DEVELOPMENT OF RETAIL SECTOR IN INDIA

 TABLE OF CONTENTS
1. Abstract
2. Introduction
3. India : The Top Retail Destination
4. Market Size
5. Evolution Of Retail
6. Retail Industry : Business Model
7. Retail Industry : Revenue Model
8. Growth Of Retail Industry in India
9. Retail Sector : Types
10. Objectives Of Retail
11. Investments And Development
12. Government Initiatives
13. FDI Policy In Retail
14. Impact of Covid-19 In Retail Industry
15. Retail Sector : Challenges
16. Strategies To Overcome Challenges
17. Retailing Format In India
18. Trends In Retail Sector
19. Retail Industry : Value Chain
20. Retail Industry : Drivers and Dynamics
21. Importance Of Retail Sector
22. Future Prospects Of Retail Sector
23. Conclusion
Abstract
The Indian Retail Industry is the fifth largest in the world. Comprising of
organized and unorganized sectors,
Indian retail industry is one of the fastest growing industries in India,
especially over the last few years.
Though initially the retail industry in India was mostly unorganized, however
with the change of taste and
preferences of consumers, the Industry is getting more popular these days
and getting organized as well. The
Indian Retail Industry is expected to grow from US$330 billion in 2007 to
US$640 billion by 2015. According
to the 10th Annual Global Retail Development Index (GRDI) of A.T.
Kearney, India is having a very strong
growth fundamental base that’s why it’s the perfect time to enter into
Indian Retail Market. Indian Retail
Market accounts for 22% of country’s GDP and it contributes to 8% of the
total employment. The total retail
spending is estimated to double in the next five years. Of this organized
retail –currently growing at a CAGR
of 22%- is estimated to be 21% of total expenditure. The unorganized
retail sector is expected to grow at about
10% per annum with sales expected to rise from $309 billion in 2006-
07 to $496 billion in 2011-12. This
paper focused on changing face of Retail Industry, organized or
unorganized retail industry, major players in
retail industry and also highlights the challenges faced by the industry in
near future.
 INTRODUCTION

Indian retail industry has emerged as one of the most dynamic and fast-
paced industries due to the entry of several new players. It accounts for
over 10% of the country’s gross domestic product (GDP) and around
eight% of the employment. India is the world’s fifth-largest global
destination in the retail space. India ranked 73 in the United Nations
Conference on Trade and Development's Business-to-Consumer (B2C) E-
commerce Index 2019. India is the world’s
fifth-largest global destination in the retail space and ranked 63 in World
Bank’s Doing Business 2020.

The sizeable middle class and nearly unexplored retail market in India are
the main enticing factors for international retail behemoths seeking to
move into newer markets, which will help the Indian retail business grow
more quickly. The urban Indian consumer's purchasing power is
increasing, and branded goods in categories like apparel, cosmetics,
footwear, watches, beverages, food, and even jewellery are gradually
evolving into business and leisure that are well-liked by the urban Indian
consumer. The retail sector in India is expected to reach a whopping US$
2 trillion in value by 2032, according to a recent analysis by the Boston
Consulting Group (BCG).

India is the world’s fifth-largest global destination in the retail space. In FDI
Confidence Index, India ranked 16 (after the US, Canada, Germany,
United Kingdom, China, Japan, France, Australia, Switzerland, and Italy).

India is one of the most promising and developing marketplaces in the

world. There is a great deal of desire among multinational corporations to
take advantage of the consumer base in India and to enter the market
first. Nearly 60 shopping malls encompassing a total retail space of 23.25
million square feet are expected to become operational during 2023-25.

India ranks among the best countries to invest in Retail space. Factors that
make India so attractive include the second largest population in the world,
a middle-income class of households, increasing urbanization, rising
household incomes, connected rural consumers and increasing consumer
spending.

FMCG, apparel & footwear, and consumer electronics are the largest retail
segments, constituting 65%, 10%, and 9% respectively of the retail
market.

As of 2021, there were 1.2 million daily e-commerce transactions. Online

shoppers in India are expected to reach 500 million in 2030 from 150 million
in 2020. The e-Commerce market is expected to touch US$ 350 billion in
GMV by 2030.

India’s retail sector was experiencing exponential growth with retail

development taking place not just in major cities and metros, but also in
small cities. Healthy economic growth, changing demographic profile,
increasing disposable income, urbanisation, and changing consumer tastes
and preferences have been some of the factors driving growth in the
organised retail market in India.

To improve the business climate and make it simpler for foreign

companies to register fully owned subsidiaries in India, the Indian
government has implemented a number of rules, regulations, and policies.

 India- The Top Retail Destination

The retail market in India has undergone a major transformation and has
witnessed tremendous growth in the last 10 years

Indian retail market is expected to reach $1.1Tn by 2027

and $2 Tn by 2032 India currently has the 4th Largest retail
market in the world
India ranks among the best countries to invest in the retail space. Factors
that make India so attractive include having the second largest population
in the world, a rising middle-income class of ~158 households, increasing
urbanization, connected rural consumers and increased discretionary
spending amongst consumers.

India ranked No. 2 in Global Retail Development Index (GRDI) in 2021

The retail sector in India accounts for over 10% of the country’s GDP and
around 8% of the workforce (35+ Mn). It is expected to create 25 Mn new
jobs by 2030
Increasing demand for organized retail space has helped create a capacity
of ~120 Mn square feet (MSF) in retail space across major Indian cities.
Major Indian cities include Delhi (23.7 MSF) and Mumbai (16.7 MSF)
Food & Grocery, Apparel & footwear, and consumer electronics are the
largest retail segments, constituting 63%, 9% and 7% respectively of the
retail market
The E-Commerce market is expected to touch $350 Bn in
GMV by 2030 India’s digital economy is expected to touch
$800 Bn by 2030
Online shoppers in India are expected to reach ~500Mn in 2030 from
+150Mn in 2020
UPI accounted for a significant portion of all digital payments in 2022,
accounting to ~62 billion transactions in 2022
Growth in income will transform India from a bottom of the pyramid economy
to a truly middle-class led one, with consumer spending growing to nearly US
$6 trillion by 2030.
.
Industry Scenario
The Indian e-commerce industry is expected to cross the $350 Bn in GMV
by 2030.
Indian retail market is estimated to reach $2 Tn by 2032, driven by socio-
demographic and economic factors such as urbanization, income growth
and rise in nuclear families. On the other hand, the Indian e-commerce
industry is expected to cross $350 Bn mark by 2030, growing at a CAGR of
23%.

The Indian e-commerce market was estimated to be worth over $55 Bn in

Gross Merchandise Value in 2021. By 2030, it is expected to have an
annual gross merchandise value of $350 Bn. E-commerce and consumer
internet companies raised US$15.4 billion in PE/VC funding in 2022,
almost twice the amount raised in 2020 of ~US$8.2 billion. India will
become the 3rd largest online retail market by 2030, with an estimated
annual gross merchandise value of $350 Bn.

The Indian retail market is largely unorganized. However, over the next
3-5 years, share of modern retail (including e-commerce) will increase
to 30-35% with share of traditional retail coming down to 65-70%.
 MARKET SIZE

As per Kearney Research, India’s retail industry is projected to grow at

9% over 2019-2030, from US$ 779 billion in 2019 to US$ 1,407 billion by
2026 and more than US$ 1.8 trillion by 2030. Revenue of India’s offline
retailers, also known as brick-and-mortar (B&M) retailers, is expected to
increase by Rs. 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.
India’s direct selling industry is expected to be valued at US$ 2.14 billion
by the end of 2021. E-Retail has been a boon during the pandemic and
according to a report by Bain & Company in association with Flipkart ‘How
India Shops Online 2021’ the e-retail market is expected to grow to US$
120-140 billion by FY26, increasing at approximately 25-30% p.a. over the
next five years.
Despite unprecedented challenges, the India consumption story is still
robust. Driven by affluence, accessibility, awareness and attitude,
household consumption stood at Rs. 130–140 trillion (US$ 1.63-1.75
trillion) in 2021.

India has the third-highest number of e-retail shoppers (only behind China,
the US). The new-age logistics players are expected to deliver 2.5 billion
Direct-to-Consumer (D2C) shipments by 2030. Online used car transaction
penetration is expected to grow by 9x in the next 10 years.

According to recent industry reports, the e-commerce industry witnessed a

phenomenal 36.8% YoY growth in terms of order volumes. As consumers
prefer to shop online throughout the year, this fast-changing consumer
preference towards online shopping reveals the mature status acquired by e-
commerce brands in India.

As of 2021, there were 1.2 million daily e-commerce transactions. The total
value of digital transactions stood at US$ 300 billion in 2021 and is projected
to reach US$ 1 trillion by 2026. Online shoppers in India are expected to
reach 500 million in 2030 from 150 million in 2020.

India’s digital economy is expected to touch US$ 800 billion by 2030 and
the e-Commerce market is expected to touch US$ 350 billion in GMV by
2030.
 Evolution of Retail: Indian Context

With revolutionary changes taking place in the worldwide economy and the
growing importance of 24/7 operation of the business, the retail sector has
been undergoing a paradigm shift across the world.

The world of today has turned into a global village; consumerism is having
a huge impact on the contemporary retail business, and technological
advancements have created opportunities as well as several challenges for
the retail industry. With the advent of the internet, the growth in the retail
industry has been impressive due to the benefits of the economies of scale
and also the expansion of business across the geographical boundaries at
B2B (Business to Business) and B2C (Business to Consumer) levels.

