Challenges

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. There is also a trend for hiring hotel management graduates, though now many retail schools are coming up, and Pantaloon has set up links with major business schools from where it would be selecting the right candidates. The sector is likely to produce 2 million jobs in the coming 3 years. There also exists a possibility that the retail sector would become a poaching ground once a number of domestic and international players enter the industry. Supply Chain Management The retail scenario is characterized by logistical challenges, constant changes in consumer preferences and 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. Frauds in Retail It is one of the primary challenges the 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. This is so even after the use of security techniques, such as CCTVs and POS systems. As the size of the sector would increase, this would increase the number of thefts, frauds and discrepancies in the system. Challenges with Infrastructure and Logistics The lack of proper infrastructure and distribution channels in the country results in inefficient processes. This is a major hindrance for retailers as a non-efficient distribution channel is very difficult to handle and can result in huge losses. Infrastructure does not have a strong base in India. 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. Warehouse facilities and timely distribution are other areas of challenge. To fully utilize India's potential in retail sector, these major obstacles have to be removed.

Andrew Levermore gestures impatiently to the bottle of mineral water on the table. It is clearly
old stock - the brand recently rolled out its new look and colours in a high-decibel campaign. But it's not the vintage that is bothering the CEO of Hypercity, Mumbai's [ Images ] largest hypermarket.

"They changed the packaging a couple of months ago, but the bottles still don't have barcodes," Levermore shakes his head in disbelief. "A package makeover in 2006 - and no barcode." Does it really matter? Perhaps not to the kirana or paan shops, which, admittedly, collectively sell more bottled water than the hypermarket, but a barcode is a critical business tool for organised retail, where it helps track products from the warehouse to store shelves and, finally, the checkout counter. And when suppliers don't provide barcoded products, retailers need to print their own barcodes and then employ staff to stick them on every piece of merchandise. In a store like Hypercity, which carries 80,000-100,000 SKUs (stock-keeping units) at any given time, that means a lot of sticking. It is also an indicator of the changes organised retail brings in its wake. For decades now, consumer goods companies have been used to delivering to India's proverbial "12 million kiranas" more or less on terms of their own choosing. They are now finding that modern format retail doesn't operate along quite the same lines. In fact, it is so dramatically different, it is an entirely new business. "With the rise of organised retail, the balance of power shifts in favour of retailers," points out Jagdish Sheth, Charles H Kellstadt professor of marketing in the Goizueta Business School at Emory University. What opportunities and challenges do organised retail present for consumer goods suppliers? And what strategic changes will help them do better business with giants like Wal-Mart, Reliance [ Get Quote ] Fresh, Foodworld and Food Bazaar? the strategist takes a look. The kiranas continue First things first. The rise of organised retail does not mean the end of traditional retail. According to "Retail in India: getting organised to drive growth", a joint report by global management consultancy A T Kearney and the Confederation of Indian Industry, the Indian retail sector is valued at $320 billion (Rs 14,40,000 crore), of which organised retail accounts for a minuscule 6 per cent (Rs 86,400 crore or Rs 864 billion). Of course, the latter's 35 per cent growth is multiple times the 7-8 per cent forecast for the sector as a whole: which is why Kearney forecasts organised retail will cross $100 billion by 2012. Even at that level, though, it will be far behind traditional retail. Most manufacturers understand that. "For a very long time to come, the biggest chunk of business will be from general trade. The corner shop will not disappear," says V S Sitaram, executive director, consumer care division, Dabur India [ Get Quote ]. Even modern format retailers agree. "Microenterprise is the most adaptable retail entity in India. It will always remain relevant," points out Damodar Mall, president and CEO, foods business, Future Group.

