impact of merchandising in retail store preferences of indian customer

8/2/2019 Impact of Merchandising in Retail Store Preferences of Indian Customer

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IMPACT OF MERCHANDISING IN RETAIL STORE PREFERENCES OF

INDIAN CUSTOMER

NAME: GOKULAKRISHNAN.K.R

REG NO: 10MBA1021

SUBJECT: RETAILING


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also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is

expected to grow to US$ 700 billion by 2010. By the same time, the

organized sector will be 20% of the total market share. It can be mentioned

here that, the share of organized sector in 2007 was 7.5% of the total retail

market.

Major Retailers in India

Pantaloon:

Pantaloon is one of the biggest retailers in India with more than 450 stores

across the country. Headquartered in Mumbai, it has more than 5 million sq.

ft retail space located across the country. It's growing at an enviable pace

and is expected to reach 30 million sq. ft by the year 2010. In 2001,

Pantaloon launched country's first hypermarket Big Bazaar. It has the

following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar

Home Solutions: Hometown, Furniture Bazaar, Collection-i

Consumer Electronics: e-zone

Shoes: Shoe Factory

Books, Music & Gifts: Depot

Health & Beauty Care: Star, Sitara

E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group

Tata group is another major player in Indian retail industry with its

subsidiary Trent, which operates Westside and Star India Bazaar.

Established in 1998, it also acquired the largest book and music retailer in

India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across

the country.


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RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it

came into food & grocery retailing in 1996 with its retail Foodworld stores.

Later it also opened the pharmacy and beauty care outlets Health & Glow.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than

300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian

retail market. It's expecting its sales to reach ` 90,000 crores by 2010.

AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The

brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite

popular. It's also investing in other segments of retail. It will invest ` 8000-

9000 crores by 2010.

Retail formats in India

Hypermarts/supermarkets: large self-servicing outlets offering products from

a variety of categories.

Mom-and-pop stores: they are family owned business catering tosmall sections; they are individually handled retail outlets and have a

personal touch.

Departmental stores: are general retail merchandisers offering

quality products and services.

Convenience stores: are located in residential areas with slightly

higher prices goods due to the convenience offered.


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Shopping malls: the biggest form of retail in India, malls offers

customers a mix of all types of products and services including

entertainment and food under a single roof.

E-trailers: are retailers providing online buying and selling of products

and services.

Discount stores: these are factory outlets that give discount on the

MRP.

Vending: it is a relatively new entry, in the retail sector. Here

beverages, snacks and other small items can be bought via vending

machine.

Category killers: small specialty stores that offer a variety of

categories. They are known as category killers as they focus on

specific categories, such as electronics and sporting goods. This is

also known as Multi Brand Outlets or MBO's.

Specialty stores: are retail chains dealing in specific categories and

provide deep assortment. Mumbai's Crossword Book Store and

RPG's Music World are a couple of examples.

DATA AND SURVEYS RESULTS:

The survey revealed that the urban Indian retail consumer, values product

attributes freshness as well as unobservable attributes such as place of

produce or environmental friendliness and is not driven by the low-prices

only. Products (and retailers) that do not share enough information

regarding the production methods tend to be preferred less by the urban

Indian consumer. For retailers interested in the Indian market or those

seeking to enter the retail trade, it is important to note that consumers, on

an average,

Value the transparency in the supply and production chain

Do not use price as the primary factor to make purchase decisions

there exist distinct consumer groups.

Prefer fresh products, but products that are not local are also well

accepted.


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Prefer environmentally friendly products and attach high utility to

products that represent this information pictorial on the packaging

Do not accept anymore products with no information.

Urban Indian customers appear to fall into 3 major groups depending on

their product and purchase choices.

Environment conscious group This group was the largest (nearly

44%) among the respondents, These consumers attach maximum

value to environmental impact of the products purchased. They

prefer local produces and are willing to pay a small premium to get

products that have these characteristics. Health conscious group 26% of the respondents belongs to this

group. This group prefers products that are not treated with

pesticides and are particularly sensitive to health issues.

Price dependent group 21% of the respondents make their product

choices by considering the price alone and they are not heavily

affected by the method or place of production. They also do not

worry substantially about the environmental impact of the products

purchased.

Challenges facing Indian retail industry

The tax structure in India favors small retail business

Lack of adequate infrastructure facilities

High cost of real estate

Dissimilarity in consumer groups

Restrictions in Foreign Direct Investment

Shortage of retail study options

Shortage of trained manpower

Low retail management skill


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The Future

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, the India retail

industry is expected to grow further in the future days. By the year 2013, the

organized sector is also expected to grow at a CAGR of 40%.

India retail industry is progressing well and for this to continue retailers as

well as the Indian government will have to make a combined effort.

Merchandising is the methods, practices, and operations used to promote

and sustain certain categories of commercial activity.In the broadest sense,

merchandising is any practice which contributes to the sale of products to a

retail consumer. At a retail in-store level, merchandising refers to the variety

of products available for sale and the display of those products in such a

way that it stimulates interest and entices customers to make a purchase.

Classification of India (Customers) on the basis of Research:

Research Conducted by Future Group future group2 research classifiesIndian Customers into three sets and provides a base to the retailers in

segmenting the Indian market. The research shows that serving class

consists of approximately 55% of the population, the major one & only 14%

are in the upper middle class, regarded as consuming class.

It indicates that retailers should target this segment (India 2) rather than

focusing on India one only, and should formulate their strategies according

to the needs and expectations of serving class, to flourish in the market


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Recognizing and Responding to Shopper Differences at the Store Level:

The advent of social media and online communities is making the world

smaller. With consumers seeking more personalization and intimacy at their

local retail stores, the costly days of stack it high and watch it fly are over.

Retailers can no longer tie up their working capital in excess inventory that

will require significant markdowns to clear. Traditional broad-brush planning

and buying strategies based solely on historical data are no longer effective

when it comes to offering consumers the right products.

To get closer to their customers, retailers are tapping into demand-driven

clustering exercises that are augmented by detailed demographic and

geographic shopper data. A major big-box retailer and JDA Software

customer is combining performance along with descriptive consumer data

to get a highly accurate snapshot of local consumers that provides

descriptive residence information, their family lifestyle, how frequently they

go out to eat, their level of education and more. Armed with such granular

information, this retailer is shaping future assortments, grouping similarly

performing stores and then conducting more consumer research to

determine what other products they are likely to buy.

