OUTSIDE THE CLASSROOM

COMPONENT
Prof. Satyaki Datta

Reliance SMART Superstore

MBA-1: International Business

Devanarayan V: 24I106
Sindhu Gannavarapu: 23I126
Yajur Jayaprakash: 24I123
Ovi Kulkarni: 24I114
Nireeksha Devadiga: 24I113
Ishani Shukla: 24I107
1 of 11
 RELIANCE SMART SUPERSTORE
City Centre Mall, Udupi, Karnataka

Introduction
The group was tasked performing an in-depth analysis of Reliance smart bazar, situated in
Udupi, Karnataka. The goal was to identify an operational or business challenge currently
impacting the store devise a strategic solution to address it.
About the company
Reliance Smart is one of the largest and fastest-growing supermarket chains in India.
Founded in 2001, Smart now has 260 stores spread across 100 tier 1, 2, and 3 cities in India.
It is a one-stop destination for all your needs with an average shop size ranging from 45000
sq. ft to 75000 sq. ft.
Udupi has two Reliance smart stores. In this project, we will focus on the Reliance smart
superstore situated in the City Centre Mall in Udupi Junction. Reliance SMART offers a one-
stop shopping experience by offering fresh produce, bakery, and dairy products, along with
that there is a section for fashion apparel.
The main purpose of this study is to identify a problem faced by this retail store and consult a
solution for the same.
Shop Overview
Reliance has positioned Smart as a value retail chain that caters to a wide range of customer
needs. From a packet of salt for your kitchen to stylish apparel for your wardrobe, Reliance
Smart has it all. Reliance’s affordable pricing strategy has made SMART accessible to lower-
income households meanwhile maintaining excellent quality. Frequent discounts are what
make Reliance smart an ideal option for customers.
The Product categories in Udupi store is as follows
 Fresh produce: A selection of fresh fruits and vegetables, including local and
imported options
 Bakery and dairy: Bread, cakes, biscuits, milk, cheese, and butter
 Staples and grains: Rice, wheat flour, pulses, and spices
 Snacks and beverages: Chips, biscuits, soft drinks, juices, tea, and coffee
 Personal care: Soap, shampoo, toothpaste, and skincare products
 Household essentials: cleaning supplies, detergents, and kitchenware
 Meat and seafood: Fresh and frozen meat and seafood products
 Apparel and appliances: Smart apparel and appliances
 General merchandise: A variety of general merchandise

2 of 11
Revenue breakdown
In the last September, Reliance smart recorded a revenue of 2.2 CR INR. The revenue
composition is as shown below:

Majority of the revenue is coming through Grocery items like vegetables and fruits.
According to the manager, this section is one of the major deciding factors in shop footfalls.
Major Problems faced
Around 1.5 years ago, Reliance smart was the clear leader in the market in terms of footfall
and Revenue. Customers viewed SMART as their one stop destination for all their needs.
Lack of better alternatives in the vicinity made the customers see past the flaws of the shop.
The whole story took a turn when D Mart, one of the leading retail chains in India started
one of their largest outlets in Udupi, only 2-3 kms away from Reliance Smart.
Now Reliance is not customer’s first preference in supermarkets. D Mart caused a major
disruption the market with their grand showroom. In 2021, Total revenue in the month of
September was 3 CR INR. Now this year it has reduced to 2.2 CRs only. This huge reduction
of around 80 lakhs in the revenue is largely due to a better alternative in the market. It is not
just D-Mart but there are some other Supermarkets as well.
Reasons for this sudden shift in footfall and sales are discussed down below.

3 of 11
4 of 11
 1. Space Limitations
Due to its location within a mall, Reliance Smart Bazar operates with limited space, which
hinders the store’s ability to present its product assortment effective.
The following specific issues arise from these limitations:
 Product Display Challenges: The restricted space prevents product displays,
resulting in a congested layout. This setup limits customers’ ability to browse and
navigate freely within the shop affecting their shopping experience.
 Limited Promotional Displays: Reliance Smart Bazar is unable to accommodate
special product displays, promotional setups, or seasonal arrangements due to the
space crunch. These displays are essential in a retail environment to capture customer
interest and drive impulse purchases. During special days, all the major brands will
push for promotional displays for their products. Unfortunately, the spacing issue
forces Reliance to limit display to only one or maximum 2 brands, that too they are
not able to do properly.
 Grid Layout Constraints: While the store follows a simple grid layout, the limited
space hampers the design’s effectiveness. The narrow aisles do not facilitate a smooth
customer flow, making it challenging to guide shoppers along a designated path or
create a structured browsing experience. This is crucial in a supermarket, as the
customers should be made to follow a predetermined path along the shop to make sure
all the products are getting equal visibility.
Effective product display is essential in stimulating customer interest and encouraging
additional purchases. When customers are exposed to well-organized displays, it helps
remind them of items they may have forgotten or didn’t realize they wanted. Strategic
placement of products, especially high-margin or popular items, can create a more
engaging shopping experience and increase impulse buying.
2. Parking Limitations
Unlike its competitor D-Mart, which has a large, easily accessible parking lot directly in front
of the store, Reliance Smart Bazar’s parking is constrained by the mall’s shared parking
facilities. Customers often face longer wait times and added inconvenience in finding
parking, which can deter them from choosing Reliance over D-Mart.
3. Customer Experience Impact
The combination of a congested layout, restricted movement, and parking inconveniences
significantly affects the overall customer experience. Retailers typically aim to direct
customer flow strategically through the store, encouraging them to explore different sections
and increase engagement with products. However, the current limitations prevent the creation
of an optimal path, leaving the store experience somewhat disorganized and potentially
frustrating.