Several studies have proven that the Indian Retail Market is one of the top
emerging markets in the world. For Indian Economy, the retail sector is one
of the pillars, which contributes towards a growth rate of approximately
10% of the total GDP and towards the total employment around 8%.
According to the latest studies, Indian retail market is ranked amongst the
top 5 retail markets worldwide estimated around 600 Billion US Dollars.

Indian Retail industry is expected to have a bright future and offers

numerous opportunities for progress and growth. According to GRDI
reports, some favorable factors which support the growth of retail business
are: rise in fashion loving and brand conscious young population, extensive
urbanization, and expansion of opportunities for new investment in retail
sector.
As per the report of FICCI (2011), a positive trend in the Indian retail sector
can be attributed to a sharp rise in the Middle-Income segment and
growth in domestic consumption. Moreover, studies suggest that with
changes in the consumer buying preferences, demographics composition
and increasing preference for mall culture, there has been a transition
from the traditional retail formats to a more organized form of retailing, as
a result of which the Indian Retail market is expected to witness an
optimistic trend in future as well.

The retail sector in Indian context can be subdivided into Organized and
Unorganized retail sectors. Organized retailing constitutes licensed retailers
registered under sales and income tax, involved in carrying out their day-to-
day trading functions. This may include large hypermarkets, large-scale
owned retail ventures owned privately or the retail chains as well. On the
other hand, unorganized retailing comprises of a sizeable proportion of
small retailers operating their own Kirana, paan, beedi shops, general
stores, chemists, hawkers, etc.

In developed economies, organized retail enjoys a predominant share of

around nearly 75-80% as against traditional retailing, while in developing
economies; unorganized sector enjoys a predominant share in the retail
market.
The retail sector in India is highly fragmented or distributed. Unorganized
retail constitutes a significant share of over 90%, while the organized retail
segment is just in a start up stage and has witnessed an impressive growth
over last few years. Retail in India originated with the Mom and Pop Stores
and Kirana Stores, which used to cater to the requirements of the local
population. Over a period, the government encouraged rural retail and
provided support for establishing Khadi & Village industries.

During 1980’s, the retail scene in India changed further with the opening
up of the economy, as a result of which leading retail chains in textile
sector were established like Raymond’s, S Kumar’s and Bombay Dyeing.
Subsequently, Titan launched its retail showroom, and the organized
retailing started strengthening its grip in the Indian market.

By 1995, major retail outlets such as Food World, Music World, and
Planet M, Crossword entered the Indian retail market. Large retail formats
and stores like shopping malls, hypermarkets and supermarkets came into
operation for providing best of the class experience to the customers.

The retail sector evolution witnessed improvements in the distribution set

up, supply chain management, technological innovations, back end
operational support and excellence and increase in business alliances in the
form of collaborative ventures, mergers, acquisitions, joint ventures, etc.

Major players in the retail industry like Tata Group, Future Group, Bharti,
and Reliance, etc. have stepped forward with aggressive and ambitious
investment plans in the retail sector as a part of their business expansion
strategy across various verticals. Moreover, with the introduction of retail
reforms by the Government of India which allows FDI of 51% in multi brand
stores in India, organized retail sector is expected to capture a major share
of the market in the upcoming future.

According to Assocham study, factors such as globalization and

liberalization of economies, increase in the purchasing power of the
consumers, changing lifestyle and infrastructural developments, have
revolutionized the Indian retail market. Studies reveal that organized retail
market which was just at 7% of the total retail market share in 2011-12, is
expected to attain a total share of over 10% across the retail sector by
2016-17. The estimated growth rate of traditional retail is expected to be
around 5% while for organized retail it is expected to be around 25% by
2020.

Food & Grocery is the major contributor in the entire retail market in India
with a total contribution of almost around 60% of the total retail sector in
2012. This is followed by Clothing (8%) and Telecom & Mobile (6%) and
many others.

In organized retailing, Apparels is the major contributor which accounted for

a total contribution of 33% in 2012 to the retail industry followed by food
and grocery (11%). Though, the share of Food & Grocery segment in
organized retailing has shown an impressive growth since last few years. E
Commerce and E Tailing in recent years have redefined the retail
landscape and offer a lot of opportunities to various stakeholders.
 Retail Industry - Business Model

A retail business model articulates how a retailer creates value for its
customers and appropriates value from the markets. In retail, a business
model would dictate the product and/or services offered by the retailer, the
pricing policy that he adopts. Many different types of retail establishments
exist, and, the overall industry has seen a significant blurring of the
boundaries that separated the wide range of retail businesses. Understand
the key business models adopted by the retail industry. Understand the
distinctive ways that retail industry players use to reach to the end
consumer.
A retail business like any other type of business can be owned by different
types of entities. It could be a sole proprietor, partnership concern,
corporation, a cooperative body, a joint venture, or other types of legally
permitted formats. A majority of retail businesses in India are sole
proprietorships and partnerships due to their nature. Every business has
its distinctive way of organizing the very many activities that are involved in
delivering its product or service to the end consumer. In retail parlance,
one would term it as the format adopted by the retailer to reach his end
consumer.

Retail enterprises can be either independently owned or operated or part

of a chain. Chains may all be owned by a single company, and the
individual stores may be franchises that are independently owned by a
small business person. Many different types of retail establishments exist,
and, as noted above, the overall industry has seen a significant blurring of
the boundaries that had long separated the wide range of companies
operating under the retail umbrella.

Seven Key Business Models in Retail

A retail business model articulates how a retailer creates value for its
customers and appropriates value from the markets. Given below are the
main types of business models that exist in the retail industry
:

1. Independent Retailer:
Independent retailers are the entrepreneurs who have built their business
from the ground up. They can take help from various agencies in the
process like consultants, builders, or other contractors, but the decision-
making authority always rests with the independent retailer, who is also the
owner of the retail enterprise. Independent Retailer generally operates one
outlet and offers personalized service, at a convenient location and
establishes close customer contact.

Roughly 90% of all the retail businesses are managed and run by
independents, including barbershops, dry cleaners, furniture stores,
bookshops, Gas Agencies, and neighborhood stores. This is due to the
fact that entry into retailing is easy and it requires low investment and little
technical knowledge. This obviously results in a high degree of
competition. Many independent retailers fail because of the ease of entry,
poor management skills, and inadequate resources.

2. Existing Retail Business:

This categorization includes those retailers who have taken over an
existing business by investing in it. They gain ownership of an existing
business and use that foundation to build upon it. The primary benefits are
the goodwill and reputation that comes with the enterprise. This brings
down the entry-level risks as the business has already been established
by the previous owner.

3. Retail Chain:
This business model involves common ownership of multiple units where
the purchasing and decision making is centralized. It can be defined as ’’ a
group of two or more stores whose activities are determined and
coordinated by a single management group”. Stores that are part of a
Chain often rely on, specialization, standardization, and elaborate control
systems. Retail chains are able to serve a large dispersed target market
and maintain a brand name for their chain. Chain stores have the
opportunity to take advantage of "economies of scale" in buying and selling
goods. They can maintain their prices, thus increasing their margins, or
they can cut prices and attract greater sales volume. Examples of retail
chains in India are Shoppers stop; Westside and IOC, convenience stores
at select petrol filling stations.

4. Retail Franchising:
A franchise is a store with the right to use a certain business name,
product, and business model. Franchising is the practice of using another
firm's successful business model. The word 'franchise' is of Anglo-French
derivation - from franc - meaning free, and is used both as a noun and as a
(transitive) verb. For the franchisor, the franchise is an alternative to
building 'chain stores' to distribute goods that avoids the investments and
liability of a chain. The franchisor's success depends on the success of the
franchisees. The franchisee is said to have a greater incentive than a direct
employee because he or she has a direct stake in the business.

The franchisee receives marketing, support, and training from the

franchisor in order to make the lay the foundation, use the trusted
business strategies, and drive economies of scale in buying and selling. It
is a contractual arrangement between a "franchiser" and a "franchisee"
which allows the latter to conduct a certain form of business under an
established name and
according to a specific set of rules.

The franchise agreement gives the franchiser much discretion in

controlling the operations of small retailers, in exchange for fees,
royalties, and a share of the profits, the franchiser offers assistance and
very often supplies as well. Classic examples of franchising are
McDonald's, Subway, PizzaHut, and Nirulas.

5. Retail Cooperatives:
A retail cooperative is a group of independent retailers that have combined
their financial resources and their expertise in order to effectively control
their wholesaling needs. They share purchases, storage, shopping facilities,
advertising planning, and other functions. The individual retailers retain their
independence but agree on broad common policies. “Amul” is a typical
example of a cooperative in India.

6. Retail Dealership:
The dealership is a cross between a franchise and an independent retailer.
A dealership is an authorized seller that has the right to sell a particular
brand of products and usually doesn't have to pay any fees to the licensor.
When setting up a dealership, the dealer generally doesn't receive any
support.

7. Network Marketing:
This is a unique business model that involves not only selling a product but
also recruiting other salespeople to sell the same product. In this way,
sales of the product depend entirely on the people in the network. Multi-
level marketing (MLM) is a marketing strategy in which the sales force is
compensated not only for sales they personally generate but also for the
sales of the other salespeople that they recruit. This recruited sales force is
referred to as the participant's "downline", and can provide multiple levels
of compensation. Other terms used for MLM include pyramid selling,
network marketing, and referral marketing. Most commonly, the
salespeople are expected to sell products directly to consumers by means
of relationship referrals and word of mouth marketing.

