Specialist Core Mandatory Your Pathway Through The Retail

Specialist Core Mandatory Your Pathway Through The Retail Business College Foundation Developed Advanced The Retail Industry Foundation Of Merchandising Point Of Purchase Marketing Developing A Customer Satisfaction Mindset The Evolving Supervisor Personal Leadership AF Basic Selling Guide Building A Customer Centered Business Operations For FBM Store Operations Retail Financials Zodiak Business Simulation Foundation Retail Maths Advanced Selling Skills Strategic Business Planning Selling @ Retail Step-Up Supervisor Leading Change Managing Performance Retail Coaching Engaging The Employee & Managing Your Team Leading Self Learning To Lead AF ‘Real Life’ Simulation Category Management Key Account Management Highly Effective Business Presentation Negotiation Skills Supplier Management Recruit The Best Building A Performance Culture The Future Of Retail

Course Modules • • About Al Futtaim The Retail Landscape in the Region Introduction to Retail Categories Retail Channels Store Formats Key Retail Challenges Organizational Structure

Course Objectives By the end of the session you will… • State the Al Futtaim Mission and Vision • Identify the Al Futtaim brands • Define the various store functions, job roles and formats • Outline key retail business terminology • Explain the challenges and opportunities in the industry

Module I- About Al Futtaim Lessons: 1) History 2) Vision and Mission Statements 3) Al Futtaim Brand Portfolio

Bonded by Tradition, Changed with Time The Al-Futtaim Group is an integrated commercial, industrial and service organization, positioning itself as one of the leading real estate development and trading companies in the GCC. Omar Al Futtaim CEO – Al Futtaim Group

Al Futtaim Globally Over 20, 000 Employees Across 3 Continents

Vision To seek maximum long-term profit as the primary means to ensure the prosperity of the owner and employees, the well-being of our customers, and the improvement of the UAE people’s living standards.

Mission • Grow sales by addressing market needs and excellence in services • Enhance brand equity and awareness through effective marketing programs • Achieve lowest cost base, improving Group net profit • Continuously improve our employee productivity and management process • Attract and retain talented, competent people, and pay them well for their performance – becoming an employer of choice • Empower our employees to participate in decision making processes under one business direction • Progress significantly in the Emiratization program • Be a good, corporate citizen in charity and in protecting the environment

Activity

Al Futtaim’s Business Units AUTOMOTIVE ELECTRONICS, ENGINEERING & TECHNOLOGIES FINANCIAL SERVICES REAL ESTATE & CONSTRUCTION JOINT VENUTRES GENERAL SERVICES RETAIL

Al Futtaim In Retail Interesting Facts…………. . There are over 200 Al Futtaim Outlets In The MENA Region (Excluding RSH) There are 26 Retail Brands across the Global Network A purchase is made from an Al Futtaim outlet every 3 seconds!

Al Futtaim’s Brand Portfolio

Al Futtaim Retailers In the Region

Competitors In The Region

Exercise: Competitor List Objective – To build a list of all the competitors that you believe Al Futtaim has and understand why they are competitors Method – Choose the Regional Al Futtaim Retailers and the name of the competitors that you think Al Futtaim Retailers has – Decide / P[ick for each competitor what you think they are good at and what Al Futtaim can do/is doing to be competitive Time – 15 minutes to create the flipchart ideas 16

Exercise: Competitor List COMPETITOR COMPETING WITH WHICH AL FUTTAIM RETAILER WHAT IS THE COMPETITOR GOOD AT? WHAT IS THE AL FUTTAIM RETAILER GOOD AT? Good Mall Locations Large Store at Dubai Festival City

Module II The Retail Landscape in the Region Lessons: 1) Top MENA Region Retailers by Value 2) Mena Population 3) Consumer Spend

1. Inditex (Zara) 2. IKEA 3. H&M 4. Next 5. Arcadia (Topshop) 6. Lulu (Non Grocery Sales) 7. Mothercare 8. Boots 9. Debenhams 10. Limited Brands (La Senza) Top 10 ‘Non Food’ Retailers In the MENA Region By Total Sales Source: Planet Retail 2012

