Retail: An Introduction
The word “Retailer” originates from a French-Italian word “retailer” which means someone who cuts or shreds a small piece of something. Retail sale 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 essential in getting the Goods or Merchandise or Services to the End User or End Consumer.
Retail Types
disorganized
Traditional or unorganized retail outlets are often street markets, counter shops, kiosks and vendors, owned and managed by a single 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 retail mainly comprises modern retail 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, known as mom-and-pop stores. The biggest advantage in this sector is the consumer familiarity that is passed down from one generation to the next. The transformation stage of the retail sector began in the late 1990s. The rise of the pure retailer has started at this stage, as it is perceived as a beginner 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 a rapid transformation into different business areas by using profitable and bottom-up retail models across different categories, consumers started to accept modern retail irresistibly. The disorganized market is making its way to modern retail formats such as shopping malls, grocery stores, hypermarkets, discount stores, etc. Most of the malls began to expand from metropolitan areas to Tier 2 cities as part of 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 drivers of demand for the retail sector in India. Rapid economic growth has translated into higher disposable income for India’s burgeoning middle class. Disposable income is expected to increase at an average of 8.5% per year until 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 India’s 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 income, better health, higher 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 income is expected to grow concurrently in this segment.
Media Burst: TV, Internet, radio and the press have the power to influence the population when 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 the print media remains strong in this area. The radio is opening up and growing day by day.
Infrastructure development: Real estate development, private transportation ownership, 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. Private transportation ownership provides accessibility. The credit line is also playing an important role as its availability is more liberalized and interest rates are affordable.
Competition: As the market is a mix of organized and unorganized players, it is obvious that there will be competition from the unorganized and future stores.
Prices: Pricing will be a crucial variable due to its direct relationship to a company’s objective and its interaction with other elements of retail. The importance of pricing decisions is growing because today’s customers look for good value when purchasing goods and services. Price is the easiest and fastest variable to change.
Operations Scale: 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 facing Indian retailers. The cost of business operations is very high in India.
The human resources factor: As this sector has just emerged 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 reach 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, getting about 15 percent of overall retail sales. dirty. According to his projections, the top five organized retail categories for 2015 would be food, grocery and general merchandise; wear; durable; food service; and home improvements.
The past few years 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. 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 therefore perceived value. But most important to winning in this intensely competitive market 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.