1.

1. Retail marketing is the planning and process of selling goods or services

directly to consumers.
a.
An example of retail marketing is the advertising of fashions
for sale in a clothing store.
b.
An example of retail marketing is an in-store promotional
campaign for snack foods in a grocery store during Super Bowl
week.

2. Meaning and Definition of Retailer.

The word retailer has been derived from the French word "Retail" which means to sell in small
quantities, rather than in gross. A retailer is a person who purchases a variety of goods in small
quantities from different wholesalers and sell them to the ultimate consumer. He is the last link
in the chain of distribution from the producer to the consumer.
Characteristics
The followings are some of the essential characteristics of a retailer:

He is regarded as the last link in the chain of distribution.

He purchases goods in large quantities from the wholesaler and sell in small quantity to
the consumer.

He deals in general products or a variety of merchandise.

He develops personal contact with the consumer.

He aims at providing maximum satisfaction to the consumer.

He has a limited sphere in the market.

Functions
Retailers perform a number of functions. These are:

The retailer buys a variety of products from the wholesaler or a number of wholesalers.
He thus performs two functions like buying of goods and assembling of goods.

The retailer performs storing function by stocking the goods for a consumer.

He develops personal contact with the consumers and gives them goods on credit.

He bears the risks in connection with Physical Spoilage of goods and fall in price. Besides
he bears risks on account of fire, theft, deterioration in the quality and spoilage of goods.

He resorts to standardization and grading of goods in such a way that these are accepted
by the customers.

He makes arrangement for delivery of goods and supply valuable market information to
both wholesaler and the consumer.
Service of a Retailer
A retailer provides a number of services to the customer and to the wholesaler.

To Customers:
1.
He provides ready stock of goods and as such he sells and quantity of goods desired by
the customers.
2.
He keeps a large variety of goods produced by different producers and thereby ensures a
wide variety of choice to the customers.
3.
He relives the consumers of maintaining large quantity of goods for future period because
he himself holds large stock of goods.
4.
He develops personal relationship with the customers by giving them credit.
5.
he provides free-home delivery service to the customers.
6.
He informs the new product to the customers.
7.
he makes arrangement for replacement of goods when he receive complaints.
To Wholesaler:
1.
He gives valuable market information with regard to taste, fashion and demand for the
goods to the wholesaler.
2.
The retailer maintains direct contact with the customers and so he relieves the wholesaler
with regard to maintenance of direct contact.
3.
He helps the wholesaler in getting their goods distributed to the consumer.
4.
He is regarded as an important link between the wholesaler and the consumer.
5.
He creates demand for the products by displaying the goods to the consumers

3Characteristics of Retailing Business

Here are some characteristics of a retail business that sets it apart from
other business entities. According to Berman and Evans (1992: 41).
Characteristics of the retail business there are three, namely: small
enough quantity, impulse buying and store condition. The explanation of
each characteristic, as follows:
1) Small Quantity Enough
Sales of goods and services in a small enough quantity (small parties, in
amounts sufficient for their own consumption in a given time period).
Although the retailer to get the goods from suppliers in the form kartonan
(cases), but retailers displaying and selling it in a fraction per unit (piece
(s)).
2) Impulse Buying
That condition created by the availability of goods in the amount and type
of a very varied so as to minimbulkan many options in the process of
consumer spending. Often the consumer in the shopping process, the
decision to purchase an item was not previously listed in the expenditure
items (out of purchase list). This decision comes out of nowhere
tersetimulasi by variations in product mix (assortment) and the item
offered.
3) Store Condition

And interior environmental conditions in the shops / stores that are

influenced by the location of the store, the effectiveness of lighting goods,
open hours (store hours) and a competitive price.

Retail In India -Revolution Or Evolution

Retailing in India came with evolutionary patterns from Kirana store to Super market. This sector was
un-organized in the initial stage, and after that it carried forward by the textiles industries through the
dealer model. Now it is growing as supermarket and hypermarket. The main drivers of the retail
evolution in India are buying behavior of the customer, increase in disposable income of middle class,
infrastructure development and changing customer choice. The target segments of retailers are the
younger middle class earners which belong to more than 20% of total population.

