ORGANISED RETAIL

Organised retailing

TOPIC Page No.

1. What is Retailing 03

2. Functions of Retailers 05

3. Meaning of Multichannel Retail 10

4. What is Organised Retailing 17

5. Impact of Oragnised Retailing on our Environment 20

6. Difference between Organised and Unorganised Retail 24

7. Kishore Biyani 30

8. The Great Indian Tale Called Retail 34

9. Retail Roadmap 36

10. Major Retailers in India 37

11. Tactics used by Organised Retailers 39

12. Success Stories 44

13. Failures 48

14. Field Study 51

15. Future Prospects 55

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1. WHAT IS RETAILING?

Although there are many approaches to understanding and defining retailing, most often

emphasis is on retailing as a business activity of selling goods or services to the final

consumer.

Retailing is the set of business activities that adds value to the products and services sold to

consumers for their personal or family use. Often people think of retailing only as the sale

of products in stores, but retailing also involves the sale of services: overnight lodging in a

motel, a haircut, a DVD rental, or a home –delivered pizza not all retailing is done in

stores. Examples of non store retailing include platforms like ebay.com.

As per the above definition, the final consumer is a key concept within the distribution

chain, especially since the retailers are at the end of the chain and directly interact with the

customer. Moreover, the final consumer is presumed to be the final user of a product

unlike a customer who may have bought the goods for her own use or as a present or as a

part of her own business activity. Retail transaction include more than the sale of tangible

products, services such as financial services, beauty care saloons, dry cleaning and so on.

They receive goods from producers and wholesalers and pass it on to consumers. The

retailers are able to accomplish this through the store/retail outlet located at convenient

place and also by ensuring that the consumer is a focal point for the selection and display

of stock.

It is said that the term retailing is derived from the old French word ‘retailer’ meaning ‘a

piece of’ or “to cut up”. This can be applied to the functions carried out by the retailers-

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acquiring whole stock of goods which they divide in to smaller amounts which are then

sold to individual consumers.

Traditionally, the retail landscape in India has been dominated by unorganized retailers

like kirana stores, cloth merchant’s etc. Who buy and resell merchandise from local

suppliers or wholesalers. Most of today’s modern retail formats, that have been

proliferating over the metros, cities and towns were non existent a decade ago. Fifteen

years ago future Group, Home Town, Spencer’s retail, Reliance Retail, Shoppers Stop

Limited, Subhiksha, Lifestyle etc. were either small start-up firms or did not even exist.

Leading international retailers are heading towards India for setting up their stores. Wal-

Mart worlds largest corporation and Carrefour, the worlds second largest retailer are

awaiting foreign direct investment laws to be amended suitably to allow them to open their

stores in India. However, till such time Wal-Mart and Carrefour are planning to enter India

through the cash-and-carry business route. In fact Wal-Mart has started with this format

with Bharti as an equal partner in JV formed. Sears, America’s fourth largest retailer with

approximately 3,800 full-line and speciality retail stores is also looking at entering India

through the same route. The Indian government allows 100percent FDI through cash and

carry format making this route quite attractive for global retailers.

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2. FUNCTIONS OF RETAILERS

Retailers play an important link in the marketing function by adding a lot of value to

manufacturer’s products or services, sold to the ultimate consumers.

These functions include:

Providing an assortment of products and services

Breaking the bulk into smaller quantities

Holding inventory stocks

Provide right infrastructure and suitable environment to make shopping “consumer

friendly”

Increase the value of products

All the above functions are designed/performed keeping the consumer in mind. They

eventually try to achieve the comfort and satisfaction level of consumers.

Providing assortments

Producers usually manufacture one or more variety of products. They prefer to sell this

stock of inventory to a few buyers so as to reduce costs. Whereas, the final customers will

like to make a selection from a large variety of merchandise. Though he may ultimately

purchase the same in small quantities only. The retailers while acting as the intermediary

tries to work out a balance of the demands of both the sides. For this purpose the retailer

will build up an assortment of merchandise obtained from various sources in sufficiently

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large quantities and then sell them to the final customers in smaller units at their retail

outlets.

This functional process is referred to as sorting or providing assortments of products and

services and also adding value to the merchandise sold to the final customers.

Example: If customers were to make their purchase from supermarkets like Spencer’s

(RPG group) they will be able to make choice from a wide range of brands in various

designs, sizes and prices from their particular outlet (or location). How tedious would it be

to visit each manufacturer if at all the retailers would not have been in this chain.

Breaking the bulk into smaller quantities

In order to reduce transportation costs, the manufacturers and wholesalers will usually

transport large cartons of the products (or merchandise) to the retailers. In turn these

retailers will break this bulk into smaller quantities tailored to meet the requirements of the

individual customers. This breaking bulk is very important and helpful to the manufacturer

as well as the customers. For the manufacturer, it will be cost effective to pack and

transport in large quantities to retailers. While customers will find it more convenient to

shop for products.

Holding inventory stock

Related to the above mentioned function, retailers help manufacturers by holding inventory

stock for them. By holding stock, retailers are helping consumers by ensuring them that the

products are available at their outlet whenever required. Today, when space is a premium

in many houses, these services provided by the retailer will help the consumer to save on

inventory carrying cost.

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Provide certain additional services

When change in ownership of merchandise is provided by the retailer, they offer certain

additional services making it convenient for the consumers to buy and use products. These

services could take the form of credit facility(buy now and pay in instalments),sales

personnel to answer queries, display of products such that it is easily visible (Visual

Merchandising) samples to facilitate testing before purchasing, at times 24x7 availability

of products(pharmacy) and home delivery facility (within a short distance from the outlet)

Increase the value of products and services

By performing the functions of providing assortments, breaking the bulk into smaller

quantities, holding inventory stock and providing services itself increases the value of

products and services bought by their customers. In short, the retailer adds and increases

the value of the products and services by ensuring that the customer receives the

merchandise in the required assortment (or form) at the required place and right time.

Apart from the form, time and place utilities when the merchandise is sold, the retailer

helps manufacturers to gauge and obtain information, which is a very vital role played by

the marketing intermediary.

E.g. A simple day to day example would be of soft drinks like Pepsi, company provides

them with stock but retailers cool them and keep them at their refrigerators so that

consumer gets Pepsi which is ready to drink.

More recent example would be of clothing retailers who focus on visual merchandising,

make clothes visible, and make their designs visible so that customer/shopper gets to

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choose from the best. Visual merchandising is today’s buzz, which we shall discuss, in

coming chapters.