By managing a rich set of attributes and leveraging multidimensional data

from one category to another, the retailer is able to reveal and address the

unique customer profiles that distinguish each store. As that insight

accumulates season after season, the company will be positioning its

decision makers to tailor an entire store for every category and every type

of consumer who likes to shop there.


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Emerging Trends in Consumers Income & Consumption Pattern:

NCAER study and some other data published by different research &

consulting sources indicate the following trend in Consumer income and put

the following projections about the Indian retailing:

1) Growing Prosperity: Making Indian Consumers Great: As per Indias

Marketing White book (2006)3by Business world, India has around 192

million households. Of these, only a little over six million are affluent thatis, with household income in excess of INR215, 000. Another 75 million

households are in the category of well off immediately below the affluent,

earning between INR45, 000 and INR 2, 15,000. This is a sizable proportion

which offers excellent opportunity for organized retailers to serve.

2) Increase in the Sizable Disposable Income: Business communities

believe that sizable disposable income in India is concentrated in the urban

areas and well off and affluent classes; income distribution in India is

unequal compared to other Asian economies. In fact, the 20 million middle

class home in rural India equals the number in urban India4 and thus have

the same purchasing power.

Therefore, there is significant and considerable opportunity for organized

retailers in the rural areas as well. There is no denying that the rural market

holds immense promise for the organized retail but companies ponder over,

how to serve that market profitably. Unlike the urban market, it is less

developed in terms of infrastructural facilities.

3) Place is no more important: The Major issue is to find out a suitable

business model and retail format to fit local taste and preferences. Of

course, cost of doing business in rural market would be lesser, as

compared to urban market but reaching out to the mass is a concern. For

example the most successful and the largest incorporation, Wal-Mart


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started in the rural market where as competition started in the urban market.

This retailer has proved that it is important to understand how do you

operate your business model rather than where you do it. Given the

increasing urban exposure of rural India, the urban and the rural upper-

income groups can form an interesting continuum market, giving it a scale

of 23 million households, or 115 million consumers.

4) Increasing Potential in Rural Markets: NCAER data shows that for 1998-

99, for a basket of 22 FMCG products it tracks, a total of over Rs 91,500

crore was spent. Of this, 37% was spent by the two lowest- income groups

in rural India, and only about 20% by the top two income groups in urban

areas.

This is, perhaps, the best and only statement of the structure and potential

of the Indian market. Hence, marketers have to worry about purchasing

power of consumers not where do they reside. For example there are nearly

42,000 rural haats, average number of sales outlets per haatis 300 and

average sales per outlet is INR 900 and average foot fall in a haatis about

4,500. In rural India there are 50 million

5) As per NCAER data no. of Household having income of < 90,000 per

annum in 2005-06 was 1,32,249 ( 000) is projected to come down to

1,14,394 by 2009-10 which indicates that middle class is growing and they

are emerging as real customers.( Annexure:1,2,3,4)

6) Higher Proportionate Rural Expenditure: While an average City-dweller

may be spending almost twice than his counter-part in rural areas but in

terms of allocation of his budget to key segments, the villager has sprung a

few surprises. According to the latest data on household Consumption

expenditure, rural India is allocating almost 10% of the monthly household

Budget for fuel & Lighting while an average urban household spends 9%

under the same head. (Annexure: 11) .Still it remains attractive because of

intense competition in Urban India.

In value terms, however there is a sharp difference with rural Indianhouseholds earmarking Rs. 60 a month as consumption expenditure,


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compared to Rs.110 in cities and towns. After all, at Rs.19 a day or Rs. 625

a month, the average consumption spending too is low in rural areas,

compared to Rs. 39 a day or Rs.1171 a month in urban India. The rapid rise

in incomes will lead to an even faster increase in demand for consumer

durables and expendables. Result by; the ownership of goods will also go

up significantly by getting empowered through rise in the size of the great

Indian middle class

7) Young Population: By 2010 almost half of our citizens will be in the

working age group of 20-24 years. A youthful, exuberant generation, bred

on success will not drive the productivity but also set a spiraling effect on

consumption & generation of income. Currently the country has a

population of over one billion, 60% of which is under 30 years of age. This

means majority of the population is young and working class with higher

purchasing power. The low median age of population means a higher

current consumption rate which augurs well for the retail sector. Consumer

spending in India has grown at over 12 percent since mid-1990s and 64 per

cent of Indian GDP is accounted for by private consumption. Over the last

decade, the average Indian spending has gone up from INR 5,745 in 1992-93 to INR 16,457 in 2003-04 and is expected to grow around its trend rate

of 12 per cent per annum.

8) Fundamental Changes in Indian Economy: There are fundamental but

significant changes underway in our economy. In January 2006, the

government announced that foreign companies can own up to 51 percent of

a single brand retail company, such as Nike or Adidas. This decision would

certainly encourage retailers such as Zara5 and Gap6 to enter this market.

Tesco is planning to enter the market through a partnership with Home

Care Retail Mart Pvt Ltd and expects to open 50 stores by 2010.


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WAVES OF CHANGES IN INDIAN RETAIL SECTOR IN 21ST CENTURY

The waves of changes that have transformed the Indian retail industry are:

1. The first wave of change which has revolutionized the Indian retail sector

was LPG means liberalization, globalization and privatization. According to

BMI India retail report -2011, 100% FDI is permitted under automatic route

for trading companies for cash and carry trading and wholesale trading. FDI

up to 51% under government route is allowed in retail trade of single brand

products. The consumer affairs ministry has given green signal to allow

49%. FDI in multi-brand retail SEBI has notified the increase in the retail

investment limit to US $4,391.19 in initial public offer (IPOS). So, the

proposed FDI norms will open up strategic investment opportunity for global

retailer to invest in India.

2. The second wave which began 10 years later is customer relationship

management in retailing which now transformed and paved the way

for CEM (customer experience management). To withstand the

global competition and compete successfully in the 21st century

retailers must focus on customer buying experience.

3.The third wave of change which is a continuous one is Uniqueness of

Indian customers and their changing preferences. So, the retailers in

this 21st century must make continuous efforts in understanding

customers perceptions and must create diversified and innovative

retail formats.Differentiate or die, is the current trend in 21stcentury.

4. Indian customers shifting from unorganized kirana stores retail format to

organized retail formats like hypermarkets and malls.