The growth in retail sector also comes through innovative ideas. As retailers are providing the
innovative buying options at different store like as cash & Carry, lowest price day (Sabse Sasta din)
which help to increase the customer base. Initially organize retail was involve in the apparels and
footwear. Now retail has included the food chains, book & CD store (landmark) and electronics
(CROMA store a Tata retail chain). These all changes occurred at a passage of time so; it is an
evolution rather than revolution. This paper help to give information about the journey of retail in India,
different formats of retails chains, drivers of the retail industry, and finally the barrier in the growth of
Indian retail.
Retail in India: Revolution or Evolution
Evolution of Retail in India:
The journey of retail started long back through the Kirana store in India. This is first effort by local
shopkeeper. The shopping centre concept comes into the existence in year 1869, with Mumbai
Crawford market and Kolkatas New Market in year1874. The underground shopping complex Palika
Bazaar in New Delhi was established in the late 1970s and mini malls on the Banglores Brigade Road
come into existence in 1980s.
Government of India entered into the rural India by franchisees called Khadi Bhandar. These stores
serve as outlets for products made by village industry i.e. Khadi, matchsticks, incense sticks,
decorative items made from wood and earth, ahinsak (non-violent) honey, ahinsak leather items etc.
The industries came in the retailing in 1980s through dealer network. In 1980s, the big group of textile
industry i.e. Raymond, S.Kumar, Bombay dyeing and Grasim came with this concept of retailing. In
the manufacturing sector, the pioneers were DCM group & Bata. Titan came with an organized retail
concept and establishes number of showroom for premium watches.
All the above effort for retailing came by the manufacturer. But the pure retailer approach came in the
existence in 1999s with the establishment of Ansal's Plaza in Delhi and Crossroads in Mumbai. After
the 2003, many other organizations either planning to come into the retail market through the retail
store or initiated the establishment work. Currently some popular groups which are operating the
organized retail in different formats are following.
Table-1: Indias leading retailers and their format
Retailer Format
RPG Retail Hyper market(Spencer's),Specialty Store(Health & Glow)
Piramal's Discount store(Trumart)
Pantaloon Retail Super Market(Food Bazaar), Hyper market(Big bazaar),Mall(Central)
K Raheja Group Supermarket(TBA), Hyber market(TBA)
Tata/Trent Hyper market(star Bazaar India)
Landmark Group Hyper market(TBA)

Reliance Group Super market

Others Discount store(Subhiksha, Margin free, Apna Bazaar),Super market(Nilgiri's), Specialty
Electronics(Vivek's, Vijay sales)
From the above long journey shows that organized retailing in India came through a long path and
many changes. It means it is an evolution rather than sudden, revolutionary change.
Drivers of Evolution:
Accelerating Household Income in India:
After the 1991, the income of the educated middle class houses is increasing at the rate of 3.6%. It is
expected that this rate will be 5.3% in future. The rate of growth in the urban middle class is 4.6% as
compare to the growth rate in the rural middle class households. It is also expected that average real
household disposable income (income minus taxes, adjusted for inflation) will reach $6,977. Following
graph is showing the estimated growth in disposable income of Indian middle class.
Average household disposable Income
(thousands, Indian rupees)
Source: Mckinsey Global institute
Change in Population Structure and Choice:
The Indian population structure is changing now. It consists more than 60% of people who are below
the 30 years. The people (20-30 year age group) who affect the buying pattern of the family are more
than 20% of whole population. After the 1991, the income of younger middle class is increase at
higher rate because of open of Indian economy. The choice of this new young middle class earning
people is also changing and they now shifted from local brand to global brand, Dhaba to Macdonald,
bread to burger and most important is from money saving to money enjoying. This younger middle
class is the main target segment of the retail industry.
Table-2: Population pattern of India
Source: Reference (A)
Infrastructure development:
After 2003, India is recognized for all round development in the important infrastructure sectors. The
government is investing hugely on the road, port, aviation and basic need. All these factors attract the
foreign investor to invest in retail sector. Now, the reach of information has easier than previous years
because of the development in infrastructure i.e. Telecommunication, IT, Internet and satellite TV. Now
customer is more aware of the product and their features because of the Internet accessibility. The
reach of satellite TV channels is helping in creating awareness about global products for local
markets. So, rapid development in the infrastructure sector is one of the important factors to

accelerate the retail in India.

Future growth in Retail:
The retail business in India is still highly fragmented. Nevertheless, with global biggies like Wal-Mart,
Carrefour, Marks & Spencer, Gap etc. raiding the Indian retail space, coupled with domestic biggies
like Ambanis and Mittals giving tough competition.
As till 2006, the Indias total retail market was US$ 202.6 billion which was expected to grow at a
compounded 30 per cent over the next five years. But in year 2008, due to recession in Indian
economic growth its pace slow down. The organized retail segment is growing at the rate of 25-30 per
cent per annum. The revenues from the this sector are expected to triple from the current US$ 7.7
billion to US$ 24 billion by 2010.The share of modern retail is likely to grow from its current 2 per cent
to 15-20 percent over the next decade.
Table-3: Growth in Indian retail
Source: Economist intelligence unit and A.T.Kearney report
Some new mega projects of the big retailer are in pipeline stage i.e. Wal-Mart, Tesco; while some
foreign retailer has already establish their retail store in India and now are in expansion phase. Some
major upcoming retail houses are following.
Wal-Marts is about to enter India in a tie up with Bharti group and plans to open "hundreds of stores"
all around in wholesale sector. The financial details havent been released yet as India still dont allow
FDI in retail sector.
Mukesh Ambani has established a separate company, Reliance Retail Limited, which is 100 percent
owned and would invest Rs.25, 000 crore in the retail business over the years. Stores are be set up in
phases, and around 1,600 stores will be in place.
The New York-based fashion retailer Saks Fifth Avenue has tied up with realty major DLF Properties
to set up shop in a mall in New Delhi.
Hong Kong-registered Tommy Hilfiger has entered into a tie-up with Arvind Brands, among India's
largest integrated mills and a leading menswear manufacturer. Tommy Hilfiger has recently set up
shop in the country.
Madura Garments, a division of the Aditya Birla Nuvo Group, has distribution licensing arrangement
with Hong Kong Based Esprit. It currently operates 12 stores in India and has put plans in place to set
up over 100 stores in the coming three years.
Tesco, the UKs largest retailer is entering India with a wholesale cash-and-carry business. At the
same time, Tesco is also partnering with giant Indian conglomerate Tata Group for retail business in
India. Its new wholesale business will supply merchandise to Tata's retail arm, Trent, for its Star
Bazaar hypermarkets.