How Big Is The Pie? TOTAL MENA Population 350000000 30000 250000000 20000 TOTAL MENA Population 150000000 10000 50000000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Planet Retail 2012 Population Is Increasing Every Year & Is Expected To Continue 2015

What Are People Spending Their Money On In The Region? TOTAL MENA Clothing, footwear & jewellery spend Consumer electronics spend DIY & furniture spend Sports & leisure spend Total food spend Source: Planet Retail 2012 People Spend Their Money On Different Types Of Retail Products. This Split Is Called ‘Share Of Wallet’

Lessons: 1) 2) 3) 4) Module III Introduction to Retail Definition of Retail How Retailers make money Terminology of Who’s Who In-store Path to Purchase in Retail

What Is Retail? “Retail is theatre and a ringing cash register is the applause. ” -Gordon Segal Co-Founder of Crate & Barrel

What Is Retail? A Fixed Location Stocking Multiple Products Selling those products For Use by someone

How Is A Retailer Made Up? RETAIL GROUP e. g. Al Futtaim RETAILER e. g. Toys R US OUTLET e. g. Toys R US Festival City

How Retailers Make Money More Customers o Advertising X o Promotions o More Locations Spending More X More Often = o Good Products o Loyalty Schemes o Good Merchandising o New Products o Good Environment o Better than competition GREAT CUSTOMER SERVICE! Revenue & Profit GROWTH

Definition of Who’s Who SUPPLIER RETAILER The Company who supply the goods to the store. The Company who sells the goods in the store. SHOPPER The person or people who visit the Retail store to purchase products CUSTOMER CONSUMER The person or people who use the product that has been purchased PRINCIPAL e. g Hasbro DISTRIBUTOR e. g Sandgate GROUP e. g Al Futtaim PRINCIPAL e. g IKEA

So where do these different entities play in our Definition of Retail? A Fixed Location Stocking Multiple Products SUPPLIER RETAILER Selling those products in store SHOPPER CUSTOMER For Use by someone CONSUMER

Who’s Who For Retailer & Supplier? For Retailer For Supplier CUSTOMER Person who buys Retailer e. g Al Futtaim SHOPPER Person who buys CONSUMER Person who uses

In the following pictures are the subjects in the picture most likely to be shoppers or consumers?

1. SHOPPER OR CONSUMER? CONSUMER

2. SHOPPER OR CONSUMER? SHOPPER

SHOPPER OR CONSUMER? CONSUMER 3.

4. SHOPPER OR CONSUMER? SHOPPER & CONSUMER Possibly

5. SHOPPER OR CONSUMER? CONSUMER

Where do they all meet? RETAILER Meets SHOPPER INTERFACE RETAILER Meets SUPPLIER BUSINESS INTERFACE CONSUMER Meets SHOPPER CONSUMER INTERFACE

The Path To Purchase In Retail CONSUMER SHOPPER The Moment Of Truth! CONSUMER

Module IV - Categories Lessons: 1) 2) 3) 4) Product Categories in Retail Introduction to Categories Sub Categories Why do we have categories in Retail

Categories & Why We Have Them

Store Categories. : EXAMPLE CATEGORIES

What is the category here? Ø Pillows? ØTextiles? ØHome?

What is the category here? Ø Kitchen? ØCrockery? ØHome?

What is the category here? Ø Kitchen? ØWashing? ØAppliances?

How Many Categories are here?

Categories Implications The more specialist the store, the more specialist the category Implications • Shoppers will probably expect a higher level of specialist knowledge in more specialist stores • Shoppers will often know what they want to buy in specialist stores so we need to direct them to the right category for their requirements • We may only work in one section or category but we need to be aware of all of them so we can direct customers effectively

Sub Categories In a Specialist Retailer, the Master-Categories might be more specific: Example: PLUG-INS MASTER CATEGORY SUB CATEGORES SEGMENT COMPUTERS HARDWARE LAPTOPS TABLETS SOFTWARE DESKTOP PC’S EDITING ANTI-VIRUS OPERATING SYSTEMS

