TRENDS IN THE INDIAN RETAIL INDUSTRY

INTRODUCTION: We will discuss the present scenario of Indian Retail Industry, skills needed for organized retailing, overview of Indian retail sector, modernization in Indian Retailing and factos underlying modernization in retailing. Retailing in India has traditionally been fragmented, while in the western countries, big retailers usually dominate the landscape. In recent times, India has seen the emergence of several organized retailing formats, from departmental stores like Shopper's Stop to discount stores like Big Bazaar.We also have niche (exclusive) stores like Music World, Coffee Day and PlanetM and Grocery Stores like Spencer's, subiksha etc., SKILLS NEEDED FORORGANIZED RETAILING The skills needed for organized retailing encompass many activities, like deciding on stock levels, the product mix, brand mix and human relations, customer and employee management skills dealing with regulatory authorities and cost control. Merchandising and supply chain management, in addition to customer service is how we could summarise the range of activities performed at an average retails store. As the retailing scenario evolves in India we will see many changes in the types of retail stores their sizes and competitive strategies. For example, the major retail chains in India are upmarket and the concept of discount stores is just catching on. Also, the food stores seem to be the major growth area, followed by garment based retailing. OVER VIEW / RECENT TRENDS IN THE INDIAN RETAIL SECTOR Indian retailing is undergoing a process of evolution and is poised to undergo dramatic transformation. The traditional formats like hawkers, grocers and paan shops co-exit with modern formats like Super- markets and Non-store retailing channels such as multi level marketing and teleshopping. Modern stores trend to be large, carry more stock keeping units, have a self-service format and an experiential ambience. The modernization in retail formats is likely to happen quicker in categories like dry groceries, electronics, mens' apparel and books. Some reshaping and adaptation may also happen in fresh groceries, fast food and personal care products. In recent years there has been a slow spread of retail chains in some formats like super markets, malls and discount stores. Factors facilitating the spread of chains are the availability of quality products at lower prices, improved shopping

standards, convenient shopping and display and blending of shopping with entertainment and the entry of Tatas into retailing. Foreign direct investment in the retail sector in India, although not yet permitted by the Government is desirable, as it would improve productivity and increase competitiveness. New stores will introduce efficiency. The customers would also gain as prices in the new stores tend to be lover. The consequences of recent modernization in India may be some what different due to lower purchasing power and the new stores may cater to only branded products aimed at upper income segments. The Indian retail environment has been witnessing several changes on the demand side due to increased per capital income, changing lifestyle and increased product availability. In developed markets, there has been a power shift with power moving from manufactures towards the retailers. The strategies used by retailers to wrest power include the development of retailers own brands and the introduction of slotting allowances which necessitate payments by manufactures to retailers for providing shelf space for new products. The recent increased power of retailers has led to the introduction of new tactics by manufactures such as every day low pricing, partnership with retailers and increased use of direct marketing methods. FACTORS UNDERLYING TRENDS OFMODERN RETAIL IN INDIA The earlier part of this lesson has provided some information that enables the construction and analysis of recent trends in the Indian Retail Industry. The driving forces towards that trend can be broadly classified into the following categories. i) Economic development ii) Improvements in civic situation iii) Changes in government polices iv) Changes in consumer needs, attitudes and behavior v) Increased investment in retailing vi) Rise in power of organized retail. The development of the Indian economy is a necessary condition for the development of the Indian retail sector. The growth of the economy can provide gainful employment to those who would otherwise enter retailing in areas like roadside vending and other similar low cost entries into the retail sector. The growth of modern retail is linked to consumer needs, attitudes and behavior. Marketing channels including retailing emerge because they receive impetus from both the supply side and the demand side. On the demand side, the marketing channel provides service outputs that consumer's value. In Indian retailing, convenience and merchandise appear to be the most important factors influencing store choice, although ambience and service are also becoming

important in some contexts. Store ambiance includes such as lighting, cleanliness, store layout and space for movement. The government of India has clarified on a number of occasions that foreign dried investment will not be permitted in India in the retailing sector. Major international retailer organizations are waiting for signals of policy change especially in the wake of Chinese permission for foreign investment in its retail. In opening up the retail sector, the government may consider various approaches such as insisting an joint ventures, limiting the foreign stake, or specifying the cities where investment is permitted. Although FDI is not yet permitted in retailing, a number of global retailers are testing the waters by signing technical agreements and franchises with Indian firms. Fast food chains like McDonald's and Pizza Hut are already operating in the metres. A Marks and Spencer Store is already operational in Mumbai. Recent trends show that industrial groups such as Reliance and Raymonds have been active in encouraging development of well appointed exclusive showrooms for their textile brands. Industrial houses like Rahejas, Tatas have entered retailing. Several Indian and foreign brands have used franchising to establish exclusive outlet for their brands. SUMMERY: The Indian retail sector is largely traditional but stores in modern format are emerging. Though the contribution of organized retailing in the retail sales in India though small in the last decade, but currently it is picking up very fast spreading their activates not only in metros but in other cities. Modern management techniques are used in managing the affairs of retail sector. Firms will need to proactively review their sales structures, brand activates, logistics policy and price structure to cope with pressures from powerful retailers. QUESTIONS : 1. Explain the term ' Retailing'. 2. On what basis stores may be classified? 3. Write a note on product retailing. 4. What do you understand by the term service retailing? 5. Discuss the classification of non-store retailing. 6. Discuss in detail how legal and social factors affect retail environment. 7. What strategies being used to overcome competitions in the retail sector? 8. How positioning plays an important role in retail marketing? 9. How economic factors affect retail environment? 10. Do you think technological factors affect the progress of retail industry? 11. Explain the factors which affect trends in the Indian Retail Industry.

12. Discuss the overview of Indian Retail Industry. 13. Explain the recent trends in the Indian Retailing industry.