The Indian retail industry – a sun rise industry has registered a strong growth during the recent past, which is evidenced, in terms of volume, size of operations and style of functioning across the nation. A shift from traditional retailing to well organized retailing has-been very much noticeable and that stands to testify the pattern of development in the retail industry in India. However in India, even now most of the retail business rely on unorganized retail business units each one is spread smaller in size catering to the needs of neighborhood areas
DEFINITION AND SCOPE OF RETAILING:
Retail Industry, one of the fastest changing and vibrant industries in the world, has contributed to the economic growth of many countries. The term ‘retail’ is derived from the French word retailer which means ‘to cut a piece off or to break bulk’. In simple terms, it implies a first-hand transaction with the customer. Retailing can be defined as the buying and selling of goods and services. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable. Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today
EVOLUTION OF RETAILING
l Traditionally retailing in India can be traced to
- The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers
- – Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi& Village Industries Commission l
- 1980s experienced slow change as India began to open up economy
- l Textiles sector with companies like Bombay Dyeing, Raymond’s, S Kumar’s and Grasim first saw the emergence of retail chains
- l Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches
- l The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.
- l For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.
- l Post 1995 onwards saw an emergence of shopping centers, – mainly in urban areas, with facilities like car parking – targeted to provide a complete destination experience for all segments of society
- l Emergence of hyper and super markets trying to provide customer with 3 V’s – Value, Variety and Volume
- l Expanding target consumer segment: The Sachet revolution – example of reaching to the bottom of the pyramid
- RETAILING TYPES IN INDIA
Malls:The largest form of organized retailing today. Located mainly in metro cities, in proximity to
urban outskirts. Ranges from 60,000 sqft to 7,00,000sqft and above. They lend an ideal shopping
experience with an amalgamation of product, service and entertainment, all under a common roof.
Examples include Shoppers Stop, Piramyd, Pantaloon.
Specialty Stores:Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG’s Music World and the Times Group’s music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors
Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods
Department Stores:Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.
Department Stores:Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja’s Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!.
Hyper marts/Supermarkets:Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sqft to 2,000 sqft and large supermarkets ranging from of 3,500 sqft to 5,000 sq ft. having a strong focus on food & grocery and personal sales
Convenience Stores:These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.
MBO’s:Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.
CHARACTERISTICS AND TRENDS IN RETAILING
Interaction with the end consumers
- It enhances the volume of sales but the monetary value is less
- Customer service plays a vital role
- There is a tendency for automatic sales promotion
- With more outlets retail marketing creates visibility
- Location and layout plays a vital role.
- Creates employment opportunities to all age groups, gender , irrespective of qualification and religion.
- Generates job opportunities in flexi timings.
- Retail marketing creates a place, time and possession utility for a product.
RETAIL MARKET STRATEGY
The word strategy comes from ancient Greece. A strategies,’ as an army general, and his post was a strategia. Over time, strategic came to mean the craft of generalship instead of just the job. The word spread to French as strategies and then to English as “strategy” in 1980Some of the definitions in use toWhich Steiner pointed, include the following:
- Strategy is that which top management does that is of great importance to the organization.
- Strategy refers to basic directional decisions, that is, to purposes and missions.
- Strategy consists of the important actions necessary to realize these directions.
- Strategy answers the question: what should the organization be doing? 5. Strategy answers the question: what are the ends we seek and how should we achieve them.
The rise and subsequent fall of strategic planning brings us to the definition of strategy put forth by Henry Mintzberg3. According to Henry Mintzberg, people use “strategy” in several different ways, the most common being these four:
- Strategy is a plan, a “how,” a means of getting from here to there.
- Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a “high end” strategy. 3. Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets.
- Strategy is perspective, that is, vision and direction. In Top Management Strategy, Benjamin Tregoe and John Zimmerman5 define strategy as “the framework which guides those choices that determine the nature and direction of an organization”, This can be interpreted as selecting products (or services) to offer and the markets in which to alter them.
Treacy and Wierseman identify three “value-disciplines” that can serve as the basis for strategy: operational excellence, customer intimacy and product leadership. As with driving forces, only one of these value disciplines can serve as the basis for strategy. Tracy and Wierseman’s three value disciplines are briefly defined below:
- Operational Excellence- Strategy is predicated on the production and delivery of products and services. The objective is to lead the industry in terms of price and convenience
- Customer Intimacy- Strategy is predicated on tailoring and shaping products and services to fit an increasingly fine definition of the customer. The objective is long-term customer loyalty and long-term profitability
- Product Leadership--Strategy is predicated on producing a continuous stream of state-of· the-art products and services. The objective is the quick commercialization of new ideas.