 Retail Industry: Revenue Model

Understand the traditional retail revenue model and, what are the variations
in different revenue models adopted by key players in the retail industry.
Analyze the pros and cons of various models. The most common and most
profitable revenue model is that of the traditional retailer. The traditional
retailer profits by selling products and services directly to buyers at a mark-
up from the actual cost.

Revenue Models – Retail:

Successful retail operations depend largely on two main dimensions:
margin and turnover. How far a retail enterprise can reach in margin and
turnover depends essentially on the type of business (product lines) and
the style and scale of the operations. In addition, the turnover also
depends upon the professional competence of the enterprise. Margin is
defined as the percentage mark tip at which the inventory in the store is
sold and turnover is the number of times the average inventory is sold in a
year.

In a given business two retail companies may choose two different margin
levels, and yet both may be successful, provided the strategy and style of
management are appropriate Given below are some revenue models
adopted by the players of the retail industry:

1. Low Complexity, Low Margin, High Turnover Potential

The most common and most profitable revenue model is that of the
traditional retailer. The traditional retailer profits by selling products and
services directly to buyers at a mark-up from the actual cost. In the first
model, the retailer assumes that low price is the most significant
determinant of customer patronage. Low-cost retailers generally sell to the
mass market with a strong emphasis on price over quality or other
premium product/service attributes.

.The stores in this category price their products below the market level.
Marketing communication focuses mainly on price. Low-cost retailers
typically offer a high number of SKUs at the best possible price. By
emphasizing price, the low-cost retailer operates on very low margins and
must have the market power to negotiate deep discounts from its suppliers,
coupled with significant operational efficiencies. They provide very few
services; if any, and they normally entail an extra charge whenever they do.
The merchandise in these stores is generally pre-sold or self-sold. This
means that the customers buy the product, rather than the store selling
them.
Amazon and Wal-Mart serve as the best examples of low-cost retailers.
Wal-Mart benefits from its vast size in the physical retail space, leveraging
its volume operations in the digital space.
Amazon has created its own efficiencies using digital technology.
Pantaloon Chain and Flipkart are the Indian examples of such stores.
2. High Margin Low Turnover
This operation is based on the premise that distinctive merchandise,
service, and sales approach are the most important factors for attracting
customers. Premium retailers target highly segmented markets with an
emphasis on prestige, quality, and performance much more than price.
Stores in this category price their products higher than those in the market,
but not necessarily higher than those in similar outlets. Many premium
retailers find that higher prices positively correlate to the prestige of the
brand. In many cases, the premium retailer sells its own branded products
instead of reselling other brands. The focus in marketing communication is
on product quality and uniqueness.

Merchandise is primarily sold in store and not pre-sold. These stores

provide a large number of services and sell select, categories of products.
They do not stock national brands that are nationally advertised. These
retailers manufacture their own or work with contract manufacturers to
develop name brand products for sale at premium prices. Typically, a store
in this category is located in a downtown area or a major shopping center.
Sales depend largely on salesmanship and image of the outlet.

Williams-Sonoma and Victoria's Secret are examples of premium retailers

who have developed their own mainstream premium product category by
selling quality, private-label products. Gilt Groupe is an example of a digital
premium retailer that has created an outlet to sell other premium brands to
a targeted group of customers.

3. High Margin High Turnover Stores

These stores generally stock a narrow line of products with a turnover of
reasonably high frequency. Cost-plus retailers generally sell to a segmented
mass market, trying to maintain comfortable margins instead of focusing on
price, and justifying those margins through quality, service, and selection.
They could be situated in a noncommercial area but not too far from a
major thoroughfare. Their locational advantage allows them to charge a
higher price. High overhead costs and, low volumes also necessitate a
higher price. Most cost plus retailers choose specific product segments,
such as computers and electronics or office supplies, and develop a level
of expertise that mass-market retailers cannot match. Others may offer a
broad product offering but emphasize shopping experience or a higher
level of customer service.

Staples and Best Buy represent the best examples of cost-plus retailers
that focus on specific product categories, while Target is a good example
of a cost-plus retailer that offers a broad array of products.

4. Low Margin-Low Turnover Stores

Retail enterprises in this category are pushed to maintain low margins
because of price wars. Compounding this problem is the low volume of
sales, which is probably a result of poor management, unsuitable location
etc. such businesses, normally get wiped out over a period of time. These
retailers spend most of their time fighting for sales volume and trying to
build customer loyalty

 Growth of Retail Industry in India

An increasing number of people in India are turning to the services sector

for employment due to the relative
low compensation offered by the traditional agriculture and manufacturing
sectors. The organized retail
market is growing at 3.5 percent annually while growth of unorganized
retail sector is pegged at 6 percent.
The Retail Business in India is currently at the point of inflection. Rapid
change with investments to the tune
of US $ 25 billion is being planned by several Indian and multinational
companies in the next 5 years. It is a
huge industry in terms of size and according to management consulting
firm Techno Park Advisors Pvt. Ltd.,
it is valued at about US $ 350 billion. Organized retail is expected to garner
about 16-18 percent of the total
retail market (US $ 65-75 billion) in the next 5 years.
According to the tenth report of GRDI of AT Kearney, India is having a very
favorable retail environment
and it is placed at 4th spot in the GRDI. The main reasons behind that is
the 9% real GDP growth in 2010,
forecasted yearly growth of 8.7% through 2016, high saving and investment
rate and increased consumer
spending. According to report, organized retail accounts for 7% of India’s
roughly $435 billion retail market
and is expected to reach 20% by 2020. Food accounts for 70% of Indian
retail, but it remains under penetrated
by organized retail. Organized retail has a 31% share in clothing and
apparel and continues to see growth in
this sector. A report by Boston Consulting Group has revealed that the
country’s organized retail
is estimated
at US $ 28 billion with around 7% penetration. It is projected to become a US
$ 260 billion business over the
next decade with around 21% penetration. The analysts believe that the
sector is likely to show significantgrowth of over 9% over the next ten
years and also see rapid development in organized retail format with
proportion likely to reach more respectable 25%by 2018. The BMI India
Report for the first quarter of 2012
released forecasts that total retail sales with growth from US $ 422.09 billion
in 2011 to US $
825.46 billion
by 2015.The report highlights strongly underlying economic growth,
population expansion, increasing
disposable income and rapid emergence of organized retail infrastructure
as major factors behind the forecast
growth.
Indian retail sector is wearing new clothes and with a three year
compounded annual growth rate of 46-64%,
retail is the fastest growing sector in the Indian economy. The sector is the
second largest employer after
agriculture, employing more than 35 million people with wholesale trade
generating an additional
employment to 5.5 million crore.The enormous growth of retail industry has
created a huge demand for real
estate. Property developers are creating retail real estate at an aggressive
pace. According to report titled
“India Organized Retail Market 2010”, published by Knight Frank, during
2010- 12,around 55 million square
feet of retail space will be ready in Mumbai, NCR, Bangalore, Kolkata,
Chennai, Hyderabad and Pune.
Besides between 2010 and 2012 the organized retail real estate will be
grown from existing 41 million square
feet to 95 million square feet. The total no. of shopping mall is expected to
expand at CAGR of 18.9% by
2015. Hypermarket, currently accounting for 14% of mall space is expected
to witness high growth. Industry
experts predict that the next phase of growth in the retail sector will
emerge from the rural market. By 2012,
the rural retail market is projected to have a total of more than 50% market
share.
Retail Industry Sectors: Types of Retail

A marketplace is a location where goods and services are exchanged.

The traditional market square is a city square where traders set up stalls
and buyers browse the merchandise. Now retail goods are generally sold
in a number of different establishments. Convenience Stores, specialty
stores, department stores, supermarkets & hypermarkets, discount
stores, multichannel stores are some models used by the retail industry
to provide goods to end customers.

Retail – Industry Sectors:

Retail goods are generally sold in a number of different establishments.
Retailers can be classified by a retail store strategy mix, which is an
integrated combination of hours, location, assortment, service,
advertising, and prices, etc. Retail establishments typically classified into
the following sectors:
Given below are the snapshot, definition, and major activities of various sub-
sectors of the retail industry:

1. Convenience Stores:
Small stores that sell a variety of products, such as newspapers,
magazines, candy, soft drinks, tobacco products, and lottery tickets.
Convenience Store is generally a well situated,
food-oriented store with a long operating house and a limited number of
items. These stores are usually located in urban neighborhoods or along
busy roads. Convenience stores are often open longer hours than other
types of retail establishments, making them convenient for customers.
However, prices are often higher than in other types of stores. Consumers
use a convenience store; to fill in items such as bread, milk, eggs, and
candy, etc.

2. Specialty Stores:

Specialty stores are the retail establishments that specialize in the selling
of a single type or specific range of merchandise and related items. These
establishments typically concentrate their efforts on selling a single type or
very limited range of merchandise. They concentrate on the sale of a
single line of products or services, such as Audio equipment, Jewelry,
Beauty and Health Care, Clothing, Musical Instruments, Sewing Shops,
and party supply stores. A typical specialty store gives attention to a
particular category and provides a high level of service to the customers.
Even the branded stores also come under this format. Consumers are not
confronted with racks of unrelated merchandise.

Example: Music World for audio needs, Tanishq for jewelry and McDonalds,
Pizza Hut, and Nirula's for food services.

3. Department Stores:
Department stores are large retail establishments that are made up of a
number of sections, or departments. A specific group of products is
available in each department, each of which specializes in selling a
particular grouping of products. For example, under this
compartmentalized arrangement, consumers go to one area of the store to
purchase tableware and another area to acquire bedding. These typically
are very large stores offering a huge assortment of "soft" and "hard goods;
often bear a resemblance to a collection of specialty stores. A retailer of
such stores carries a variety of categories and has a broad assortment at
an average price. A department store usually sells a general line of apparel
for the family, household linens, home furnishings, and appliances. They
offer considerable customer service.