ITC's is planning to expansion of its Wills and John Player's retail stores to 300 in the next couple of
years.
Key Challenges:
The retailing is growing at a tremendous pace in India but many environmental factors are creating
barriers to it. Therefore, the industry is also fearing and trying to overcome these problems. The retail
sector growth can be faster than the current growth rate if retail organization crosses following
hurdles:
The organized retail industry in India is faced with stiff competition from the unorganized sector. The
local shopkeepers are making cartel for wholesale buying which help them to reduce the cost of
inventory. Small traders also oppose to Foreign Direct Investment in retail industry. So, government is
prohibiting foreign investment in real estate business. Another factor which is hampering the retail
sector most is; high price of quality real estate and infrastructure. It is high because of very high stamp
duty on transfer of property. Shortage of retail space in central and downtown locations also hinders
the growth of retail industry. Land-use conversion is time consuming and becoming complex. For
settling property disputes, it consumes lot of time and rigid building laws makes procurement of retail
space difficult. The entry barriers are also high as non residents are not allowed to own property
except they are of Indian origin and customs duties are levied on import of goods in India.
Conclusion:
The Indian retail sector came with evolutionary patterns from Kirana store to Super market. This
sector was un-organized in the initial stage, and then it moved through the franchise model. As with
the change in the regulation it transformed in pure retail market. so, we can say that retail come from
evolution rather than a revolution.

5. The five principles of retail

If you are running a retail business whether bricks and

mortar or online there are five core principles you need to adhere to. From customer care to the four
Ps, Antony Welfare, author of The Retail Inspectors Handbook, explains what you need to know

1 The customer is the most important person in your business

The customer holds the key to every successful retail operation. Based on my 20 years' of experience with a
number of different retail businesses, this article will introduce you to the journey to make your business
customer-focused, and realise the potential you have to make your retail business a success.
The main retail principle to master is the customer; the customer should be the centre of your business and
everything you do must revolve around that customer. Knowing them, and focusing on them in everything you do,
will help you grow your business and your team the customer is king.

2 Retail is detail
One of the most famous principles in retailing is, of course, retail is detail this is where the challenge lies:
how do you become more detailed and what detail should you focus on? You need to address and improve your
understanding of your customer. To do this, every retailer must focus on the detail and get the detail right the
majority of the time. Mistakes are OK, but you must learn from them and do not repeat your mistakes. Customers
will allow you some mistakes, but too many will turn them away; understanding the detail is a key skill to master
in retail.

3 Understand the four Ps

This is a very old principle but still has validity. This retail principle will help you understand the overall
foundations of a retail business; the 4 Ps: Product, Price, Place, Promotion. These are the basic foundations of a
successful retail business.

Product: You need products that your customers want to buy and a product range that will satisfy your
customers needs and desires. The products must also deliver a profit for you to have a successful business;

Price: Price must be consistent across the marketing mix and meet all requirements for your business.
You need to price your product range at the correct level for the customers to be able to buy your products, and for
them to gain value from your products. This could mean pricing high or low this very much depends upon your
customer offering;

Place: You must provide somewhere for your customers to purchase your product, be that a physical
store, a catalogue or an e-commerce website;

Promotion: Once you have a product at the right price, in a place where the customer can access it
you need to tell them about this and promote your business and your products; make sure your customers know
that you and your products exist and are available for them to enjoy.

4 Go the extra mile for your customer

Providing great customer service starts with understanding and knowing your customer; however, knowing them
is the start of the journey and you will need to deliver more than just customer service. To be successful you must
deliver world-class customer service; you must go the extra mile for the customer. You and your team must
continually go the extra mile for the customer, each time delivering just a little more than they expect. Doing this
each time you and your team interact with your customers will win them over and make them loyal over a long
period of time.

5 Location, location, location

The final retail principle is: Location, location, location. History has dictated that this is one of the most important
factors in the success of a physical store, and still to this day it will have a major impact on your success. The
best location of your store will be dictated by your brand and product strategies. For example, a supermarket
operation needs a car park and a high fashion store needs to be in a high fashion area that attracts the right
customers for the store. I would argue, however, that location has less effect now than previously, due to two
main factors: the first being the flexibility of the customers; now we often travel more, and the second being the
internet.
The internet has changed our shopping habits and will continue to do so. E-commerce websites have opened up
the world of non-geographic retail a retail world without the need to visit the physical store. The emergence
of etail from retail has been the biggest change over the past 20 years.

The journey from retail to etail has been quick, and we need to embrace the world of etail and ensure we
understand its effects on our customers. The etail world is growing significantly and with new technologies, such
as iPads and mobile commerce, it will continue to change the opportunities in the world of retail.