5 of 11
Proposed Suggestions
1. One major problem Reliance faces is a major decline in sales. 80 lakh decline in
revenue is something that calls for a red alert throughout the organisation. Now they
have no option but to make an impactful change across the shop.

Most of their sales is from Vegetables, fruits and other fresh produces. Average revenue per
month from this category is 50 lakh rupees. The first step we suggest is to leverage on this
strength. Now they have a wide variety of fruits and vegetables. To grow the sales further up
in this category they can open a Fresh meat and fish section along with Vegetables and
fruits. Meat and fish are complementary products with Vegetables. Those who come to buy
vegetables will have a high probability of wanting meat and fish as well.

Since Udupi is a coastal area and is famous for various fishing activities, they can make sure
that top quality fish is sourced along with local meat.

6 of 11
Example: Big Bazaar
Big Bazaar took a developmental route on adding fresh meat and meat produce alongside
groceries for Indian families as it sought to be a one stop shop. Culture is the factor that
places convenience and high-quality ingredients, so Big Bazaar created produce and meat
sections in selected stores. The inclusion of this feature was tactical in increasing the number
of walks ins and the rate of customer retention by ensuring that customers had to purchase
some essential items more often than just the packaged goods. This integration also helped to
keep with their goal of bringing “Farm Fresh” products to the customers regarding the
freshness and price.
In this regard, Big Bazaar boosted this strategy by constantly promoting fresh fruits and meat,
advertising them as cheap and easily affordable areas. They manage to win the loyalty of
middle-class families with reasonable prices who needed time-saving solutions to their
grocery shopping. This strategy enabled Big Bazaar to stand out from those who sold only
packaged products while increasing customer loyalty and regular visits to their outlets.
As they already have a space limitation, they should find an aisle they could replace for
frozen meat and fish. Near the exit on the ground floor, there is a section near the vegetables
exclusively for rice and flour. There are two flour aisles to the left of the rice section adjacent
to the wall which can be replaced with a frozen section for Fish and Red meat.

7 of 11
 2. Store Layout Issue
In the top floor of Smart bazar there is only minimal space for customers to walk around the
shop. All the products are displayed in a congested manner. There are five rows of aisles with
a pathway in the middle. One suggestion would be to reduce the length of the horizontal
racks and make the search easier of people.

Cramped Shopper Area: There is enough room for customers to walk around and utilize
the space, but it is not utilized efficiently. The organized sections in the middle of the store do
not allow for a comfortable flow of movement. This may create a negative impression about
the shopping experience, as consumers may decide not to use all available products.

8 of 11
Avoid butt-brush effect: The butt-brush effect was discovered at New York City’s
Bloomingdale’s. The researchers taped shoppers attempting to reach tie racks while
negotiating an entrance during busy times. They noticed that after being bumped once or
twice by other customers or objects customer give up their search for neckwear. The
conclusion: Shoppers do not like to shop when their personal space is invaded. If we do not
give them enough space to move around, they will give up their search and go back to what
they already have.
Vertical Aisles: After the last horizontal counters, there are four lesser vertical counters. They
do occupy some amount of space and coupled with other factors adds to a sense of over
occupancy and difficulty in movement.

The above picture shows how the vertical aisle at the back of the floor is arranged. This
complete section is not in accordance with the shop's aesthetic. There are multiple aisles with
such arrangements of products like mats, bedsheets etc If they don’t change these
arrangements, it would be hard to hold the attention of browsing customers.
The following are some suggested changes to improve the space and customer experience: -

9 of 11
Aisle Modification: Shortening the horizontal aisles could assist create a broader central
pathway for consumers by freeing up space in the centre of the floor. This change would
make it easier to navigate the store and lessen the feeling of crowded.

Product Optimisation: At the moment, a lot of products are repeated throughout aisles,
which means that the same things are shown more than once. The store may maximise shelf
space and create a more interesting and varied display by cutting down on duplicate products.
This would improve product accessibility and attractiveness, making it easier for buyers to
locate items and enticing them to look at other categories.

Additional Suggestion
Addition of background music for the shoppers. Retailers can use music to affect consumer
behaviour. Music can control the pace of store traffic, create an image, and attract or direct
consumers’ attention. For instance, Limiter Too, a division of Limited Group has created a
signature music to appeal to their target audience (8- to 14-year-old girls). It is a mix of hip
hop, rock, R and B, pop, and swing artists such as Brandy, Fastball, and Brian Setzer
Orchestra. The Disney stores pipe in soundtracks from famous Disney movies that are tied
directly to the merchandise.

Adding such music will make the store more attractive and aesthetic, which can create a
perception of quality in consumers’ mind.

10 of 11
Reference:-

1. Retailing, Roger Cox, Paul Brittain

11 of 11