Future of Retailers
4. Muncul Konsumen Tidak sabar
Top
Mgt
Middle Management
Front-line people
CUSTOMER
CUSTOMER
Front-line people
Middle Management
Top
Mgt
Traditional Org.chart Modern customer oriented org.chart