Still, with the rise of modern retail outlets, the nature of shopping will change. While stock-up purchases (buying the month's groceries, for instance) are likely to move to the supermarkets and hypermarkets, top-ups (when you run out of, say, shampoo, in the middle of the month) will continue at local stores. That shift in buying habits has far-reaching consequences for consumer product companies. What's in store FMCG companies in India have had a fairly smooth run until now - given that the average kirana is 150-200 sq ft and has space for less than 1,000 SKUs, they didn't need to create endless product variations and extensions of the same brands. Compare this with Barry Schwartz's list in his 2004 bestseller The Paradox of Choice: Why Less is More, based on a visit to his local supermarket in the US: 285 types of cookies (21 options in chocolate chip alone), 95 different snacks, 360 shampoo types, 40 options for toothpaste, 275 varieties of breakfast cereal, 175 types of teabags. Schwartz's supermarket was a "not particularly large store", but Indian consumer goods companies would struggle (and fail) to stock even that level of products (and remember, this book is three years old): Cadbury India has over 100 SKUs in two categories, Procter & Gamble sells over 320 SKUs across five categories, while Hindustan Lever [ Get Quote ] has more than 700 SKUs in over 20 categories. If hypermarket visitors are not to be confronted by acres of empty shelves, then, consumer goods companies will have to expand their portfolios substantially. "The sheer number of SKUs will rise because of the capability to stock a wider and deeper assortment of products," agrees Sachin Gopal, sales director, Procter & Gamble India. It is not just numbers, of course. Modern format retail offers suppliers a chance to sell assortments of products, in different sizes and different bundling options: soaps in threes and sixes, bigger (2 kg and more) sacks of detergent or a variety pack of soup mixes, for instance, rather than the single packs seen in general trade. Planned properly, consumer goods companies can take advantage of different shopping habits at different shopping formats. "What we stock in a hypermarket is different from what we stock at a petrol pump shop. A convenience store does not need supervalue packs," agrees Sunil Sethi, director, sales and customer development, Cadbury India. Big packs and varying SKUs is just one angle to the product strategy. Unlike traditional outlets, where space and ambience are serious constraints, modern format stores also provide an ideal environment for FMCG companies to initiate product trials and launch premium or niche products. In mid-2006, for instance, Dabur India launched a 400 gram squeeze pack of Dabur Honey only through modern format stores. In the past year or so, the company has also launched two variants of its chyawanprash, a sugarfree version and another that claims to combat stress - both were launched in modern format

stores where the target customer is likely to shop and, perhaps more importantly, is willing to pay the 30 per cent premium these products charge over regular chyawanprash. "It is probably easier to sell such concepts through the organised retail route," agrees Sitaram. While organised retail provides brands much-needed visibility and platform for customerinteraction (more on that later), manufacturers also need to make some changes to packaging to bring their products in line with the requirements of modern retail and its customers. "Manufacturers will have to cede part ownership of the brand to retailers," says Raman Mangalorkar, head, consumer and retail practice, A T Kearney. That means complying not just with the requirement, but also ensuring expiry dates are prominently displayed, as is nutritional information and ingredient lists. The distribution dilemma Modern trade operates to a completely different set of rules. Given its superior bargaining power, it can negotiate better margins, wider product ranges and more frequent, speedier deliveries. For manufacturers, then, it makes sense to have a separate team servicing these outlets, working full-time to ensure both parties profit equally from the transactions. One way of doing that is by persuading retailers to route their purchases through suppliers' existing distribution networks. That's because for the supplier, selling directly to the retailer works only if the order size is large enough. To their credit, most large retailers are willing to accept such an arrangement. Their only condition: orders must be filled on time. Modern stores maintain lower inventories than traditional retail - nine days for Hypercity and under two weeks for Food Bazaar, compared to over three weeks for most kiranas - and losses due to a stockout are far more significant, for both the manufacturer and the retailer. Retail analysts say on-time order replenishments will become even more critical once the WalMart/ Bharti combine begins operations - the American retailer works almost entirely on crossdocking and is likely to demand higher service levels, including potential levies for delays in shipment. Meanwhile, manufacturers have to also keep their traditional distributors satisfied - a tough task, considering they offer modern trade more concessions and better promotions than their general trade partners. Hindustan Lever is working around that by involving family grocers, chemists and wholesalers in custom-made programmes that offer them targeted promotions, value deals and also build relationships through training sessions, newsletters and meetings. "General trade will continue to be the focus of all FMCG companies that want to grow," says a company spokesman.