Example: Large format apparel department stores include Pantaloon,

Ebony, Pyramid, Shoppers Stop, and Westside.

4. Supermarkets & Hypermarkets:

Supermarkets and hypermarkets are retail establishments that were
primarily involved with selling food. Many supermarkets carry other
household products as well.

Supermarkets are very similar to grocery stores, but they generally are
larger and carry a wider selection of products. The supermarkets can be
anywhere between 20,000 and 40,000 square feet (3,700 m2). A
supermarket typically carries small house hold appliances, some apparel
items, bakery, film developing, jams, pickles, books, audio/video CDs, etc.

A hypermarket is a large retail facility, or superstore, that carries a very

wide variety of products under one roof, including groceries and a variety of
non-food items. This is a self-service store consisting mainly of grocery
and limited products on non-food items. Hyper Markets is a special kind of
combination store that integrates an economy supermarket with a discount
department store. A hypermarket generally has an ambiance which
attracts the family as a whole.

These retail establishments, which were primarily involved in providing food

to consumers, have increasingly ventured into other product areas in
recent years. They account for the vast majority of total food-store sales in
America.
Example: SPAR supermarket, In India, the Government-run Super
bazaar, and Kendriya Bhandar in Delhi are good examples of a
supermarket. Similarly in Mumbai, we have Apna Bazar and Sahakari
Bhandar. Pantaloons Retail India Ltd. (PRIL) through its hypermarket "Big
Bazar”.

5. Discount Stores:
Discount stores are stores that typically sell a broad range of products at
lower prices than other retail establishments. However, they generally also
offer lower levels of service than
higher-priced retailers. These stores tend to offer a wide array of products
and services, but they compete mainly on price. They offer an extensive
assortment of merchandise at affordable and cut-rate prices. Normally
retailers sell less fashion-oriented brands. These retail outlets offer
consumers a trade-off: lower prices (typically on a broad range of products)
in exchange for lower levels of service. Indeed, many discount stores
operate.
6. Multichannel Stores:
These are retail establishments that sell products to consumers through a
variety of channels, including catalogs, mail order, telemarketing, the
Internet, and vending machines. They are also known as mail-order
businesses and other non-store retailing establishments. The customer can
shop and order through the internet or mail or other mediums and the
merchandise is dropped at the customer's doorstepasic ‘‘self-service’’
philosophy.
 .

 OBJECTIVES OF RETAIL:

Customer Satisfaction: Retailers know that saConsequently, retailers must

develop strategies intended to build relationships that result in customers
returning to make more purchases.

1. Acquiring 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.

2. 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.

3. 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, specialized promotional activities,
such as coupons.
4. 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
store to locate products. For many retailers designing the right shopping
atmosphere (e.g., objects, light, and 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 a retail website is successful.

5. Location: Where to physically locate a retail store may help or

hinder tore 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.

6. 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
tacking), point-of-purchase (e.g., scanners, kiosks, self-serve checkout),
web technologies (e.g., online shopping carts,purchase recommendations)
and many more.
 INVESTMENTS/ DEVELOPMENTS
The Retail sector in India has seen a lot of investments and developments in
the recent past.

IKEA, the Swedish furniture maker has drawn up plans to invest Rs. 850
crore (US$ 36.3 million) in its Indian operation.
Swedish retailer H&M is set to launch its home décor and accessories
products such as dinnerware and bed linen in India next month. H&M HOME
will be available on the company’s website and through Myntra in March.
Lulu Group, a UAE-based retail company, will invest Rs. 2,000 crore (US$
242.3 million) to develop a shopping mall near Ahmedabad in Gujarat as
part of its plans to expand business in India.

India’s retail trading sector attracted US$ 4.29 billion FDIs between April
2000-September 2022

According to data released by the Ministry of Statistics & Programme

Implementation (MoSPI), India’s Consumer Price Index (CPI) based retail
inflation stood at 6.77% YoY in October 2022. In November 2022, Aditya
Birla Fashion and Retail Ltd. entered into a strategic partnership with the
Galeries Lafayette to open luxury department stores and a dedicated e-
commerce platform in India.
In August 2022, Louis Philippe, India’s leading premium menswear brand
from Aditya Birla Fashion and Retail Ltd., announced the launch of its outlet
in Vadodara, Gujarat.
In August 2022, Wipro Consumer announced the launch of traditional
snacks and spices as it forays into packaged foods.
In July 2022, Reliance Brands Limited (rbl) partnered with Maison Valentino
to bring to India the most established Italian Maison de Couture.
In June 2022, Reliance Brands Limited inks a JV with plastic legno spa to
strengthen toy manufacturing ecosystem in India.
In June 2022, Aditya Birla Group formally launches TMRW – a Digital First
‘House of Brands’ venture in the Fashion & Lifestyle space.

In May 2022, Reliance brands limited (rbl) partnered with Tod’s S.p.A, the
iconic Italian luxury brand to become the official retailer of the brand
across all categories including footwear, handbags and accessories in the
Indian market.
In April 2022, Wipro Consumer Care inaugurated its factory in Telangana.
It has invested in a state-of-the-art soap finishing line that runs on highest
speed
In FY 2021-22 (till 20th March 2022) total number of digital payment
transactions volume stood at Rs. 8,193 crore (US$ 1.05 billion).
In October 2022, UPI transactions were valued at Rs. 12.11 lakh crore
(US$ 148.32 billion). In March 2022, Reliance Brands has bought the
India franchisee rights and the current Sunglass Hut retail network from
DLF Brands.
of 700 Nos of soap /minute.
Retail tech companies supporting the retail sector with services such as
digital ledgers, inventory management, payments solutions, and tools for
logistics and fulfillment are taking off in India. In the first nine months of
2021, investors pumped in US$ 843 million into 200 small and mid-sized
retail technology companies, which is an additional 260% of capital
compared to the entire 2020.
In November 2021, Department for Promotion of Industry and Internal
Trade announced that it is working on a regulatory compliance portal to
minimize burdensome compliance processes between industries and the
government.
In October 2021, retailers in India increased by 14% compared with last year
With the rising need for consumer goods in different sectors including
consumer electronics and home appliances, many companies have invested
in the Indian retail space in the past few months.
In October 2021, Reliance announced plan to launch 7-Eleven Inc.’s
convenience stores in India.
In October 2021, Reliance Retail introduced Freshpik, a new experiential
gourmet food store in India, to expand its grocery segment in the ultra-
premium category.
In October 2021, Plum, the direct-to-consumer beauty & personal care
brand, announced plan to launch >50 offline stores across India (by 2023)
to expand its customer base.
Tanishq, Shoppers Stop and Bestseller India (sells fashion brands Vero
Moda, ONLY and Jack & Jones) plan to add 10-35 stores in FY22.
 GOVERNMENT INITIATIVES

The Government of India has taken various initiatives to improve the retail
industry in IndiaIn April 2022, the government approved PLI scheme for
textiles products for enhancing India’s manufacturing capabilities and
enhancing exports with an approved financial outlay of Rs.
10,683 crore (US$ 1.37 billion) over a five-year period.
In October 2021, the RBI announced plans for a new framework for retail
digital payments in offline mode to accelerate digital payment adoption in
the country.
In July 2021, the Andhra Pradesh government announced retail parks
policy 2021-26, anticipating targeted retail investment of Rs. 5,000 crore
(US$ 674.89 million) in the next five years.
Government may change Foreign Direct Investment (FDI) rules in food
processing in a bid to permit E-commerce companies and foreign retailers
to sell Made in India consumer products. Government of India has allowed
100% FDI in online retail of goods and services through the automatic route,
thereby providing clarity on the existing businesses of E-commerce
companies operating in India.
The Minister of MSME announced inclusion of retail and wholesale trades
as MSMEs. Retail and wholesale trade will now get the benefit of priority
sector lending under the RBI guidelines.
. Some of them are listed below:
 FDI Policy in Retail

Growing liberalization of the FDI policy in the past decade has been one of
the key factors for transforming
India from a closed economy into one of the favored destinations for
foreign investments. The FDI policy
governs and regulates the entire inflow of foreign investments into the
country.
The government is considering in allowing foreign direct investment in multi
brand retailing as a measure to
make India more attractive to overseas investors. The proposal, piloted by
the Department of Industrial Policy
and Promotion (DIPP) is currently at the discussion stage and is awaiting
government clearance.
Liberalization of FDI in multi brand retail is getting closer to reality. After
almost a year of deliberation, the
white paper published by the DIPP\ Ministry of Commerce and Industry, a
retail FDI draft document has been
submitted to the Union Cabinet for approval. This is the final hurdle that
needs to be surpassed.
One aspect
seems to be clear that will be no one shot, big-bang kind of approach toward
introducing FDI in

multi brand
retail. Instead, we could expect a phased liberalization approach with a
number of conditions laid down, at
least initially, for foreign retailers to enter India. The conditions would be
intended to assure the opposition
parties, the local retailer lobbies, the farmer and trade union etc. that the
government has adopted a balanced
midway’ kind of approach after due consideration of the views of all
stakeholder 10th Jan, 2012 Indian Government allow Foreign Investment
to float and run wholly owned single brand
retail stores even as the bigger reform measure opening multibrand retailing
to international investors remains
mired in political cobweb. Currently, FDI in retail trade in prohibited except in
single brand retail trading in
which up to 51% FDI is permitted, subject to certain conditions. The DIPP,
part of ministry of commerce and
Industry has now allowed FDI up to 100% in single brand product retail
trading under the Govt. approval
routers involved.
. However the Govt. has put on hold provisions for 51% FDI in
multibrand retail. This relaxation in Foreign Investment norms for
single brand retailing would be subject to following conditions:
 Products should be sold under the same brand internationally.
 It would cover only those products which are branded during
manufacturing.
 It would need to ensure mandatory sourcing of at least 30% of the
value of the product sold, to be done
from Indian small Industries/village and cottage Industries, Artisans and
Craftsmen.
Small Industry will be defined as Industry with the total investment in plant
and machinery not exceeding
$1million. The relaxation in foreign investment in single brand retail sector
comes as the compromise for the
government who has been able to arrive at a political concusses to open
multibrand retail stores for foreign investors.
 Impact of Covid-19 on Indian Retail Industry

