Page 45 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes The Informed Consumer

Over the years, the increasing literacy in the Country and the exposure to developed nations via
satellite television or by way of the overseas work experiences, the consumer awareness has
increased on the quality and the price of the products/services that is expected. Today more and
more consumers are vocal on the quality of the products/services that they expect from the
market. This awareness has made the consumer seek more and more reliable sources for purchases
and hence the logical shift to purchases from the organized retail chains that has a corporate
background and where the accountability is more pronounced. The consumer also seeks to
purchase from a place where his/her feedback is more valued.

Self Assessment

Fill in the blanks:

1. A .................. business that sells products or services that appeal to customers’ needs has the
ability to stand up against competition.
2. .................. is world’s second largest grower of fruits and vegetables after Brazil and China.

3. .................. growth at over 5.5% over the last eight years, forex reserves of over $100.
4. The economic development was largely attributed to its dominance in the Information
Technology Sector in the .................. market place.

3.6 Evolution of Organized Retailing

Retailing, one of the largest sectors in the global economy, is going through a transition phase
in India. For a long time, the corner grocery store was the only choice available to the consumer,
especially in the urban areas. This is slowly giving way to international formats of retailing. The
traditional food and grocery segment has seen the emergence of supermarkets/grocery chains,
convenience stores and fast-food chains.
The traditional grocers, by introducing self-service formats as well as value-added services such
as credit and home delivery, have tried to redefine themselves. However, the boom in retailing
has been confined primarily to the urban markets in the country. Even there, large chunks are
yet to feel the impact of organized retailing. There are two primary reasons for this. First, the
modern retailer is yet to feel the saturation effect in the urban market and has, therefore,
probably not looked at the other markets as seriously. Second, the modern retailing trend,
despite its cost-effectiveness, has come to be identified with lifestyles.
In order to appeal to all classes of the society, retail stores would have to identify with different
lifestyles. In a sense, this trend is already visible with the emergence of stores with an essentially
‘value for money’ image. The attractiveness of the other stores actually appeals to the existing
affluent class as well as those who aspire to be part of this class. Hence, one can assume that the
retailing revolution is emerging along the lines of the economic evolution of society.
It was only in the year 2000 that the economists put a figure to it: ` 400,000 crore (1 crore = 10
million) which is expected to develop to around ` 800,000 crore by the year 2005 – an annual
increase of 20 per cent. Retailing in India is unorganized with poor supply chain management
perspective. According to a recent survey by some of the retail consulting bodies, an
overwhelming proportion of the ` 400,000 crore retail market is UNORGANISED. In fact, only
a ` 20,000 crore segment of the market is organized. As much as 96 per cent of the
5 million-plus outlets are smaller than 500 square feet area. This means that India per capita
retailing space is about 2 square feet (compared to 16 square feet in the United States). India’s per
capita retailing space is thus the lowest in the world.

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