For its part, Cadbury India has changed the rules for all its customers (retailers). It has created a menu-based approach - issues covered include prompt payment, efficiency and business building initiatives - that is common to all retailers, big and small. A couple of years ago, it also started the Purple Star programme for traditional retailers, where it tailors promotions and schemes for selected stores. "There is no differential treatment between retailers," says Sethi. Jo dikhta hai, woh bikta hai The earlier approach to marketing was simple enough: make sure the product is visible - on store shelves and through mass media advertising - and it will more or less sell itself. With the evolution of modern retail, though, the emphasis is shifting to in-store displays and promotions probably also because for the first time, the space for such initiatives is available. But manufacturers no longer have the last word on what will happen at the store. "Modern trade has a significant say in promotions, perhaps because it offers far superior results with a much faster lead time," says Future Group's Mall. Cadbury India's Sethi points out that retailers are more open to brand promotions and displays including posters, gondolas and danglers - when manufacturers back up their ideas with shopper insights. "There will be a shift from traditional media to increased communication at the point of purchase," he says. Initiatives that help grow the category as a whole are particularly welcome, say analysts, since that boosts the retailers' revenue. And many FMCG companies are predicting that spends on promotion, in-store and point of purchase displays will increase significantly from the present 20-30 per cent share of the marketing budget.

RETAILING IN INDIA:

A challenging opportunity

... I will say that if you're alive you've got to flap your arms and legs, you've got to jump around a lot, for life is the very opposite of death..... Every game is a knife-edge balance between reward and risk. Rewards are received at the end of the game if one has borne all the risk and is alive and kicking till the end. Indian retailing industry has been looked upon as a dream come true but for many entrepreneurs it has become a nightmare.

In this study we make an attempt to jot down the various problems concerning the Indian retail sector. Since a boon from one's viewpoint may be a curse from another's, so we have tried to ignore all types of biases. In some cases suggestive measures are also suggested. These measures are surely not mutually exclusive but may be (informally) collectively exhaustive.

Conspicuousness and eccentricity of Challenges

Major Challenges

1. Amalgamation or Confusion- According to Tata Strategic Management Group, India has a high density retail structure of 1 retail outlet per 90 people and is the 9th largest retail market in the world. But the structure of the retail industry in India is in utter jumble. The parallel operation of convenience stores, supermarkets, hypermarkets and specialty stores in the economy is bewildering. According to the 'Wheel of Retailing Theory', certain loopholes in one of the forms of marketing can get communicated to other forms also.

2. What to sell- Another bemusement is the category of items to be offered. According to researches, 41 percent of total consumption expenditure goes to the segment of food and groceries and it accounts for 77 percent of total retail sales. So it is obvious that this is the most preferred section of retailers. But unfortunately the foible taste bias for 'wet market' (i.e. fresh food available through hawkers) has marred this prospect also. Therefore supply chain management, storage of fresh perishable foods and persuading the customers that the food is inexpensive despite being fresh are genuine challenges to the newcomers. Diversifying the product base to consumer products such as readymade garments, furnitures, mobiles and computers can mitigate the losses, if any from food marketing and also broaden the reach to consumers.

3. Nostalgia- Indian shopping habits are no different. People tend to attach qualities like honesty, fair price, good behaviour etc. to shopkeepers with whom they have been dealing right from childhood. They find no reason to go to a distant megastore without any genuine reason. This problem is difficult to deal with as it demands a change in long-formed mindset. Organised retail outlets can overcome this problem by employing eligible local peoples who can interact in vernacular language and win the confidence of people.

4. Information Technology- This is a major problem and India must act fast if it wishes to create a smooth field for organized retailing. Digitization of services will make transfer of goods easy and an improvement in supply chain management will definitely play a significant role in attracting more

consumers and less consumer grievances. Besides, it will generate easier payments option for customer and easier money movement for the CEOs of these highly diversified malls.