RETAIL CHAINS

 Origins of Retail Chains

It is likely that, as markets became more permanent fixtures they evolved into shops.

Although advantageous in many respects, this removed the mobility that a peddler or

traveling merchant may still have enjoyed. For some shopkeepers, it made sense to obtain

extra stock and open up another shop, most probably operated by another family member.

This would recover business from peddlers, create new business and the greater volume

would allow the shopkeeper to strike a better deal with suppliers. Thus the Retail Chain

would have started.

From Family Business to Formal Structure

Although retail chains would have been mostly run by families, as some chains grew, they

would have needed to employ people from outside of their family. This was a limiting

factor as there would have been a limit to the amount of trusted non family members

available to help run the chain. Another, even more definite limiting factor was the

distance the furthest shop would have been from the original shop. The greater the

distance, the more time and effort would have been needed to effectively manage outpost

shops and to service them with goods. There was, therefore, a natural barrier to expansion.

That was the case until transport and communications became faster and more reliable.

When this happened towards the end of the 19th century, chains became much bigger and

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more widespread. Many of these businesses became more structured and formalized,

leading to the retail chains that we see today.

SELF SERVICE

Background

Up until the introduction of self-service stores, customers would simply ask the shopkeeper

for their goods. The shopkeeper would price them (weighing them if necessary), pack them

in a bag or other container (often supplied by the customer), tot up the bill and receive

payment. There was a personal one-to-one relationship between customer and shopkeeper.

The First Self-Service Store

This all changed in 1915 when Albert Gerrard opened the Groceteria in Los Angeles, the

first documented self-service store. This was soon followed a year later by the Piggly

Wiggly self-service store, founded by Clarence Saunders in Tennessee in the U.S.

Efficiency & Growth

These entrepreneurs noticed that their staff had to spend a great deal of time taking grocery

orders from customers. The groceries were stacked on shelves allowing customers to walk

around and browse, collecting their shopping in a basket that was supplied. The

shopkeeper would only need to tot up the final bill at the end of the process and transfer the

goods from the basket to the customer and receive payment. 

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This new type of shopping was more efficient and many customers preferred it. Although

personal service stores remain to this day, this new concept started a rapid growth of self-

service stores in the United States. Other countries slowly adopted this idea.

3. MEANING OF MULTICHANNEL RETAILING:

A multichannel retailer can be referred to as a retailer who sells merchandise or services

through more than one channel. In order to tap their target customers’ needs, retailers have

realised that it is possible to offer them products and services through more than one

channel. Slowly single channel retailers are going multichannel in order to attract, satisfy

and retain customers. For instance, Oxford Book store had opened it first store in Kolkata

long ago and over a period of time spread itself and opened outlets in Mumbai and

bengaluru also. In the year 2000, it started selling books and music titles over the internet

(another channel). The booklovers were happy with the online presence of oxford

bookstore’s products. This organisation’s systems provided the solution to many retail

activities right from point of sale to multichannel integration, inventory management,

warehousing, distribution and a procurement system. Today, OXFORD BOOKSTORE is

being referred to as India’s Amazon.com.

Types of channel:

Store channel

Catalogue channel

Internet channel

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TYPES OF RETAILERS

In order to know about the type of retailers, we will have to classify them on the basis of

their size (small, scale or independent, owner operated retail outlets, etc.) national or

international category. Basically, retail formats can be classified as:

1. Store based retailing.

2. Non –store retailing.

3. Service retailing.

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1) On basis of ownership, a retailer can be classified as:

a. Independent retailer: who runs the retail outlet alone with a little help

provided by his relatives. Most of the neighbourhood or kirana stores are

examples of an independent retailer. Such a retailer may have his outlet in a

suitable location and offer product mix suitable to his clientele.

b. Corporate retail chain: at time, the biggies may have two or more outlets

being run under a common ownership. These retail outlets will offer similar

merchandise, ambience, advertising and promotions. For example, Van

Heusen, Peter England, Planet M etc. Since they are many and company

owned too, these retailers can enjoy bargaining power and economies of

scale with the suppliers. Similarly, they can practice cost-effectiveness in

advertising and promotion.

c. Franchising: a franchise is a contractual agreement, as per a particular

business format, between the franchiser to carry out business in return for a

fee or compensation. Franchising can either involve a product or trademark

franchise or be a business format franchise.

d. Leased department stores: when a section of a department in a retail outlet

is leased or rented to an outside party, it is referred to as leased department.

At times, large retail chains set up smaller retail outlets in high footfall areas

such as malls, multiplexes, department store, at airports etc...Where only a

fraction of their merchandise are sold.

e. Consumer cooperatives: a consumer cooperative is a retail institution

owned and run by its member customers. For instance, cooperatives in India

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can be the Janata Bazaar (Bengaluru), Apna bazaar shops (in Mumbai,

Ahmadabad) and so on.

2) Classification of retail outlet based on the merchandise offered:

Broadly, if retailers were to be classified on the basis of merchandise offered, they could

be referred to as food oriented retailer and the general merchandise retailers. However,

within this classification, we will classify them on the basis of the target market

requirement to which they cater to. These include:

a) Convenience stores: these are relatively small local stores (probably

operating in around 3,000 to 8,000 sq.ft.area) specifically targeted at

customers who want to make their purchases frequently and quickly too.

Typically these convenience stores operate for long number of hours, 24x7

days a week and offer a limited range of convenience products such as

bread, milk, etc.

b) Supermarkets: these are big, low cost, low margin, high volume, working

on service format basis. This format was a forerunner during the grocery

revolution and is designed so as to meet the customer needs of food,

groceries and other non food items. In India some of the supermarket stores

examples can include Food World, Nilgiris, Food bazaar, Reliance Fresh,

More stores etc.

c) Hypermarkets: the world hypermarket originated from the French word

hypermarche, which implies a combination of a supermarket and a

department store. European Retail Digest has described a hypermarket as a

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retail store with sales of more than 2500 sq.mt. Wherein at least 35% of the

selling space is exclusively reserved for selling non-grocery products.

d) Speciality store: such stores specialise in offering a narrow product line

with deep assortments, i.e. such speciality stores, specifically offer a

particular or single product of durable goods such as home furniture and

related household product or consumer electrical appliances and so on.

e) Factory Outlets: This type of retail outlets are designed to cater the

masses, merchandise with minor defects are placed here and sold at a price

point which is much below the usual rates. This also helps company spread

its brands amongst masses.

f) Department stores: when the organised retailing evolution was taking

place, many general stores got converted into department stores as small

towns became cities. Department stores as name suggests have various

departments for various categories of merchandise. For instance infant

department, Men’s accessories, etc.

g) Catalogue retailers: catalogue retailer usually specialise in particular

products such as house ware, jewellery, electronics items, etc. Which are

displayed on the catalogue shown to the customer. The customer generally

looks through the catalogue and then places order for the particular product

(mentioned in the catalogue). The retailer makes arrangement for the

product to be procured from the warehouses for customer inspection and

purchase.

