CHAPTER – 1

INTRODUCTION
TO
THE TOPIC

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 Retail Marketing

Retail Marketing includes all the activities involved in selling goods or services directly to
final consumes for personal, non-business use. Any organization selling to final consumers --
whether a manufacturer, wholesaler, or retailer – is doing retailing. It does not matter how the
goods or services are sold (by Person, Mail, Telephone, Vending Machine, or Internet) or
where they are sold (in a store, on the street, or in the consumer’s home ).

There are many approaches to understanding and defining retail marketing; most emphasize
retail marketing as the business activity of selling goods or services to the final consumer, but
what we emphasized upon is defined as follows:

“Any business that directs its marketing efforts towards satisfying the final consumer
based upon the organization of selling goods and services as a means of distribution”

The concept assumed within this definition is quite important. The final consumer within the
distribution chain is a key concept here as retailers are at the end of the chain and are
involved in a direct interface with the consumer.

A retailer or retail store is any business enterprise, whose sales volume comes primarily from
retailing. Retail organizations exhibit great variety and new forms keep emerging. There are
store retailers, non store retailers, and retail organizations. Consumers today can shop for
goods and services in a wide variety of stores. The best-known type of retailer is the
department store.

A retailer is at the end of the distributive channel. He provides goods and service to the
ultimate consumers. A retailer deals in an assortment of goods to cater to the needs of
consumers. His objective is to make maximum profit out of his enterprise.

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There are three main phases in the life of a retailing institution. These are: -

 Innovation (Entry )

 Trading Up

 Vulnerability.

In the entry stage, a new retailer enters with new price appeal, limiting product offerings,
Spar ton Stores & Limited services. Its monopoly power over the others is its price
advantage, which means that it offers products at low prices so as to get a competitive edge
over its competitors.

In the trading up stage, the retailer starts expanding. It expands in terms of product offering,
better services, and improved interiors. With all these, it starts charging a bit higher prices.

In the vulnerability stage, there is a gap in the market leaving some space for the new players
to come in. this is due to increase in the prices by the retailer.

I have already explained the three stages in life of a retail institution. Normally these stages
are there in the life of a retail institution. But all these may not be necessarily there in every
retail institution. For instance, any retail institution targeting the upper class may start itself
with a large variety & high price.

This brings to broadly identify and categorize the types of retail marketing, which are defined
as follows:

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 TYPES OF RETAIL MARKETING

1. Store Retailing:-

Store retailing provides consumers to shop for goods and services in a wide variety of stores
and it also helps the Consumers to get all the needed goods and services from one shop only.
The different types of store retailing are given below:

 Specialty Stores

These stores focus on leisure tastes of different individuals. They have a narrow product line
with deep assortment such as apparel stores, sporting goods stores, furniture stores, florists
and bookstores. These stores are usually expensive and satisfy the needs of selected
consumers who have liking or preference for exclusive things.

 Departmental Stores

These stores are usually built in large area and keep variety of goods under one shed. It is
usually divided into different sections like clothing, kids section, home furnishings, electronic
appliances and other household goods. In a departmental store a consumer can buy variety of
goods under one shed.

 Super Market

These stores are relatively large, low cost, low margin, high volume, self service operations
designed to serve total needs for food, laundry and household maintenance products.
Supermarkets earn an operating profit of only 1 percent on sales and 10percent on net worth.

 Convenience Stores

These are relatively small stores located near residential area, open for long hours seven days
a week, and carrying a limited line of high turnover convenience products at slightly higher
prices than departmental stores. Many such stores also have added takeout sandwiches, coffee
and pastries.

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 Off - Price Retailer

These stores sell goods at low price with lower margins & higher volumes. These stores sell
goods with deteriorated quality. The defects are normally minor. This target at the persons
belonging to the lower income group, though some have a collection of imported goods
aimed to target the younger generation. The company owned showroom selling the seconds
products is a typical example of off - price retailer.