Minor Challenges

1. Human resource crunch- the concern for insufficient manpower in the industry has been in news for the last few months. This fear is somehow unfounded. The retail industry according to recent reports is growing at a rate of 100 percent. Kishore Biyani's Future Group i.e. the Big Bazaar chain of retail outlet alone provides employment to more than 18,000 people and is planning to expand its employment base to 34,000 by June 2008. If we add to this the foray by mega players like Reliance and Bharti-Walmart then the fear can surely turn into a misperception. Retailing mainly deals with hard-selling of space, trade of stocks and building of relationships. Since most of the openings are for front line shop people, a graduation will suffice. Nowadays many institutes also provide post-HSC and post-graduate retailspecific courses.

2. Hindrances from government- Some political parties want the government to amend laws and improve curbs so that the mega players can't openly decimate the unorganized retail sector. This is a conclusion based on a myopic outlook and must be amended for a long term strategy. The fear is baseless because of the reasons mentioned above. The megastores will no doubt provide employment to the less educated masses. Also taking business away specially from small food vendors is more easily said than done. Instead the limiting move will send wrong signals to the investors and will ward off investments when the states need it most. Allowing 51 percent retail FDI in single brand retailing is a welcome move in this direction. It is expected that the government will create further opportunities for the organized retail to come up as home grown investment is always sweeter than foreign investment.

ABSTRACT The revolution in retailing industry has brought many changes and also opened door for many Indian as well as foreign players. In a market like India there is a constant clash between challenges and opportunities but chances favour those companies that are trying to establish themselves. So to sustain in a market like India companies have to bring innovative solutions. Indian market has potential to accommodate many retail players, because still a small proportion of the pie is organized. This paper discusses the challenges like merchandising mix, retail differentiation, supply chain management and also competition from supplier's brand in the Indian perspective. Key words- Retail differentiation, Supply chain, Merchandising Mix, Private level brand.

1.0 Introduction Retailing is still in its infancy in India. In the name of retailing, the unorganised retailing has dominated the Indian landscape so far. According to an estimate the unorganized retail sector has 97% presence whereas the organized accounts for merely 3% . Industry has already predicted a trillion dollar market in retail sector in India by 2010. However, the retail industry in India is undergoing a major shake-up as the country is witnessing a retail revolution. The old traditional formats are slowly changing into more complex and bigger formats. Malls and mega malls are coming up in almost all the places be it metros or the smaller cities, across the length and breadth of the country. A McKinsey report on India (2004) says organized retailing would increase the efficiency and productivity of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share of employment of retail in India is low, even when compared to Brazil (14%), and Poland (12%).Govt of India's plan of changing the FDI guidelines in this sector speaks of the importance attached to retailing. Recently moves by big corporate houses like Reliance Industries has further fuelled the major investments in retail sector. A strategic alliance, land acquisitions in prime areas give the essence of the mood in this sector. Both MNCs and Indian firms want to get their share of this burgeoning pie. Notable in Indian firms are Pantaloons Retail & Big Bazaar, Trent's Westside, Shopper's stop, Reliance and Subhiskha, Wills Lifestyle stores, Caf Coffee Day, which are present in India in different retail formats. Wal-Mart stores have just started operations in India. Some leading retail coffee chains of the world like Starbucks, Barnies are planning to expand in a major way in India. 2.0 THE INDIAN RETAIL SECTOR India is the country having the most unorganized retail market. Traditionally it was a family's livelihood, with their shop in the front and house at the back, while they run the retail business.More than 99% retailer's function in less than 500 square feet of shopping space. Global retail consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs 35,000 crore in the year 2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself.There is no doubt that the Indian retail scene is booming. A number of large corporate houses Tata's, Raheja's, Piramals's, Goenka's have already made their foray into this arena, with beauty and health stores, supermarkets, self-service music stores, new age book stores, everyday-low-price stores, computers and peripherals stores, office equipment stores and home/building construction stores. Today the organized players have attacked every retail category. The Indian retail scene has witnessed too many players in too short a time, crowding several categories without looking at their core competencies or having a well thought out