Why Do We Have Categories? SHOPPER REASONS OPERATIONAL REASONS ü Makes it easier for them to find products ü Helps us Merchandise products easily ü Makes it easier for them to compare products ü Enables us to train category specialist staff ü Could help them buy more products ü Helps us direct shoppers easily ANALYTICAL REASONS ü Ensures we can organize sales data ü Allows us to compare similar products with market average ü Helps us identify trends so we know where to focus

Module V – Retail Channels Lessons: 1) Type of Retail Channels 2) Channel Growth in MENA region 3) Market Share

Retail Channels A channel can broadly be defined as a grouping of purchase locations of similar size, strategy and product mix. EXAMPLE Split of Retail Channels: DEPARTMENT STORE Large-scale stores with multi-level merchandise mix focused on fashion, apparel & home goods APPAREL Stores that focus on the specific category of clothing and fashion as their dominant mix CATEGORY SPECIALIST Stores selling predominantly a particular specialist product mix e. g. Electronics or Furniture HYPERMARKET Large stores that range from 100, 000 sq ft to 200, 000 sq ft with food sales accounting for more than 50% of revenue SUPERMARKET Medium stores that range from 10, 000 sq ft to 60, 000 sq ft with food representing between 75% & 90% of revenue CONVENIENCE Small stores that range from 500 sq ft to 5, 000 sq ft with food representing about 50% of revenue PHARMACY Small stores selling prescription and non-prescription drugs as their dominant product mix

Channel Growth In The MENA Region Channel Apparel Category Specialist Convenience Department Online Retail Hypermarket Supermarket TOTAL GCC Compound Annual Sales in Millions of USD Growth Rates 09 -'11 11 -'12 2009 2010 2011 2012 E CAGR 7, 9, 12, 14, 26. 9% 18. 4% 603 999 245 498 25, 2, 35, 12. 0% 11. 4% 761 929 301 983 1, 11. 6% 13. 0% 158 294 443 631 7, 9, 10, 11, 17. 1% 5. 5% 801 892 693 277 N/A 100. 0% - - - 12 71, 78, 93, 108, 14. 2% 16. 6% 502 725 270 718 66, 73, 82, 92, 10. 8% 12. 9% 966 307 176 795 180, 176, 232, 264, 13. 3% 14. 1% 791 145 128 914 Source: Kantar Retail IQ 2012 The Channels That Al Futtaim Work In Are All Growing!

What Is Market Share? Market Share is the contribution (as a %) of users of a particular brand in comparison to the overall category. It can also be the contribution (as a %) that a retailer contributes to the overall channel. Category Example: GLOBAL SMARTPHONE CATEGORY Source: Strategy Analytics

Module VI – Store Formats Lessons: 1) Different Store Formats 2) Why do we have store formats

Store Formats

Store Formats What Can Change in Different Formats? Ø Size of the Store Ø Location / Geographical Placement of the store Ø The Range /Assortment within the store Ø Price of items in the store (sometimes) Ø Layout of the store Ø Branding of the store Why do Retailers Have Different Formats? Ø Extends and targets specific neighborhood catchment areas Ø Range can be tailored to the demographics of locality or the proposition of the format Ø Items are often sold with a higher front margin, increasing category profitability Ø Maintains shopper loyalty when shoppers need ‘top up’ items or ‘forgotten’ items

Module VII – Key Retail Challenges Lessons: 1) 2) 3) 4) Retail Challenges Supplier challenges Key MENA specific challenges Implications for Al Futtaim

Key Retail Challenges RETAILER ISSUES PATH TO PURCHASE™ n What will drive shoppers to my store? n How do I address shopper need states/occasions to drive category growth? n How do I retain shopper loyalty in the midst of rising commodity prices? n How do I communicate with shoppers most effectively both in and out of store?