 Discount Store

These stores sell standard merchandise at lower prices by accepting lower margins and
selling higher volumes. The use of occasional discounts or specials does not make a discount
store. A true discount store regularly sells its merchandise at lower prices, offering mostly
national brands, not inferior goods.

In recent years, many discount retailers have “traded up”. They have improved decor, added
new lines and services, and opened suburban branches—all of which has led to higher costs
and prices and as some department stores have cut their prices to compete with discounters.

Not only that, discount stores have moved beyond general merchandise into specialty
merchandise stores, such as discount sporting goods stores, electronics stores, and
bookstores.

 Catalog Showroom

Catalog showrooms generally sell a broad selection of high-markup, fast-moving, brand-

name goods at discount prices. These include jewelry, power tools, cameras, luggage small
appliances, toys, and sporting goods. Catalog showrooms make their money by cutting costs
and margins to provide low prices that will attract a higher volume of sales. Catalog
showrooms have been struggling in recent years to hold their share of the retail market.

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 Major Formats of Retailing

Format Description The Value Proposition

Branded Stores Exclusive showrooms either owned or Complete range available for a
franchised out by a manufacturer. given brand, Certified product
quality.

Specialty Stores Focus on a specific consumer need; Greater choice to the consumer,
carry most of the brands available. comparison between brands
possible

Department Stores Large stores having a wide variety of One stop shop catering to varied
products, organized into different consumer needs.
departments, such as clothing, furniture,
appliances, toys, etc.

Supermarkets Extremely large self-services retail One stop shop catering to varied
outlets. consumer needs.

Discount Stores Stores offering discounts on the retail Low prices.

price through selling high volumes and
reaping the economies of scale.

Hyper-mart Larger than a Supermarket, sometimes Low prices, vast choice

with a warehouse appearance, generally available including services as
 
located in quieter parts of the city cafeterias.

Convenience Stores Small self-service formats located in Convenient location and

crowded urban areas. extended operating hours.

Shopping Malls An enclosure having different formats Variety of shops available close
of in-store retailers, all under one roof. to each other.

Source: India info line

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2. Non-store Retailing

It is another type of retail marketing. Different types of non-store retailing are given below:

 Direct Selling

Direct selling which started centuries ago with itinerant peddlers has burgeoned into a $9
billion industry, with over 600 companies selling door to door, office to office, or at home
sales parties. A variant of direct selling is called multilevel marketing, whereby companies
such as Amway recruit independent businesspeople who act as distributors for their products,
who in turn recruit and sell to sub distributors, who eventually recruit others to sell their
products, usually in customer homes.

 Direct Marketing

Direct marketing has its roots in mail-order marketing but today includes reaching people in
other ways than visiting their homes or offices, including telemarketing, television direct
response marketing, and electronic shopping.

 Automatic Vending

Automatic vending has been applied to a considerable variety of merchandise, including

impulse goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot
beverages) and other products (hosiery, cosmetics, food snacks, hot soups and food,
paperbacks, record albums, film, T-shirts, insurance policies, and even fishing worms).

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 Organized Retail Formats in India

Each of the retail stars has identified and settled into a feasible and sustainable business
model of its own.

 Shoppers' Stop - Department store format

 Westside - Emulated the Marks & Spencer model of 100 per cent private label, very
good value for money merchandise for the entire family

 Giant and Big Bazaar - Hypermarket/cash & carry store

 Food World and Nilgiris – Supermarket format

 Pantaloons and The Home Store - Specialty retailing

 Tanishq has very successfully pioneered a very high quality organized retail business
in fine jewellery.

Source: ksa technopak

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Structure of the retailing industry according to ownership patterns:

 An unaffiliated or independent retailer

 A chain retailer or corporate retail chain

 A franchise system

 A Leased Department (LD)

 Vertical Marketing System (VMS)

 Consumer Co-operatives

A new entrant in the retail environment is the 'discounter' format. It is also is known as cash
and-carry or hypermarket. These formats usually work on bulk buying and bulk selling.
Shopping experience in terms of ambience or the service is not the mainstay here. RPG group
has set up the first 'discounter' in Hyderabad called the Giant. Now Pantaloon is following
suit.