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2) Non Store Retailing:

Another way of classifying retailers is by the way of non- store retailing, when the

retailer directly sells to the consumer. Here, we have viewed this type of retailing as

direct selling, Telemarketing, Automatic vending and Mail Order retailing.

Direct selling

Telemarketing

Automatic Vending

Mail Order Retailing

Direct selling:

a) Direct selling is also referred to as door-to-door selling. It is one of the

major non-store retailing methods. As the terms indicates, it is a method by

which the salesperson meets the consumer directly on a face-to face basis

and tries to persuade them to purchase the product. Some of the popular

marketers who have opted for direct selling in India are

Avon, Amway, Oriflame, Tupperware, Avaince (cosmetics from Hindustan

liver) and Medicare(homecare and personal care products)

Telemarketing:

Telemarketing is a form of direct marketing. In this case, the marketer directly goes to the

customer using telecom/IT facilities. Telemarketing is usually carried out through specific

campaigns. Through a campaign, which usually runs for a few days, contact is established

with hundreds of prospects. Many tele-callers are hired for the tele-call operation.

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The telecall operation works in the form of the call centre, which has a manager in overall

charge, few supervisors and the required number of tele callers. The tele- callers are

grouped into teams comprising of six or seven callers, with a supervisor handling each

such team. The tele-callers sit in front of a computer terminal and a fresh data as the tele

talks progress. The tele-callers are imparted training for the job to be carried out.

Automatic vending:

This can also be referred to as vending machine retailing. This is a non-store format, where

merchandise or services are stored in a machine and dispensed to customers when they

make payment by using credit card or deposit money(or cash). Vending machines are

conveniently placed at locations, which see a lot of floating population such as

multiplexes, railway stations, airports and primarily contain hot drinks such as tea or

coffee. For instance, vending machines from cafe coffee day/ Nescafe and Bru are seen at

airports and multiplexes.

Mail order retailing:

This type of retailing does away with personal selling and store operations. It is a very

convenient form of retailing for the retailer. He will use a customer database specifically

aimed at a particular targeted market, which are sent mail order forms via which the

particular product from the catalogue can be purchased.

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4. WHAT IS ORGANISED RETAILING?

Organised retailing refers to trading activities undertaken by licensed retailers, that is,

those who are registered for sales tax, income tax, etc. These include the corporate-

backed hypermarkets and retail chains, and also the privately owned large retail businesses.

ORGANISED RETAILING IN INDIA

Indian organized retail market is growing at a fast pace due to the boom in the India retail

industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for

about 10% to the country's GDP. The organized retail market in India out of this total

market accounted for Rs 350 billion which is about 3.5% of the total revenues. 

Traditionally the retail industry in India was largely unorganized, comprising of drug

stores, medium, and small grocery stores. Most of the organized retailing in India have

started recently and is concentrating mainly in metropolitan cities.

The growth in the Indian organized retail market is mainly due to the change in the

consumers behaviour. This change has come in the consumer due to increased income,

changing lifestyles, and patterns of demography which are favourable. Now the consumer

wants to shop at a place where he can get food, entertainment, and shopping all under one

roof. This has given Indian organized retail market a major boost. 

Retail market in the organized sector in India is growing can be seen from the fact that

1500 supermarkets, 325 departmental stores, and 300 new malls are being built. Many

Indian companies are entering the Indian retail market which is giving Indian organized

retail market a boost. One such company is the Reliance Industries Limited. It plans to

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invest US$ 6 billion in the Indian retail market; half of the planned amount is already

invested, keeping in mind group’s scenario to scale up its consumer business. It also has

entered areas of financial services and telecom space.

Pantaloons is another Indian company which plans to increase its retail space to 30 million

square feet with an investment of US$ 1 billion. Bharti (Airtel) has already established a

JV with global giant Wall-mart (for cash-n-carry format). A number of global retail giants

such as Carrefour and Metro AG are also planning to set up shop in India.

Indian organized retail market is increasing and for this growth to continue the Indian

Retailers as well as government must make a combined effort.

India represents an economic opportunity on a massive scale, both as a global base and as a

domestic market. Indian Retail sector consists of small family-owned stores, located in

residential areas, with a shop floor of less than 500 square feet. At present the organized

sector accounts for only 5-6% of the total market although this is expected to rise by 20 to

25%.

Retail growth in the coming five years is expected to be stronger than GDP growth, driven

by changing lifestyles and by strong income growth, which in turn will be supported by

favourable demographic patterns and the extent to which organized retailers succeed in

reaching lower down the income scale to reach potential consumers towards the bottom of

the consumer pyramid. Growing consumer credit will also help in boosting consumer

demand.

The structure of retailing will also develop rapidly. Shopping malls are becoming

increasingly common in large cities, and announced development plans project at least 150

new shopping malls. The number of department stores is growing much faster than overall

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retail, at an annual 24%. Supermarkets have been taking an increasing share of general

food and grocery trade over the last two decades.

The next cycle of change in Indian consumer markets will be the arrival of foreign players

in consumer retailing. Although FDI remains highly restricted in retailing, most companies

believe that will not be for long. Indian companies know Indian markets better, but foreign

players will come in and challenge the locals by sheer cash power, the power to drive

down prices. That will be the coming struggle.

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5. IMPACT OF ORGANISED RETAILING ON OUR

ENVIRONMENT (PEST)

While there is a lot of debate going on the impact of organised retailing on unorganised

sector, there is little we know of how it will impact our economy in general. Common

sense says that perhaps it will help the economy.

Political

Even though the government is yet to give the sector an Industry status and we see

aggressive political protests, some aspects of the Government’s policy have been

favourable on other fronts. For example- let’s take Delhi, NCR and Mumbai. In Mumbai,

the Government is releasing unused textile mill land for retail development. In Delhi &

NCR, the Government has released large tracts of land for retail development.

Anyway main points to look out for are:

1. Decision on FDI

2. Government’s stand for foreign players

Economical

Although the organised retail sector constitutes only 4-5% of the USD 350 billion Indian

retail market, it is expected to grow 400%- from USD 12-15 billion currently, to over USD

30.0 billion. There is hectic activity in the sector in terms of expansion, entry of

international brands and retailers as well as focus on technology, operations and processes.