The coronavirus pandemic has forced governments all around the world to
shutdown the country for weeks to curb the spread of the deadly virus.
Immediate closure of retail outlets and manufacturing units caused an
immediate fall of sales to an all time low. The organised retail sector
reported a loss of INR 90,000 Crore in the first two months of the lockdown
period.
Retailers in the country witnessed a sales degrowth of 60-80% across high
street outlets and malls during the four months lockdown period from April
to July, 2020. According to a survey conducted by Retail Association of
India(RAI), Home Furnishings and Jewellery categories sales declined by
73% and 72% in 2020 when compared to the previous year. Food &
Groceries sales were down by 31%. The pandemic not only impacted the
retailers but also had a huge influence on brand perseverance. As supply
chains were distracted, well established brands were not able to meet the
demand causing local brands to gain more attention from customers.
 Retail Industry: Current Challenges

Today consumers are choosing multichannel buying experiences and

expect that to be a seamless experience. To attract customer loyalty,
retailers need to provide an experience that stands out from others. Learn
the challenges faced by the retail sector today. Multi-channel sale avenues,
changing consumer behavior, technological advances, rising competition,
rising frauds, and supply chain management are some of them that require
immediate attention.

Consumers today have changed the way they interact with

businesses. Given below are some challenges that are
faced by the retail industry today:
1. Multichannel Availability:
The means by which consumers purchase products, services, or offerings
have undergone vast changes during this decade. The consumer has
adapted to multiple channels and they move easily across channels to
search for products, decide on the best product through discussions or
reviews, search for the best prices and promotions on the net, finalize a
store/web-store and finally make a purchase. Retailers need to understand
this need for changing behavior and enable themselves to service the
customers through various channels while presenting an integrated view of
the business.
2. Changing Consumer Behavior:
In today’s world product differentiation is minimal and consumers are
becoming more and more price sensitive. They look for differentiation and
consistent experience when they move across different channels to buy the
same product. Retailers succeed where they are able to offer a
personalized experience.

3. New Technology Innovations:

A proper framework is needed to understand all the facets of operations
and technology which need to be deployed to deliver on the expectations.
With the advent of the internet, retailers can create online stores that are
open 24 hours a day, 7 days a week. Customers can shop from the comfort
of their own homes, searching for products, and comparing prices of
retailers around the world. The Internet has increased both opportunities
and competition within the retail industry.

4. Rising Competition:
The competition between players in the industry is increasing day by day as
the products, items, or services that were only available and sold at only
one type of store but are now available at many different types of stores.
The four traditional areas of competition between retailers are price,
variety, assortment, and convenience. Prices can change frequently due to
sales and promotions. Product variety refers to the number of categories of
products carried by a retailer. Assortment refers to the number of items a
retailer carries within a certain category.
Convenience refers to where a store is located.

5. Availability of Skilled Workforce:

The industry is facing a shortage of middle management level professionals.
Major retailers are hiring aggressively from the similar and smaller
organizations by offering better packages. They are creating various levels
of management and hiring on a spree. Some of the areas such as
technology, supply chain, distribution, logistics, marketing, product
development, and research

are becoming very critical for the success of the organizations. All of
these would lead to the recruitment of highly professional people who
specialize in these fields. The sector is likely to produce 5 million jobs in
the coming 3 years in the developing nations alone.

6. Optimization of Supply Chain Management:

The retail scenario is characterized by logistical challenges, constant
changes in consumer preferences, and the evolution of new retail formats.
All this increases the challenges faced by the industry. Various strategies
are to be implemented to improve core business processes, such as
logistics, innovation, transparency, distribution and inventory, management
of point sale (POS) data. Retail majors are under serious pressure to
improve their supply chain systems and distribution channels and reach the
levels of quality and service desired by the consumers.
Warehouse facilities and timely distribution are other areas of challenge.

7. Preventing Frauds in Retail:

It is one of the primary challenges retail companies would have to face.
Frauds, including vendor frauds, thefts, shoplifting, and inaccuracy in
supervision and administration are the challenges that are difficult to
handle. Retailers have to deal with customer theft, employee theft, and
supply chain theft. This is so even after the use of security techniques,
such as CCTVs and POS systems. As the size of the sector would
increase, the number of thefts, frauds, discrepancies, etc. in the system
would also increase.

8. Improving Infrastructure & Logistics:

Lack of proper infrastructure and distribution channels in any country
results in inefficient processes. A non-efficient distribution channel poses
problems for retailers as it is very difficult to handle and can result in huge
losses. Urbanization and globalization are compelling companies to
develop Infrastructure facilities. Transportation, including railway systems,
has to be more efficient. Highways have to meet global standards. Airport
capacities and power supply have to be enhanced.

9. Maintaining Loyal Customers:

To sustain customer loyalties, retailers must be able to provide their
customers, right products, at the right time and at the right location. This
can lead to higher revenue growth, which can enable the retailer to obtain
better purchasing conditions and pass the savings on to customers,
leading to more profitability and growth.

10. Inventory Management & Optimization:

Inventory management refers to the processes retailers use to control
ordering, shipping, receiving, storage, tracking, and delivery to customers.
Poor maintenance of inventory means either having too much of one product
or having too many slow-moving products that result in space constraints for
other fast-moving profitable goods. Requirements of an inventory
management system include capabilities for tracking inventory, evaluating
sales, analyzing and comparing products, and collecting sales data for
individual stores.
Some other challenges faced by the industry are media explosion,
corporatization of retail, the new breed of entrepreneurs, and entry of
foreign retailers. On the other hand, the rising income of consumers across
the globe is also creating huge opportunities for this industry.
 Retail Industry: Strategies for overcome
challenges
stay competitive in this ever-evolving landscape, it is imperative for
retailers to deliver a seamless customer experience and provide the right
services and products at the right time. Learn the strategies for overcoming
challenges for the retail industry. Retailers must use technology and
solutions to revive their businesses in the COVID-19 world. An
multichannel marketing strategy can help retailers reach a wider audience
for specifically, retailers must develop an integrated strategy that aligns
talent, physical space, processes, marketing, and merchandising to meet
consumer demands. This strategy should be supported by emerging
technologies and continually adapted to remain relevant to the customer of
tomorrow. Given below are some of the strategies that the retailers can
use to overcome the challenges that they are facing:

Emerging Markets:
Retailers in developed markets are facing a decline in sales and slow
economic growth. In order to overcome these challenges, many retailers
are looking towards emerging markets as opportunities for growth. Factors
influencing this decision are mass population, younger population base,
growing middle class, affordable real estate, and a gross domestic product
(GDP) that is predicted to continue growing.

Customer Retention:
The transformation of the retail store begins with a deep understanding of the
customer and a strategy to personalize the experience at every point of
interaction. The most appropriate technologies should be leveraged to
enhance the experience. The cost to acquire new customers is much
higher than retaining and building the loyalty of the current ones. The
challenge is to find ways to hold onto the customer's retailers already have.
There are a number of steps that retailers can take to retain customers and
gain their loyalty including focusing on quality, providing good customer
service and resolutions to issues if any, personalization of products &
services for customers, using promotions, and using customer information
to personalize and reward customers on their preferences.

Mergers and Acquisitions:

Mergers and acquisitions result in economies of a larger scale that result in
increased profits; better-negotiating strength enabling cost reductions.
Small retailers are merging with large players, decreasing the number of
competitors in the industry. Large retailers can purchase smaller
companies with new innovative products and market the products under
their own brand names.

Leveraging Technology:

Technology in use by retailers can be disparate and fragmented. Multiple

physical locations can drive an unsustainable cost structure that is not
flexible and often underperforms. Retailers can use new technologies,
such brands.as mobile devices and radio-frequency identification (RFID)
as a strategy to overcome challenges in the retail industry. The
popularity of mobile devices has resulted in innovative and low cost
means to connect with customers through e-mail and the Internet.
Retailers can use these technologies to contact their customers anytime
and anywhere. A flexible IT infrastructure needs to integrate existing and
emerging applications and devices
Integrated Channels:
The retail industry is in the midst of a customer revolution and the collision
of the virtual and physical worlds is fundamentally changing consumers’
purchasing behaviors as they are
demanding an integrated shopping experience across all channels. Failure
to deliver puts retailers at risk of becoming irrelevant. The key drivers of
this customer revolution are the rapid adoption of mobile devices, digital
media, and tablets equipped with shopping apps. Traditional retailers must
find opportunities to seamlessly embed the virtual world into their retail
strategy by developing in-store and online technologies that allow them to
create and maintain meaningful and sincere connections with customers
across all channels.