6. Retail Objectives
Profitability
A common business goal is to run a profitable operation, which typically means
increasing revenue while limiting expenses. Revenue objectives could consist of
increasing annual sales by 10 percent or landing three new accounts each month.
Expense objectives could involve finding a new operating facility that decreases your rent
by $200 a month or cutting monthly utility bills by 15 percent.

Customer Service
Examples of customer service goals are to develop a perception that your company is
easy to do business with or to improve your response time to customer complaints.
Objectives to help meet these goals could be increasing your customer service staff from
one to three workers by the end of the year or implementing a policy where customers
are guaranteed to receive a return phone call before the end of the business day.
Related Reading: Examples of Human Resources Goals & Objectives

Retention
If you've experienced a problem with employee turnover, your overall goal could
be to improve retention. To achieve this goal, your objective might be to develop and
implement a training program that details new-hire activities for the first 90 days on the
job. You also could implement one-on-one meetings with your employees in an effort to
build rapport and find out what's on their mind.

Efficiency
Another goal could be to become more efficient in your business operation as a way to
increase productivity. To improve efficiency, you could challenge your salespeople to
improve their closing ratio from 30 percent to 45 percent. If you distribute a product, you
might consider implementing a new shipping procedure that improves your delivery time
from four days to two.

Growth
Perhaps your goal is to grow your business operation. If you own a franchise unit, for
example, your objective might be to open three more units within a five-year period. If
you operate a retail store, your objective might be to increase your selling space by 25
percent by completing an addition to your building within a year.

7.

ntroduction
The Indian retail industry has presently emerged as one of the most dynamic and fast paced
industries as several players have started to enter the market. It accounts for over 10 per cent of the
countrys gross domestic product (GDP) and around eight per cent of the employment in India. The
country is today the fifth largest global destination in the world for retail.
Several corporates have planned to exploit the opportunities in the Indian retail space, such as
Reliance Industries Ltd (RIL), which has lined up capital expenditure of Rs 1.8 trillion (US$ 28.94
billion) for the next three years for its petrochemicals, telecom and retail ventures.
With the growth in the retail industry, the corresponding demand for real estate is also being created.
Further, with the online medium of retail gaining more and more acceptance, there is a tremendous
growth opportunity for retail companies, both domestic and international.

Market Size
Indias retail market is expected to double to US$ 1 trillion by 2020 from US$ 600 billion in 2015 driven
by income growth, urbanisation and attitudinal shifts, highlighted the Boston Consulting Group and
Retailers Association of Indias report titled, Retail 2020: Retrospect, Reinvent, Rewrite.
While the overall retail market will grow at 12 per cent per annum, modern trade will grow twice as fast
at 20 per cent per annum, and traditional trade at 10 per cent, according to a report titled Retail 2020:
Retrospect, Reinvent, Rewrite by Boston Consulting Group and Retailers Association of India.
The retail spending in the top seven Indian cities of India currently amounts to Rs 3.58 trillion (US$
57.56 billion), with organised retail penetration at 19 per cent in 2014. It is expected that the online
retail will be at par with the physical stores in five years

India is expected to become the worlds fastest growing e-commerce market on the back of robust
investment activity in the sector and the rapid increase in internet users. It is expected that Indias ecommerce market will grow from US$ 2.9 billion in 2013 to over US$ 100 billion by 2020.
E-tailers are betting on more Indians switching to shopping online, with a projection of 200 million new
consumers by 2017, according to a report released last year by Accel India,

Investments
The Indian retail industry in the single brand segment has received foreign direct investment (FDI)
equity inflows to the tune of US$ 275.38 million in the period April 2000January 2015, according to
the Department of Industrial Policies and Promotion (DIPP).
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. Some of
them are:

Paytm plans to set up 30,000 to 50,000 retail outlets where its customers can load cash on their digital wallets.
The company is also looking to enrol retailers - mostly kirana stores - as merchants for accepting digital
payments.

Mobile wallet company MobiKwik has partnered with Jabong.com to provide mobile payment services to
Jabong's customers.

DataWind has partnered with HomeShop18 to expand its retail footprint in the country. Under the partnership,
HomeShop18 and DataWind will jointly launch special sales programs across broadcast, mobile and internet
media to create greater access of the latter's tablet range.

Amazon Inc and Flipkart India will invest nearly Rs 2,300 crore (US$ 369.87 million) in the near term as they
plans to acquire more customers in the country's fast-growing online retail market.

FashionAndYou has opened three distribution hubs in Surat, Mumbai and Bengaluru to hasten deliveries.

Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 401.98 million) in a fruit and vegetable
processing unit, an integrated meat processing unit and a modern shopping mall in Hyderabad, Telangana.

Government Initiatives
Ms Nirmala Sitharaman, Union Minister of Commerce and Industry, Government of India has stressed
on India building a culture of branding and marketing its products to the rest of the world. The ministry
is also willing to take steps to start a Free Trade Agreement (FTA) with the European Union (EU).
The Government of India has taken various initiatives to improve the retail industry in India. Some of
these initiatives are:

The Foreign Investment Promotion Board (FIPB) has cleared five retail proposals worth around Rs 420 crore
(US$ 67.53 million) from companies such as Bestseller, Puma SA and Flemingo. Additionally, the board
cleared three 100 per cent single-brand retail proposals worth Rs 222.5 crore (US$ 35.77 million), suggesting
renewed interest in Indias growing retail market.

