Introduction about company: Big Bazaar

In the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail. In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore. Big Bazaar has 107 stores across all over India covering almost all tier-I and tier-II cities. With its motto of Is se sasta aur accha kahin nahin, Big Bazaar ensures that all the products are of good quality and offered at the lowest prices. Promising 'more for less', Big Bazaar, offers 1.6-lakh mass-market product ranges that are sought by a majority of Indian consumers. Parent Company or Group is Future Group. Owner of the Group is Mr. Kishore Biyani. Big Bazaar came into existence in 2001. They are having their Head-quarters in Jogeshwari Mumbai. At Big Bazaar, you will definitely get the best products at the best prices - thats what we guarantee. With the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise you. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping experience. Pantaloon Retail (India) Limited, is Indias leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer marker. Headquartered in Mumbai (Bombay), the company operates over five million square feet of retail space, has over 450 stores across 40 cities in India and employs over 18,000 people. The companys leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara. The company also operates an online portal, futurebazaar.com. A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, Collection i, selling home furniture products and E-Zone focused on catering to the consumer electronics segment. Pantaloons Retail was recently awarded the International Retailer of the Year 2007 by the US-based National Retail Federation (NRF) and the Emerging Market Retailer of the Year 2007 at the World Retail Congress held in Barcelona. Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire Indian consumption space.

Overview of the problem:

Shrinkage is the loss of products between point of manufacture or purchase from supplier and point of sale. The term shrink relates to the difference in the amount of margin or profit a retailer can obtain. If the amount of shrink is large, then profits go down which results in increased costs to the consumer to meet the needs of the retailer. The second annual Global Retail Theft Barometer 2008 Survey, covering 920 large retailers across 36 countries has rated India with the highest shrinkage rate at 3.10% this year, an increase of 6.9% over last year. In retailing, shrinkage is the loss of products between point of manufacture and point of sale. Sometimes shrinkage may be as high as 15% to 20% of total volume, having a major negative impact on profits. Shrinkage is calculated after the stock taking which takes place after a fixed interval of time for different retail formats. In stock take, a check of physical stock inside the store is being done and then it is compared with the stock in company books. Shrinkage is the difference between the physical stock in the store and stock in companys books. Factors which are mainly responsible for retail shrinkage are: Internal theft, External theft, Intercompany fraud and Process failure1. Process failures can occur in the physical flow of goods along the supply chain, in information systems or in finance systems. The effect of failure in any one of these systems is that stock will be lost and/or payment for goods is incorrect. When considering fresh product, process failure is likely to be the biggest cause of shrinkage. Inter-company fraud leads to shrinkage when trading partners intentionally deliver the wrong quantities and/or charge for goods to their advantage. This tends to occur when poor processes, procedures or controls are exploited. Whilst the effect is similar, theft is categorised as being either internal, e.g. by employees or contracted staff, or external, e.g. shop thieves or burglars. The ways theft occurs can vary significantly although in many instances it is a consequence of poor processes, procedures or controls within a company. Among the newest security technologies being used by retailers this year to control losses due to theft: Point-of-sale data mining software solutions that detect potential theft problems at the cash register and alert appropriate personnel in real-time.

Source tagging programs where tiny anti-theft labels about the size of a paper clip are placed inside and actual product or product package, effectively hiding it from view.

Self-alarming anti-theft tags that broadcast an audible alarm throughout the store when a shoplifter attempts to improperly remove it from merchandise.

RFID2 and other security products play an outstanding role to combat retail shrinkage and prevent shoplifters3 from sliding expensive products into their pockets. RFID tags are used in tracing specific product information, even if they are kept in the customers cars. These applications provide a host of services to retailers such as product tracking, mustering, supply chain security etc, in addition to the traditional services of smart card systems and others. They consist of tags with electronic information, and work with an instrument called readers that captures the information and pass it on to the database. There are two kinds of RFID tags. Passive RFID tags which operate without onboard power source, and use radio wave energy to turn the Micro-chip attached with the product. Active tags that operate on battery power and send information through a transmitter to the database.

According to Mr. B. S. Nagesh, Managing Director, Shoppers Stop Shrinkage exists and cant be eradicated completely, It can only be constantly monitored and lowered. Stores that utilize security technologies generally have lower overall inventory shrinkage than those retailers who do not use technology. According to researcher, with so much of technology advances against retail shrinkage, retailers are still facing problems to control shrinkage. Problem for retailers is to provide good customer service and promote high job satisfaction levels along with a close look on shrinkage patterns. According to Mr. Mohit Raina, department manager for GM Home section at Big Bazaar Zirakpur, tackling shoplifting accounts for about 95 per cent of our security budget. Problem which is being faced by retailers after putting so much of money into the security technologies is the results which are showing that there is an increase in retail shrinkage from the previous year. To be effective, shrinkage results should be communicated regularly at board level, not hidden from view amongst the general cost of doing business. As lack of co-operation between the top level and operational level can create more complications to the situation. Considering the cost of shrinkage, the most significant

element is typically the cost of lost stock. Shrinkage is a problem that transcends departmental and company boundaries it is a common problem requiring shared solutions. A lack of co- operation not only within the company itself, but also between companies who are involved in the supply chain. Retailers see stock loss as the exclusive responsibility of the security/loss prevention and audit departments, and store management, while manufacturers tend to put the onus upon the logistics team to deal with this problem. So collaborative approach is missing. Shoplifters use different shoplifting techniques for the theft. It is done deliberately with the intention of robbing the possessor for that particular piece of property that has been stolen from the retail establishment. Another term used for shoplifting is-Retail Theft. Technology should work faster than the shoplifters. This is the major challenge for the security and technology companies which are providing solutions to the retail stores to reduce shrinkage.

Research Objectives:
To understand what is retail shrinkage and how it is contracting retailers profit To study the factors which are responsible for retail shrinkage To study about the merchandise category in Big Bazaar which is most prone to shrinkage To observe what are the technologies used in Big Bazaar to reduce shrinkage To study the effectiveness of the technology(CCTV, manual surveillance and RFID) used in Big Bazaar

Benefits of the study:

Outcomes of the project will provide understanding about: The merchandise category in Big Bazaar which is most prone to shrinkage Factors which are responsible for shrinkage and proportion of each factor in total shrinkage Effectiveness of the technology used in Big Bazaar to resist retail shrinkage Technological advances which are helping in controlling shrinkage

Scope of the study:

Under this project, conceptualization of retail shrinkage and all the factors responsible for retail shrinkage will be covered. Approach will be to make visits to the store and to make interactions with Managers of different Technology providing Companies in NCR region which are providing security solutions to the retail stores. Interactions with all the store staff are important to get proper results. This research project analyzes the technology (CCTV and RFID) at the forefront of the fight against shrink at the point of sale. This project is to provide better understanding of issues that make shrinkage an area of focus.

Glossary: 1.)
Process Failure: Mistake in entering the stock information into the system. Process failures can occur in

the physical flow of goods along the supply chain, in information systems or in finance systems. The effect of failure in any one of these systems is that stock will be lost and/or payment for goods is incorrect.

2.) 3.)

RFID: Radio Frequency Identification Technology Shop-lifter: The person who is doing the theft inside the retail stores.