bridging the skill gap in the

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“BRIDGING THE SKILL GAP

IN THE

INDIAN RETAIL SECTOR”



OVERVIEW OF INDIAN RETAIL INDUSTRY:

Indian robust macro and micro economics fundamentals, such as :

1. robust GDP growth

2. higher incomes

3. increasing disposal income

4. favorable demographics and supportive government policies

These will accelerate the growth of the retail sector. Indian retail industry

is perhaps one of the most challenging, dynamics and exciting markets to

operate in. India is an economy of $1.43 trillion and expected to reach

$2.0 trillion by 2020.sixty percent of Indian total population lies between

15 to 35 years. Top ten cities of India account 10% of total population;

however account one third of disposal income. Organized retail, accounts

for around 5% of the total Indian retail market. Organized Retail has been

growing at an impressive rate of 35% to 45% Y-O-Y in the last few yearsCompared to 9-10% growth in the overall retail industry. Unorganized

retailing contributes to about 95% of total retail revenues. Unorganized

retailing which involves the local kirana shops, paan/beedi shops etc

continues to be the backbone of the Indian retail industry.



SEGMENT BASED ON RETAIL PRODUCTS:

1. food and grocery

2. Jewellery

3. Clothing,textiles and fashion

4. Watches

5. Footwear

6. Health care and beauty care

7. Pharmaceuticals

8. Consumer durables

9. Mobile handsets

10. Utensil, furniture

11. Entertainment

12. Books, music



SHARE OF VARIOUS SEGMENTS OF ORGANISED RETAIL:

Sl no Consumption

category Share in

Organized

Retail

Extent of

Penetration

1 Clothing, Textiles and

Fashion Accessories 38% 23%

2 Food and Grocery 11% 1%

3 Consumer Durables,

Home Appliances and

Equipments 9% 12%

4 Out of Home Food

(catering) services 7% 8%

5 Furnishings, Utensils,

Furniture - Home and

Office 6% 11%

6 Mobile handsets,

Accessories, and

Services 3% 10%

7 Entertainment 3% 5%



IMPORTANT FACTORS FOR INDIAN RETAIL SECTOR:

1. Leveraging technology

2. Efficient Supply Chain management

3. Rural market penetration

4. Customized solution

5. Customer relationship management

CORE PROCESS IN RETAIL:

1. Store operation

2. Merchandising

3. Logistic and distribution

4. Marketing

5. Procurement

6. Corporate services



DISTRIBUTION OF HUMAN RESOURCE BY EDUCATION LEVEL IN

RETAIL INDUSTRY:

5%

30%

10%

40%

15%

POST GRADUATE

GRADUATE

DIPLOMA

XII

CLASS X PASSED OUT

DISTRIBUTION OF HUMAN RESOURCES BY EDUCATION LEVEL



FUNCTIONAL DISTRIBUTION OF EMPLOYMENT IN ORGANIZED

RETAIL:

Major proportion of the employment in the retail sector is in front-end/retail assistant

profiles in stores. The function/activity-wise distribution of human resource in the

Organized Retail sector is shown in the following figure. Store operations account for

75%-80% of the total manpower employed in the Organized Retail sector

As there are very few courses which are specific to retail, graduates/post graduates

from other streams are recruited. Persons with education up to 12th Standard and 10

th Standard account for 55% of the workforce. The education profile of the human

resource will vary for retailers in small cities and rural areas where X/XII pass peopleaccount for a higher share of the workforce.

75%

8%

8%

9%

FUNCTIONAL DISTRIBUTION OF

EMPLOYMENT IN INDIAN RETAIL INDUSTRY

STORE OPERATION

MARKETING

MERCHANDISING

OTHERS



SHARE OF CITIES OF OPERATIONAL MALL SPACE IN INDIA :

Tier 1 : includes Delhi NCR, Mumbai, Bangalore, Chennai & Kolkata

Tier 2 : includes Hyderabad, Pune, Ahmedabad , Chandigarh, Jaipur & Luckhnow

Tier 3 : includes cities like Agra, Allahabad, Ludhiana, Kanpur etc

TIER-1

CITIES, 68%

TIER-2

CITIES, 18%

TIER-3

CITIES, 14%

TIER-1 CITIES

TIER-2 CITIES

TIER-3 CITIES

SHARE OF CITIES OF OPERATIONAL MALL SPACE IN INDIA



SKILL REQUIREMENTS AND SKILL GAPS IN STORE

OPERATIONS:

(A)FUNCTIONAL SKILLS:

1. Responsible for the day-to-day management of a department/ store

2. Proficient with spreadsheet and word processor tools to analyze sales and

generate sales reports

3. Understanding of various aspects of customer behavior. For e.g the profile

of customer as user/buyer will have impact on selection of merchandise.