All these present a tremendous opportunity in this new high growth industry

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The important thing is that the growth of this sector will create a totally new demand in our

economy. Households across India are now exposed to products and services they had

never seen before, the tempting value proposition and an inviting atmosphere is making

them purchase these items. Without the new stores the same money would have been

sitting idle in some bank lockers. But now the money is out in market, helping the

manufacturers to come out with new and innovative products. A great aggregation is also

taking place now. You can go and buy as much low quantities that you want, and the

systems assist you in this because no one is bothered.

Imagine what happened in the Shampoo sachet market in India, prior to the entry of

Velvet which later transformed the industry landscape.No one was catering to the huge

demand of affordable hair care solution. And today sachets hold 76% of the total

shampoo market in India.. That means at least 60% more demand generation

Political Social

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Economical Technological

Social

There has been a demographic shift in India, emergence of a larger middle and upper

middle classes and the substantial increase in disposable income has changed the nature of

shopping in India from need based to lifestyle dictated. In addition to this, facilities like

credit friendliness, availability of cheap finance and a drop in interest rates have changed

consumer markets.

Organised retail increases the efficiencies in the agriculture sector by removing

intermediaries in the food chain; as a result, farmers are getting better prices for their

produce. The private retail players can actually introduce new technology, seeds, and thus

encourage farmers to improve their productivity.

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Unorganised retail is feeling the heat of the emergence of the organised retail due to the

changing trends of the Indian consumers. In the last four years, an estimated two crore

traders have been rendered jobless due to the opening of big shopping malls in the country.

However there is no evidence of a decline in overall employment in the unorganised sector

as a result of the entry of organised retailers. According to the survey, the unorganised

sector witnessed a closure rate of 4.2% of which only 1.7% closures were attributed to

competition from modern retail.

Large retailers like Wal-Mart can never impact small kirana stores in India. This is largely

due to India’s socio-cultural heterogeneity and consumer choice. The consumer wants

small retail. The ‘kirana’ store and the paan shop are seen as part of community life.

Technological

With increasing competition, slimmer profit margins and diminished returns-cost cutting at

every point of value chain has become important. Today’s global retail business strategies

utilize technology. Ecommerce, Customer Relationship Management (CRM) software,

Enterprise Resource Planning (ERP) and Point of Sale (POS) systems are all vital to retail

businesses. Using these technologies retailers can actually gain key insights to further gain

market share and increase revenue

Indian retailer would feel the need for technology only when he wants to grow beyond a

certain point. This is one of the reasons why the traditional grocery is here to stay, with

90% of sales in India done through them

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6. DIFFERENCE BETWEEN ORGANISED AND

UNORGANISED RETAILING

So the Indian retail industry is divided into two sectors- organised and unorganised.

As explained in earlier chapter Organised retail sector refers to the sectors undertaken by

licensed retailers, that is, those who are registered for sales tax, income tax, etc. These

include the corporate retail formats of the exclusive brand outlets, hypermarkets,

supermarkets, departmental stores and shopping malls.

MEANING OF UNORGANISED RETAILING:

 Unorganised retailing, refers to the traditional formats of low-cost retailing, for example,

hand cart and pavement vendors, & mobile vendors, the local kirana shops, owner manned

general stores, paan/beedi shops, convenience stores, hardware shop at the corner of your

street selling everything from bathroom fittings to paints and small construction tools; or

the slightly more organised medical store and a host of other small retail businesses in

apparel, electronics, food etc.

 

WHAT IS UNORGANISED RETAILING?

The small local stores have dominated Indian retailing over the decades and are present in

every village and local community, addressing the needs of the population in the area and

being the point of contact with the consumer. The distribution networks of brands extend

right up to this point to stay in touch with customer needs and preferences.

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India like most other countries has a very large network of local stores. The retail industry

in rural India has typically two forms: "Haats" and "Melas". You will find these in almost

every village and locality. A lot of them function as paan and cigarette outlets with tea and

coffee sometimes also offered. Besides this these stores stock and offer small eats and soft

drinks including biscuits, soft drinks, chocolate, sweets, bread and baked products. Many

of them also sell fruits like bananas and a range of toiletries and cosmetics like soaps,

shampoos, toothpastes and some creams. These small stores cater to the needs of their own

local population and travellers who stop by for a smoke or a snack. A little larger format is

the neighbourhood grocery store that focuses on grains, foods, snacks and toiletries besides

other home essentials.

Fruits and vegetables that are perishable are usually maintained and offered by exclusive

vegetable stores and not by the normal groceries. Every fair sized village is likely to have

at least one grocery store, a fruit and vegetable shop and a paan and cigarette shop. The

new addition of the past decade is to have a telephone booth that lets locals and travelers

make national and international telephone calls.

This network is very large and spread all across India. It is not really a network since each

store is individual or family owned and has no connection with the other. It does however

represent a network since large consumer product companies like Unilever, Procter &

Gamble, Colgate-Palmolive, Cadbury, Coca Cola, Pepsi and ITC uses them as their final

point of retail to the consumer.

While it is commonly believed that the new retail chains will drive these small stores out of

business, reality points the other way and it is likely that these stores will continue even in

the next two decades of growth.

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These small stores are very personal and have strong relationships with the local

population. They are points of news and connection. They offer credit to the local

population and help out in times of crisis. They also have a very good understanding of

requirements of the local population and have very low overheads enabling them to offer

the best price for their products.

EVOLUTION OF RETAIL SECTOR IN INDIA

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The origins of retailing in India can be traced back to the emergence of Kirana stores and

mom-and-pop stores. These stores used to cater to the local people. Eventually the

government supported the rural retail and many indigenous franchise stores came up with

the help of Khadi & Village Industries Commission. The economy began to open up in the

1980s resulting in the change of retailing. The first few companies to come up with retail

chains were in textile sector, for example, Bombay Dyeing, S Kumar's, Raymonds, etc.

Later Titan launched retail showrooms in the organized retail sector. With the passage of

time new entrants moved on from manufacturing to pure retailing.

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Retail outlets such as Food world in FMCG, Planet M and Music world in Music,

Crossword in books entered the market before 1995. Shopping malls emerged in the urban

areas giving a world-class experience to the customers. Eventually hypermarkets and

supermarkets emerged. The evolution of the sector includes the continuous improvement in

the supply chain management, distribution channels, technology, back-end operations, etc.

this would finally lead to more of consolidation, mergers and acquisitions and huge

investments.