branding strategy. The growth rate of super market sales has been significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience. With growth in income levels, Indians have started spending more on health and beauty products. Here also small, singleoutlet retailers dominate the market. In recent years, a few retail chains specialised products have come into the market. Although these retail chains account for only a small share of the total market, their business is expected to grow significantly in the future due to the growing quality consciousness of buyers for these products .Numerous clothing and footwear shops in shopping centres and markets operate all over India. Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and footwear stores have modern products and attractive displays to lure customers. With rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely that the traditional outlets will survive the test of time. Despite the large size of this market, very few large and modern retailers have established specialized stores for products. There seems to be a considerable potential for the entry or expansion of specialized retail chains in the country. The Indian durable goods sector has seen the entry of a large number of foreign companies during the post liberalization period. A greater variety of consumer electronic items and household appliances became available to the Indian customer. Intense competition among companies to sell their brands provided a strong impetus to the growth for retailers doing business in this sector. Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. There are specialized retailers for each category of products (books, music products, etc.) in this sector. Another prominent feature of this sector is popularity of franchising agreements between established manufacturers and retailers. A strong impetus to the growth of retail industry is witnessed by economic boom and driver of key trends in urban as well as rural India. 2.1 Key Trends in Urban India: * Retailing in India is witnessing a huge revamping exercise.

* Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion. * India is rated the fifth most attractive emerging retail market: a potential goldmine

* Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. * India is rated the fifth most attractive emerging retail market: a potential * Food and apparel retailing key drivers of growth. * Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. 2.2 Key Trends in Rural India: * Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption goldmine

* ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hypermarkets. 3.0 The Hidden Challenges Modern retailing is all about directly having "first hand experience" with customers, giving them such a satiable experience that they would like to enjoy again and again. Providing great experience to customers can easily be said than done. Thus challenges like retail differentiation, merchandising mix, supply chain management and competition from supplier's brands are the talk of the day. In India, as we are moving to the next phase of retail development, each endeavor to offer experiential shopping. One of the key observations by customers is that it is very difficult to find the uniqueness of retail stores. The problem: retail differentiation. The next problem in setting up organized retail operations is that of supply chain logistics. India lacks a strong supply chain when compared to Europe or the USA. The existing supply chain has too many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor - Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retail chains will have to build a supply chain network from scratch. This might run foul with the existing supply chain operators. In addition to fragmented supply chain, the trucking and transportation system is antiquated. The concept of container trucks, automated warehousing is yet to take root in India. The result: significant losses/damages during shipping. Merchandising planning is one of the biggest challenges that any multi store retailer faces. Getting the right mix of product, which is store specific across organization, is a combination of customer insight, allocation and assortment techniques. The private label will continue to compete with brand leaders. So supplier's brand wiil take their own way because they have a established brand image from last decades and the reasons can be attributed to better customer experience, value vs. price, aspiration, innovation, accessibility of supplier's brand. 4.0 Strategies 4.1: Right Positioning The effectiveness of the mall developer's communication of the offering to the target customers determines how well the mall gets positioned in their minds. At this stage, the communication has to be more of relative nature. This implies that the message conveyed to the target customers must be effective enough in differentiating the mall's offering from that of its competitors without even naming them. The message should also clearly convey to the target audience that the mall offers them exactly what they call the complete shopping-cum-entertainment point that meets all their expectations. The core purpose is to