The person should be able to communicate these insights to the salespersonnel

4. Understanding of the local market to provide inputs for the CRM initiatives,

sales promotion and in-store advertising. Awareness of local festivals and

other important occasions

5. Knowledge of offerings of competing stores/brands

6. Ensure optimum stock levels and avoid stock outs

7. Co-coordinating with logistics. Optimum inventory levels have a major

impact on the store top-line and bottom-line

8. Ability to negotiate with vendors to resolve issues relating to the quality

and price of products



(B)SOFT SKILLS:

1. Strong communication skills to interact with the store employees and

customers. Depending on the format, it is required to have proficient

Knowledge of English and/or the relevant vernacular language

2. Written communication skills (English) for sales and other routine reports

3. Man management skills to motivate the store

4. Ability to maintain inventory, achieving targets and maintaining store

margins.

(C)SKILL GAPS:

1. Inadequate understanding of cross functional activities such as logistics, in

store marketing and merchandising is limited

2. Man management skills to keep the employees motivated in the

Demanding work environment

3. Ability to adapt quickly to the changing customer/market trends

4. Insufficient knowledge of completion both in general and specifically local

to the catchment area of the store



SKILL REQUIREMENTS AND SKILL GAPS IN TRANSACTION

PROCESSING (BILLING ASSOCIATE):


1. The ease of transaction is a key factor in ensuring customer convenience.

Key responsibilities involve accurate and quick transaction processing.

2. Requisite computer skills. Understanding of transaction software/hardware

such as bar code reading machines, etc.

3. Knowledge of handling credit/debit card payments

4. Total cash &credit-card transactions and compare with cash register

receipts and enter the results in financial records, reporting cash surpluses

or shortfalls

5. Solving minor transaction software problems

6. Knowledge of offers underway in the store and its implications on billing

(B)SOFT SKILLS:

1. Good interpersonal skills to interact with the customers in a friendly

manner. Ability to handle customers with patience when credit-card

transaction is not approved, a requested item is out of stock or a refund

cannot be issued

2. Good oral communication skills to interact with the store employees and

customers. The executive should be able to communicate and explain the

billing amount to the customers

3. A working knowledge of English and vernacular language



(C)SKILL GAPS:

1. Inadequate knowledge of processing of transactions and managing cash

2. Inadequate knowledge of software related to transaction processing

3. Inadequate soft skills – ability to interact with customers in the

Presence of a long queue

SKILL REQUIREMENTS AND SKILL GAPS IN CUSTOMER

SERVICE REPRESENTATIVE:


1. Knowledge of current sales promotion schemes of the company and

ability to communicate the same to the customers

2. Ability to sell – i.e., selling skills

3. Knowledge of policies regarding exchanges

4. In depth knowledge of store offerings. The person should be aware of

the offerings of competing stores/brands. For e.g., in case of sales

person

5. engaged in apparel retail, knowledge of type of fabrics, styles, etc. of

competing brands would be important

6. Knowledge of product features such as :

i. brand options

ii. warranties

iii. features and benefits

iv. use/application

v. shelf life/use by dates

vi. care and handling

vii. storage requirements

viii. product



7. Ability to guide the customers to the relevant sections of the store. This is

important for formats such as supermarket and hypermarket which are

spread over a large area

8. Knowledge about the merchandise in inventory to help customers find the

desired merchandise which is not on display.

