Changing dimensions through Retail: Indian perspective


Mrs. Shilpee Adhikari
Sr. Lecturer


Retailing is a set of business activity that adds value to the producers and services sold to the consumers for there personal or family use. Retailing includes sales of service, medical facilities, boarding, lodging, services of food, after sales service for repair etc.

It has played a major role in increasing productivity across a wide range of consumer's goods and services. Its impact can be best seen in countries like USA UK Mexico etc.

With reducing Trade barriers among countries, saturated markets in developed markets, cheap lobour available in emerging markets, established distribution and sourcing knowledge big successful retailers are expanding their success stories in new emerging market economies.

The Retail industry employs more than 22 million Americans and generates more than $3 trillion in retail sale annually.

Retail Scene in India

India is the Last Large Asian economy to Liberalize its retail sector.  Indian consumers are changing, they are accepting modern formats. Retail space is no longer a hurdle for growth. The Large Indian corporate groups like Piramals, The Tatas, Rahejas, ITC, RPG Enterprises, and Pantaloons are in a race to revolutionize the Retailing sector.

Retailing has changed the Life style pattern of Indians through Malls, There had been high level of employment opportunities.

Investments into the sector are estimated at INR 20 – 25 billion in the next 2-3 years and over INR 180 billion by end of 2010.

The size of Organized retailing market stood at Rs. 280 bilion in 2004, making up of just 3% of total retail market.

According to an survey report

Totalretail in1999was 7000 in 2002 was 8250 and which has gradually increased till 10000 in billion (INR). Organized retail grew from 50 to150 and then finally till350by 2005. The growth of Retailing is projected to grow at the rate of 25% to 30% p.a. and to reach at INR 1000 billion by 2010.

Concerns of Retailers

Retailers are faced with many issues as they attempt to be successful. The key issues include:

*  Customer Satisfaction – Retailers know that satisfied customers are loyal customers. Consequently, retailers must develop strategies intended to build relationships that result in customers returning to make more purchases.

Ability to Acquire the Right Products – A customer will only be satisfied if they can purchase the right products to satisfy their needs. Since a large percentage of retailers do not manufacture their own products, they must seek suppliers who will supply products demanded by customers. Thus, an important objective for retailers is to identify the products customers will demand and negotiate with suppliers to obtain these products.

*  Product Presentation – Once obtained products must be presented or merchandised to customers in a way that generates interest. Retail merchandising often requires hiring creative people who understand and can relate to the market.

*  Traffic Building – Like any marketer, retailers must use promotional methods to build customer interest. For retailers a key measure of interest is the number of people visiting a retail location or website. Building "traffic" is accomplished with a variety of promotional techniques such as advertising, including local newspapers or Internet, and specialized promotional activities, such as coupons.

*  Layout– For store-based retailers a store's physical layout is an important component in creating a retail experience that will attract customers. The physical layout is more than just deciding in what part of the store to locate products. For many retailers designing the right shopping atmosphere (e.g., objects, light, sound) can add to the appeal of a store. Layout is also important in the online world where site navigation and usability may be deciding factors in whether of a retail website is successful.

*  Location – Where to physically locate a retail store may help or hinder store traffic. Well placed stores with high visibility and easy access, while possibly commanding higher land usage fees, may hold significantly more value than lower cost sites that yield less traffic. Understanding the trade-off between costs and benefits of locations is an important retail decision.

*  Keeping Pace With Technology – Technology has invaded all areas of retailing including customer knowledge (e.g., customer relationship management software), product movement (e.g., use of RFID tags for tracking), point-of-purchase (e.g., scanners, kiosks, self-serve checkout), web technologies (e.g., online shopping carts, purchase recommendations) and many more.

Types of Retail Outlets

There are many ways retailers can be categorized depending on the  characteristics  being evaluated. For our purposes we will separate retailers based on six factors directly related to major marketing decisions:

Target markets served

The first classification looks at the type of markets a retailer intends to target. Retailers can be classified into three: Mass Market, Specialty Market and Exclusive Market.

Product offerings

Under this classification retailers are divided based on the width (i.e., number of different product lines) and depth (i.e., number of different products within a product line) of the products they carry.

1. General Merchandisers
2. Multiple Lines Specialty Merchandisers
3. Single Line Specialty Merchandisers

Pricing structure

Retailers can be classified based on their general pricing strategy. Retailers must decide whether their approach is to use price as a competitive advantage or to seek competitive advantage in non-price ways.

1. Discount Pricing
2. Competitive Pricing
3. Full Price Pricing

Promotional emphasis

Retailers generate customer interest using a variety of promotional technique, yet some retailers rely on certain methods more than others as their principle promotional approach.

1. Advertising
2. Direct Mail
3. Personal Selling

Distribution method

Retailers sell in many different formats with some requiring consumers visit a physical location while others sell to customers in a virtual space. It should be noted that many retailers are not tied to a single distribution method but operate using multiple methods.

1. Store-Based Sellers
* Stand-Alone
* Strip-Shopping Center
* Shopping Area
* Regional Shopping Mall

2. Non-Store Sellers
* Online Sellers
* Direct Marketers
* Vending

*  Service level

Retailers attract customers not only with desirable products and affordable prices, but also by offering services that enhance the purchase experience. There are at least three levels of retail service:

1. Self-Service
2. Assorted-Service
3. Full-Service

*  Ownership structure

Finally, we can categorize retailers based on the ownership structure of the business.

1. Individually Owned and Operated
2. Corporate Chain
3. Corporate Structure
4. Contractually Licensed and Individually Operated


The Indian Retail sector is estimated to have a market size of about $180 billion, but the organized sector represents only 2% share of this market. Liberalization of Indian Economy has brought opening for consumer goods this has helped many MNC,s to serve with wide variety of choices to Indian consumers. Consumers has shifted there demands towards foreign brandslike Pizza hut, Mc donalds etc. Internet has also  been an tool for this Revolution as Indian consumers are more accessible to the growing influences of domestic and foreign retail chains.

Mrs. Shilpee Adhikari
Sr. Lecturer

Source: E-mail June 18, 2008


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