The retail sector is presently undergoing a transition in India. Previously, customers used

to go to kirana stores to purchases their necessities. This later changed to bigger shops run

by one man with a few employees. Here, all the work was done manually. Gradually, more

sophistication seeped into this sector and department stores came into being.

Beginning in the mid-1990s, however, there was an explosion of shopping malls and

plazas where customers interacted with professionals and not with just one single person -

the owner. An important point here is that customers' requirements are catered to by

trained staff. Today, organized retailing has become an experience characterized by

comfort, style and speed. It is something that offers a customer more control, convenience

and choice along with an experience.

ORGANISED retailing got a leg up during 2004 with the opening of new format stores,

rapid growth of existing players, start-up of new-generation shopping malls, the

Government's intention of allowing a certain level of foreign direct investment in retail and

the formation of a retailers' association. With consumer sentiment positive during most of

2004, it led to substantial spending across a number of categories such as consumer

durables, clothing and lifestyle, automobiles and telecom products.

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Mr Kishore Biyani of Pantaloons launched his new-format shopping mall called Central;

Trent (Tata Sons’ Subsidiary) opened the first Star India Bazaar while new-generation

shopping malls such as InOrbit in Mumbai and Forum in Bangalore opened their doors.

The year also saw a rapid scaling up of operations by players such as Pantaloon’s Big

Bazaar, Shoppers' Stop, Lifestyle, Westside (Trent) and RPG's Spencer's.

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7. KISHORE BIYANI

Mr. Biyani needs very little introduction, he is rightly known as father of modern retailing

in India. He being a pure retailer justified the name and meaning of retailer. Understood

consumer psyche and put their preferences right in front of consumers thus making every

stake holder happy.

Following diagram explains the chain of Information which retailers enhance

Manufacturers---

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Manufacture’s make what information retailers

provided them with, tailor made for consumer

preferences.

As a result consumers are encouraged to buy more

and with better performance

manufacturer awards retailer with healthy

margin.

Healthy margin and high volumes encourages

retailers to constantly peep into consumer

insights so that they are satisfied.

Organised retailing

Retailers---Consumers

This simple technique was adopted by Mr. Biyani and followed by others. Customer was

made the king but truly said by someone, everything comes at a cost. Organized retailing

made things simple for itself but complex for masses (middle class people).

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Manufacture’s make what information retailers

provided them with, tailor made for consumer

preferences.

As a result consumers are encouraged to buy more

and with better performance

manufacturer awards retailer with healthy

margin.

Healthy margin and high volumes encourages

retailers to constantly peep into consumer

insights so that they are satisfied.

Organised retailing

For instance Pantaloons Retail has so many subsidiaries, brands and private labels that

consumer have got no choice but to adhere to them and buy them. They have mastered the

art of retailing so much so that they indirectly dominate the customers as well as the

manufacturer.

A study reveals more than 40% of brands in central and pantaloons (both future group) are

privately held. Some of them are Lee cooper, Blue Diamond, Urban Yoga, M square,

Planet Sports, Bare Denim, etc.

Coming back to Kishore Biyani, he re-wrote the retail script in India. From a position

when he was almost looked down upon as a trader who wouldn’t amount to much to his

current position as the Group CEO of the rapidly growing Futures Group, he and his

companies have come a long way.

It is said that, right from the time he first started, Biyani showed amazingly accurate

perception of the Indian consumer -especially in the retail space. He perhaps understands

the psyche of his typical customers more than anybody else. Therein lays the secret of his

success.

These are Pantaloons genes, given by Kishore Biyani:

1. We like being simple

2. Speed is the essence of everything

3. We like to learn while we execute

4. We like thrift

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5. We believe that customers are always right

6. We like to think in terms of the majority of people

7. We take pride in our core value of Indian-ness

8. We believe in ourselves

9. We do not like to blame others or external factors

10. We like to think positively in every situation

11. We like building and nurturing relationships

12. We love to rewrite rules even as we retain our values

These rules clearly show us what sought of thinking went behind in Biyani’s mind while

building India’s largest retail Chain. Some of the differentiating points are under lined.

Biyani made business model to work in synchronization with Indian culture.

For instance, Indians were and still are accustomed with “haats” and weekly bazaars, even

in cities like Mumbai, Pune; we still have such weekly bazaars. Malad, a western suburb in

Mumbai is famous for its “somvari bazaar”. Every week on Monday this area is flooded

with traders and customers.

Biyani did exactly what Indians were accustomed to, Big bazaar has special days like

“Wednesdays” or 1st of every month were Big bazaar provides customers with great deals

of discounts.

Same goes with his daughter AashnaBiyani, the post she handles is Chief innovative

officer. She heads a team which looks into the consumer behaviors and consumer insights.

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A newspaper article reveals that this team of future group is studying Indian houses to

design furniture which suits them the best. Such kind of thinking, efforts and research

makes future group what it is. A detailed version on Future Group and its strategies is

mentioned in coming chapters.

8. THE GREAT INDIAN TALE CALLED RETAIL

Last five years have seen lots of ups and downs for this industry, in other lines last five

year have been a roller coaster ride for organized retail in India. The country’s top business

houses, the Tata Sons, Reliance Industries and Aditya Vikram Birla Group to name a few

have entered even as smaller aspirants made a beeline to find a toehold in retailing too.

Global giants Wal-Mart, Carrefour, metro and Tesco made headlines in India.

The Retail ride hit a pole around 2008. With the rush amongst the retailers to rapidly

expand into the newer markets to get the first mover advantage, both real estate and human

resource costs were driven up due to this race. The same wasn’t matched by higher

footfalls. As a result the likes of Subhiksha and Vishal Retail went down and others were

forced to rethink their strategies. The organized retail sector saw 10% decline in sales in

2008. There were store closures, formats were changed and organizations were made

leaner. Vendors on the other hand looked for other ways to make their brands popular

amongst consumers and retailers.

Organized retail in India in its old form actually dates back to the pre-independence times.

Interestingly it was south India which took lead this time in formally setting up the first

organized retail chains in the food and grocery segments in India with stores such as

Nilgiri’s, food world, margin free, etc.

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Even in later years, retailing (not organised retailing as we see today) was essentially

dominated by manufacturers such as Bata, Bombay dyeing, the S.Kumar’s group and the

Raymonds group to name a few. Government initiatives included super bazaar and mother

dairy outlets. Post 1990 the business opportunities in organized retail sector seemed more

lucrative.