9. Ability to watch out for security risks and thefts, and know how to prevent

or handle these situations

10. Ability to cross sell

11. Ability to describe merchandise and explain use, operation, and care of

merchandise to customers

(B)SOFT SKILLS:

1. Good communication skills are a must for customer interaction. The

executive must be able to understand both the explicit and implicit

customer requirements such as :

(a) Size, color etc (in case of garments)

(b) price range (value for money)

(c) Usage ( For personal use or for gifting)(d) Convenience

(e) Flexibility

2. Ability to understand product information, store policies and procedures

3. Ability to interface effectively with customers - Great emphasis is attached

to adhering certain levels of behavioral norms/etiquettes while interacting

with customers. There is a code of conduct conveyed to employees in this

regard



(C)SKILL GAPS:

1. Inadequate product specific knowledge, especially at the entry level

2. Inadequate understanding of sales promotion, marketing and other

schemes

3. Inadequate communication skills and interpersonal skills is the major

concern as it is relatively easier to bridge gaps in functional skills

SKILL REQUIREMENTS AND SKILL GAPS IN

MERCHANDISING MANAGER /SENIOR MERCHANDISING

MANAGER:


1. Ability to conceptualize and execute window and in-store display

2. Ability to position signage at key locations

3. Responsible for the overall feel of the stores and for creating a pleasant

shopping ambience. The look and feel has to be consistent across stores and

need to be modified at suitable intervals to sustain customer interest

4. Ability to understanding of visual merchandising concepts, designing store

layouts, visual displays in store windows and on the sales floor. This is required

as retail space in a store is limited and has to ensure that the “retail brand” is

communicated properly

5. Understanding and knowledge of current market trends - ability to ensure that

items in high demand get more share of the shelf space. For e.g. , an apparel

retail merchandiser should know the colors, designs which are doing well at the

6. Sale counters and gives more focus to the same

7. Knowledge of products and customer behavior



(B)SOFT SKILLS:

1. Good oral communication and interpersonal skills to liaison with

Marketing/purchase and other departments

2. Adequate reporting skills

3. Knowledge of data analysis and the requisite tools such as spreadsheet to

analyze sales trends

4. Shortage of people with knowledge of merchandising concepts. Also, the

number of SKUs (Stock Keeping Units) handled in a retail store is very large and

hence it necessitates prior experience

5. Inadequate understanding of merchandising and its impact on the same – e.g.,

ease of access, relative position in the shelf, location in the trading area

6. Responsible for executing merchandising strategy

7. Ability to liaise with stores and purchase department.

8. Understand the store layout, display scheme and merchandising strategy and

customize it for different stores (stores may be different in size and may have a

different customer profile)

9. Routinely visit stores and ensure that the merchandising scheme is being

implemented appropriately

(C )SKILL GAPS

1. Shortage of people with knowledge of merchandising concepts. Also, the number of

SKUs (Stock Keeping Units) handled in a retail store is very large and hence it

necessitates prior experience.

2. Inadequate understanding of merchandising and its impact on the same – e.g., ease

of access, relative position in the shelf, location in the trading area.



3. Soft skills required for co-coordinating with other departments.

SKILL REQUIREMENTS PURHASE MANAGER/ CATEGORY

MANAGER:

(A)FUNCTIONAL SKILL:

1. Centralized purchase helps the organized retail firms to exploit the

advantages Of Scale. The manager should able to negotiate better pricing

and other payment terms with the suppliers.

2. Good understanding of the products purchased

3. Ability to track inventory levels

4. Knowledge of various sourcing alternatives and ability to search/select

various vendors

5. Ability to liaise with logistics and merchandising departments

(B)SOFT SKILLS:

1. Good oral and written communication skills are important to liaison with

the store managers and vendors

(C)SKILL GAPS:

1. Inadequate negotiation skills

2. Shortage of skilled people especially at the Manager levels

3. Soft skills required for co-coordinating with other departments



SKILL REQUIREMENT FOR PURCHASE EXECUTIVES:


1. Routinely interact with the various vendors and ensure that the delivery of

merchandise takes place in a timely manner. Identifying and screening of new

vendors.

2. Understand the characteristics of merchandise from probable vendors and

communicate the promising vendors to the senior management

(B)SOFT SKILLS:

1. Key responsibility is to ensure proper availability of merchandise in the retail

outlets.

2. Responsible for maintaining the warehouse operations. Should able to come up

with continual improvements to drive down the logistics cost.

3. Design and modify the logistic schemes in terms of location of warehouses and

transport mediums.

4. Negotiate with warehouse owners for leasing agreements and transport

operations

(C)SKILL GAPS:

1. Inadequate skills to customize the merchandising plan to varying

requirements of individual stores2. Insufficient soft skills to liaison with the stores and purchase

departments.

3. Insufficient ability to ensure timely delivery of merchandise during

peak demand season.



