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Unit 2: Structural Change in Retail Environment

store for a specific reason. This is where the “How may I help you?” greeting comes into play. Notes
Customers buy for the pleasure of it. Helping them achieve that goal is what makes the
salesperson, working within a carefully planned display, the most important key to a sale. Thus,
an understanding of the display, an evaluation of the consumer and the appropriate training of
the salesperson can convert even consumer durable/electronics stores with a smaller assortment
to succeed in retailing.

Luxury Retailing

The number of Indian households with an income of $100,000 or more and purchases of $9,000
on designer goods is growing and experts expect the segment to grow at 15% each year. With the
arrival of luxury retailers, wealthy Indians will become increasingly aware of the value of
designer brands. Tata International, the largest Indian leather exporter, has tied up with Lloyd,
a leading German footwear maker whose shoes will retail in Indian showrooms in a range
stretching from ` 9,000 to ` 45,000 a pair for men. The women’s range starts from ` 8,000. Lloyd
GmbH plans to hawk its top-of-the-line footwear through multi-brand luxury retail outlets and
by the year-end will introduce an exclusive Lloyd store in Delhi. They said that the size of the
premium market in the country is to the tune of ` 500 to ` 600 crore. Lloyd is a well-established
lifestyle brand part of the Ara group that sells close to 14 million pairs of shoes a year.
In a clear indication of global luxury retail kicking in the $1.28-billion (€ 1.09 billion) high-end
ready-to-wear German clothing major Hugo Boss has decided to set shop in the country. The
store will retail top-of-the-line Hugo Boss Black Label for men, which is business-oriented
urban wear. The base price for a suit will begin approximately at ` 35,000. There are no plans, as
of now, to introduce the range for women or the Orange and Green labels. Alternatively, even
Hugo the casual wear portfolio that has taken the world by storm. The reasons are clear. The
company has a market presence in 108 countries, with a strong presence in Japan and China.
BOSS already has a customer base among Indians, who currently buy our collections in shops
outside the country. Now we are bringing the market to the consumer. At the same time, we will
be building up the consumer base within India. Hugo Boss will not be the first luxury brand to
dig into the country’s blooming market for high-end lifestyle products, in particular clothes.
Ermenegildo Zegna, Louis Vuitton and Escada already have stores in place in Delhi and Mumbai.
BOSS is one of the few non-Italian labels that have succeeded in growing its market. Instead of
taking on the competition, it joined them. The brand is known to use the finest virgin wool,
cashmere, and cashmere mixtures from the leading Italian weavers Carlo Barbera, Loro Piana,
Torello Viera, not to mention rivals in the ready-to-wear segment Cerruti and Zegna.

Canali’s flagship store is to set shop at India’s oldest running five star hotel — the Taj Mahal
Palace & Towers, Mumbai — besides a host of others like Armani, Cartier, Bulgari, Rolex, Gucci,
Louis Vuitton to Prada to name a few. The entry of these brands at the Taj Palace means is that the
heritage wing of the hotel will add as much as 5,000 sq ft of new retail space. At present, the Taj
Mumbai has a total retail space of 25,000 sq ft. According to market reports, there are close to 23
people in the reckoning for the new space, which commands a rate of `750-1,000 per sq. ft. All the
new retailers will be on a three to six year licensee or franchisee arrangement. While the Palace
wing will define the super luxury shopping experience, the Towers wing will retain the small
shop formats with existing retailers for now, though it will be given the look, feel and unified
character in keeping with the new positioning and retail strategy. For the Palace wing, the focus
is to build an experience comparable to London’s Bond Street, or Chimes in Singapore, where
there has been an adaptive reuse of space. Unlike Europe, the U.S. or even South East Asia, India
has failed to create public spaces like Champs Elysee or a Bond Street.
Christian Dior has opened its first store in India. The luxury goods brand’s store in New Delhi
offers Indian consumers the haute couture from $1,000 handbags to $400 sunglasses. Luxury

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