This time around it was not the manufacturer who was looking for an alternate sales

channel but pure-play retailers who entered the retail markets, to expand pan India

presence for instance pantaloons, shopper’s stop and lifestyle. Towards mid 1990s, the

international food retail brands made debut in India led by the likes of Mc Donald’s. And

modern retail began to take shape. However it was only in 2000 that the retail sector took

off in terms of scale and growth with the entry of large business houses and development

of new formats. The rapid growth that followed soon attracted the luxury product segment.

With the FDI policy 2006 allowing single-branded foreign retailers to take up to 51% stake

in joint ventures with local firms, the intervening years saw the entry of several premium

brands like Giorgio Armani, Versace, Gucci, etc.) Mostly through joint ventures.

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9. RETAIL ROAD MAP

India is the fifth largest retail market globally, with a size of $500 billion and has been

growing at 7% per annum. Organized retail just accounts for 5% of total sales and has been

growing at healthy pace of 35% (compounded annual growth rate). Though the journey so

far has been mixed, organised retail is being tipped as one of the biggest gainers from

growing consumerism and rising affordability. Retail has undergone significant alignment

during slow down, which is resulting in increased sales growth and profitability.

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10. MAJOR RETAILERS IN INDIA

Future Group’s:

Pantaloon is one of the biggest retailers in India with more than 450 stores across the

country. Headquartered in Mumbai, it has more than 5 million sq.ft Retail space located

across the country. It’s growing at an enviable pace and is expected to reach 30 million

sq.ft by the year 2010. In 2001 future group launched country’s first hypermarket ‘Big

Bazaar’. It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar.

Home solutions : Hometown, Furniture Bazaar, Collection-i

Consumer Electronics : e-zone

Shoes :shoe factory

Books, Music & gifts : Depot

Health & Beauty Care: Star, Sitara

E-tailing: Futurebazaar.com

Entertainment: Bowling Co.

Tata Group:

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Tata group is another Major Player in Indian retail industry with its subsidiary Trent,

which operates Westside and star India Bazaar. Established in 1998, it also acquired the

largest book and music retailer in India ‘Landmark’ in 2005. Trent owns over 4 lakh sq. ft

space across the country.

Reliance:

Reliance is one of the biggest players in Indian retail industry. More than 300 reliance

Fresh stores and Reliance Mart are quite popular in the Indian retail market. It’s expecting

its sales to reach Rs 90,000 crores by 2010

AV Birla Group:

AV Birla Group has a strong presence in Indian apparel retailing (Madura Garments). The

brands like Louis Phillipe, Allen solly, Van Heusen, Peter England are quite popular. It’s

also investing in other segments of retail.

Even Sahara group is entering in to retail business. Following article will show how Sahara

group plans to start retail chain.

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11. TACTICS USED BY ORGANISED RETAILER

MALL VISIT

I visited Oberoi mall and found how retailers attract the consumers to buy more and

observed various strategies adopted by them.

A mall is cleverly designed to bring out the shopaholic in consumers.

First floor temptations

Maximum impulsive buying happens on the ground floor. This is why most of the big

brands are spread across the ground floor in a mall. Also, this floor typically has unisex

stores. It is observed that when couple enters into a mall, the woman is bound to venture

into the stores. If it has only ladies products, the guy is most likely to refrain from entering.

But if it has goods that cater to both their needs there is no chance that men can escape it.

And once a costumer enters the shop they are most likely to come out with a bag or a two.

Stores that only have women or kids apparels are generally on first or the second floor. The

reason is that when it comes to shopping, women are most likely to walk extra mile to find

the goods of their choice. As for men, they are most likely to stick to the ground floor. In

addition a lot of stuff that can be bought instinctively is placed near the cash counter.

Experts say that these things are there to tempt consumers to buying resulting into

impulsive purchase. So as consumers stop and wait for your turn to pay, they start

throwing little things in their trolley.

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Why food court always on top?

The food court are always on the top floor because the most of the people who come to the

mall want to grab a quick bite so in the process of reaching the top floor they travel the

length n the breadth of the mall. The more consumers look around the more they are likely

to pick up something. The big retail wants consumers to take good look at the entire mall

and that is why there are multiple escalators in the mall. So while they are moving from

one escalator to another they are most likely to be drawn toward an inviting piece of

garment or accessories. The same logic is at work even when it comes to grocery shopping

in a supermarket. Usually the most essential items like wheat, rice and vegetables are

placed inwards in the store to make sure that the consumers have to go through a large part

of the store and thus their chances of making instinctive purchase go up. In the other

scenario if supermarkets have garments and accessories also than all FMCG products are

displayed towards the end.

Also the entry and the exit point for some of the stores are not the same.so that while

consumers negotiate their way through that maze they actually remember everything that

they need in their house.

Good smell makes consumers buy more

Aroma therapy not only pampers of the consumers but also coaxes then to loosen their

purse strings more than they thought was possible. Smell and sound are substantially more

potent anyone had even dreamed of. And that is the reason why lots of mall have a florist

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shop or a cookie store or for that matter even a shop selling perfumes near their entrance.

All this helps to improve people’s mood and therefore, they can end up shopping more. So

a pleasant smell possibly can help in quickening up the speed of people to their favorite

store. Even before they think, consumers will already be surfing the products.

Discounts, limited offer

As we know sales and discounts are the best at driving customers to a store. But once

customers spot an additional “offer limited” tag, there is very little chance that they will let

go off the product

As experts say it automatically sends their mind the message that next time they come

here, they will not find the same deal. And the next moment consumers will be at the cash

counter. It is explained in detail in coming pages.

Pushing private labels

The in-house brands of retailers are usually placed next to products which are twice as

expensive. This is done because consumers will obviously prefer cheaper products than

those expensive once. In Dalston, Sainsbury’s (a big retailer) open brand of fresh chilled

juice was sitting next to the Tropicana at about half the price, and the concentrated juice

was almost six times cheaper than the Tropicana. People may get same product of some

other brand at a far cheaper price, but the thing is that they never bother to check. So they

end up taking an impulsive decision and buy that product without checking similar

products. Extended version of private brands is given in coming pages.

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Higher- margin product display

The reason why there are watches and accessory counters near the entrance is because the

retailers want to make sure that consumers don’t miss them, as these goods have

phenomenal margin. The other logic behind this is that these products top the list in

impulsive buying. They are also referred to as “gift products” and the moment consumers

see’s them, the salesman unleashes all his charm to lure them into to trying them on. Then

starts the big dilemma to buy or not to buy. The margins in the accessory category are

phenomenal compared to others which mean that the retailers will never want you to miss

this section.