Mobile & Social Commerce:

Mobile commerce is an important channel for many retailers; however, its
application can and should be extended from merely an online sales
alternative to a tool that drives meaningful connections between the brand
and the consumer. Social commerce is another critical part of the
customer experience and digitally savvy retailers will devote taskforces to
supporting their social media strategy. Proper management of Facebook,
Twitter, and other media is vital.

Radio-frequency identification (RFID):

RFID involves equipping products with tiny chips that replace barcodes.
These chips, or smart tags, contain all the information necessary to track a
product on its way through the supply chain, from the factory floor to the
customer's shopping bag. There are several advantages to using RFID like
the ability to read a number of items simultaneously, tag, and store a lot of
information and automatic data reading with no manual processing. RFID
tags can mean labor savings for retailers. RFID technology can also lead
to improved inventory management, as smart tags make tracking
merchandise more efficient and precise. Retailers can also use RFID to
improve their customers' experience.

Digital Stores:
The retail paradigm has shifted from a single physical connection point
with customers to a multi-pronged approach that crosses both physical
and digital channels. The traditional bricks-and-mortar retail store is no
longer the dominant medium for purchasing goods. Many retailers are
struggling to take advantage of the increasing number of channels
available to them for connecting with customers.

Organizational Changes:
Addressing present-age consumers may require structural changes to the
retail organization in order to deliver a seamless experience and drive
competitive differentiation for the retailer’s brand. The key is the flexibility
to quickly embrace operational changes brought about by new
technologies and anticipate the integration of emerging solutions that
have not yet been invented.

Trained Customer Service Staff:

Employees often lack the knowledge, training, and tools necessary to
facilitate a shopping experience that engages customers effectively and
extends beyond the traditional shopping experience. As a result, many
retailers are falling behind in the race to offer a unique and
comprehensive experience with their brand that keeps pace with
customers’ ever-evolving attitudes and expectations.
Innovative Business Models:
Many retailers are capturing valuable market share through innovative
business models. Many companies are now seeking to become vertically
integrated by controlling the whole supply chain. As a result of a vertically
integrated value chain, a new generation of e-commerce players is bringing
high-quality products from the warehouse directly to consumers at
significantly lower prices. They must find a path to success that not only
addresses the needs of their customers today but is also flexible enough to
continually evolve with customer interests and expectations.

Performance Analysis:
Retailers must focus on continual evaluation and analysis of their business
to determine if they are delivering on the customer experience. Thorough
collection and analysis of customer data will give retailers the best chance
to understand, anticipate, and adapt to the continuous change that comes
with the digital age. Information is king, and the use of predictive analytics
can help retailers gain deeper insight into the value that is being generated
for their customers through their own operating model, and provide them
with leading indicators of the experience desired by them.
 RETAILING FORMAT IN INDIA

Malls:
The largest form of organized retailing today. Located mainly in metro
cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to
7,00,000 sq ft and above. They lend an ideal shopping experience with an
amalgamation of product, service and entertainment, all under a common
roof. Examples include Shoppers Stop, Piramyd, and Pantaloon.
Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet
M, are focusing on specific market segments and have established
themselves strongly in their sectors.

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on

the MRP through selling in bulk reaching economies of scale or excess
stock left over at the season. The product category can range from a variety
of perishable/ non-perishable goods.

Department Stores:

Large stores ranging from 20000-50000 sq. ft, catering to a variety of

consumer needs. Further classified into localized departments such as
clothing, toys, home, groceries, etc.

Departmental Stores are expected to take over the apparel business from
exclusive brand showrooms. Among these, the biggest success is K
Raheja's Shoppers Stop, which started in Mumbai and now has more than
seven large stores (over 30,000 sq. ft) across India and even has its own
in store brand for clothes called Stop.

Hyper marts/Supermarkets:

Large self-service outlets, catering to varied shopper needs are termed as

Supermarkets. These are located in or near residential high streets. These
stores today contribute to 30% of all food & grocery organized retail sales.
Super Markets can further be classified in to mini supermarkets typically
1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft
to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residential
areas. They stock a limited range of high-turnover convenience products
and are usually open for extended periods during the day, seven days a
week. Prices are slightly higher due to the convenience premium

 Trends in Retail Sector

Markets are continuously changing and to understand the dynamics of

any industry it is important to understand what is happening and how the
industry market players see the future for the industry. In this article, we
will discuss the recent trends witnessed by the retail sector. This
document provides insights into major trends identified for the retail
sector.

Given below are the key trends in the retail industry:

Competition:
Competition among retailers has never been tougher and retailers need to
build a competitive advantage to survive. On one side, Superstores are
battling each other, while Internet marketers are stealing customers from
stores. Some consumers are using stores as showrooms where they can
touch and feel the merchandise, and then making their purchases at lower
cost online sites. Online selling at deep discounts is even making inroads
into major consumer purchases such as jewelry.

Private Brands:
As retail chains expand and spread their operations they are focusing on
the development of private brands. A private brand is the licensed brand of
a retailer. These are exclusive and only available at outlets of a specific
retailer. Marks & Spencer stores for example carry the St Michael brand. In
India, West Side has emphasized private brands while Shoppers Stop
focuses more on manufacturers' brands or brands available across retail
chains. The use of private brand enables retailers to maintain an image of
exclusiveness and develop a loyal clientele. It

also enables them to quote lower prices since retailers do not have to
promote or spend heavily on advertisements of private brands whose
circulation is limited.

Exclusive Products:
Manufacturers are adapting their marketing strategies to the needs of
modem retail. They often develop products exclusively for a specific retail
chain. Many consumer durable companies in India for example sell
customized washing machines and refrigerator sets through hypermarkets
like Big Bazaar, etc.

Expansion into Emerging Markets:

Retailers in developed markets are dealing with home markets that are
growing at a slower rate and in order to achieve growth, these companies
are expanding their base in new, emerging markets. Although large global
retailers are making inroads into these markets, the companies that are best
positioned to benefit are those that are already based in these markets.
Many of these local retailers have been successful in expanding into
neighboring emerging markets, becoming regional powerhouses. The most
exciting stories in retail industry growth are in emerging nations, such as
China, India, and Brazil. In China, many of the world’s leading retail chains
are rushing to open stores and new malls have been developed at a rapid
pace, even in remote cities.

Multichannel Availability:
The means by which consumers purchase products, services, or offerings
have undergone vast changes during this decade. The consumer has
adapted to multiple channels and they move easily across channels to
search for products, decide on the best product through discussions or
reviews, search for the best prices and promotions on the net, finalize a
store/web-store and finally make a purchase. Retailers need to understand
this need for changing behavior and enable themselves to service the
customers through various channels while presenting an integrated view of
the business.

E-Commerce:
E-commerce refers to buying and selling products over the Internet is being
widely used for purchasing goods from the convenience of home. Retailers
need to be consistent across all channels. Consumers expect to receive the
same benefits and services from a retailer, whether they make their
purchase online or in-store.

Mobile Commerce:
Mobile Commerce refers to using a mobile phone or smartphone to conduct
retail transactions is gaining acceptance for shopping. The popularity of
social networking sites, such as Facebook and Twitter, is also having an
impact on the retail industry A recent trend is that consumers increasingly
reach for their phones and tablets even while shopping in a physical store. It
is anticipated that consumers will make more purchases via their mobile
phone than their credit card in the coming years

Predictive Analysis:
New technologies are being incorporated to better predict customer demand
patterns, improve marketing, and optimize product pricing and supply chain
efficiencies. Retailers can use data they collect to customize their product
selection to align with customer demands
..

Technology:
A proper framework is needed to understand all the facets of operations
and technology which need to be deployed to deliver on the expectations.
With the advent of the internet, retailers can
create online stores that are open 24 hours a day, 7 days a week.
Customers can shop from the comfort of their own homes, searching for
products, and comparing prices of retailers around the world. The Internet
has increased both opportunities and competition within the retail industry.

Mergers and Acquisitions:

Mergers and acquisitions result in economies of a larger scale that result in
increased profits; better-negotiating strength enabling cost reductions.
Small retailers are merging with large players, decreasing the number of
competitors in the industry. Large retailers can purchase smaller
companies with new innovative products and market the products under
their own brand names.

Home Delivery:
Home delivery from brick and mortar retail locations is gaining acceptance
and more and more customers are expecting the retailers to provide this
service.

Innovations in In-Store Technology:

The rise of multi-channel retailing and ease of online shopping have led
retailers to update their stores with technological conveniences like tablets,
interactive panels, and digital signage.
Some retailers are expediting the checkout experience by allowing shoppers
to use their mobile phones to instantly scan their items and pay at self-serve
kiosks. Other retailers are adding kiosks that let consumers purchase
products not available in-store and installing e-signs that allow for changing
prices remotely

 Retail Industry: Value Chain

The retail value chain defines a series of actions that enable businesses to
sell their products to customers. Value Chain for any industry describes
how an industry is structured and its methods for maximizing revenues.
Learn the value chain of the industry. Learn about the key partners, key
activities, cost structures, and revenue streams of the retail sector. The
value/supply chain analysis reveals the business activities which comprise
the movement of retail goods.

Value Chain for any industry describes how an industry is structured and
its methods for maximizing revenues and profits. The value chain is
independent of competitors and the current state of the market, which is
where business strategy comes in. The business strategy describes how
the company will engage competitors, identify and segment customers,
and respond to the actual market environment.

Key Activities in the Retail Industry:

Retailers spend significant time and effort shaping the shopping experience
(through store layouts and/or website design) and finding opportunities to
increase the share of sales and overall order size. Marketing efforts are
focused on point-of-sale, up-selling, and cross-selling, encouraging
customers to purchase more than what they originally began shopping for
The key for the traditional retailer is determining the correct merchandising
mix, offering exactly the right products in the right sizes and colors, along
with complementary products. Finally, retailers are now focusing on
purchase and customer analytics to better understand buying habits and
tastes.

