The development of organized retail is dependent on the efforts of several agencies and institutions. A glimpse of the last 2 decades of the previous century proves illuminating. Large-format retailing started with outlets like D-Mart, More, Hyperity etc. at another level, with manufacturer-retail brands like Bata, Bombay Dyeing and Titan etc.
Government: The first among these is the government. In a country as big as India and with as many states as ours, it is imperative that the Central government and all state governments bring in Value Added Taxation or a unified taxation system to ensure that the tax-regimes are the same across the country.
The laws governing retail real estate should also be looked into, so that it is possible to develop retail-estate beyond the city-limits. Apart from providing entertainment and retail opportunities, this will also decongest the city center and facilitate the development of suburbs. The relevant rules should also be amended to allow retail-stores to operate 7 days a week, 12 hours a day.
Nuclear Families: Given the hours most urban consumers keep at work, and keeping in mind the increase in the number of nuclear families, this may, indeed, make sense. This will also help people enjoy their evenings, out at malls.
Developers: The second group, whose participation is essential in making retail a boom-sector in this millennium, comprises developers. Most properties are developed without considering the end user; thus, we sometimes find high-Ceilinged offices and low-ceilinged retail stores. Often, the shopper’s convenience is not taken into consideration while the property is constructed.
Manufacturers: There’s a lot at stake here: even so early in the 21st Century, India is too large a market to be ignored by transnational retail giants. From the manufacturing company’s perspective, the focus should be on producing good products, and forging relationships with organized retail. Manufacturers need to draw a plan of producing quality products and tie in with retailers. Indeed, the birth of organized retail will also engender the creation of private labels and store-brands. Thus, if a manufacturing company lacks the resources to build a brand, it can supply to a retail-chain that has the resources to create a brand of its own.
Indian Consumers: And even as these developments were taking place, the Indian consumer became more mature. Customer-expectations zoomed. Thus, at the beginning of the New Millennium, retailers have to deal with a customer who is extremely demanding. Not just in terms of the product-quality, but also in terms of service, and the entire shopping experience.
Today, the typical customer who shops in a retail outlet compares the time spent at the check-out counter with that at an efficient petrol station, and the smile of the counter-person to that decorating the face of a Jet Airways’ crew member. To cope with the new customer, manufacturers have to focus on product quality and brand building. And retailers, in turn, have to focus on the quality of the shopping experience.
In this millennium, like in the last, customers will want to spend time with their family and friends. They may like to visit an outlet on weekends where everything will be available under one roof. India will benefit from these developments because of increased consumption through retailing and the corresponding increase in employment created by retailing.
Retail organizations exhibit great variety and new forms keep emerging. There are store retailers, non-store retailers, and retail organizations. Consumers today can shop for goods and services in a wide variety of stores. The best-known type of retailer is the department store. Japanese department stores such as Takashimaya and Mitsukoshi attract millions of shoppers each year. These stores feature art galleries, cooking classes, and children’s playgrounds.
The success of the retail stores, therefore, depends on customers’ reaction to the retailing mix which influences the profits of the store, its volume of turnover, its share of the market, its image and status and finally its survival.
At this point, I can summarize the main development retailers and manufacturers need to take into account as they plan their competitive strategies.
In India the trends are mainly in three sectors. These sectors are: Trends in retail marketing New retail forms and combinations continually emerge. Bank branches and ATM counters have opened in supermarkets. Gas stations include food stores that make more profit than the gas operation. Bookstores feature coffee shops. The electronic age has significantly increased the growth of non-store retailing consumers receive sales offers in the mail and over television, computers, and telephones, to which they can immediately respond by calling a toll-free number or via computer.
Competition today is increasingly intertype, or between different types of store outlets. Discount stores, catalog showrooms, and department stores all compete for the same consumers. The competition between chain superstores and Smaller independently owned stores have become particularly heated. Because of their bulk buying power, chains get more favorable terms than independents, and the chains’ large square footage allows them to put in cafes and bathrooms.
Today’s retailers are moving toward one of two poles, operating either as mass merchandisers or as specialty retailers. Superpower retailers are emerging. Through their superior information systems and buying power, these giant retailers are able to offer strong price savings. These retailers are using sophisticated marketing information and logistical systems to deliver good service and immense volumes of product at appealing prices to masses of consumers. Many retailers are even telling the most powerful manufacturers what to make; how to price and promote; when and how to ship; and even how to reorganize and improve production and management. Manufacturers have little choice: They stand to lose 10 to 30 percent of the market if they refuse. Technology is becoming critical as a competitive tool. Retailers are using computers to produce better forecasts, control inventory costs, order electronically from suppliers, send e-mail between stores, and even sell to Customers within stores. They are adopting checkout scanning systems, electronic funds transfer, and improved merchandise-handling systems.
There are various ways of making goods available to consumers like:
These three are among the most common ways of making the goods available to consumers. But in India the three layered system of distributor, wholesaler and retailer, forms the backbone of the front-end logistics of most of the consumer-good companies.
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