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Consumer perception towards organized retail store

Part-1 General Information

1. About Industry Sector:Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store or kiosk, or by mall, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or directly or through a wholesaler, and then sells smaller quantities to the end-user. Retailers are at the end of the supply chain.

Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. Retail has been one of the largest growing sectors in India over the past few years. Traditionally the retail market in India was largely unorganized; however with changing consumer preferences, organized retail is gradually becoming popular. Organized retail in India is expected to grow at a healthy rate from $18billion in 2008; Retail is usually classified by the type of products as follows: - Food products - Soft goods: clothing, apparel and other fabrics - Hard goods (hard-line retailers): appliances, electronics, furniture, sporting goods, etc. It is expected to touch $ 73billion by 2013 and $170 billion by 2018. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working women population and emerging opportunities in the service sector are going to be the key factors in the growth of the organized retail sector in India.

Consumer perception towards organized retail store

1.1) Overview Of the world Market:1.2) Overview Of The Indian Market:Purchasing power of Indian urban consumer is growing and branded merchandise in categories like apparels, cosmetic, shoes, watches, beverages, food and even jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian Retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The Emphasis is on retail as brand rather than retailers selling brands. Indian Retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money.

Retailing Format in India:1) Mall: - The largest form of organized retailing today located mainly in metro cities, in proximity to urban outskirts .ranges from 60,000 sq.ft. to 7,00,000 sq.ft and above. They lend an ideal shopping experience with an amalgamation of product, service, and entertainment, all under a common roof. For example: pantaloon, pyramid.

2) Specialty Store:-

For Example: - Lilliput for small kids, Mumbai books retailer crossword
etc. 3) Discount Store: - Tend to offer a wide array of products and services, but they compete mainly on price offers extensive price assortment of merchandise at affordable and cut rate prices. Here normally retailers sell less fashion oriented brands.

Consumer perception towards organized retail store

4) Variety Stores: - These offer extremely low cost goods, with limited selection. Demographic: - Retailers that aim at one particular segment. Mom- And Pop:-It is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These store are seen in local community often are family run business. 5) General Store: - A rural Store that supplies the main needs for the local community.

Major formats of non-store retailers

Format Direct Response Television (DRTV) Advertising Including Infomercials Description Marketed directly over television, with prominent display of a toll-free number and/or internet address, asking the consumer to take specific action leading to or making a product sale Catalog Sales/ Online Catalog Sales Customers select products from catalogs and fill out an order form. The order is brought to the sales executive, who completes the order through the warehouse Vending Machines Chewing gum to hot meals have been sold through these machines and have become an integral part of contemporary consumption E-commerce Buying and selling of products or services over electronic Increases consumers ability to gather information about

Value Proposition Rapidly and cost-effectively introduce a new product or revive an under-marketed product

Lower prices than other retailers and lower overhead expenses due to the smaller size of the store

No human efforts required; vending machines are beneficial for low-cost consumables

Consumer perception towards organized retail store

systems such as the Internet and other computer networks Multi-level Marketing Products and company are marketed directly to consumers and potential business partners by means of relationship referrals and word-of-mouth marketing

products and prices

Cost of logistics is low

Retail market overview of India


Continued to growth expected to grow retail market to $73 billion to $130 billion


The Indian Retail Boom is at its peak and this phase has been termed the High Retail Gold Rush


Maintaining Its 1 position as the market with the most opportunity for retail Growth. Indias retail market grew to $330.00 billion.


Retail Boom: - The beginning of the retail boom, India is also ranked as the 1 market for global retailers to enter according to global retail development indices.


Growth: - Standing at $230.00billion, Indias retail market enters the growth phase ,characterised by the entry of new domestic and international participants and


expansion by existing retailers in India.


Consumer perception towards organized retail store

Emerging:- The Indian retail market is classified as emerging market.

Projected growth for Indian retail by 2015 Growth Drivers: Risk and market attractiveness of Indian retail are moderate. Increased spending power and disposable incomes are expected to penetrate the retail sector. Expectant relaxation of FDI norms beyond single brand retailers. Multiple investment routes in retail to international retailers: via master or regional franchisees, cash and carry wholesale trading, licensing agreements with national retailers and setting up a manufacturing base in India allowing sales in India as well as 100.0% foreign equity.