IKEA has entered into a memorandum of understanding (MoU) with the Government of Telangana to set up its
first store in India at Hyderabad. IKEA retail outlets have a standard design and each location entails an
investment of around Rs 500-600 crore (US$ 80.38-96.46 million).

The Government of India is also in the final phase of talks with the states for the Goods and Services Tax Bill
to be implemented. This Bill is seen as a key to facilitating industrial growth and improving the business
climate in the country.

Road Ahead
The share of e-Commerce is growing steadily. Customers have an ever increasing choice of products
at the lowest rates. E-Commerce is probably creating the biggest disruption in the retail industry and
this trend will continue in the year to come. Almost everything is sold on the internet now and this
means that pretty much all of the retail industry faces the challenge of either being a part of ecommerce or taking it head on.
For better prospects of this industry, as a whole, both organized and unorganized retail companies
should work together to improve the overall retail industry, while generating new benefits for their own
customers.
Also, the retailers should take advantage of digital retail channels (e-commerce), which would enable
them to spend less money on real estate while reaching more customers in tier-2 and tier-3 cities.
Nevertheless, the long term outlook for the industry remains to be positive on the back of rising
incomes, favourable demographics, entry of foreign players and increasing urbanization.
Exchange Rate Used: INR 1 = US$ 0.016 as on March 24, 2015
References: Media Reports, Press Releases, Deloitte report, Department of Industrial Policy and
Promotion website, Union Budget 2014-15

8.

Major Factors Responsible for the Growth of Organised

Retailing in India
by Smriti Chand Retailing

Advertisements:

The major factors responsible for the growth of organised

retailing in India are as follows:
Organised retailing is a recent development. It is the outcome of
socioeconomic factors. India is standing on the threshold of retail
revolution.

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Retail Industry, one of the fastest changing and vibrant industries

that, has contributed to the economic growth of our country. Within
a very sport span of time, Indian retail industry has become the
most attractive, emerging retail market in the world.
Healthy economic growth, changing demographic profile,
increasing disposable incomes, changing consumer tastes and
preferences are some of the key factors that are driving growth in
the organised retail market in India.
Some of the factors responsible for the growth of
organised retailing are as under:
1. Growth of middle class consumers:
In India the number of middle class consumer is growing rapidly.
With rising consumer demand and greater disposable income has
given opportunity of retail industry to grow and prosper.

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They expect quality products at decent prices. Modern retailers offer

a wide range of products and value added services to the customers.
Hence this has resulted into growth of organised retailing in India.
Growing consumerism would be a key driver for organized retail in
India. Rising incomes and improvements in infrastructure are
enlarging consumer markets and accelerating the convergence
(meeting) of consumer tastes.
2. Increase in the number of working women:
Today the urban women are literate and qualified. They have to
maintain a balance between home and work. The purchasing habit
of the working women is different from the home maker.

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They do not have sufficient time for leisure and they expect
everything under one roof. They prefer one-stop shopping Modern
retail outlets therefore offers one store retailing.
3. Value for money:
Oganised retail deals in high volume and are able to enjoy
economies of large scale production and distribution. They
eliminate intermediaries in distribution channel.

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Organised retailers offer quality products at reasonable prices.

Example: Big Bazaar and Subhiksha. Opportunity for profit attracts
more and more new business groups for entering in to this sector.
4. Emerging rural market:
Today the rural market in India is facing stiff competition in retail
sector also. The rural market in India is fast emerging as the rural
consumers are becoming quality conscious.

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Thus due to huge potential in rural retailing organised retailers are

developing new products and strategies to satisfy and serve rural
customers. In India, Retail industry is proving the countrys largest
source of employment after agriculture, which has the deepest
penetration into rural India.
5. Entry of corporate sector:
Large business tycoons such as Tatas, Birlas, and Reliance etc.
have entered the retail sector. They are in a position to provide
quality products and entertainment.

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As the corporate the Piramals, the Tatas, the Rahejas, ITC,

S.Kumars, RPG Enterprises, and mega retailers- Crosswords,
Shoppers Stop, and Pantaloons race to revolutionize the retailing
sector.
6. Entry of foreign retailers:
Indian retail sector is catching the interest of foreign retailers. Due
to liberalisation multinationals have entered out country through
joint ventures and franchising. This further is responsible for
boosting organised retailing.

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7. Technological impact:
Technology is one of the dynamic factors responsible for the growth
of organised retailing. Introduction of computerization, electronic
media and marketing information system have changed the face of
retailing. Organized retailing in India has a huge scope because of
the vast market and the growing consciousness of the consumer
about product quality and services.

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One of the major technological innovations in organised retailing

has been the introduction of Bar Codes. With the increasing use of
technology and innovation retailers are selling their products online
with the help of Internet.
8. Rise in income:
Increase in the literacy level has resulted into growth of income
among the population. Such growth has taken place not only in the
cities but also in towns and remote areas.