5. Spreading fad and fashions consciousness of Indian retail customers.


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STASTICAL DETAILS :

During the last few years, the Indian retail market has seen considerable

growth in the organised segment. Major domestic players have entered the

retail arena and have ambitious plans to expand in the future years across

verticals, formats, and cities. For example, companies like Reliance, Tata,

Bharti, Adani Enterprise, have been investing considerably in the booming

Indian retail sector. Besides, a number of transnational corporations have

also set up retail chains in collaboration with big Indian companies.

The Indian retail sector is highly fragmented and the unorganised sector

has around 13 million retail outlets that account for around 95-96% of the

total Indian retail industry. However, going forward, the organised sectors

growth potential will increase due to globalisation, high economic growth,

and changing lifestyle. Moreover, high consumer spending over the years

by the young population (more than 31% of the country is below 14 years)

and sharp rise in disposable income are driving the Indian organised retail

sectors growth. Even small towns and cities are witnessing a major shift in

consumer lifestyle and preferences, and have thus emerged as attractive

markets for retailers to expand their presence.

Although the growth potential in the sector is immense, it is not without

challenges that could slow the pace of growth for new entrants. Rigid

regulations, real estate costs, high personnel costs, lack of basic

infrastructure, shrinkage, and highly competitive domestic retailer groupsare some such challenges. Additionally, resource constraints at shopping

mall projects are also delaying completion and disrupting many retailers

entry strategies.


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Global retail sales was estimated to be around US$ 12 trillion in 20072;

however, in 2008, the slowdown in the global economy, especially in the

US, and credit crunch, decreased consumer spending. On a global level,

the economy performed robustly till 2007, but the US crisis spread over to

Europe in early 2008, and its impact was felt in the Asia-Pacific region by

mid-2008.

India has the highest number of retail outlets in the world at over 13 million

retail outlets, and the average size of one store is 50-100 square feet. It

also has the highest number of outlets (11,903) per million inhabitants. The

per capita retail space in India is among the lowest in the world, though the

per capita retail store is the highest. Majority of these stores are located in

rural areas.


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Evolution of organised retail

The share of organised retail in developed countries is much higher than

developing countries like India. In 20063, the share of organised retail in the

US was around 85%, in Japan it was 66%, in the UK it was 80%, while in

developing countries like India, China and Russia it was 6%, 20% and 33%,

respectively. The concept of organised retail had occurred much later in

developing economies than the developed economies. Modern day retail

came into existence in three successive waves. The first wave took place in

the early to mid-1990s in South America, East Asia excluding China, North

Central Europe and South Africa. The second wave of organised retail

occurred during mid-to-late 1990s in Mexico, Central America, South-east

Asia and South Central Europe. The third wave of organised retail boom

started in the late 1990s and early 2000 in some parts of Africa, Central and

South America, South-east Asia, China, India and Russia and continues to

grow at a rapid pace.

Rising household expenditure in BRIC countries drives organised retail

The household expenditure in Brazil, Russia, India and China, or the BRIC

countries, is growing at a faster rate than the developed countries like the

US, UK, Japan, Germany, and France, indicating the higher growth

potential for the retail sector in these countries that have a large consumer

base. Household expenditure (at constant prices) in developed countries

like the US, UK, Germany, and Japan has witnessed an average annual


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growth of 3.2%, 2.5%, 0.2%, and 1.0%, respectively, during 2004-2007, but

the expenditure in the BRIC countries has been much higher. The

developed countries are witnessing a continuous fall in domestic demand

and high dependence on export earnings, which are the reasons for lower

household expenditure. In current times, the global demand is weakening,

owing to economic slowdown, and this worry is looming large over the retail

sector.

The consumer market in the developed countries is saturating, and

therefore, big retail companies in those countries are increasingly

expanding their footprint in emerging countries like India, China, and

Russia. Even though 100% FDI is not permitted in the retail sector, India

continues to attract leading global retailers to start retail business through

local alliances. For example, recently, Wal-Mart has opened its first store at

Amritsar (Punjab) in a joint venture (JV) with Bharti Enterprises, and it isalso planning to expand its footprint to other parts of India. The fact that the

penetration of organised retail in BRIC countries is much lower than the

developed countries is acting as an added advantage for these retail giants.


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Major global retail markets

This section provides a brief overview on the retail industry in major global

markets on the basis of phases of retail lifecycle. Organised retailing in

most economies typically passes through four distinct phases:

In the first phase, new entrants create awareness of modern formats

like hypermarket, supermarket, department stores etc and raise

consumer expectations

In the second phase, consumers demand more modern formats as

the markets develop, thereby leading to a strong growth

In the third phase, the high rate of growth leads to a stage of maturemarket

In the final phase, the domestic market reaches a saturation point

leading to limited growth, so retailers explore and evaluate new

markets across the globe

Retail in India: Industry Structure

The retail industry in India is highly fragmented and unorganised. Earlier on

retailing in India was mostly done through family-owned small stores with

limited merchandise, popularly known as kirana or mom-and-pop stores. In

those times, food and grocery were shopped from clusters of open kiosks

and stalls called mandis. There were also occasional fairs and festivals

where people went to shop. In the twentieth century, infusion of western

concepts brought about changes in the structure of retailing. There were

some traditional retail chains like Nilgiri and Akbarallys that were set up onthe lines of western retail concepts of supermarkets. The government set up

the public distribution system (PDS) outlets to sell subsidised food and

started the Khadi Gram Udyog to sell clothes made of cotton fabric. During

this time, high streets like Linking Road and Fashion Street emerged in

Mumbai. Some manufacturers like Bombay Dyeing started forward

integrating to sell their own merchandise. Shopping centres or complex

came into existence, which was a primitive form of todays malls.


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Since liberalisation in early 1990s, many Indian players like Shoppers Stop,

Pantaloon Retail India Ltd (PRIL), Spencer Retail ventured into the

organised retail sector and have grown by many folds since then. These

were the pioneers of the organised Indian retail formats. With the opening

up of foreign direct investment in single-brand retail and cashand-carry

formats, a new chapter unfolded in the retail space. Many single-brand

retailers like Louis Vuitton and Tommy Hilfiger took advantage of this

opportunity. The cash-and-carry format has proved to be an entry route for

global multichannel retailing giants like Metro, Wal-Mart and Tesco.