inform the target customers about the offering of the mall, persuade them to visit the mall and remind them about the mall. The mall developer can create awareness about the offering among the target customers in a number of ways. Various communication tools available to the mall developer for this purpose may include advertising, buzz marketing (WoM), celebrity endorsement, use of print media, press releases and viral marketing .Once the message is being conveyed through these channels, the mall developer must add a personal touch to his message by carrying out a door-to-door campaign in order to reinforce the message. 4.2: Effective Visual Communication Retailer has to give more emphasis on display visual merchandising, lighting, signages and specialized props. The visual communication strategy might be planned and also be brand positioned. Theme or lifestyle displays using stylized mannequins and props, which are based on a season or an event, are used to promote collections and have to change to keep touch with the trend. The merchandise presentation ought to be very creative and displays are often on non-standard fixtures and forms to generate interest and add on attitude to the merchandise. 4.3: Strong Supply Chain Critical components of supply chain planning applications can help manufacturers meet retailers' service levels and maintain profit margins. Retailer has to develop innovative solution for managing the supply chain problems. Innovative solutions like performance management, frequent sales operation management, demand planning, inventory planning, production planning, lean systems and staff should help retailers to get advantage over competitors. 4.4: Changing the Perception Retailers benefit only if consumers perceive their store brands to have consistent and comparable quality and availability in relation to branded products. Retailer has to provide more assortments for private level brands to compete with supplier's brand. New product development, aggressive retail mix as well as everyday low pricing strategy can be the strategy to get edge over supplier's brand. 5.0 Conclusion: In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing Positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy.

3 pressing issues facing retailers and marketers using mobile

By Chantal Tode Marketers are looking for the best ways to reach consumers via mobile There is no doubt that mobile is growing, but the industry faces several pressing questions if it wants to continue moving along the same path. Mobile applications and the mobile Web have grown quickly in the past couple of years to the point where well-known national brands are regular players in the space. However, mobile is still fragmented and marketers need to be thinking two or three steps ahead if they want to meet consumers needs easily and efficiently. Mobile advertising whether through mobile bar codes, on the mobile Internet or via applications is now no longer a trial medium for marketers, said Laura Marriott, chief executive officer at NeoMedia Technologies, Atlanta, GA. Mobile has the ability to breathe new life into traditional and digital campaigns, enabling engagement with the consumer on impulse. But because mobile is such a personal communications channel, there are specific issues unique to mobile marketers must address while still keeping their eye on the overall marketing strategy, per Ms. Marriott. Here is what industry experts have to say about the top issues facing mobile marketers. How to best engage customers using tailored communications While there is a lot of talk about location-based targeting via, marketers should be careful to match consumer need and behavior with their campaign strategy, considering all possible ways to tailor communications to provide value. Access to relevant content, discount coupons, or exclusive information can help grab consumer attention and encourage interaction, Ms. Marriott said. This tried-and-true marketing strategy is a great way to increase a user base and will promote user participation in the campaign, so be sure that any communication is tailored to the target consumer using the data available to you and offers value in a form suitable for both brand and campaign, she said. Right now, marketers are looking for ways to engage in cross-channel targeting across every mobile channel they are in. This is not easy because mobile is not a cookie-based environment and there is no standardization across mobile ad units. However, the payoff could be significant.

This year weve seen a lot of interest in using the same targeting metrics from online in mobile, said Zaw Thet, CEO of 4Info, San Mateo, CA. As this happens, there will be an exponential growth in mobile as marketers start to move their online budgets into mobile, he said. Geotargeting, in particular, deserves attention. With all the attention being paid to mobiles consumer privacy issues in Washington and by consumer advocates, many are watching to see what the impact will be on the use of location in mobile advertising. A big focus for mobile marketers is on using mobile to send consumers a targeted mobile offer when their phone shows they are in close proximity to an advertiser. That is the Holy Grail of what location is capable of but, the question is will consumers be comfortable with that and do retailers need that level of granularity, said Brett Leary, vice president and director of the mobile practice at Digitas, Boston. There is a big difference in the implications for privacy between targeting at the ZIP code level versus targeting three feet away and that needs to get sorted out, he said. Looking further ahead, however, marketers may want to consider whether it makes more sense to have apps across multiple devices or a single mobile Web presence. As the number of platforms has grown, marketers are having to update apps and push this out to all these different platforms, which can be time consuming and expensive. Marketers want to want to be able to reach as wide a targeted audience as possible, said Neil Strother, practice director of mobile marketing strategies and mobile services at ABI Research, Kirkland, WA. The mobile Web is that standardized platform. What role should mobile play in a brands overall marketing strategy? Marketers need to plan ahead and integrate mobile into the marketing mix if they want to get the most out of it. This will help insure that interactivity is a key element of the campaign itself and not simply added as an afterthought, NeoMedias Ms. Marriott said. Continued consumer engagement should be a key benchmark in determining the overall success of your campaign, so planning for it early on will only serve to bolster consumer satisfaction with your campaign. This means marketers should align their mobile efforts with the customer journey and not have a separate strategy for mobile. If you treat mobile in a siloed way, you are not able to find those insights that enable us to create greater relevancy with apps and mobile ads, Digitas Mr. Leary said.