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As a result the increase in income has led to increase in demand for

better quality consumer goods. Rising income levels and education
have contributed to the evolution of new retail structure. Today,
people are willing to try new things and look different, which has
increased spending habits among consumer.
9. Media explosion:
There has been an explosion in media due to satellite television and
internet. Indian consumers are exposed to the lifestyle of countries.
Their expectations for quality products have risen and they are
demanding more choice and money value services and
conveniences.

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10. Rise of consumerism:

With the emergence of consumerism, the retailer faces a more
knowledgeable and demanding consumer. As the business exist to
satisfy consumer needs, the growing consumer expectation has
forced the retail organizations to change their format of retail trade.
Consumer demand, convenience, comfort, time, location etc. are the
important factors for the growth of organised retailing in India.

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The retail industry is divided into organised and un-organised

sectors. Organised retailing refers to trading activities undertaken
by licensed retailers, that is, those who are registered for sales tax,
income tax, etc.

These include the corporate-backed hypermarkets and retail chains,

and also the privately owned large retail businesses. Un-organised
retailing, on the other hand, refers to the traditional formats of lowcost retailing, for example, the local kirana shops, owner manned
general stores, paan/beedi shops, convenience stores, hand cart and
pavement vendors.
It is important to understand how retailing works in our economy,
and what role it plays in the lives of its citizens, from a social as well
as an economic perspective. India still predominantly houses the
traditional formats of retailing, that is, the local kirana shop,
paan/beedi shop, hardware stores, weekly haats, convenience
stores, and bazaars, which together form the bulk.

There are a host of factors that are propelling the expansion of modern retail in India, including the
improving infrastructure, a move away from the socialistic pattern of economy, better educational
opportunities, and rising consumerism.
Over the last couple of decades, much has been written in the Indian media about modern retailing,
but the term has never been defined. FMCG companies have begun to use the words modern trade
to describe the industry. Here again, there is a confusion. While a stand-alone supermarket chain in
Mumbai gets treated as modern trade, supermarkets with monthly sales of Rs 200 crore in Jalgaon or
Jalna do not. Numerous such examples are found throughout India. To the common man, this
distinction may matter little, except that modern trade sells things a little cheaper and offers many
discounts and schemes, but it falsifies national data about the true extent of modren retail in the
country.
Since many of the Indian retailers would sooner or later like themselves to be recognised as modern
retailers, they would want to know what exactly is modern retailing. The US Bureau of Labor Statistics
defines modern retailing as a retail chain with 15 or more stores. In India, if a retailer follows a modern
format, has a chain of stores, uses technology like computers, and employs college graduates in his
working team, he can be said to be a modern retailer. Some may add one more point to this: the
owner should not look into the routine day-to-day affairs of the business, leaving these to the
professionals.
Listed below are some key drivers of growth in Indian modern retail:
Infrastructure: Just five or six decades ago, connectivity was a big problem in India. Forget about
villages, even cities were not connected by road as there were hardly any bridges straddling major
rivers. Things have since changed and are still changing fast. Express highways are being built and
all cities and towns got electrified long ago. Several states even claim that they have electrified every
village within their borders!
Education: Until some decades ago, well over half of the Indian population could not read and write.

More than 50 percent of the districts in the country had no colleges. There was not a single
engineering or medical college in several states and hardly one or two women colleges in each. But
now, India boasts of the biggest English-speaking population on earth.
Industrialisation: India is the tenth biggest industrial country in the world. Instead of importing, it now
exports motorcycles, cars, watches, and a wide range of industrial products.
Communication: India today has the second-largest number of mobile phones in the world, next only
to China. SMS, emails, and fax are now the main mode of communication.
Media: Cable TV and hundreds of channels with news, views, and entertainment have resulted in an
information explosion in India. Even the poorest man living in a slum today owns a TV set. Telephone
and TV are no longer parameters of luxurious living. Now, hundreds of magazines are printed in India
in all languages and read by the middle class.
Attitude: Todays youth in the metros is having 10 to 20 pairs of dresses, half a dozen pairs of
footwear and perhaps as many T-shirts. Fast-food chains like McDonalds, KFC, and Pizza Hut are
crowded with youngsters.
The result of all the above was a proliferation of small shops all over India mainly selling food grains,
pulses, cooking oil, spices, dry fruits, tea and a few brands of toiletries and cosmetics. However, in the
last decade or so, department stores and malls have come up in all cities and towns of India and new
ones are being built every day.

The Indian Retail sector has come off age and has gone through major transformation over the
last decade with a noticeable shift towards organised retailing. A T Kearney, a US Based global
management consulting firm has ranked India as the fourth most attractive nation for retail
investment among 30 flourishing markets.
The retail market is expected to reach a whooping Rs. 47 lakh crore by 2016-17, as it expands at
a compounded annual growth rate of 15 per cent, accordingy to the Yes Bank - Assocham
study.
The retail market, (including organised and unorganised retail), was at Rs. 23 lakh crore in 201112. According to the study, organised retail, that comprised just seven per cent of the overall
retail market in 2011-12, is expected to grow at a CAGR of 24 per cent and attain 10.2 per cent
share of the total retail sector by 2016-17.
In terms of sheer space, the organised retail supply in 2013 was about 4.7 million square feet (sq
ft). This showed a 78 per cent increase over the total mall supply of just 2.5 million sq ft in 2012.
Favourable demographics, increasing urbanisation, nuclearisation of families, rising affluence
amid consumers, growing preference for branded products and higher aspirations are other
factors which will drive retail consumption in India, said DS Rawat, Assocham Secretary
General.
Retail classification

Retail industry can be broadly classified into two categories namely- organised and unorganised
retail.

