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Vijay Gabale (07305004) Ashutosh Dhekne (07305016) Piyush Masrani (07305017) Sumedh Tirodkar (07305020) Tanmay Mande (07305051). Demand Forecasting in Indian Retail Industry. Applied Economics Course Project. Motivation.
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Vijay Gabale (07305004) Ashutosh Dhekne (07305016) Piyush Masrani (07305017) Sumedh Tirodkar (07305020) Tanmay Mande (07305051) Demand Forecasting in Indian Retail Industry Applied Economics Course Project
Motivation • The A.T. Kearney Global Retail Development Index shows India on the top of the list. • Multi-outlet retail concept has gained acceptance. A report by Images Retail predicts Over 400 malls by 2010 • Competition: Survival of the fittest! • Forecasting of demand!
Indian Retail Industry • Retail - The sale of goods or commodities in small quantities directly to consumers. • Retailers in India • Shoppers’ Stop • Westside (Trent) • Pantaloon (Big Bazaar) • Lifestyle • RPG Retail (Foodworld, Musicworld) • Crossword
Challenges in Demand Forecasting • Scale of forecast • Erratic demands • Introducing new goods • Changing price • Restocking period • How do we resolve them?
Techniques • Judgmental • Unaided • Delphi • Expert Systems • Simulated interactions • Quantitative • Extrapolation • Data mining – Least Square Regression
Existing Surveys • The Indian Retail Report 2007 released by Kamal Nath on January, 09, 2007 • The India Retail Report 2007, Amitabh Taneja, Chief Convenor of India Retail Forum • An article by “Tata Strategic Management Group” in September, 2006 • India has huge population • The forecasting plays major role in quantifying trends • Sophisticated tools or expert analysts
Our Survey • We visited Haiko, a division of the Lakewood Malls Pvt. Ltd. at Hiranandani Gardens. • Mr. Gaurav Purohit (Business Manager) • Haiko • Small scale retailer • Do not use sophisticated tools but historical data to analyze trends
What are the key aspects of a forecasting exercise? • Beginning Early • Taking expert inputs • The tools used for demand forecasting cannot replace domain expertise • Thinking of multiple solutions • Being on the field
Questionnaire • How is the forecasting done? • Past data and Targeted growth • Tastes and trends are subjective terms • What are some tips for developing a forecasting model for new product? • try out different forecasting techniques • What is the period of time in the future for which you do forecasting? • a six monthly basis, place orders at 2 months in advance • Could you share with us an example story?
Questionnaire • Does the volume of sale have a bearing on the rack space you allocate to a good? • They have a fixed rack space and that dictates how much they can stock. • For all the analysis do you use software? • Could you relate a failure story? • The detailed interview in report!
Conclusion • The increasing competition in Indian Retail Sector is compelling retailers to use demand forecasting tools. • Retailers who have their own brand labels use the forecasting techniques of the kind we study in theory. • On the other hand, small scale retailers can employ qualitative techniques on the historical data and considering the behavior trends in the market.
References • Images retail. http://www.imagesretail.com/india retail report.htm. • Tata Strategic Management Group. Retail revolution. http://www.tata.com/tata strategic/articles/20060925 retail.htm. • A.T. Kearney. Global retail development index (GRDI) 2004-2007. http://www.atkearney.com/. • Kamal Nath. India retail report. http://commerce.nic.in/pressrelease/pressrelease detail.asp?id=1895. • Namita Singh, S. Jason Olasky, Kellie S. Cluff, and Jr. William F. Welch. Supply chain demand forecasting and planning. http://www.patentstorm.us/patents/7080026-fulltext.html. • Software & Consulting Services to the Consumer Goods Industry. Demand forecasting model. http://www.ibsw.com/demand.htm.