Two categories of customers visit these retail outlets.

1. The small retailer. For example, a customer of Giant could be a dhabawala who needs to
buy edible oil in bulk.

2. The regular consumer who spends on big volumes (large pack sizes) because of a price
advantage per unit.

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Retailing in India is still evolving and the sector is witnessing a series of experiments across
the country with new formats being tested out; the old ones tweaked around or just discarded.
Some of these are listed in Table below.

Retailer Current Format New Formats

Shoppers' Stop Department Store Quasi-mall

Ebony Department Store Quasi-mall, smaller outlets, adding

food retail

Crossword Large bookstore Corner shops

Pyramid Department Store Quasi-mall, food retail

Pantaloon Own brand store Hypermarket

Subhishka Supermarket Considering moving to self service

Vitan Supermarket Suburban discount store

Foodworld Food supermarket Hypermarket, Foodworld express

Glob us Department Store Small fashion stores

Bombay Bazaar Super market Aggregation of Kiranas

Efoodmart Food super market Aggregation of Kiranas

Metro Departmental store Cash and carry

S Kumar's Departmental store Discount store

Source: India info line

Retailers are also trying out smaller versions of their stores in an attempt to reach a maximum
number of consumers. Crossword bookstores are experimenting with Crossword Corner, to
increase reach and business from their stores. Food World is experimenting with a format of
one-fourth the normal size called Food World Express.

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 Trends in Retail Marketing

At this point, I can summarize the main development retailers and manufacturers need to take
into account as they plan their competitive strategies.

In India the trends are mainly in three sectors. These sectors are:

Trends in retail marketing

Urban Suburban Rural

1. New retail forms and combinations continually emerge. Bank branches and ATM counters
have opened in supermarkets.

2. New retail forms are facing a shorter life span. They are rapidly copied and quickly lose
their novelty.

3. The electronic age has significantly increased the growth of non store retailing, consumers
receive sales offers in the mail and over television, computers, and telephones, to which they
can immediately respond by calling a toll-free number or via computer.

4. Competition today is increasingly intertype, or between different types of store outlets.

Discount stores, catalog showrooms, and department stores all compete for the same
consumers. The competition between chain superstores and smaller independently owned
stores has become particularly heated. Because of their bulk buying power, chains get more
favorable terms than independents, and the chains’ large square footage allows them to put in
cafes and bathrooms. In many locations, the arrival of a superstore has forced nearby
independents out of business.

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6. Marketing channels are increasingly becoming professionally managed and programmed.
retail organizations are increasingly designing and launching new store formats targeted to
different lifestyle groups. They are not sticking to one format, such as department stores, but
are moving into a mix of retail formats.

7. Technology is becoming critical as a competitive tool. Retailers are using computers to

produce better forecasts, control inventory costs, order electronically from suppliers, send e-
mail between stores, and even sell to customers within stores. They are adopting checkout
scanning systems, electronic funds transfer, and improved merchandise-handling systems.

8. Retailers with unique formats and strong brand positioning are increasingly moving into
other countries. McDonald’s, The Limited, Gap, and Toys “R” Us have become globally
prominent as a result of their great marketing prowess.

RETAILING – THE SUNRISE INDUSTRY

INTRODUCTION

The word ‘retail’ means to sell or be sold directly to individuals. Retail is India’s largest
industry, and arguably the one with the most impact on the population. It is the country’s
largest source of employment after agriculture, has the deepest penetration to rural India, and
generates more than 10percent of India’s GDP. However, retailing in India has so far, been
mostly in the hand of small disorganized entrepreneurs. It is also India’s least evolved
industries. In fact, it is not even considered a real industry. The industry suffers from lack of
management talent, poor access to capital, unfavorable regulation and denial of access to best
practices. The Indian retail industry is only now beginning to evolve in line with the
transformation that has swept other large economies.

