The retailing industry has been present in our country
through history and is considered as one of the largest sectors in the Indian
economy, contributing to around 14% to the GDP, and employing around 7% of the
total population.. For decades, retailing in India has been highly fragmented,
i.e., unorganized, due to the presence of huge number of small mom-n-pop
stores. As per Images F&R Research 'India Retail Report 2007', organized retailing in
India accounts for 4.6% (Rs. 55,000 Crores or $ 12.4 Billion) of Rs. 120,000
Crores or $ 270 Billion retail market with an expected 40% plus annual growth
rate, and is expected to grow to Rs. 2,00,000 Crores, i.e., $ 45 Billion by
2010. During the period 2005- 2006, the leading retailers' sales growth was
While retailing industry is present for centuries, it is
only in the recent times that it has witnessed so much dynamism and corporate
attention. It is the latest bandwagon that has witnessed hordes of big players
like TATA, Birla, Reliance, Pantaloon Group, etc., leaping into it. The entry
of big players in retailing has caused a major revolution in its marketing strategies and innovations. Now retail
sector, being considered as the most dynamic and attractive sector in India, is going through a transition phase. For a long time, the corner grocery store was
the only choice available to the consumer. This is slowly giving way to
international formats of retailing. The traditional food and grocery segment has
seen the emergence of hypermarkets / supermarkets / grocery chains (food world,
Subhiksha, Apna Bazaar, Big Bazaar, etc.) And fast food chains (McDonalds,
Concerns of Retailers
are faced with many issues as they attempt to be successful. The key issues
- 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
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.