06-05-2013, 03:39 PM
Study on changing consumer preferences towards Organised retailing from un-organised retailing (Delhi /Noida)
Study on changing consumer.pdf (Size: 330.5 KB / Downloads: 28)
Introduction to Indian retail industry:
The sea of change can pull customers in many directions. It is our
responsibility to light the way and take care of them… before the
competition does.
RETAILING Means “Re-tailing” to the customers so that they comeback.
Retailing consists of all activities involved in selling goods and services to
consumers for their personal, family, or household use. It covers sales of
goods ranging from automobiles to apparel and food products, and services
ranging from hair cutting to air travel and computer education. Sales of
goods to intermediaries who resell to retailers or sales to manufacturers are
not considered a retail activity.
The Indian retail story couldn't have been more different. India has approx
12 million retail stores, more than rest of the world put together. But the per
capita square feet area under retail is just 2 sq.ft or 0.2 sq. meters with
fragmented kirana stores being the predominant players.
Retailing in India has remained in the unorganized sector and largely
untouched by corporate. The first decade of modern retail in India has been
characterized by a shift from traditional channels to new formats including
department stores, hypermarkets, supermarkets and specialty stores across a
range of categories.
Modern retail formats have mushroomed in metros and mini-metros, in the
last few years modern retail has also established its presence in the second
rung cities. Thus, exposing the residents of these cities to shopping options,
they have never experienced before. It has been forecasted that the share of
modern retail will increase from 2 per cent currently, to about 15-20 per cent
over the next decade.
Traditional Convenience Stores:
Traditional convenience stores are too well established in India than to be
wiped out and besides there is uniqueness in the traditional items that
represent the sub-continent. The retail stores in India are essentially
dominated by the unorganized sector or traditional stores. Infact the
traditional stores have taken up 98 percent of the Indian retail market. Now
stores run by families are primarily food based and the set up is as Kirana or
the 'corner grocer' stores. Basically they provide high service with low
prices. If the stores are not food based then the type of retail items available
are local in nature.
The traditional family run convenience stores can take pride in the fact that
the Kirana is the most common outlet forms for the consumers. The tough
competition for convenience stores are coming from organized retail stores
dealing in food items, like:
· Apna Bazaar
· Canteen stores
· Food World
· Subhiksha
· Food Bazaar
Convenience Stores are open for long hours and is one of the formats of the
Indian retail stores that cater to basic needs of the consumer. A good
example of such would be Convenio. These stores are found in both
residential as well as commercial markets. The food products of traditional
family run convenience stores are comprised of branded as
well as non-branded items. The benefits of family run convenience stores is
that they give importance to:
· Personal touch
· Facilities of credit
· Quick home delivery
· Non-food based stock comprises of multiple and varieties of local
brands.
The future of such stores as they face competition from organized sector,
would depend on the following particulars:
· Place and capacity
· Diligent area coverage
· Disciplined work schedule
· Managing turnover
· Revenue from assets
· Customer service and satisfaction
The traditional family run convenience stores serves the purpose of the
housewives who definitely wants to avoid traveling long distances to
purchase daily needs. The convenience factor in terms of items, among
people in general can be highlighted as below:
· Groceries
· Fruits
· Drug Store
· Necessary stationery
As such traditional family run convenience stores are here to stay and cannot
be oversized by the organized retail sector besides, it represents the variety
of India.
Indian organized retail market:
Indian organized retail market is growing at a fast pace due to the boom in
the India retail industry. In 2005, the retail industry in India amounted to Rs
10,000 billion accounting for about 10% to the country's GDP. The
organized retail market in India out of this total market accounted for Rs 350
billion which is about 3.5% of the total revenues.
Classification of Indian retail sector:
a) FOOD RETAILERS
There are large number and variety of retailers in the food-retailing sector
Traditional types of retailers, who operate small single-outlet businesses
mainly using family labour, dominate this sector In comparison, super
markets account for a small proportion of food sales in India, However the
growth rate of super market sales has being 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.
b) HEALTH & BEAUTY PRODUCTS
With growth in income levels, Indians have started spending more on health
and beauty products .Here also small, single-outlet retailers dominate the
market .However in recent years, a few retail chains specializing in these
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.
C) CLOTHING & FOOTWEAR
Numerous clothing and footwear shops in shopping centers 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. However, with rapid
urbanization, and changing patterns of consumer tastes and preferences, it is
unlikely that the traditional outlets will survive the test of time.
Consumer behavior and retailing decisions:
Consumer behavior refers to the mental and emotional process and the
observable behavior of consumers during searching, purchasing and post
consumption of a product or service. Consumer behavior involves study of
how people buy, what they buy, when they buy and why they buy. It blends
the elements from psychology, sociology, sociopsychology, anthropology
and economics. It also tries to assess the influence on the consumer from
groups such as family, friends, reference groups and society in general.
Buyer behavior has two aspects: the final purchase activity visible to any
observer and the detailed or short decision process that may involve the
interplay of a number of complex variables not visible to anyone.
Organized vs Unorganized Retail:
In the developed economies, organized retail is in the range of 75-80 per
cent of total retail, whereas in developing economies, the unorganized sector
dominates the retail business. The share of organized retail varies widely
from just one per cent in Pakistan and 4 per cent in India to 36 per cent in
Brazil and 55 per cent in Malaysia (Table 2.2). Modern retail formats, such
as hypermarkets, superstores, supermarkets, discount and convenience stores
are widely present in the developed world, whereas such forms of retail
outlets have only just begun to spread to developing countries in recent
years. In developing countries, the retailing business continues to be
dominated by family-run neighbourhood shops and open markets. As a
consequence, wholesalers and distributors who carry products from
industrial suppliers and agricultural producers to the independent familyowned
shops and open markets remain a critical part of the supply chain in
these countries.