Booming Indian economy spurs consumption

The Indian economy posted a remarkable CAGR growth of 8.9% during

FY04-FY08, which increased the per capita income and in turn, the

disposable income of a large section of the population. Growth in the retail

trade depends on the fundamentals of an economy. The Indian economy

grew at a robust rate over the last five years, riding high on the high growth

in the service sector (10.5%) and the manufacturing sector (9.4%) as

compared with 7.4% and 4.1% during FY99-FY03. The rise in per capita

income and the resultant rise in disposable income stimulated consumption

during this five-year period, thereby resulting in a spurt in retail trade.

Furthermore, according to the Mckinsey Global Institute (MGI), the average

real household disposable income is likely to grow by 5.3% during 2005-

2025 and reach Rs 318,896 per annum as compared with 3.6% in the

previous 20 years, which indicates the huge potential for the retail sector in

India.


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Private Final Consumption Expenditure, per capita income and retail sales

are positively related

The private final consumption expenditure (PFCE) and GDP growth are

indicative of the growth in the retail sector. In the past consumers,

especially young consumers in the age group of 15-34, increased their

consumption expenditure with an increase in their earnings; these young

consumers totalled around 400 million and constituted 35% of the total

population. Due to the consequent boom in the Indian retail sector many

foreign and Indian players entered the Indian retail sector.


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The chart above shows that during FY95-FY00, the PFCE (constant prices)

increased by 5.4% per annum. Later on, from FY01 to FY03, PCFE

declined to 4.0%. Again during FY03-FY07, it went up to 6.2% per annum.

During these time periods, the retail sales, the per capita income, and the

real GDP growth followed a similar trend as the PFCE, which made it

evident that there is a positive correlation between real GDP and PFCE on

the retail sector. During FY08, the PFCE as a percentage of GDP at factor

cost at constant prices remained very high at 62.2%; hence, the overall

retail sector growth received a major impetus during this period.

There have been striking changes in Indias consumption pattern over the

past 50 years owing to the ever-increasing media exposure, changes in

lifestyle, growing urbanisation, coupled with an increase in the educationlevels among others. The Indian retail industry has matured tremendously

over the years, and has become more process-driven, standardised,

qualityassured, and brand-driven.

Industry segmentation

Organised retail can be segmented in two ways - segmentation by verticals

and by channels. Verticals are segmented on the basis of the type of


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merchandise offered; similar merchandise can be clubbed together to form

a vertical, for instance food and grocery. Channels are the means through

which retailers sell their merchandise; for example, store channels of

retailing that comprise different formats like hypermarkets, supermarkets

and department stores and non-store formats like online retailing, vending

and kiosks.

Major retail segments

Food and grocery:

In 2007, the food and grocery segment was valued at Rs 7,920 billion, and

it enjoyed a dominant market share of 62% in the total Indian retail sector;

however, there was a completely opposite scenario in the organised retail

segment. The food and grocery segment is the second-largest in the

organised retail and has an 11.5% share that is valued at Rs 90 billion.

Initially this segment grew at a slow pace due to the presence of an

established retailing system led by kirana stores, a highly-fragmented food

supply chain, and the lack of a developed food processing industry. Nilgiri

was one of the earliest retailers that started a chain or stores in different

parts of the country. However, the growth of Nilgiris stores was limited as it

was challenged by a weak supply chain and an under-developed food

processing industry. Post-liberalisation, organised retailers saw a renewed

opportunity in the food and grocery segment.

Few food and grocery retailers

Food Bazaar: PRIL ventured into food retailing with Food Bazaar in Apr

2002. Initially it was a part of Big Bazaar but later on it started operating as

a standalone outlet in addition to being a part of Big Bazaar. The store

offers a wide range of fruits, vegetables, FMCG products and ready-to-cook

products. It uses a concessionaire model for wet groceries, and it sources

staples from APMC or farmers (where the state permits). Food Bazaar


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attracts high footfalls due to innovative initiatives like live-grinding, live

bakery, fresh juice corner etc.

In Aug 2007, the store ventured into another retail format that served the

food and grocery segment called the KB Fair Price shop. This store is

modelled on the concept of low-frills neighbourhood store of 1,000-1,600

square feet. The Fair Price store follows a pricing model that is 20% lower

than the prevailing market price.

More: Aditya Birla Retail Ltd forayed into the retail business in 2006 by

acquiring Trinethra Super Market Ltd, the south-India based retail chain. In

May 2007, the company launched its own brand of stores called More inPune. The supermarket store has a minimum size of 2,500 square feet and

offers fruits, vegetables, staples, personal care, general merchandise,

pharmacy, poultry and dairy products.

Reliance Retail: Reliance Retail Ltd, a subsidiary of Reliance Industries Ltd,

has an aggressive plan to expand its retail network across India. It entered

the food and grocery segment in November 2006 through its convenience

store format Reliance Fresh. The store offers a range of fruits, vegetables,

personal care, home care and kitchen utensils. It focuses on building a

strong relationship with the agri-business value chain and sources directly

from wholesalers.

Fashion and accessories

Fashion and accessories is the largest category in organised retail and had

a 38.1% share valued at Rs 298 bn in 2007. In terms of total retail, this

category held the second position with a 9.5% share valued at Rs 1,313 bn.

The segment has driven the retail boom in India and has opened many

opportunities for large as well as global retailers to enter the segment.

Despite the high rental, many global retailers like Gas, Gucci, Levis,

Benetton, Marks and Spencer have opened their stores in India, and also

have plans to increase their presence.


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The mens wear segment had the highest share of 40.2% in the Rs 1,313-

billion fashion and accessories market in 2007 while the womens category

accounted for 34.8%, followed by the kids wear and uniform category at

24.9%. Demand in the branded apparel segment is increasing as

consumers are upgrading to premium brands due to changing preferences.

The premium segment has seen the fastest growth in value owing to the

rising preference for formals at Indian workplaces, the new offerings from

international brands, and the increasing willingness on the part of

consumers to pay a premium for quality. The apparel retailers are also

pushing themselves to the accessories segment to attract more customers.

Few fashion and accessories retailers

Pantaloons: The first Pantaloon store was opened at Gariahat in 1997 in

8,000-square-feet area. Over the years, the store has undergone several

transitions. When it was launched, the store mostly sold external brands.

Gradually, it started retailing an eclectic mix of external brands as well as

private labels. Initially, it positioned itself as a family store targeted across

age and gender groups but later it shifted its focus towards being a fashion

store and gave more emphasis on the youth. As on Dec 2008, Pantaloons

had around 44 stores spread across major cities in India.