Organized retail - Organised traders/retailers, who are licensed for trading activities and
registered to pay taxes to the government.

Unorganized retail It consists of unauthorized small shops - conventional Kirana shops,

general stores, corner shops among various other small retail outlets - but remain as the
radiating force of Indian retail industry.

Market Dynamics
In the past few years, Indian Retail sector has seen tremendous growth in the organised
segment. Major domestic players have stepped into the retail arena with long term, ambitious
plans to expand their business across verticals, cities and formats.
Companies like Tata, Reliance, Adani Enterprise and Bharti have been investing considerably in
the booming Indian Retail market. Along with these giant retailers, a number of transnational
brands have also entered into the market to set up retail chains in close association with bigger
Indian companies.
High consumer spending over the years by the young population (more than 31% of the country
is below 14 years) and sharp rise in disposable income are driving the Indian organised retail
sectors growth. Even Tier I & Tier II cities and towns are witnessing a major shift in consumer
preferences and lifestyles, the result of which, they have emerged as attractive markets for
retailers to expand their presence.
The Indian retail sector is highly fragmented and the unorganised sector has around 13 million
retail outlets that account for around 95-96% of the total Indian retail industry. However, going
forward, the organised sectors growth potential is expected to increase due to globalisation, high
economic growth, and improved lifestyle.
Although the growth potential in the sector is immense, there are obstacles too, that could slow
the pace of growth for new entrants. Rigid regulations, high personnel costs, real estate costs,
lack of basic infrastructure, and highly competitive domestic retailer groups are some such
challenges.
Key drivers of the Indian Retail Industry

Emergence of nuclear families

An increase in the double-income households trend

Large working population

Reasonable Real estate prices

Increase in disposable income and customer aspiration

Demand as well as increase in expenditure for luxury items

Growing preference for branded products and higher aspirations

Growing liberalization of the FDI policy in the past decade

Increasing urbanisation,

Rising affluence amid consumers

Bottlenecks

A long way to meet international standards

Lack of efficient supply-chain management

Lack of required retail space

No fixed consumption pattern

Shortage of trained manpower

Lack of proper infrastructure and distribution channel

Emerging sectors/trends in Indian retailing

Within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce,
fashion and lifestyle.
Incorporation of technology in the organised retail segment has been something to reckon with in
the past few years. Use of computers for merchandise planning and management, control of
inventory costs and supplies and replenishment of goods done electronically, internal store
billing, etc has changed the face of product retailing.
Online retail business is the next gen format which has high potential for growth in the near
future. After conquering physical stores, retailers are now foraying into the domain of e-retailing.
The retail industry is all set to test waters over the online medium, by selling products through
websites. Food and grocery stores comprises the largest chunk of the Indian retail market.
An emerging trend in this segment is the virtual formats where customer orders are taken online
through web portals which are delivered at the door step the very same day or the following day.
This trend has been catching up with most of the large sized retail chains that have their
websites.
The Road Ahead
According to panel members at the seventh Food and Grocery Forum India, the opportunities in
food and grocery retail in India are immense, given that it constitutes about 69 per cent of Indias

total retail market. The Indian retail market, currently estimated at $490 billion, is project to grow
at a compounded annual growth rate of 6 per cent to reach $865 billion by 2023. Modern retail
with a penetration of only 5% is expected to grow about six times from the current 27 billion USD
to 220 billion USD, across all categories and segments.
Organised Retail is emerging as the new phenomenon in India and despite the slump, the
market is growing exponentially. As economic growth brings more of Indias people into the
consuming classes and organized retail lures more and more existing shoppers, by 2015, more
than 300 million shoppers are likely to patronize organized retail chains.
Consumer markets in emerging market economies like India are growing rapidly owing to robust
economic growth. India's modern consumption level is set to double within five years to US$ 1.5
trillion from the present level of US$ 750 billion.
The growing middle class is an important factor contributing to the growth of retail in India. By
2030, it is estimated that 91 million households will be middle class, up from 21 million today.
Also by 2030, 570 million people are expected to live in cities, nearly twice the population of the
United States today.
Thus, with tremendous potential and huge population, India is set for high growth in consumer
expenditure. With India's large young population and high domestic consumption, the macro
trends for the sector look favorable.

9. The Indian Retail sector has come off age and has gone through major transformation over
the last decade with a noticeable shift towards organised retailing. A T Kearney, a US Based
global management consulting firm has ranked India as the fourth most attractive nation for retail
investment among 30 flourishing markets.

