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Unit 2: Structural Change in Retail Environment

6. ……………………. appraisal is important for the changing environment as it offers new Notes
opportunities to the organisation.
7. In India ……………………….. factors are the main consideration in retail business planning.

8. Every country has its own outlook and approach towards technology and
……………………..
9. Technological conditions determine the development of an organisation by
…………………… the efficiency, production and competitiveness.
10. ………………………….. has evolved the new marketing concepts like real-time marketing,
database marketing, integrated retailing.

2.2 Socio Demographic Change

Retailing in India is at a very nascent stage of its evolution, but within a short period of time it
will be in line with the global experience, going by the emerging trend indicators in the
environment.
During the next ten years, the Indian population is expected to grow by 14 percent. But this
increase will not be even across, various segments.
The number of children in the age group, 0-15 is expected to remain stable at approximately 30
million. This reflects a lesser demand for toys, games and some apparel segments. Nevertheless
these sectors are still expected to offer reasonably high growth, given the nascent stage of the
retailing industry in the country. The number of people in the age group 20-50 years will, in all
likelihood grow by 30%. The sales of cosmetics, skin care, hair dyes and other beauty care
products are likely to increase. More consumer resources will be spent on housing and retirement
planning. Hence real estate businesses and companies offering financial services are expected to
benefit.

The number of middle class households are expected to increase by about 25 percent. This
should result in a higher growth in home furnishings and decor, along with personal items like
apparel and fashion wear.
Dual income families are on the increase. A dual income family can spend more but has little
time for shopping. Therefore speed and convenience will become critical dimensions in the
retail business, in the years to come. The increase in population will also accentuate an increase
in per capita spending.

Urbanization is another factor contributing to the unprecedented growth in retailing. Rural-
Urban mobility has led to high customer density areas, which enables retailers to target a larger
number of customers with lesser number of stores, thus resulting in economies of scale for the
retailer.

An overall improvement in transportation structure and increased number of automobiles,
covering distances has become much easier. Now a customer can travel a long distance to reach
a particular shop if he/she sees value in shopping there.

2.3 Technology Change

Increasing the efficiency of business processes is a very important part of retailing today. Without
accurate data gathering, analysis and the visibility to plan precisely, retailers risk, losing their
competitive edge.

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