The Indian Retailing Industry stands poised to take off into the 21st century. It is one of the
fastest growing sectors in the nation that caters to the world's second largest consumer
market. Retail boom is unabating. India has five million retailers with a business volume of
$180 million growing at 5 to 7 per cent a year. The middle class drives retailing anywhere in
the world and this segment should have reasonable income. The next driver is availability of
variety of goods, products and brands. The third one is “sense of awareness”.

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In other developing economies, this transformation has already begun. In many of these
countries, organized retail already has a 40 percent share of the market, compared to India’s
current levels of 2 percent. As India goes through this transformation, new businesses with
sales of 1billion – 2 billion US $ will be created in grocery and of 250million - 500million
US $ in apparel. Smaller but still interesting opportunities will be created in other sectors like
books, electronics, and music. This transformation will also impact the supply chain in
agriculture, the tax collections from trade and the way people shop.

OVERVIEW OF THE GLOBAL RETAIL INDUSTRY

Retail: world largest industry

Retail, with total sales of $ 6.6 trillion, is the world’s largest private industry ahead of
financial industries $ 5.1 trillion. It is also home to a number of the world’s largest
enterprises. Over 50 of the Fortune 500 companies, and around 25 of the Asian top 500
companies, are retailers. The industry accounts for over 8 percent of the GDP in western
economies.Retail: Largest private industry in the world economy

Source: Euro monitor

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A Study by Mc Kinsey states that organized retail accounts for just around 2 percent (out of
which modern retail formats account for 7 percent of trade) presently is set to grow at
exponential exceeding 35 percent. Fitch estimates the current share of organized retail to
grow from 2percent presently to around 15 to 20 percent by 2010.

Retail Consumption areas US $ billion Existing Companies in the organized

sector

Food Retailing 130 Food Bazaar (Pantaloon) Food World

Subhishka.

Clothing & Apparel 12 Pantaloon Westside, Shoppers Stop

Jewelry, Watches 7 Tanishq, Titan, Gold Bazaar

(Pantaloon)

Home Furnishing 5 Home Store, Arcus (Pantaloon)

Foot wear 1.7 Bata, Woodland

Beauty Care 3.6 VLCC, Health & Glow

Source: economic time’s industry report

Traditionally, most retailers have had very localized operations. This localized nature of the
industry is changing as retailers face low rates of growth and threatened profitability at home.
New geographies will help them sustain top-line growth as well as permit global sourcing.
Profits in retail have steadily been rising and have generated 18 percent shareholder returns
between 1994 and 1999. Significantly, retail is also one of the world’s largest employers,
accounting for instance 16 percent of the US workforce, Poland 12 percent, China 8percent,
India 10 percent and Brazil 6percent. Factors such as scale in sourcing, merchandising,
operational effectiveness and ambience have driven the spread of organized retail.

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Grocery, electronics are examples of categories that compete on the strength of better pricing,
which in turn is driven by superior sourcing and merchandising and cost-efficient operations.
Wal-Mart, Home Depot and Kingfisher are benchmark retailers in these fields.

In apparel, home furnishings and furniture, the advantage is driven by the marketers’ ability
to provide better products in a comfortable ambience at affordable prices. In these cases
sourcing capability has to be backed by strong design capability and store management.
IKEA and GAP are good examples of this model of retailing.

Over the last few decades, retail formats have changed radically. The basic department stores
and co-operatives of the early 20th Century have given way to mass merchandisers,
hypermarkets, warehouse clubs, category killers, discounters and convenience stores. Each of
these formats has been driven by marketer’s need to offer relevant, distinctive and economic
propositions to an evolving consumer base.

Global retailers have also reached a position of strength that enables their brand to be
leveraged across a wide range of services. Many of them have expanded their offering, over
the years to include fuel retail, car retail, convenience services and personal financial
services. This has put them in a position where they are not only beginning to capture growth
from geographical expansion, but are also entering large new areas of business.

