Page 11 - DMGT552_VISUAL_MERCHANDISING

Visual Merchandising

Notes or operate on their own for long, and will soon sellout or merge with the much larger global
retail chains.
The increasing magnitude of retailing as a business in absolute terms can also be estimated by
the fact that the sector accounts for a major portion of the GDP of many countries. Our country
has been extremely slow in responding to the trend of globalisation of retailing, as a result of
which many of the distribution and retailing methods adopted here are still considered to be
pre-historic. While many countries around the world have started considering retailing as an
integral part of their social infrastructure, India still has to realise the benefits of organised
retailing that accrue to society at large.

Self Assessment

State whether the following statements are true or false:

5. The ways in which retailers evolve have been the subject of academic debate for over half
of a century.
6. Many of the academic references use the term ‘retail institutions’ to describe a type of
retail outlet.
7. It is not easy to confuse the term retail institution with a large retail business (stores like
Marks and Spencer are often referred to as institutions) and so the term format will
continue to be used in this discussion.

8. The evolutionary theories attempt to provide some predictive suggestions relating
to the likely pattern of development of retailer types rather than specific retail
companies.

1.3 Retail Formats

Indians debate which side—traditional unorganised or national organised—will prevail. One
such analysis entitled “Indian Retailing—Will it be Traditional or Modern” states,
“Modern retailing may take away a sizable share from traditional retailing but will never close
down the opportunities of selling certain categories in specific denomination for the traditional
retailers.”
The retail industry in India is currently growing at a great pace and is expected to go up to
US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018
at a CAGR of 10%. As the country has got a high growth rates, the consumer spending has also
gone up and is also expected to go up further in the future. In the last four year, the consumer
spending in India climbed up to 75%. As a result, Indian retail industry is expected to grow
further in the future days. By the year 2013, the organised sector is also expected to grow at a
CAGR of 40%.

1.3.1 Trends in Retail Format

Traditionally three factors have plagued the retail industry:
1. Unorganised: Vast majority of the twelve million stores are small “father and son” outlets.
The employees in such stores are completely on the whims and wishes of the shop owner.
Huge amounts of taxes are evaded from the government.
2. Fragmented: Mostly small individually owned businesses, average size of outlet equals
50 s.q. ft. Though India has the highest number of retail outlets per capita in the world, the
retail space per capita at 2 s.q. ft per person is amongst the lowest.

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