Shoppers Stop: Shoppers Stop is one of the largest retailers in India. It

primarily caters to the lifestyle segment and offers customers both domestic

and international brands. The store recently revamped its branding by

introducing a new symbol. Shoppers Stop has lifestyle retailing as its core

housing brand across categories like apparels and accessories. The store

operated at 26 locations in 12 cities as on Dec 2008.

Koutons: Koutons Retail is a leading manufacturer of readymade and

fashion wear brand. It was established as Charlie Creation Pvt Ltd in 1991

for manufacturing and exporting garments. Later in 1998 Koutons was

established to provide affordable mens wear to the masses. Koutons also

entered the womens segment in Apr 2008 by launching its brand Les

Femme, which caters to young women in the 16-34 years age group and


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includes apparels like t-shirts, partywear, lycra, semi-formal shirts, denims,

capri pants etc. Koutons has also launched its brand Les femme for women

& Koutons Junior for kids. Few renowned brand of Koutons are: Koutons

mens wear, Les Femme, Koutons Junior and Charlie Outlaw.

Footwear

In 2007, the footwear segment had a 1.1% share in the total retail market

and was valued at Rs 160 billion while it had a 9.9% share in the organised

market and was valued at Rs 77.5 billion. In the same year the organised

footwear market recorded a fantastic growth of 49% over 2006 while the

overall retail market grew by just 16.4%. The changes in consumerbehaviour and attitudes reflected in the increasing demand for newer styles

and different types of footwear. The market currently offers many brands

that cater to every target segment. The Indian footwear market is moving at

a brisk pace presently to cater to the domestic demand. Moreover, the influx

of international brands is inducing the otherwise price-conscious customers

to shell out more bucks for their favourite brands.

The footwear market is experiencing a changing consumer preference for

casual and younger style due to media penetration and due to the

increasing awareness about international trends and lifestyle. There already

are a large number of players, both domestic and international, in the semi-

formal, formal and casual segment but the casual segment dominates the

Indian footwear market with a 75% share. Branded sports wear is also

growing at a faster rate than the other segments and the key players in this

segment are Adidas, Reebok, Nike, Puma et al.

Few footwear retailers

Reebok: In 1995, Reebok forayed into the Indian retail market. Today

Reebok is one of the frontrunners in the Indian sports wear industry.

Reeboks offerings include apparels, footwear and fitness equipment and

products. Its footwear offerings are mostly in the trainers and sneakers


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segment. Reebok recently has introduced its new lifestyle vertical Reebok

Classic.

Bata: Bata India is one of the most well-known and largest footwear

retailers in India. The retailer manufactures and markets different types of

footwear that includes rubber, canvas, leather, and plastic footwear. It

markets footwear under the brand names of North Star, Power,

Ambassador, Marie Claire besides dealing in international brands like Dr

Scholl and Hush Puppies. Bata has a strong distribution network structure

of wholesalers and distributors.

Khadims: Khadims forayed into footwear retailing in 1993 and is one of themost renowned retailers in east India. Khadims markets its own products

besides few others and specialises in womens and childrens footwear. The

retailer has a presence in multi-brand outlets (MBOs) across the country in

addition to its own exclusive outlets.

Home and office improvement

In 2007, the home and office-related retail segment was valued at Rs 455

billion in the total retail market while it was valued at Rs 50 billion in the

organised retail market. In the same year the segment had a 6.4% share in

the organised retail. Home and office improvement is another important

segment of the organised retail as people have started spending more on

discretionary items. Presently the segment is growing at an impressive rate.

Due to the salary hikes and rise in the double-income households, the

lifestyle needs of the young and flourishing India are surging andconsequently, consumers are going for renovation of their homes. The

concomitant rise in investments in furniture, home accessories and

furnishings, has added to the segments boom.

Few home and office improvement retailers

Godrej Lifespace: On Apr 1, 2003, Godrej & Boyce Manufacturing Company

Ltd launched a new retail division. The division was established to present a


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new concept in retailing by displaying and selling under one roof the Godrej

range of home and office furniture, appliances, security equipment and

locks. Later in 2005, the showrooms were branded as Godrej Lifespace

Stores.

Home Stop: Home Stop is one of the premium home improvement stores

that offers a wide range of merchandise. It stocks various national and

international brands that cover all the home needs like home dcor,

furniture, bath accessories, draperies and health equipment. Home Stop

currently operates three Home Stop stores, one each in Mumbai, Bangalore

and New Delhi.

Home Town: Home Solution Retail (India) Ltd (HSRIL), a subsidiary

company of Pantaloon Retail, is designed to cater to the home furnishing

and improvement market. The format is designed as a one-stop destination

that offers a complete range in consumer electronics, furniture and other

home products. HSRIL operates five retail formats: Collection-i, Furniture

Bazaar, Electronics Bazaar, Home Town and e-zone.

Electronics In 2007, the electronics segment had a 4% share in the total

retail segment and was valued at Rs 575 billion while it had a 9.1% share in

the organised electronic retail segment valued at Rs 71 billion. The

electronics market has seen a proliferation of brands and product

categories in recent years. All international brands from Japan, Korea, the

US, Europe and China have been launched in India and have been trying to

build a pan-India dealer network. The lifestyle category has seen higher

growth in India on the back of changing consumer preferences and a

consumption boom.

Few electronic retailers

eZone: eZone is an electronics specialty retail format from HSRIL by

Kishore Biyani-led Future Group. The first eZone store was launched in

2006 in Indore and was followed with a second one in Bangalore. eZone

offers a range of personal products like computers, laptops, handy cams,


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MP3 players and mobile phones, entertainment products like plasma/LCD,

flat TVs, home theatre systems, DVD players, and stereosystems, home

products like refrigerators, air conditioners, washing machines and

microwave ovens, among other kitchen appliances.

Viveks: In 1965, B A Lakshmi Narayana Setty founded Viveks in a 200-

square-feet-shop in Chennai. Today Viveks is one of the largest consumer

electronics and home appliances retail chains in India. Viveks Ltd is a public

limited company that runs two retail brands Viveks and Jainsons. The

store was transformed into a public company from a family-run company

when 14 stores of Jainsons were bought over in 1999. Later on in 2001 two

stores of Premier and in 2002 Spencers Super Store were purchased.

Viveks has recently absorbed Spencers into the Premier brand. Viveks

grew from three stores in 1995 to more than 35 stores as on Dec 2008.