Metrics to use to measure the success of a mobile campaign This needs to address the fragmentation that currently exists in mobile advertising. There is a lot of fragmentation with iAd, other display ad formats and newer emerging formats such as rich media, Mr. Leary said. All of these need to be smoothed into an efficient system in order for marketers to spend more in mobile. How the industry standardizes measurement is something a lot of players in the industry have their eyes on. Because mobile has the ability to connect the digital and physical worlds, the question can we find the way to close the loop between these two worlds when it comes to marketing, Mr. Leary said. This represents an important opportunity to differentiate mobile because if the industry can figure out a way to tie back an in-store purchase to a mobile marketing message the purchaser received. Companies such as Nielsen and 4Info and trying to make this happen. Being able to provide a clear picture of mobiles return on investment could have big ramifications. It is going to encourage repeat action, spread overall usage of the medium and investment in it by advertisers, Mr. Leary said. First of all, however, the industry needs to address the fragmentation in mobile ad units. Unlike online, there is not really an easy way to get cross-channel accountability in mobile, 4Infos Mr. Thet said. What needs to happen is for marketers to be able to buy mobile ad units from one source and to easily view metrics in one report for all of their mobile activity, per Mr. Thet. We are starting to see more of this with more ad networks starting to support third-party tracking, Mr. Thet said.

Problems faced by organized Retail industry in India

By

Mr. R. Sethumadhavan
BSc, MBA, M.Phil

Faculty-Management Studies Tamilnadu College of Engineering Coimbatore-641 659

INTRODUCTION: India has 12 million retail outlets. The retail sector is the second largest source of employment and the job market is hugely receptive to retailing expertise as more and more B-schools are now focusing on the sector and large retailers are setting up retail academies. It is estimated to create 50,000 jobs a year in the next five years.

MARKET SIZE: The retail market in India is estimated at Rs.5,88,000 crore. Of this the unorganized market is worth Rs.5,83,000 crore and the organized market is Rs.5,000 crore. OPPORTUNITY: Over 8% of India's population is engaged in retailing. According to ASSOCHAM, the total retail market is expected to grow by 20% annually and is one of the fastest growing sectors in India. PROBLEMS: 1. The organized retail industry in India is faced with stiff competition from the unorganized sector. 2. There is a shortage of quality real estate and infrastructure requirements in our country. 3. Opposition to Foreign Direct Investment from small traders affects retail industry. 4. Very high stamp duties on transfer of property affects the industry. 5. Shortage of retail space in central and downtown locations also hinders the growth of retail industry. 6. Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is posing problems. 7. Land-use conversion is time consuming and becoming complex. 8. For settling property disputes, it consumes lot of time. 9. Rigid building laws makes procurement of retail space difficult.

10. Non residents are not allowed to own property except they are of Indian origin. 11. Prohibition of Foreign investment in real estate business. 12. Customs duties are levied on import of goods in India. CONCLUSION: The organized retail industry is facing lot of opposition from traders, politicians and the government has to formulate a separate policy for the industry. FDI needs to be encouraged and land acquisition rules required modification. Retail has to be recognized as a separate industry and to be given fair treatment by all.

PROBLEMS The retail industry is a driving force in the American economy, so much so that news reports often base at least part of their perception of the economy on how the retail industry is performing. Aside from the major economic ebb and flow of the buying seasons and how they affect retail sales, the retail industry as a whole has a number of other major problems that it must often deal with.