Manage the cost and ultimate price to customers; focus on problem-

solving for the customer,providing a useful service that meets the need at
a fair price. In this article, we will discuss the building blocks for the value
chain of the Retail Industry. The retail value chain is split into two
distinctive components: the buy-side of the chain, and the sell-side of the
chain.

1. Buy-Side of Retail Value Chain:

The buy-side of the value chain involves the retailer sourcing products
from suppliers and incurring costs on infrastructure and getting ready to
sell. Retailers are very familiar with the buy-side of the chain, which is
made up of the functions that support the interaction between a retailer
and its suppliers.

Because of low margins, traditional retailers are much cost-driven. They

attempt to create economies of scale to overcome significant fixed costs
associated with a large retail footprint. The digital retailer flips much of this
upside-down with relatively low fixed costs and the ability to grow sales
without significantly increasing costs. Premium retailers are more value-
driven than cost-driven.
The cost structure ties in closely to the value proposition since customers
must feel they are receiving more than they are paying, or at least the
potential to take advantage of the company if they make full use of its
services. Cost structures include the activities of warehouse management,
inventory management, and product and vendor analytics.

Key Partners – Supply/Buy Side:

Key partners for the retail industry include major brand manufacturers,
regional and national suppliers, and local governments. To appeal to a wide
variety of consumer tastes, traditional retailers must have access to national
name brands and plenty of products. Local governments can strongly
influence the choice of retail locations as well as provide tax incentives.

The buy-side is composed of the following functions:

Warehouse Management:
Warehouse management and distribution logistics involve the physical
warehouse where products are stored after they have been procured. This
function also encompasses the activities of the receipt and movement of
goods. The finished goods normally go to either a temporary storage
location, the retail store, or to the final customer.

Inventory Management:
Inventory management involves maintaining a certain level of goods and
merchandise on hand at all times. This can help protect against delays and
ensure that customer sales can continue, even if unexpected problems
arise. Making available the right product to the customer with the right
carrying costs is the objective. If inventory management is not proper the
retailer could end up storing high value or slow-moving goods in the
inventory.
Product and Vendor Analytics:
Retailers today focus on optimizing supply chain operations and managing
real estate. Product and vendor analytics involves analyzing sales patterns,
inventory levels, and vendor performance to ensure deliveries are accurate
and products are profitable. Retailers must find reliable vendors, while also
keeping costs low enough to make a profit. The retail industry relies heavily
on human resources and physical infrastructure.

2. The Sell-Side of the Chain:

The sell-side involves the retailer marketing and selling these products to
customers. The traditional retail business model emphasizes convenience
as the value proposition. Beyond that,each variation offers a different
value proposition: price for the low-cost retailer, value and quality for the
cost plus retailer, and quality and prestige for the premium retailer. The
sell-side of the chain encompasses the functions that support the
interaction between a retailer and its customers. Sometimes called
customer chain management, the sell-side entails retailers proactively
anticipating, meeting, and managing the needs of their customers before
the onset of a demand. The sell-side of the chain consists of the following
functions:

Sales Channels:
Customer point-of-interaction entails interacting with the customer through
various channels, which can be online or offline. The traditional retailer
sells through two main channels:
bricks-and-mortar retail stores and their own company websites. Sometimes
these retailers work with other mass merchants to distribute their own
branded products.
Sales Operations:
Sales operations involve any functions that directly promote, support, or
sell a product or service. Most traditional retailers target the mass market,
but some choose to target specific segments, such as consumer
electronics, home goods, and office supplies. Premium retailers always
target specific segments within the mass market, although they often build
brands that appeal to the mass market. The largest source of revenue for
the traditional retailer is from profit on the sale of products or services.
Some retailers also collect rebates and incentives from manufacturers in
return for premium shelf space (or website placement) and promotion.

Customer Relationships & Sale Analytics:

Customer and sale analytics involves collecting and analyzing information
about customers, their concerns, and their needs. This knowledge can give
a retailer a complete picture of the market. For traditional retailer, customer
relationships depend on the style of the retailer. The low cost and cost-plus
retailer generally focuses on self-service or pre-sale service, while the
premium retailer emphasizes personal assistance and post-sale service.
Digital retailers focus almost exclusively on self-service.
.

 Retail Industry – Drivers & Dynamics

To succeed in the retail sector, retailers must offer compelling value

propositions and be responsive to market dynamics. The continued rise of
e-commerce has altered the dynamics of the retail industry in such a way
that has forced retailers to drastically reallocate their resources to multi-
channel strategies. This article focuses on retail industry drivers and
dynamics that provide the reader with a basic understanding of the factors
that influence this trade.
Understand the business drivers and dynamics of retail industry

Retail trade is widely known as a very competitive area of commercial

endeavor, and for entrepreneurs who launch a retail store on an adequate
foundation of capital, business acumen, and attractive merchandise,
involvement in the trade can be rewarding on both financial and personal
fulfillment levels. Like all industries, the retail industry is subject to various
business drivers that influence the direction of this industry.

Given below are the key drivers of the retail industry:

1. Consumer-Focused Selling:
While salespeople regularly call on institutional customers, to initiate and
conclude transactions, most end-users or final customers, patronize stores.
This makes store location, product
assortment, timings, store fixtures, sales personnel, delivery, and other
factors, very critical in drawing customers to the store. The focus should
be on the customer, his demand, and his changing tastes and
preferences. Due to the diversity of the country, standardization is
impossible for the entire population.

2. Disposable Incomes:
The retail industry depends on customers who have sufficient disposable
income to spend on goods and services. The economic state of any nation
determines and influences the amount of disposable income that people
have. Factors such as lower savings rates and higher debt levels in
developed markets compared to developing markets such as China and
India is slowing down the retail industry in these markets. However, in the
developing market the growth is leading to increased turnover for retail
industries.

3. Simple over Complex:

As life becomes more complicated and stressful, simple things
will be preferred over-complicated and difficult to understand
products and services.

4. Convenience:

Each customer wants to save as much time as possible. Thus, the focus
should be on providing improved service through properly trained staff
providing customer convenience. Final customers make many unplanned
purchases. Therefore, retailers need to place impulse items in high traffic
locations, organize, store layout, trains salespeople in suggestion, and
place related items next to each other, to stimulate purchase.
5. Demographics /Store Location:
Location is critical to the success of a retail store. Different segments of
the population are looking for different products and shopping
environments. A store's trading-area is the area surrounding the store
from which the outlet draws a majority of its customers. The extent of this
area depends upon the merchandise sold. To be successful, retailers
need to know who they are trying to sell their products. For example,
some people might be willing to travel a long distance to shop at a
specialty store because of the unique and prestigious merchandise
offered. Factors affecting the site include traffic patterns, accessibility,
competitors' location, availability and cost, and population shifts within the
area.

6. Segments:

Population growth is currently occurring in the older and younger

generations. The younger generation tends to be more interested in
entertainment, technology, and recreation. They prefer to go to large chains
rather than neighborhood stores.

7. Target Markets:
Although retailers normally aim at the mass market, a growing number are
engaging in marketing research and market segmentation, because they
are finding it increasingly difficult to satisfy everyone. Through a careful
definition of target markets, retailers can use their resources and
capabilities to position themselves more effectively and achieve a
differential advantage.

8. Margin & Turnover:

Successful retail operations depend largely on two main dimensions: margin

and turnover. How far a retail enterprise can reach in margin and turnover
depends essentially on the type of business (product lines) and the style
and scale of the operations. In addition, the success of the retail enterprise
also depends upon the professional competence of the enterprise. In a
given business two retail companies may choose two different margin levels,
and yet both may be successful, provided the strategy and style of
management are appropriate.

9. Store Image & Trust:

A store image is the mental picture, or personality of the store, a retailer
likes to project to customers. Image is affected by advertising, services;
store layout, personnel, as well as the quality, depth, and personal dealing
with the customers. The customer frequents that retailer who is able to
develop a relationship trust with the end customer. Many consumers today
are looking for retailers that share their values and provide good corporate
citizenship.

10. Merchandise Management:

This is a critical business driver as this is the knowledge to identify the
merchandise that customers want and make it available at the right price, in
the right place at the right time. Merchandise Management includes
merchandise planning, merchandise purchase, and merchandise control.

11. Multichannel Retailing:

Multichannel retailing involves online retailing, which is a fast-growing
market in the retail industry. This involves cross-channel services, such as
cross-channel stock merchandising and management, home delivery, and
visibility of customer transaction data across channels.
Maintaining low cost of operations
12. Changing Consumer Habits:
Consumers have changed their spending habits over the years and they
keep on constantly evolving. In the 1950s, families typically spent more on
food than they did on housing, clothing, fuel, and transportation combined
and the 70s brought big changes in lifestyles and spending patterns. In
the 1980s and 1990s, premium and luxury products became more
available to the average consumer. And increased Internet usage and
advances in mobile technology changed the ways consumers make their
purchases in the 2000s.

Some other factors that are influencing industry are an investment in

appropriate and
cost-effective technology; focus on customer service and loyalty, building a
reliable supply chain and logistics systems, making and maintaining
private brands, and reducing shrinkage and pilferage.
 Growth Drivers for
Indian Retail Industry

An increase in income level generally means people have more purchasing

power. With rising
income levels, a greater number of households are being added to the
consumption class. This leads to an increase in demand for retail goods.