Product placements in categories were their brand loyalty is not strong will have a different

section arrangement then the rest. For instance in the chocolate section you will always

find Cadburys and ferrero rochers of the world placed in the upper shelves, right at the eye

level. People will find “kismi bar” and “parle toffees” that go unnoticed. But once you

have picked up and examined the expensive yet exotic chocolates they land straight into

trolley.

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LOYALTY CARDS

Loyalty cards are most common in retailing. They are used to attract customers and in

retaining them. Specially coded credit/debit cards or other special scanner-readable cards

are issued which are “swiped” at point of sale. It is a mechanism for identifying and

rewarding loyal customers”.

They resemble to debit and credit cards of banks yielding credibility and value. They are

durable, cheap and versatile. Card are of various types: point cards, coalition/multi retailer

cards, co-branded cards, store cards etc.Loyalty card scheme operates by awarding points

according to customer spend on each transaction. These points are used for giving

discounts for future/current purchase at store where earned, Gifts, member-only deals,

rebates at some threshold level of spending and /or eligibility to participate in lucky draw,

contest.

For example:

Shoppers’ Stop’s customer loyalty program is called The First Citizen. The program offers

its members an opportunity to collect points and avail of innumerable special benefits.

Currently, Shoppers’ Stop has a database of over 2.5 lakh members who contribute to

nearly 50% of the total sales of Shoppers’ Stop.

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12. SUCCESS STORIES

Future Group’s Pantaloons:

Future Group makes every effort to delight its customers, tailoring store formats to

changing Indian lifestyles and adapting products and services to their desires.

They operate some of India’s most popular retail formats. Across value and lifestyle

segments, our multi-format retail strategy caters to the complete consumption needs of a

wide cross-section of Indian consumers.

Lifestyle

Style for Every Occasion

Value

Helping India Save

Home

Building Dreams in a New India

Digital

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Connecting the Youth of India

As modern retail drives fresh demand and consumption in new categories, their strategy is

based on a deep understanding of Indian consumers, the products they want, and making

these products available in every city, in every store format. Future Group offers

innovative offerings at affordable prices tailored to the needs of every Indian household.

Pioneers in the India’s retail space, their formats are household names in more than 85

cities and 60 rural locations across the country

Future Group’s stores cover around 15 million square feet of retail space and attract

around 220 million customers each year

Pantaloon Retail (India) Limited focuses on the lifestyle retail segment led by the

Pantaloons and Central formats

Future Value Retail focuses on the value retail segment through the Big Bazaar, Food

Bazaar and KB’s Fairprice formats

Pantaloon is one of the biggest retailers in India with more than 450 stores across the

country. Headquartered in Mumbai, it has more than 5 million sq.ft Retail space located

across the country. It’s growing at an enviable pace and is expected to reach 30 million

sq.ft by the year 2011. In 2001 Pantaloon launched country’s first hypermarket ‘Big

Bazaar’. It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar.

Home solutions : Hometown, Furniture Bazaar, Collection-i

Consumer Electronics : e-zone

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Life Style: Brand Factory, Central, Pantaloons

Shoes :shoe factory

Books: Music & gifts : Depot

Health & Beauty Care: Star, Sitara

E-tailing: Futurebazaar.com

Entertainment: Bowling Co.

Food: Blue foods (Cream centre, Copper Chimney, Gelato, Bombay Blues, etc)

An article would support how Future group uses consumer insights; a letter (first hand

source) from Ashna Biyani, chief insights officer would also support this chapter.

Shoppers Stop

Shoppers' Stop started professional, organized retailing in India. It was the only retailer to

hire graduates and place them in front line selling activities and was also one of the first

few retailers to recruit from business schools. In 1991, the first Shoppers' Stop outlet

opened in an area of 2,800 sq. ft., as a ready-to-wear men's wear store.In 1992, ladies wear

was added and in 1993 the kids' section and accessories including jewellery, cosmetics and

watches. Shoppers' Stop was now a complete department store.

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In August 1993, institutional sales were introduced for corporate clients, sale of gift

hampers, gift vouchers and dress kits. 1994 saw the launch of 'STOP' - the first in-house

brand of merchandise.

In response to the ever-growing customer base, Shoppers' Stop launched the first retail

loyalty programme in April 1994. All buyers who became members of this programme

were entitled to special privileges and benefits.

Shoppers' Stop expanded operations outside Mumbai with its second store, at Bangalore in

1995. This was followed by a store in Hyderabad in 1998. Shoppers' Stop next entered the

Northern markets of Jaipur and New Delhi in 1999.

Shoppers' Stop redefined the shopping experience in India by introducing the 'everything-

under-one-roof' format coupled with the convenience of cash & carry from a customer-

friendly display of merchandise. It is a strategy, which has made Shoppers' Stop into a Rs.

4 billion (2003/04) organisation today.

Shoppers' Stop runs a chain of departmental stores offering apparel, accessories, footwear,

jewellery and home products. Currently 1,805 employees man its fourteen departmental

stores in Mumbai, Bangalore, Hyderabad, Chennai, Pune, Jaipur, Delhi, Gurgaon and

Kolkata. The stores are spread over 629,471 sq. ft of retailing space with an average

footfall of 50,000 customers per day across the chain.

The company has aggressive expansion plans and is expected to continue to lead the

growth of the organised retailing in India projected at Rs.13,500 billion (Industry

projections as per the India Retail Review by Knight Frank).

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13. FAILURES

Reliance Fresh, Subhiksha, Vishal Retail, Spencer’s, More, Big Bazaar and many more

have entered India since the modern format retail concept began. The expanding middle

and upper classes has played a big role in the expansion of existing modern format stores

and entry of new ones.

The biggest question is “Have all of these stores been successful?”

The answer is a big NO. We shall discuss about two of the biggest failures in the history of

Indian retail – Subhiksha and Vishal Retail.

Subhiksha was started by R. Subramaniam, an IIM A and IIT Chennai alumnus with its

first store at Chennai. Ram Chandra Aggarwal set up his Vishal Garments Store in 1994 –

three years before Biyani’s Pantaloon and seven years before setting up Vishal Retail. Both

of them are discount stores at prices which are much lower than other retail outlets.

Though, Subhiksha has closed down and Vishal is still in the market, there are some points

of similarity in their fall from glory which I would like to mention here –

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Un-mindful expansion spree across different parts of the country

Subhiksha didn’t realize that with this only a few stores would be profitable and generate

positive cash flows. It moved across different sectors such as medicine, grocery, IT, mobile

etc very fast.

Vishal expanded without having the proper capital. They got the orders from the suppliers

but when the stores didn’t work out, the entire supply chain got choked.

