Retail: An Introduction

The word “Retailer” originates from a French-Italian word “retailer” which means someone who cuts or grinds a small piece of something. Retailing includes activities of marketing and selling products or services to final consumers for their domestic or personal use. Retailer is a Person or Agent or Company or Organization that is instrumental in getting the Goods or Merchandise or Services to the End User or End Consumer.

Types of retail

disorganized

Traditional or unorganized retail outlets are often street markets, counter shops, kiosks and vendors, where ownership and management are vested in one person. This sector represents two thirds of the market and requires low-skilled labor. These are highly competitive outlets, with negligible rental costs (unregistered kiosks or traditional ownership), cheap workers (work is shared by family members), and low taxes and overhead.

Organized retail

Organized retailing mainly comprises modern retailing with busy malls, multi-storey malls and huge complexes that offer a wide variety of products in terms of quality, value for money and make shopping a memorable experience.

Retail scenario in India

Most of the retail sector in India is unorganized, which used to be known as mom-and-pop stores. The biggest advantage in this sector is the familiarity of the consumer that is passed from one generation to the next. The transformation stage of the retail sector began in the late 1990s. The rise of pure retail has started at this stage as it is perceived as an upstart and organized retail is becoming more attractive. In India, the retail business contributes about 11 percent of GDP in 2005. Of this, the organized retail sector accounts for only about 3 percent share, with the remaining share being contributed by the unorganized sector. The main challenge facing the organized sector is competition from the unorganized sector.

Transformation of the retail landscape in India

As Indian retail is undergoing rapid transformation in different business areas by using bottom-up and profitable retail models in different categories, consumers started to embrace modern retail irresistibly. The disorganized market is making its way to modern retail formats such as shopping malls, provision stores, hypermarkets, discount stores, etc. Most of the malls started to expand from metropolitan areas to tier 2 cities as part of the expansion plans. Consumers are more attracted to these because of the shopping experience they provide and the additional facilities like food court, entertainment that are under one roof.

Supply and demand factors

Economic growth: Economic growth is one of the main demand factors for the retail sector in India. Rapid economic growth has translated into higher disposable incomes for India’s burgeoning middle class. Disposable income is expected to grow at an average of 8.5% per year through 2015. The increased number of working women has also increased both consumption and purchasing power. Real GDP grew at an annual rate of 9.4% in fiscal year 2006 (ending March 2007), the fastest expansion in 18 years.

Demography: A wave of young adults is entering the Indian consumer society with rising aspirations, new lifestyle requirements and an insatiable demand for consumer brands. Large numbers of young worker populations between the ages of 24 and 35 are also an important factor.

Urbanization: Urban areas are the engines of the country’s productivity and growth. Urbanization is associated with higher incomes, better health, increased literacy, better quality of life, and other benefits. The Indian urban population is projected to increase from 28% to 40% of the total population by 2020 and incomes are expected to grow simultaneously in this segment.

Media Blast: TV, Internet, radio and the press have the power to influence the population when it comes to promoting. Compared to previous years, the presence of the media has become more important. Our televisions have more than 200 channels: international, national, regional and local. And print media is still strong in this area. Radio is opening up and growing day by day.

Infrastructure development: Real estate development, ownership of private transport, banking/credit are other factors that intervene on the demand side. The history of real estate in India is growing day by day. Industry experts believe that Indian real estate has huge demand potential in almost all sectors, especially commercial, residential and retail. Organized retail is expected to generate demand for about 220 million square feet of retail space by 2010. Ownership of private transportation provides accessibility. The line of credit is also playing an important role, since its availability is more liberalized and interest rates are in an affordable position.

Competition: As the market is a mixture of organized and unorganized players, it is obvious that there will be competition from the unorganized stores and the future.

Prices: Pricing will be a crucial variable due to its direct relationship to a company’s goal and its interaction with other elements of retailing. The importance of pricing decisions is growing because today’s customers are looking for good value when purchasing goods and services. Price is the easiest and fastest variable to change.

Scale of Operations: The scale of operations includes all the activities of the supply chain, which are carried out in the business. It is one of the challenges faced by Indian retailers. The cost of doing business is very high in India.

The human resource factor: As this sector is just emerging from its nascent phase, recruiting the right talented people and training them will be an important factor.

Organized retail in India

The organized retail business in India is very small but has tremendous scope and is expected to grow faster than GDP growth in the coming years. Research by Tata Strategic Management Group (TSMG) indicates that over the next 10 years, the total retail market in India is likely to grow at a compound annual growth rate (CAGR) of 5.5 percent (at constant prices). ) to USD 374 billion. (Rs 16,77,000 crore) in 2015. The organized retail market is expected to grow much faster, at a CAGR of 21.8 per cent to USD 55 billion (Rs 246,000 crore) in the same period of time, garnering about 15 percent of overall retail sales. dirty. According to their projections, the top five organized retail categories for 2015 would be food, groceries and general merchandise; wear; durable; food service; and home improvements.

Recent years have witnessed the growth of the retail sector in India. The growth of this sector led to the entry of foreign players, expansion plans, use of new technologies and processes. The supply chain plays an important factor in new age retail due to its complex structure that includes different vendors, retailers and other third-party providers. The supply chain includes activities such as proper relationship and communication with suppliers, stock management, cost reduction, and waste reduction, which is one of the main factors.

conclusion

Finally, it is important to note that value is a function not only of price, quality, and service, but can also be enhanced through personalization and offering a memorable experience. In fact, building customer relationships can itself increase the quality of the overall customer experience and thus the perceived value. But the most important thing to winning in this intensely competitive marketplace is understanding the target customer’s definition of value and making an offer that not only delights customers but is also difficult for competitors to replicate.