Catering services In 2007, the catering service in organised retail showed a

tremendous growth of 44.7% over the previous year. It was valued at Rs

713 billion in the total retail market and at Rs 57 billion in the organised

retail market. The catering services market is divided into fast food, cafes

and restaurants and others. India is a buoyant market for this segment with

over a billion people with different food habits, religious festivals, and

various regions. Each region has its own traditional food, dietary habits and

its own food specialities. In recent times many international food chains

have entered India, which has made this segment more dynamic and its

growth, fast-paced. The key growth drivers of the segment in India are: the

changes in Indian demographics, young working population, nuclear

families, rise in double-income household etc.

Few catering service retailers

Yum! Restaurants: Yum! Restaurants is present in India through its brands

Pizza Hut and KFC. In 1995, KFC, which mainly serves chicken products,

set foot in India. After taking into account the vegetarian population of India,

KFC recently modified its menu and launched a vegetarian fare, which now

constitutes 40% of the product categories. Pizza Hut entered India in 1996


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and as on Dec 2008, there were 147 Pizza Hut and 45 KFC stores across

35 and 14 cities, respectively.

McDonalds:McDonalds is a 50:50 joint venture partnership in India

between McDonalds Corporation (USA) and two Indian businessmen.

Hardcastle Restaurants Pvt Ltd owns and operates McDonalds restaurants

in West India while Connaught Plaza Restaurants Pvt Ltd owns and

operates these food outlets in the North.

Caf Coffee Day: Caf Coffee Day is a division of Indias largest coffee

conglomerate Amalgamated Bean Coffee Trading Company. Caf Coffee

Day sources coffee from 5,000 acres of estates and is the second-largestcoffee shop in Asia. It has ventured into formats such as music cafes, book

cafes, highway cafes, lounge cafes, garden cafes and cyber cafes.

Telecom

In 2008 the telecom market in India was worth Rs 272 billion and had a

1.8% share in the total retail market while it had a 3.4% share in the

organised retail segment and was valued at Rs 27 billion. The mobile and

accessories segment exhibited tremendous growth in 2007. The Indian

telecom sector emerged as the second-largest wireless network in the world

after China with the recent spate in number of wireless subscribers.

Few telecom retailers

The Mobile Store: The Mobile Store, promoted by the Essar Group, is one

of the countrys largest mobile retailers. Its a one-stop mobile solution shop

that offers telecom products like mobiles, accessories, mobile connections

and recharges, mobile bill payments, handset repairs, handset exchange,

music and gaming devices and DTH, all under one roof, in a world-class

shopping ambience. The shop had more than 1,300 stores spread across

200 cities as on Dec 2008.

MobileNXT: Bangalore-based MobileNXT Teleservices Pvt Ltd has a pan-

India presence and operates in the following three major retail formats:


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standalone stores, store-within-a-store, and enterprise stores. This store is

eyeing a pan-India network and hence has initiated a tie-up with Shoppers

Stop, Star Bazaar, Mega Mart, and Landmark stores, for setting up store-

withina- store in their outlets across the country. As on Dec 2008, the

company was operating more than 36 stores that were spread across major

cities in India.

Pharmaceuticals

In 2007, the pharmaceuticals market had a 3.5% share and was valued at

Rs 488 billion in the total retail market; however, its share in the organised

retail market accounted for merely 2.0% share at Rs 15.4 billion during thesame period. The organised pharmaceutical retailer is known to implement

innovative concepts and global standards to provide customers with an

experience that is completely different from what an unorganised retailer

offers.

Few pharmaceutical retailers

Apollo Pharmacy: In 1983, Apollo Pharmacy, a division of Apollo Hospital

Enterprise Ltd, entered retailing by opening up its first store in Chennai. The

retailer also took initiatives to provide medicines to the rural regions by tying

up with ITCs e-choupal and Godrej Aadhaar. Apollo has also started

expanding through the franchise route. It has recently launched a new

concept, NurseStation, at its pharmacy outlets, where the nurses are

available to attend the patients at their houses, or refer them to an Apollo

Clinic nearby. As on Dec 2008, Apollo was operating at over 890 outletsacross the country.

MedPlus: In 2006, MedPlus Health Services Private Ltd was incorporated in

Hyderabad to cater into the health care segment. The company has

established a large number of pharmacy outlets chain across major cities in

various states of the country, and are majority of those are spread across

four southern states. It has over 600 pharmacy outlets spread across 63

cities/ towns in the country.


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Beauty and wellness In 2007, the beauty and wellness segment grew at a

tremendous rate of 65% over the previous year in the organised retail

market. Its share in the total retail market, however, was just 0.3% and was

valued at Rs 46 billion. In the organised market, the segment showed

tremendous growth due to the rise in service sector employment.

Few beauty and wellness retailers

Reliance Wellness: In Oct 2007, Reliance Retail Ltd, owned by Mukesh

Ambani, entered the beauty and wellness segment by opening its first store

at Hyderabad. This store offers a wide range of products under the health

foods, personal care, healthcare, and pharmaceuticals categories.

Himalaya Drugs: The Himalaya Drug Company operates both exclusive

retail outlet formats and shop-within-a-shop outlets. The stores offer an

entire range of Himalaya drugs from pharmaceuticals, personal care, to

baby care and animal healthcare products at competitive prices. The

company emphasises on service, trained personnel and a quality shopping

experience in their stores. Himalaya has also launched its online shopping

website to make all its products conveniently available to its customers 24/7

and to reach a wider market, where its stores are not present.

Jewellery

In 2007, jewellery retail was worth Rs 694 billion and accounted for 5% of

the total retail market. In the organised retail market, jewellery retail merely

had a 2.9% share at Rs 23 billion. In the same year jewellery retail in the

organised retail market recorded high growth of 36.9% over 2006 as

compared with 15.3% recorded in the total retail market.

Few jewellery retailers

Gitanjali: Gitanjali Gems Ltd (GGL) is one of the largest, integrated diamond

and jewellery manufacturer and retailer in India. It sources rough diamonds

from primary and secondary source suppliers in the international market,

cuts and polishes the rough diamonds and exports the diamonds to its


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international markets. GGL sells diamonds and other jewellery through retail

operations in India as well as in international markets. Its brand extensions

include Gili, Asmi, Sangini, DDamas, Giantti, Nakshatra, Collection G, Gold

Expressions, Vivah Gold & Kiah.

Tanishq: In mid-1990s Titan Industries Ltd - promoted by the TATA Group -

entered jewellery retailing through Tanishq. Tanishq has set up production

and sourcing bases by researching the jewellery crafts of India. Its factory,

located at Hosur, Tamil Nadu, is spread across 135,000 square feet and is

equipped with all modern machinery and latest equipment. As on Dec 2008,

there were 115 Tanishq stores spread across major cities in India.