IPO problem

Subhiksha was thinking of going for an IPO in 2007 but shelved it in view of “uncertain

market conditions”. But I believe that they got greedy as they expected a market

correction.

Vishal on the other hand raised Rs 110 crore from an IPO in June 2007 which wasn’t

enough to meet it scorching growth pattern. It had 50 stores by then and was looking to

expand to 130 stores in a year. But it went for short term debt which resulted in a big blow

to their entire supply chain when the stores didn’t happen as intended.

Both of them didn’t consolidate

Subhiksha and Vishal instead of stabilizing and consolidating themselves first in different

places and then moving to newer locations, tried to be the first in every town.

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Poor inventory management

Subhiksha had a bad history of credit defaults and this led to supply breakages. This led to

situations where sometimes the store had very high inventory and at others, the stocks were

out. This led to great dissatisfaction.

Vishal’s distribution center led model failed as it couldn’t build an IT network. Buying at

warehouses was mostly not aligned to what the customers needed and resulted in dead

inventory.

Private Labels

Vishal tried to develop private labels in almost every category but had limited scale to

support them.

Subhiksha closed down in 2009 amid allegations of defaults, non – wages payments and

bankruptcy. The people behind it are still struggling to come up with valid explanations.

Vishal has brought down the rentals of the properties, decreased its expenses and closed

down two dozen stores and warehouses and plans to close more. They still need an

infusion of about Rs 50 crore. Would the lenders give them?

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14. FIELD STUDY

I got an opportunity to visit retail stores of KEWALKIRAN CLOTHING LIMITED

(KKCL) and counters of its brand at various national sales stores.

About Kewalkiran clothing limited-

Killer, Easies, Lawman, Integriti – leading brands in India are under the ownership of

KEWALKIRAN CLOTHING LIMITED. Incorporated in 1981, Kewal Kiran Clothing

Limited today is amongst the few large branded apparel manufacturers in India. The

company has sales in Asia, Middle East and CIS. The company designs, manufactures and

markets branded jeans, Semi-formal and casual wear for men and women.

Product line consists of :

Jeans Jackets Innerwear (briefs & vests)

Trousers Tee Shirts Shoes & socks

Shirts Cargos & Capris Accessories like bags, belts, caps, etc.

The company began as a manufacturer of men’s wear for reputed brands. The company is

exposed to global standards in quality, technology, marketing and branding. In 1989, the

company introduced “Killer” the first international denim brand created in India.

Today "Killer" is one of the most successful and widely recognized brands in the Indian

apparel industry.

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Innovation has been the hallmark of Kewal Kiran Clothing Limited A marriage of design

and technology, the company has constantly introduced new fits, finishes and fabrics. The

company’s own R & D team working closely with designers is constantly innovating –

creating an exciting array of product lines in a variety of fabrics, washes and cuts, using the

latest in technology and processes. The company’s own manufacturing and processing set

up enables it to have a speedy ‘go-to-market’ time frame – from design to production.

As part of my observation I concentrated on:

a) Consumer insights.

b) Visual merchandising.

Consumer insights:

There has been change in trend where in consumers are no more that price sensitive

but demands quality over price. He does not mind paying premium if he gets right

quality, design, latest fashion. Moreover he gets attracted to the product as it is

displayed. Now a day’s all consumers need branded products. They all have

become brand conscious. This change has taken place because of various foreign

brands coming in and rising competition. The retailers in India need to concentrate

on quality, latest fashion, price to compete with foreign brands.

I had visited various retail stores of KKCL as a mystery shopper. I observed on

what basis consumers make their buying decision.

For e.g.: I observed a guy in the retail store of KKCL he had come there to buy

jeans and pair of tshirts.The salesperson was showing him various type of jeans and

asked that guy as to what kind of jeans he wants. The guy said that he wants

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something of latest fashion and jeans of good quality. The jeans which the sales

person was showing was expensive and over the budget of that guy. But the guy

went ahead and bought jeans which were bit expensive. He compromised on price

but he didn’t compromise on quality and brand.

This shows us that people do not mind paying premium price if given good quality

products.

Visual merchandising

Which one of the above will you prefer?

From the above pictures the first picture will obviously attract a consumer to buy because

the merchandise is appealing to the eyes of the customer. It sets the context of the

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merchandise in an aesthetically pleasing fahion, presenting them in a way that would

convert the window shoppers into prospects and ultimately buyers of the product.

Now a day’s people have converted into shoppers. They go for window shopping, not

necessary for the purpose of buying but if at all they like something they will go ahead and

buy at that moment (shoppers phenomenon).And because of this reason merchandise

should be displayed in such a manner that shoppers are attracted to buy. Even though the

merchandise displayed is of good quality, price and of latest fashion only its display will

attract the shoppers to buy. Hence visual merchandising is very important in retail.

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15. FUTURE PROSPECT

As mentioned earlier organised retail sector in India is poised to grow at a

very healthy rate. Experts feel the ratio of organised retail to unorganised

would be 1:4 by 2015.

Clearance of FDI norms(upto51%) in multi brand retail is considered as a

win-win situation, since opening up of FDI would get foreign players like

Wal-Mart(which till date is present only in cash n carry format in

India),Carrefour, Tesco, etc... this would increase the competition between

retailers which would indirectly benefit customers.

Besides these benefits FDI, which is proposed to be worked out in a

regulatory framework would include benefits for Indian farmers and

manufacturers since the clauses in FDI policy would make it mandatory for

foreign players to purchase certain amount of goods from Indian farmers

and manufacturers. Example: wheat, sugarcane, tea, coffee beans.

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This policy would also enhance the forex reserve holding and ease out the

pressure which otherwise would have been developed since the outflow (to

foreign nations) of money would have been increased.

With change in retail dynamics consumer mind sets and buying behaviour

are also set to change infact have started changing. Increase in competition

have made customers the king and he demands more even if he is asked to

pay premium prices.

Since the job culture in India is developing the group of salaried people are

also increasing. They generally tend to buy in bulk, look out for varieties,

ask for high discounts and hence look forward to organised retailer who is

tailor-made for such classes of people.

Even though organised retail is poised to grow at very healthy rate but

factors like slow infrastructure development, social lifestyle, personal touch,

proximity to reach destination would keep the existence of unorganised

sectors (mom and pop stores) in India. Hence we can safely conclude that

Modern as well Traditional retail would go hand in hand at least for a

decade to come. But as mentioned above the growth rate of organised

would be much ahead of unorganised sector.

Primary data and field study collected in this project “ORGANISED RETAILING” also

highlights the above points and fore sees the future path for organised retailing in India.

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