Consumer perception towards organized retail store

Retail sales ($)

700 600 500 400 300 200 100 0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Retail sales ($

Sales performance by retail sector: Trends Affecting Indian Retail Industry

1) Changing age profile & Disintegration of joint family

India is believed to have an average age of 24 years for its population as against 36 years for the USA and 30 years for China. A younger population tends to have higher aspirations and spends more as it enters the earning phase. Also, nuclearisation of families has led to enhanced demand. 2) Growing disposable income

More Indian households are getting added to the consuming class with the growth in income levels. Also, with declining interest rates, the aversion of domestic consumers to taking loans is also fast disappearing. 3) Globalization:growing media penetration is leading to a convergence of aspirations of various classes of consumers, bridging the rural-urban divide. The modern consumer cannot be satisfied by any product or service that is lesser in quality than the best offered in any other place on the globe.

2. About Major Organized Store in Retail industry:-

Consumer perception towards organized retail store

Pantaloon Retail: - Pantaloon headquartered in Mumbai with 450 stores across

the country employing more than 18,000 people. It can boast of launching the first hyper market big bazaar in India in 2001.It is not only largest retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments- food & Grocery (Big Bazaar, Food Bazaar), Home Solutions (Home Town, Furniture Bazaar), Consumer Electronics (E-zone), Shoes (shoe Factory), Health & Beauty care services (star, sitara and health village in the pipeline), Entertainment (Bowing Co.)

Its Innovations Include E-commerce hybrid format of small shops.

Consumers will be encouraged to browse through the entire range of products on digital screen. They will be able to place the order, the delivery of which will be arranged by the shop to their homes with a few hours.

K Raheja Group: - K.Raheja group is Indias first departmental store in 2001. It

is the only retailer from India to become a member of prestigious intercontinental group of departmental stores(IGDS).They have signs 50:50 joint venture with the nuance group for Airport retailing crossword brand of book stores, homes stop a store for home solutions mother care a concept stocking merchandise related to childcare are also owned by them. Recently, Raheja have sign an MOU with the home retail group of UK to enter in to a franchise arrangement for the Argos formats of catalogue & internet retailing.

Tata Group:-Established in 1998, Trent- one of the subsidiaries of Tata groupoperates Westside, a lifestyle retail chain and star India Bazaar- a hypermarket with a large assortment of products at the lowest prices. In 2005 It acquired landmark, Indias largest book and music retailer. Another subsidiary, Titan Industries, owns brands like Titan, the watch of India has 200 exclusive outlets the country and tanishq, the jewellery brand, has 87 exclusive outlets.

RPG Group:- One of the first Entrants in to organised Food & Grocery retail with
food world stores in 1996 and then formed as alliance with Dairy farm international and launched health& glow(pharmacy& beauty care) outlets.

Landmark Group:- Landmark group were launched in 1998 in India. Lifestyle is

spread across six cities. Their retail mix includes home solutions (Home centre), Fashion (Lifestyle, land mark international), Hypermarkets & Super markets (max), kids entertainment (Fun city).

Consumer perception towards organized retail store

Piramal Group:- In September 1999,piramal enterprises announced their arrival into retail with the launch of three retail concepts; Indias first true shopping mall of international standards, called crossroads, a lifestyle department store named piramyd Megastore; and a family entertainment centre known as Jammin. Subhiksha: - Subhiksha is a Chennai-based, decade old, no frills, food, grocery, pharma and telecom, discount retail chain. ICICI venture capital holds 24% in the equity capital of Subhiksha. New but potential BIG players. Bharti-walmart: - Their plans include US$7 Billion investment in creating retail network in the country including 100 hypermarkets and several hundred small stores. They have signed a 50:5 percent joint venture agreement with Wal-Mart. Reliance:- Indias most ambitious retail plans are by reliance, with investments to the tune of Rs. 30,000 cr. To set up multiple formats. They are already more than 300 reliance fresh stores and the first reliance mart hyper mart has opened in Ahmedabad. The next one is open at Jamnagar, followed by marts in Delhi, Hyderabad, pune and Ludhiana.

AV Birla Group:- They have a strong presence in apparel retailing through

Madura garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis phillipe, Van Heusen, Allen Sollay, Peter England, Trouser towns.