Reliance Jewels: Reliance Retail Ltd entered jewellery retailing by opening

its first store in Bangalore. The company aims to make Reliance Jewels a

one-stop destination that offers consumers a wide range of gold and

diamond jewellery.

Timewear

In 2007, the Indian watches market enjoyed a 2.9% share in the overall

organised retail market as compared with merely 0.3% in the total retail

market. The market size of the watch market was valued at Rs 44 billion in

the same year. The size of this market has expanded due to the changes in

consumer preference and the growing market for international watches in

India. International players like Tag Huer, Rado, Omega, Rolex have even

signed up Indian celebrities

as brand ambassadors to tap the market.

Few timewear retailers

Citizen: Citizen has 38 exclusive outlets in 27 cities across India. The

Exclusive Branded Outlets (EBOs) called First Citizen house the latest

international range of Citizen Watches and display over 800 different

watches. Besides, Citizen Watches are also available at Lifestyle, Shoppers

Stop and more than 250 Citizen Corners (MBOs) across the country.


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Titan: Titan is one of the largest manufacturers of watches in India. It offers

product ranges that include the flagship brand Titan, Edge, Fastrack,

Nebula, Raga, Steel, Regalia, Flip, Sonata, which is available in Titan and

exclusive Sonata stores. As on Dec 2008, there were 245 exclusive Titan

showrooms (World of Titan) across 122 Indian cities in India.

Books, music and gifts

Books, music and gift retailing were the earliest segments that witnessed a

consolidation of business into organised formats. The combined share of

this segment was 1.1% of the total retail market at Rs 164 billion in 2007.

Organised retailers like Planet M, Music World, and Landmark dominatedthe music segment. Archies, a prominent gift retailer, has a presence on

both high streets as well as in malls.

The books and publishing business continues to thrive due to greater

literacy levels and rapidly growing middle class and higher middle class

population, English-speaking middle-class population. Moreover, new

format chains like Crossword, Landmark, Oxford, and now, Odyssey, that fit

into the leisure aspirations of people, are located conveniently, and offer an

ambience conducive to browsing and book buying. As a result, the segment

has been growing further.

Crossword: Crossword was established in Oct 1992, is Indias leading

bookstore chain and a wholly-owned subsidiary of Shoppers Stop Ltd. The

company sells books and other products under the Crossword brand.

Crossword sells a wide variety of products like magazines, CD ROMs,music, stationery and toys apart from books. Crossword provides customers

with cafes, reading tables and cloak facilities at each of its outlets.

Crossword customers can also shop for books using dial-a-book, fax-a-

book and email-a-book facilities offered by the company. Its other services

include gift vouchers, apart from the return, exchange & refunds policy

being followed by the company. Crossword bookstores are presently

located in Mumbai, Bengaluru, Ahmedabad, New Delhi, Pune, Nagpur,

Vadodara, Kolkata, Chennai, Jaipur and Hyderabad.


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Entertainment In 2007, the entertainment segment was worth Rs 456 billion

and had a 3.2% share in the total retail industry. This segment has been

driven by the increasing base of young population in India, whose

entertainment needs has been surging with the influx of malls and

multiplexes that provide leisure retail, gaming, and cinema. Players in the

segment are likely to gain greater market share as the consumer spend on

entertainment is increasing. PVR cinemas, Fun Cinemas, Inox are the

major players in the entertainment retailing space.

Overview of formats/channels The Indian retail industry is categorised into

different retail formats on the basis of the retail operation. The formats are

basically defined on the basis of the size of the outlet, the pricing strategy

followed, the type of merchandise sold, and also the location. Given below

is a list of formats on the basis of the above-mentioned characteristics:

Hypermarkets: Hypermarkets are big-box formats with an average size that

ranges between 60,000-120,000 square feet, and they stock multiple lines

of products such as food and grocery, general merchandise, sports goods,

and apparels. Hypermarkets are mammoth outlets that are fewer in number

but cater to a larger area (3-5 kilometre). HyperCITY, Big Bazaar, RPG

Spencers and Shoprite Hyper are some major players in this format.

Supermarkets: The average size of supermarkets range from 10,000-

30,000 square feet. They are a smaller version of hypermarkets that holds

multiple lines of merchandise but is limited in number when compared with

supermarkets. Supermarkets are spread across the city, are greater in

number, but cater to a smaller area (1-2 kilometer). Foodworld, Food

Bazaar and Spinach are some major players in this format.

Convenience stores: Convenience stores offer easy purchase experience

through easily accessible store locations. The stores are basically small in

size (500-3,000 square feet), which allows quick shopping and fast

checkouts. Subhiksha and Reliance Fresh are some major players in this

format.


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Cash-and-carry outlets: Cash-and-carry outlet is strictly not a retail format,

but considering the business dynamics it follows it can qualify for a retail

format. In a retail business usually a consumer has to purchase one or

more products but under this format, the consumers have to buy a minimum

volume of products or value specified by the cash-and-carry retailer. In this

format the buyers are basically small retailers or catering service providers

who purchase in bulk quantities. This stores size ranges from 100,000

square feet to 300,000 square feet. At present, Metro is a major player that

falls under this format. Wal-marts alliance with Bharti and Tescos with

Trent will also come under the cash-and-carry format.

Discount stores: The focus of these stores is to offer merchandise at a price

that is lower than the market price, and to gain profit from volumes. These


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stores keep merchandise mainly on the basis of its saleability. Usually these

are no-frill stores with simple surroundings and less service. Big Bazaar and

Subhiksha are some famous examples.

Specialty stores: These stores usually specialise in one line/category of

merchandise. As these stores are concerned with only one type of

merchandise, they are able to offer a wider range of products at a lower

price. Examples: Next and Vijay Sales.

Department stores: These stores are typically lifestyle stores where most of

the merchandise constitutes apparels and products other than food and

grocery. These stores offer high quality service to consumers. These storesstock lesser merchandise than other formats since the merchandise is

stored in a presentable manner. Notable examples are Shoppers Stop,

Growth Drivers

Currently, organised retail is in a nascent stage of growth in India as it just

has a 5.9% share in the total India retail trade. However, in recent years,

organised retailing has been growing at a robust rate due to rise in the

number of shopping malls as well as in the number of organised retail

formats. The key factors of growth of organised retail in modern India are

discussed in the following pages.