Increasing Awareness
As a result of increased literacy levels in the country, exposure to the
western culture, foreign magazines, newspapers and other factors, there
has been an increasing customer awareness among Indians. Today’s
customers are more selective over the brand and quality of the products they
purchase.

Brand Consciousness
The major portion of India’s population comprises Millennials making
around 35% of the total population. This set of customers are more
conscious about brands and willing to spend more to satisfy their needs.
Growth of Shopping Malls
The major portion of India’s population comprises Millennials making
around 35% of the total population. This set of customers are more
conscious about brands and willing to spend more to satisfy their needs.

Availability of Consumer Credit

Consumer credit in terms of consumer durable loans or credit cards, offer
customers to pay the price of a product in several installments at a
minimum rate of interest. As this option provides the convenience of not
paying the full amount in advance, this may create demand for certain
products in the retail sector.

 Importance of Retail Industry

Consumers benefit from retailing as retailers perform marketing functions

that make it possible for customers to have access to a broad variety of
products and services. Retailing also helps to create a place, time, and
possession utilities. A retailer's service also helps to enhance a product's
image. Retailing has a tremendous impact on the economy. It involves high
annual sales and employment. Learn the importance of the retail industry
in this article.

Retail involves the selling of goods to customers. While meeting the needs
of customers, the following are some of the functions performed by a
retailer:

1. Customer Convenience:
Perhaps the most important role of bringing the ready to be consumed
goods to the doorstep of the consumer is performed by the retail
community. Consumers benefit from retailing as retailers perform
marketing functions that make it possible for customers to have access to
a broad variety of products and services. Retailing also helps to create a
place, time, and possession utilities. A retailer's service also helps to
enhance a product's image. Retailers stock goods and ensure the
availability of products and services just when the customer needs them.
Convenience Stores operate over extended hours throughout the week and
give customers greater flexibility and choice.

2. Accessibility to Products & Services:

Products and services have no value for consumers until they are acquired
and used by the customers. Retailers acquire products and services from
different places and. assort them at a single point as per the needs of the
consumers and thus facilitate customers' access.

3. The convenience of Size:

Retailers breakbulk and serve the products in quantities and sizes as
desired by the customer. For example, shampoo is available in small
sachets. The retailer helps consumers by providing appropriate products,
services, and advice in the packing and quantities desired by them.

4. Providing Associated Services:

A vibrant retail sector benefits the consumers by providing a range of

products and services efficiently. Retailing can be done in either fixed
locations or online. Retailing includes subordinated services, such as
delivery. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility,
like electric power. Retailing also helps to increase living standards and
enable consumers to possess various goods, services, and utilities.

5. Supply Chain:
Retailers are part of an integrated system called the supply chain. A retailer
purchases goods or products in large quantities from manufacturers or
directly through a wholesaler, and then sells smaller quantities to the
consumer for a profit. Retailers participate in the sorting process by
collecting an assortment of goods and services from a wide variety of
suppliers and offering them for sale. The width and depth of assortment
depend upon the individual retailer's strategy. Retailers provide a vital link
between producers and ultimate consumers.

6. Value Chain:
When consumers purchase goods, retailers must order more goods to
replenish their stock. In turn, factories must manufacture the goods for
retailers. The factories then purchase more raw materials to use to
manufacture more goods. This is how consumer spending is able to drive
much of the economy.

7. Research & Information:

The retailer provides useful information across the supply chain. He
informs and educates customers about product features and benefits. They
provide information to consumers through advertising, displays, and signs
and sales personnel. Marketing research support is given to other
channels, members. Retailing in a way is the final stage in marketing
channels for consumer products. He also provides feedback about
consumer requirements to the manufacturers and wholesalers which help
them in planning production and supply.
8. Mobilizing Finance:
The retailing industry mobilizes the investment and savings of people, as
a small shop can be set up with minimal investment. They store
merchandise, mark prices on it, place items on the selling floor, and
otherwise handle products; usually they pay suppliers for items before
selling them to final customers. They complete transactions by using
appropriate locations, and timings, credit policies, and other services e.g.
delivery. They influence the lifestyle of consumers and help people to
build their identity in a social setting.

9. Economic Development:
Retailing has a great impact on the economic development of a nation.
Retailing has become an intrinsic part of our daily lives. Consumer
spending on retail goods drives much of the global economy, and the retail
industry employs a large number of people. Nations that have enjoyed the
greatest economic and social progress have a vibrant retail sector.
Retailing is one of the most important industries in the world and plays a
predominant role in the economic development of the country. Healthy retail
sector growth and speeds up economic development.

10. Generating Employment:

There are a large number of people and companies involved in the
production, distribution, and retail of goods. Globally, retailing is the largest
revenue generator and employment provider next only to agriculture. It
provides opportunities to the poorest and unskilled along with the educated
and skilled. As a major source of employment retailing offers a wide range
of career opportunities including; store management, merchandising and
owning a retail business.
11. Social Responsibility:
Successful retailers also recognize that people want to see the
improvements in the general level of consumption and social cohesion
over time. Retailers have to enhance their perceived value to the
community by acting as a focal point and through effective public relations
and promotional campaigns including sponsorships. This encourages
social responsibility behavior by the corporates where public welfare
programs get funded by a certain percentage of purchase prices of the
company's products.

(Retailers today can no longer be accurately characterized as intermediaries

that buy from suppliers and sell to customers. Today they serve as
ecosystems in which value is created and delivered to customers and,
subsequently, appropriated by the retailer and its business partners
 Future Prospects of Organized Retail Sector in
India

India has been ranked as the third most attractive nation for retail
investment among 30 emerging markets by
the US-based global management consulting firm. AT Kearney’s study on
Global Retailing Trends Found
that India is the least competitive as well as least saturated of all major
Global markets. This implies that there
are significantly low entry barriers for players trying to setup base in India, in
terms of
competitive landscape.
The report further stated that Global Retailer such as Wal-Mart, Carrefour,
Tesco and Casino would take
advantage of more favorable FDI rules that are likely to be introduced in
India. A good talent pool, unlimited
opportunities, huge markets and availability of quality raw material at
cheaper cost is expected to make India
overtake the world best retail economies by 2042.

The sector is expected to see an investment of over $30billion within next

5 years and putting modern retail
in the country to $175-200 billion, according to Techno park estimates.
International retailers see India as the
last retailing frontier left as the Chinas retail sector is becoming as
saturated. Domestic players are selectively
growing in India-postponing aggressive expansion plans, adding stores
judiciously and shifting gears to tier
2 and 3 cities. While India is a difficult market to enter, the potential payoff
is huge. India’s population of
nearly 1.2 billion – forecast eventually to overtake China’s –also is an
attractive target.
 Carrefour, the world’s second-largest retailer, has opened its first
cash-and-carry store in India in New
Delhi. Germany-based wholesale company Metro Cash & Carry (MCC)
opened its second wholesale
center at Uppal in Hyderabad, taking to its number to six in the country.
 Jewellery retail store chain Tanishq plans to open 15 new retail stores
in various parts of the country
in the 2011-12 fiscal.
 V Mart Retail Ltd, a medium-sized hypermarket format retail chain,
is set to open 40 outlets over the
next three years, starting with 13 stores in 2011, in Tier-II and Tier-III
cities.
 Reliance Retail, the wholly owned subsidiary of Mukesh Ambani's
Reliance Industries, is set to open

150 stores by the end of Dec. 2011 and double the number of stores
across the country in all formats within five years.
 Future Value Retail, a Future Group venture, will take its hypermarket
chain Big Bazaar to smaller
cities of Andhra Pradesh, with an investment of around US$ 1.54 million
to US$ 4.41 million depending on the size and format.
 RPG-owned Spencer's Retail plans to set up 25 Hyper Markets
Through 2012 in the country.
 Spar Hypermarkets, the global food retailing chain of the Dubai-
based Landmark Group, expects to
start funding its India expansion beyond 2013 out of its local cash flow in
the country. So far, the Landmark Group has invested US$ 51.31 million
in setting up five hypermarkets and plans to pump
in another US$ 51.31 million into the next phase of expansion.
 Leading watchmaker Titan Industries Limited plans to invest about US$
21.83 million for opening 50
premium watch outlets Helios in the next five years to attain a sales target
of US$ 87.31 million.
 British high street retailer, Marks and Spencer (M&S) plans to
significantly increase its retail presence
in India, targeting 50 stores in the next three years.
 India's retail industry is the second largest sector, after agriculture,
which provides employment
opportunities. According to the Associated Chambers of Commerce and
Industry of India (ASSOCHAM),
The retail sector will create 50,000 jobs in the next few years.
 Retail companies are starting retail management courses in
partnership with management institutes,
roping in talent from other sectors and developing comprehensive
career growth and loyalty plans for
existing employees. Top players like Pantaloons Retail India Limited,
Trent, Shopper's Stop, RPGGroup and ebony are virtually on their toes.
Consider the plans of the largest player, The Pantaloons Retail
India Ltd; the company, has developed a comprehensive strategy, where it
expects that in 2 years, it
will not recruit any new managers from outside.
 Conclusion

Many agencies have estimated differently about the size of the organized
retail market in 2011. The one thing
that is common amongst these estimates is that the Indian organized retail
market will be very big in 2011. The
The status of the retail industry will depend mostly on external factors like
government regulations and policies
and real estate prices, besides the activities of retailers and demands of
the customers, also show an impact on

retail industry. As the retail marketplace changes shape and competition

increases, the potential for improving retail productivity and cutting costs is
likely to decrease. Therefore, it is important for retailers to secure a
distinctive position in the market place based on values, relationships or
experience.
.