SKILL REQUIREMENTS FOR SENIOR MANAGER:

(A)FUNCTIONAL SKILLS

1. Key responsibility is to ensure proper availability of Merchandise in the retail

outlets.

2. Responsible for maintaining the warehouse operations should able to come up

with continual improvements to drive down the logistics cost.

3. Design and modify the logistic schemes in terms of location of warehouses and

transport mediums.

4. Negotiate with warehouse owners for leasing agreements and transport

operations

(B)SKILL GAPS:

1. (Stock Keeping Units) handled in a retail store is very large and hence the logistics

task is more demanding in the retail environment. Availability of experienced

Logistics personnel is a key challenge

SKILL REQUIREMENTS FOR MARKETING MANAGER/SR.

MARKETING MANGER/ MARKETING OFFICER :

(A)FUNCTIONAL SKILLS :

1. Knowledge of data analysis and the requisite tools like spreadsheets to formulate

loyalty programs and other CRM initiatives.

2. Ability to monitor the various CRM initiatives to gauge their effectiveness and

make suitable modifications from time to time



3. Understanding of customer profile to develop in store marketing campaigns and

sales promotion activities.

4. Ability to understand customer behavior. Should be aware of the seasonality

factors to ensure proper timing of the sales promotion schemes.

5. Ability to coordinate with media agencies Knowledge of CRM/sales promotion

activities of competing retail outlets. Should be able to

Develop schemes which can break through the clutter

(B)SOFT SKILL:

1. Oral Communication skills are essential for coordinating with the various store

managers and ensuring that the various campaigns are executed properly.2. Good writing skills (English) to generate routine reports. Good knowledge of

vernacular language is also desirable for better marketing communication

(C)SKILL GAPS:

1. Ability to translate marketing knowledge to a retail perspective

2. Insufficient ability to quickly adapt to changing market dynamics and modify the

marketing campaigns. Creative approach to the various

3. Campaigns are also desirable.

4. Inadequate soft skills for co-coordinating with other departments



SKILL REQUIREMENTS FOR MARKETING MANAGER/SR.

MARKETING EXECUTIVE/MARKETING ASSOCIATE:

(A)FUNCTIONAL SKILL:

1. Knowledge of the various marketing, sales promotion, CRM schemes. Should be

able to communicate the same to the stores in an effective manner.

2. Ensure that the marketing strategies are being implemented at the stores

appropriately

3. Get feedback from the stores to customize the schemes according to the customer

profile in the catchment area and communicate the same to the senior

management.

4. Liaise with vendors for marketing collaterals and ensure that they are properly

used in the stores. Promotion, CRM schemes. Should be able to communicate the

same to the stores in an effective manner.

5. Ensure that the marketing strategies are being implemented at the stores

appropriately

6. Get feedback from the stores to customize the schemes according to the customer

profile in the catchment area and communicate the same to the senior

management.

7.

Liaise with vendors for marketing collaterals and ensure that they are properlyused in the stores



(B)SOFT SKILLS:

1. Good oral communication skills for interacting with the stores and

other departments

2. Reasonable knowledge of English and vernacular language is a must

(C)GAPS:

1. Insufficient ability to understand and communicate the varying

requirements of individual stores – the Requirement of stores

differs based on locality and format.

2. Communication of the various schemes to the stores in an effective

manner.

FACTORS LEADING TO DIFFERENCE IN SKILL INTENSITY

ACROSS RETAIL SEGMENTS:

1. Complexity of the product

2. Nature of supply chain

3. Changes in the product nature

4. Level of customer involvement

5. Store characteristics



APPROACH TOWARDS NEW SKILL BUILDING INITIATIVES

1. Skill building programs for store-job

2. Skill building programs for non-store jobs

CONCLUSION :

Megacities (Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad,

Ahmedabad and Pune), Boomtowns (Surat, Kanpur,bhubaneswar, Jaipur,

Lucknow, Nagpur,patna, Bhopal & Coimbatore) and Niche cities

Faridabad, Amritsar, Ludhiana, Chandigarh and Jalandhar) would account

for most of the human resource requirement in retail industry.

Hence it is very much important to bridge the skill gap in Indian retail

industry by keeping in eye that it is going to be the fastest growing sector

of the next decades if government of india is going to approve FDI in retail

sector.

bridging the skill gap in the

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