There is Pressure On Retailers SHOPPER UNDERSTANDING OPERATIONAL COSTS Retailer Pressure Points RE-INVENTION & INNOVATION COMPETITION, & REGULATIONS

There Is Pressure On Suppliers COMPETITIVE RETAIL LANDSCAPE SHOPPER UNDERSTANDING Suppliers Pressure Points OPERATIONAL COSTS TRADING TERMS

Key MENA Specific Retail Challenges Diverse Mix Of Cultures Increasing Shopper Expectations Denser Competition

Working With Different Cultures E M B R A C E xpect to get it wrong at first ake an effort to learn about other cultures ody language has to be appropriate esist only forming relationships with similar cultures sk questions to your colleagues (the best way of learning) onfidence to approach all cultures njoy working with so many different people!

What Can We Do About It? Developing An Action Plan RETAILER CHALLENGE WHO CAN INFLUENCE? WHAT CAN WE DO?

Implications For Al Futtaim – How do we get our shoppers to shop only with us? LOYALTY – How do we reduce the cost of selling to our shoppers? EFFICIENCY

Module VIII – Organizational Structure Lessons: 1) 2) 3) 4) What is Organizational Structure Organizational structure at Al Futtaim Job Roles Summary

Organizational Structure In Retail “There is only one boss. The Customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else” -Sam Walton Founder of Wal-Mart

Organization Structure At Al Futtaim OMAR AL FUTTAIM CEO Corporate Head Office Internal Audit Automotive Division Al Futtaim Motors Electronics Division Al Futtaim Panatech Retail Division Services Property Development Ikea Gmasco Marketing Real Estate Dubai Festival City Legal Trading Ent Al Futtaim Technologies Ace Al Futtaim Travel Finance Al Futtaim Auto mall Aftron Toys R Us Systems & Technologies Human Resources Famco Plug-Ins Marks & Spencer AOIC Training Centre Hertz Techserve AFWJ Al Futtaim Logistics Al Futtaim Engg Ladybird Al Futtaim Electronics Danier Intersport Judith Leiber

Al Futtaim Job Roles Interio r D tant e Assis ehous Log is tics esigne War r r anager Store M t Adm in M nag Buyer to Decora er anag er HR Manag er diser an Visual Merch Executive Marketing ssistan Sales A Ma Reta il Sa les A ssist Home Deliv ery Mana ger nt ssista HR A Visual Merch Cust Serv Manager a Man Departm Are Assist ent Mana ger Assistant Cashier Supervisor ne Oper a Dep H an ties M Facili Assistant Cust Serv Telepho r Manage ome Del Retail Area ager Inventory tor per e Store Ke IT M a Store S uyer Junior B nage Busines s uperv Analys t isor r

Example At Store Level STORE MANAGER DEPARTMENT MGR (OUTDOOR) DEPARTMENT MGR (GIRLS) DEPARTMENT MGR (BOYS) DEPARTMENT MGR (R-ZONE) DEPARTMENT MGR (BRU) VISUAL MERCHANDISER ADMINISTRATION ASSISTANT SALES ASSISTANT VISUAL MERCHANDISING MGR FINANCE MANAGER OPERATIONS MANAGER BUYING MANAGER LOGISTICS MANAGER HR BUSINESS PARTNER MANAGEMENT ACCOUNTANT BUYER LOGISTICS EXECUTIVE MARKETING MANAGER ACCOUNTS EXECUTIVE BUYING ASSISTANT ADMINISTRATION ASSISTANT

Organization Structure In Retail Supplier Senior Mgmt Marketing Supplier Account Manager Functional Specialists Category Buyer/ Manager Senior Mgmt Store Ops Inventory Admin & Facilities SUPPLIER RETAILER

Summary Throughout the 8 modules we have informed you about: ü Who is Al Futtaim, their geographic and brand presence , their mission and vision ü The integral parts of the retail business and the key terminologies that are used when communicating with in retail industry ü How the path of purchasing has an influence on the shopper and its impact to the retail brand ü How the organization uses market share data to gain a competitive edge based on the demographics in the MENA region ü How retailers format their stores to entice shoppers and merchandise products as well as structured around the organization strategy ü How the retail brand structure the products based on the type of store format. ü The various challenges from an organization, retailer, supplier standpoint ü The various job roles that a retail brand can have with in a store format based on the strategy from the principle Organization

But Overall……. Its About YOU!

Glossary