Rising disposable income of Indian middle-class

The Indian middle-class can be categorised into seekers and strivers, which

is the consuming class and the prime target segment for retailers in India. In

2005, these two categories together constituted around 6.4% of total

households in India but accounted for 20% of the disposable income. By

2015, the middle class is expected to constitute around 25% of total

households and account for 44% of the total disposable income, and by

2025, the respective figures are likely to go up to 46% and 58%. The Indian


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middle-class population and their growing disposable income levels will

drive the future growth of organised retail in India6.

Changing consumer preferences and shopping habits

The prime reason for a paradigm shift in the shopping attitude of the Indian

consumer is the change in their preferences and tastes. Due to the

increasing use of IT and telecom, Indian consumers have become aware of

brands and shops for lifestyle and value brands according to the need and

occasion. Consumers will continue to drive the growth in the organised

retail by expanding the market and compelling retailers to widen their

offerings in terms of brands and in terms of variety.

Changing demographics India is one of the youngest and largest consumer

markets in the world with a median age of around 25 years, which is the

lowest as compared with other countries. According to estimates, Indias

median age would be 28 by 2020. It is expected that over 53% of the

population will be under the age of 30 by 2020, which means that the

potential for the Indian retail segment will be enormous. Another plus about

this population is that they will be more dynamic than the previous

generations because their consumption is driven by wants rather than

needs. Thus, the organised retailing, which thrives on lifestyle products, is

expected to receive a boost because of the young population by 2020.

Increase in working population

India is the second-largest country in the world in terms of population, and

is the largestconsumer markets in the world owing to its favourable

demographics. In 2008 Indias working population (in the 15-49 years age

group) constituted around 53% of the population as compared with 48.6% in

the UK, 49% in the US, and 53% in Russia. Further, the increase in the

number of working women has fuelled the growth in sales of discretionary


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items. There has been a 20% increase in the number of working women in

the last decade

OPPORTUNITIES IN INDIAN RETAILING IN 21ST CENTURY

1. UNTAPPED RURAL MARKET IN INDIA

Indian rural market offers a sea of opportunity for retail sector. The urban-

rural split in consumer spending stands at 9:11 with rural India accounting

for 55% of private retail consumption. According to Singh, 12.2% of the

worlds consumers live in India. Rural households form 72% of the total

households. This puts the rural market at roughly 720 million customers.Total income in rural India about 43% of the total income is expected to

increase from around US $220 billion in 2004-2005 to US $425 billion by

2010-2011, a CAGR of 12% (India knowledge@wharton, 2011)

So the retailers can exploit the opportunities and tap the Indian rural market

with focused attention and strategies.

2. INDIA-A VIBRANT ECONOMY

Indian retail market is expected to be worth about US $410 billion, with5%of sales through organized retail, means that opportunity in India

remains immense. According to the Retail report, Expanding opportunities

for global retailers released by A.T. Kearney, 2010 Indian retailing is

estimated to grow rapidly up to US $535 billion by 2013 with 10% coming

from organized retail. India topped the list of emerging markets for retail

investment for three consecutive years. India is the second fastest growing

economies in the world, the third largest economy in terms of GDP and

fourth largest in PPP. India is rated among top 10 FDI destinations.

From the above figures we can conclude that India is definitely a country for

healthy investments and provides better opportunities for retailing.

3. YOUNG AND TALENTED POPULATION AND WORKING WOMEN

CLASS:

Increase in young and talented population and also the working women

class have created high disposable incomes that lead to higher

consumption and thus opened the doors for more opportunities for retailers


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to flourish.

4. INTERNET REVOLUTION AND E-TAILING:

Internet revolution and E-tailing are allowing global brand to understand

Indian customers psyche and influence them even before entering the

market. Due to the wide reach of media even in remote markets, consumers

awareness on global brands are increasing and providing better

opportunities for global retailers in India.

CHALLENGES IN INDIAN RETAIL SECTOR:

1.SUSTAINABILITY is the biggest challenge in the 21st century whether

retailers accept it or not. Finance minister Pranab mukherjee in his budget

speech 2010-11 addressed on the wastages in storage as well as in the

operations of the existing food supply chains in the country.

So, the retailers challenge in the 21st century is concentrate on developing

a strong back-end support to help to reduce wastages which is estimated to

be 40% of nations produce.

2. Tax structure is also one of the challenges in retailing because it favours

small retail business 3. High costs of real estate4. Poor infrastructuralfacilities.

5. Lack of adequate retail research on India. Considerable research has

been directed towards retail attributes in western countries however limited

attention has been paid in Indian retail context (Carpenter & Moore, 2006).

6. Shortage of trained manpower.


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CONCLUSION AND SUGGESTIONS:

The urban Indian consumer has grown to a large extent from being a price

only driven buyer to a more discerning buyer who needs to be convinced

about a product's attributes. Urban Indian consumers are aware of potential

environmental impacts and the effect of bio-technology on farming.

Retailers need to improve their communication related to products, the

supply chain operations and provide better organized retail experience to

meet the requirements of the informed urban Indian buyer who is willing to

pay a price premium.

The key attributes that act as motivational factors to drive customers to the

store. The study provides an insight to test the effect of Indian customers

perceptions on retail attributes in the changing business scenario in 21st

century. Findings suggest that:

Product attributes has more profound effect on customers

than store attributes.

Findings reveal that majority of the customers prefer to

purchase from retail outlets on cash payment mode. This

indicates that there are better opportunities for growth in

Indian retail sector.

This study concludes that originality of the product was given

highest preference and Indian customers are more price

sensitive and quality conscious.

Findings also indicates that customers are more inclined to

the retail store that offer better customer services, promotional

offers and discounts.

Location and customer relationship management are another

important factors identified by the customers because they

want to reduce the time, energy and psychic costs involved in

shopping from a retail store.

To compete successfully in this 21st century retailer must focus on


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customer buying experience. Sustainability of the fittest and fastest in the

market is the mantra of todays game plan. So the difference between a

successful retailer and a failed one would be in

Understanding customers perceptions Speed in reaching customers

Updating with latest trends, ideas, and services and forming long

term relations with customers.

Therefore the future belongs to the multi-cannel retailers which provides all

in one roof rather than the single- channel retail stores that offer a network

of channels and store formats that are more transparent to customers

delivering high value.

impact of merchandising in retail store preferences of indian customer

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