The retail market is expected to reach a whooping Rs. 47 lakh crore by 2016-17, as it expands at
a compounded annual growth rate of 15 per cent, accordingy to the Yes Bank - Assocham
study.
The retail market, (including organised and unorganised retail), was at Rs. 23 lakh crore in 201112. According to the study, organised retail, that comprised just seven per cent of the overall
retail market in 2011-12, is expected to grow at a CAGR of 24 per cent and attain 10.2 per cent
share of the total retail sector by 2016-17.
In terms of sheer space, the organised retail supply in 2013 was about 4.7 million square feet (sq
ft). This showed a 78 per cent increase over the total mall supply of just 2.5 million sq ft in 2012.

Favourable demographics, increasing urbanisation, nuclearisation of families, rising affluence

amid consumers, growing preference for branded products and higher aspirations are other
factors which will drive retail consumption in India, said DS Rawat, Assocham Secretary
General.
Retail classification
Retail industry can be broadly classified into two categories namely- organised and unorganised
retail.

Organized retail - Organised traders/retailers, who are licensed for trading activities and
registered to pay taxes to the government.

Unorganized retail It consists of unauthorized small shops - conventional Kirana shops,

general stores, corner shops among various other small retail outlets - but remain as the
radiating force of Indian retail industry.

Market Dynamics
In the past few years, Indian Retail sector has seen tremendous growth in the organised
segment. Major domestic players have stepped into the retail arena with long term, ambitious
plans to expand their business across verticals, cities and formats.
Companies like Tata, Reliance, Adani Enterprise and Bharti have been investing considerably in
the booming Indian Retail market. Along with these giant retailers, a number of transnational
brands have also entered into the market to set up retail chains in close association with bigger
Indian companies.
High consumer spending over the years by the young population (more than 31% of the country
is below 14 years) and sharp rise in disposable income are driving the Indian organised retail
sectors growth. Even Tier I & Tier II cities and towns are witnessing a major shift in consumer
preferences and lifestyles, the result of which, they have emerged as attractive markets for
retailers to expand their presence.
The Indian retail sector is highly fragmented and the unorganised sector has around 13 million
retail outlets that account for around 95-96% of the total Indian retail industry. However, going
forward, the organised sectors growth potential is expected to increase due to globalisation, high
economic growth, and improved lifestyle.
Although the growth potential in the sector is immense, there are obstacles too, that could slow
the pace of growth for new entrants. Rigid regulations, high personnel costs, real estate costs,
lack of basic infrastructure, and highly competitive domestic retailer groups are some such
challenges.
Key drivers of the Indian Retail Industry

Emergence of nuclear families

An increase in the double-income households trend

Large working population

Reasonable Real estate prices

Increase in disposable income and customer aspiration

Demand as well as increase in expenditure for luxury items

Growing preference for branded products and higher aspirations

Growing liberalization of the FDI policy in the past decade

Increasing urbanisation,

Rising affluence amid consumers

Bottlenecks

A long way to meet international standards

Lack of efficient supply-chain management

Lack of required retail space

No fixed consumption pattern

Shortage of trained manpower

Lack of proper infrastructure and distribution channel

Emerging sectors/trends in Indian retailing

Within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce,
fashion and lifestyle.
Incorporation of technology in the organised retail segment has been something to reckon with in
the past few years. Use of computers for merchandise planning and management, control of
inventory costs and supplies and replenishment of goods done electronically, internal store
billing, etc has changed the face of product retailing.
Online retail business is the next gen format which has high potential for growth in the near
future. After conquering physical stores, retailers are now foraying into the domain of e-retailing.
The retail industry is all set to test waters over the online medium, by selling products through
websites. Food and grocery stores comprises the largest chunk of the Indian retail market.

An emerging trend in this segment is the virtual formats where customer orders are taken online
through web portals which are delivered at the door step the very same day or the following day.
This trend has been catching up with most of the large sized retail chains that have their
websites.
The Road Ahead
According to panel members at the seventh Food and Grocery Forum India, the opportunities in
food and grocery retail in India are immense, given that it constitutes about 69 per cent of Indias
total retail market. The Indian retail market, currently estimated at $490 billion, is project to grow
at a compounded annual growth rate of 6 per cent to reach $865 billion by 2023. Modern retail
with a penetration of only 5% is expected to grow about six times from the current 27 billion USD
to 220 billion USD, across all categories and segments.
Organised Retail is emerging as the new phenomenon in India and despite the slump, the
market is growing exponentially. As economic growth brings more of Indias people into the
consuming classes and organized retail lures more and more existing shoppers, by 2015, more
than 300 million shoppers are likely to patronize organized retail chains.
Consumer markets in emerging market economies like India are growing rapidly owing to robust
economic growth. India's modern consumption level is set to double within five years to US$ 1.5
trillion from the present level of US$ 750 billion.
The growing middle class is an important factor contributing to the growth of retail in India. By
2030, it is estimated that 91 million households will be middle class, up from 21 million today.
Also by 2030, 570 million people are expected to live in cities, nearly twice the population of the
United States today.
Thus, with tremendous potential and huge population, India is set for high growth in consumer
expenditure. With India's large young population and high domestic consumption, the macro
trends for the sector look favorable.

10. Global Powers of Retailing