Employee Turnover
Lack of worker continuity, or employee turnover, is one of the major problems faced by the retail industry. Columbus IT notes that the typical turnover rate in North American retail is much higher than in European countries and often ranges between 200 and 300 percent. Employees coming in and out of your business as if it were a revolving door only creates problems for human resource professionals who must constantly find and train new staff, which can eat up valuable time and resources.

Auditing
Auditing is another problem that the retail industry faces on a regular basis. Retail businesses are regularly engaged in competition with one another, and this competition can create price wars, forcing a need to keep tight control over inventory and other important data. MetricStream, Inc. notes that the retail industry is often faced with inefficient and poor auditing plans that make competing with other companies difficult. The company notes that existing auditing systems may be outdated and provide inadequate audits needed to stay competitive.

Economic Challenges
Another area of challenge for the retail industry is the economic uncertainty it faces moving forward. The retail industry as a whole is largely dependent upon the economic well being of the

nation. As the nation prospers and people have more money to spend, the retail industry generally flourishes. However, in more difficult economic times, the retail industry is often faced with potential shrinkage. Columbus IT also indicates that the future uncertainty of global economic markets makes economic planning difficult in the retail world.

Technology
Keeping up with the pace of modern technology is another problem the retail industry faces. For instance, retail point of sale technology often uses computer systems that are several years behind the computer industry as a whole. An article in Mobile Commerce Daily by Peter Finocchiaro points out that the inability of retail industry technology to keep up with initiatives such as mobile digital coupons is a problem that the industry regularly faces. Given the rate of turnover and the constantly changing economic environment, constantly upgrading and keeping their equipment and networks running on the newest technologies can be difficult for retail leaders.

Problems in the Retail Industry in the UK

Tony Supperstone, Vice President, R3; Consultant, BDO Stoy Hayward LLP, Birmingham
The retail business has to be one of the most cut-throat industries in the world. In 2005 and already in 2006 we have seen well-known names going to the wall. Year after year, we are called in to advise companies in the autumn and, year after year, they say that their problems will be eradicated by a good Christmas. This may be a little nave. R3 (the association of business recovery professionals) thinks it is such a big issue that a major part of our 2006 annual conference will be devoted to the retail industry. We will examine failures and also look at turnarounds and find out how they have been dealt with in each case. In terms of high street names, one only has to look at Marks & Spencer, which seemed to be in free fall in 2004. Once a business as vast as this starts struggling and the papers keep talking about their problems, it becomes increasingly difficult for it to pull out of the decline. Shoppers desert the stores which then become over-stocked and the only way that they can sell the stock is to have a sale which leads to further losses. Stuart Rose seems to be introducing new strategies and the publicity has improved considerably as, it would appear, did the Christmas trading. The morale of the business is good and staff can see that someone is in control and determined to turn the business around and take it back to its original position as the leading retailer in the UK. So, going back to the earlier point, why are businesses nave in thinking that a good Christmas will sort out all their problems? Business restructuring professionals have to explain to owners that there are other significant factors to take into account such as the overtime they will have to pay staff over that period, the rents due on 25 December, and the amounts due to suppliers for the substantial quantities of stock delivered pre-Christmas. I heard recently about a company which had been forced into administration just after Christmas the reasons were fairly classic but, unfortunately, they had not taken advice early enough and were left with no alternatives. It was a long-established family business which had not kept pace with the times the shops looked old-fashioned and their competitors who, in many cases, had

shops in the same high streets were miles ahead of them in terms of stock and brand. The 71year-old sales director was on a cruise at the time the balloon went up and he might have been better advised to have stayed there! Administration is a tried and tested option for companies in the retail trade because it gives the administrator time to assess all the options and to close the poorly performing branches. Landlords cannot take action against the company and a neat package can be presented to potential purchasers who know that they will not have to take on onerous leases which they do not need. This may go some way to explaining why so many high street names have been in the press lately, seeking the protection referred to above. Consider Alders, Courts, Unwins, Ciro Citterio, All Sports, Past Times, Furnitureland, World of Leather and New World of Leather, Klaussner, Eisenegger, Kookai, Gadget Shop. Just to name a few.