Retail Investment in India – Retail as an Investment Option

Despite the huge presence of the unorganized sector, the Indian retail industry is attractive for international players (Read: Unorganized Retail in India). It is favored over China’s among the developing countries due to a slew of laws in the communist country at various levels. Though the market hasn’t seen big time players of the developed nations yet, the fact that Indian per capita retail space is among the lowest, is expected to provoke people to look at retail as a potential business arena.

The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behavior being favorable to the growing organized segment of the business.… Read the rest

Impact of Technology in Retail Industry

Technology in the retailing industry has provided a new dimension. The introduction of point of sale equipment, bar codes and huge storage capacity for billing and payment database has facilitated the management of large set-ups with ease. Operations can be recorded in a structured and systematic manner, providing detailed analysis of the sales and volume of transactions. Electronic transactions have increased the volume of sales in the country. Flexibility in the mode of payment and cashless transactions has helped in driving sales. Communication assists in maintaining a competitive advantage in retaining and attracting customers. The introduction of new technology may be intricate for retailers, but the convenience and cost effectiveness create the need for new advancements.… Read the rest

Unorganized Retail in India

Retailing in India is predominantly unorganized. According to a survey by AT Kearney, an overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organized.

We are known as a nation of shopkeepers with over 12 million, the highest outlet density in the world in the world with an estimated turnover of $ 200 billion. However a disturbing point here is that as much as 96 per cent of them are smaller than 500 square feet in area. This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States).… Read the rest

Site Selection Analysis in Retail

With the advent of new retail formats in India such as planned shopping centers and malls, emergence of free-standing department stores, hypermarkets, etc., and further development of traditional business districts and other unplanned shopping locations, a retailer is presented with a wider choice of locations. Consideration of all the options keeping in view the product mix, customer profile and overall business model presents an enormous challenge. A retailer has to consider the following factors while selecting a site:

  1. Kind of products sold
  2. Cost factor
  3. Competitor’s location
  4. Ease of traffic flow and accessibility
  5. Parking and major thoroughfares
  6. Market trends
  7. Visibility

1. Kind of Products Sold

For stores dealing in convenience goods, the quantity of traffic is most important.… Read the rest

Location Strategies for Retail Business

Location is the most important ingredient for any business that relies on customers. It is also one of the most difficult to plan for completely. Location decisions can be complex, costs can be quite high, there is often little flexibility once a location has been chosen and the attributes of location have a strong impact on a retailer’s overall strategy. In India, most retailers prefer to own the property rather than avail of the desired property through lease or rental. This makes the location decision even more critical. Choosing the wrong site can lead to poor results and in some cases insolvency and closure.… Read the rest

Trends in Retail Formats

Retail industry is continuously going through changes on account of liberalization, globalization and consumer preferences. While multinational retail chains are looking for new markets, manufacturers are identifying, redefining, or evolving new retail formats. The existing retail houses are also gearing up to face the emerging competition from the organized sector and the changing outlook of the consumers. For example, consumer spending is shifting from goods to services. Accordingly the retailers too are fast adjusting to the changing consumer preferences.

Consumers are not only looking for the core products or functional benefits from the retailers but also the non-functional benefits, which need to be compatible with their lifestyles.… Read the rest