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Common Information

Around the turn of the century; and interesting trend was slowly becoming prominent in retailing across the globe. Department stores were slowly becoming prominent in retailing across the globe. Department stores were slowly becoming less and less popular with customers. Large department stores offered a wide range of product categories - from apparel, luggage, toys, crockery, to home furnishing - as well as owned and managed the stock of products they sold inside the store and from their warehouses. Industry analysts started questioning whether this could still be the ideal retail model, and whether the changing retail environment marked the end of large department stores as we knew them.

On one side there were the stores that focused on a particular category - electronics, toys, women’s wear or home appliances. Over the years, these had evolved into giant superstores and had become very popular with customers who went shopping for a particular product. On the other hand, there were discounters, hypermarkets and wholesale clubs that served the new age shoppers found their ambiance to be formal and boring.
To keep pace with these trends, some department stores were steadily reinventing themselves. The most prominent among them was UK based selfridges chain. In 2003, Selfridges launched a new store in Birmingham, England that completely reinvented the idea of the department store. Brands competed with each other within the store but there was no hierarchy of goods: watches competed with each other perfume, and luggage with fashion. In addition the store organised various show stunts and performances through the day and called it, ‘shopping entertainment.’ Similar stores had come up in various parts of Southeast Asia, Japan and Europe. For customers, these new-age department stores seemed like mall, just the they didn’t have the walls that separate the different stores within a mall.

While this trend was becoming more and more apparent abroad, within India too, certain consumer patterns were emerging. Our experience showed that a customer visiting a mall typically walks into four or five stores. That includes a large store and a few smaller brand showrooms. After that fatigue sets in and he or she is unwilling to walk into any more stores at the mall. So we asked ourselves, what would happen if we removed the walls between the different stores in a mall? In that case, a customer would be exposed to multiple brands at the same time, without the necessity of walking in and out of different stores. And along with shopping we could also provide her with other entertainment options.

Within the company itself there was a renewed confidence and an urge to play a larger role in shaping the modern retailing space in India. We had completed more than six years in retailing. With Big Bazaar we had tried and tested our skills at offering a wide range of categories while Pantaloons was firmly positioned in the lifestyle segment. We could now create shopping and entertainment landmarks in the cities in which we had already established a strong presence.
There three insights - the metamorphosis of department stores into developed markets; customer fatigue at the existing shopping malls in India; and the need to create working on, Central. The objective was to create a retail format that was must larger and totally different from what India had seen till then. It would offer everything - from multiple brands for shopping, to restaurants, coffee shops, entertainment options and gaming zones - all under one roof. If we were able to deliver ton these two fronts, we could attract customers from every part of the city and make it the city’s prime shopping destination.

There were a couple of the issues that the Central model addressed quite well. Pantaloons outlets had limited space. We were positioning it as a fashion destination and their business model was based on selling mostly brands that we owned, or what are called private labels. However, with its increasing popularity; we were being approached by multiple foreign and Indian brands to stock these at Pantaloons. Central, being far bigger in size allowed us to open up a lot of space for other brands paid us a certain percentage of their sales in the mall as commission. Based on the performance of these brands, we could decide on which to keep and which to discard.
The first Central mall was launched in Bangalore in May 2004. Measuring 1,20,000 square feet, it was spread over six floors and housed over three husband brands in categories like apparel, footwear, accessories, home furnishing, music and bools. In addition we had coffee shops, food courts, a Food Bazaar, restaurants, pubs and discotheques. A customer could also book tickets for movies and concerts, book travel tickets and make bill payments.

What has primarily made Central the ‘destination mall’ for Bangalore is its location. It is located in the heart of the city, at M.G. Road, where once Hotel Victoria stood. Moreover, we added a lot of features to further establish it as the focal point of the city. The Central Square located outside the mall building has been made available for art exhibitions, cultural performances, shows and product launches. And in 2005, the vintage car rally was flagged off from the Central flag-point, which has since become the epicentre for many such events. Thus, Central captured in all its glory what we wanted a destination mall to be, and loved up to its tagline of ‘Shop, Eat, and Celebrate.’

Soon after the launch of Bangalore Central, we opened the second Central in Hyderabad in November 2004. Once again it was located at the heart of the city on the Punjagutta Cross Road. Here, the roads connecting the city centre with Secunderabad, Jubilee Hills and the old part of the city; converge. It was more than double the size of Bangalore Central. Apart from over hundreds of brands to shop, it had food courts, restaurants, as well as a five-screen multiplex managed by PVR Cinemas. Much like the one Bangalore, Hyderabad Central didn’t take much time to become the nerve centre of the city. With an annual retail turnover of around Rs 200 crore it is presently among the largest retail destinations in the country.


Common Information Question: 5/5

Which of the following statement is not true?


In tune with the changing time, the new store created in Birmingham allowed brand competition within the store without explicit hierarchy of products, and organized various events to ensure lively amusement for the shoppers.


Since visiting different stores even within a mega shopping complex gets monotonous once the initial excitement is over, the exposure to multiple brands simultaneously with removal of the walls has been a consumer-friendly move.


The market analysis by the company described in the passage revealed that a representative buyer to a shopping centre goes to at the most four or five stores, selecting large or small showrooms randomly.


The idea behind setting up a mega retail network was to make it city’s unique shopping location by ensuring exposure to multiple brands on one hand, and by making it an excellent hang-out option through setting up of entertainment and nourishment options on the other.

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Option(C) is correct

The passage states that ‘experience’ (not market analysis) tells the company that a buyer visits around 4 or 5 stores (not at the most 4 or 5 stores) and that they go to a large store and a few smaller brand showrooms (not necessarily selected at random)

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