A BRIEF OVERVIEW ABOUT BIG RETIAL PLAYERS IN

INDIA

Shoppers’ Stop

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Shoppers' Stop Ltd., was started by the Rahejas, with the very first outlet being in Mumbai (a
retail area of 4500 sq. ft.) in 1991. It now holds around 1, 95,000 sq. ft. of retail space from
Shoppers' Stop alone. It also has chain of stores in other formats, with Cross words and
Shoppersstop.Com under its wings

 Shoppers' Stop, is a specialty chain of garment and accessory retail stores with outlets in
Mumbai, Bangalore, Hyderabad, Jaipur, and New Delhi.

 Crosswords is a specialty chain of books, music and gifts retail stores with outlets in
Mumbai, Bangalore, Ahmedabad, Delhi, Pune, Nasik, Goa and Vadodara.

 Shoppersstop.Com (India) Pvt. Ltd, is 100percent subsidiary of Shoppers' Stop Ltd. It has
been floated with the intention of breaking down location barriers and helping customers
from around the world to "Feel the Shoppers' Stop shopping experience", online.

As per the Asst. Marketing Manager Mr. Pransanjeet Dutt Barua, at Shopper’s Stop (Ansal
Plaza), what makes Shopper’s Stop different from other stores is the entire experience of
shopping, that a customer goes through while shopping at Shopper’s Stop.

To ensure its reach to its target audience Shopper’s Stop engages in advertising on the net,
through news papers, TV, radio, banners, hoardings, outdoor displays etc.

Shoppers stop loyalty programmed to its customers start with shoppers stop first citizen
programmed claims to have generated a database of over 410,000 customer which it uses to
target special sales.

Although, shoppers stop has capture large market share in retail format store it has many
loyal customers and giving world class shopping experience. But when shoppers stop initially
setup its apparel outlets they could not deliver on the international experience that high value
customers were expecting. Not only that the company went into expansion mode without
investing adequately in process and systems. Net result, shoppers stop reported the net losses
of Rs. 8.4 crores and 23 crore in the financial years ended March 2000 and 2001. But right
now it is with the helm of fashion and trend that is demanded by the customers that is why
shoppers stop is writing a successful retailing amongst the organized format retailers.

BigJo’s

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One of the top stores on the priority list of a Delhi – based shopping spree seems to have top
of the mind awareness, due to successful advertising and cashing on the credit earned over
the years, in terms of good quality merchandise available in large variety.

Bigjo’s started under the aegis of JAINSON’S outfit is today a standard, that the connoisseurs
of fine taste swear by from men’s, women’s, kids fashion wear to every conceivable fashion
accessories to the most wanted home accessories. It has that entire customer needs in our
everyday life.

Existing on 2 prime shopping locations - South Extension and C.P. adds to its advantages to
capture its target customers, who, belong to the relatively high-income category.

The store deals mostly in fabricated products, and sells mostly its own branded products. Like
others store, Big Jo’s too cares for its loyal customers base through loyalty programs using
loyalty cards and special occasion greetings. It also announces discount sales and other
promotional offers at least twice to thrice in a year, in order to induce the non-regular buyers
to come to the store, having an implicit motive of stock clearance too

Pantaloon Retail ( India ) Limited

Pantaloon is among the leading players in the Indian retail market place. The Company has
three formats – departmental stores, hypermarkets and supermarkets. The departmental stores
are christened Pantaloon Stores, while hypermarkets are called Big Bazaar and supermarkets
are called Food Bazaar. The Company currently has 14 departmental stores, five Big Bazaars
and one Food Bazaar, which are operational, with close to 204,000 sq. ft. of total area. The
Company has embarked on an aggressive expansion plan of adding close to 150,000 sq. ft. of
retail space annually. The plans for the next two years involve the opening of five Big
Bazaars, a chain of 10 Food Bazaars and four departmental stores. The Company expects a

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turnover of Rs10bn by 2005.The Biyani family controls the management of Pantaloon and is
involved in the day-to-day operations of the business. The family entered the business of
textile manufacturing in the second half of 1980s. The Group has a weaving plant for
producing trouser lengths, which are sold under the brand name Pantaloon. The Company
entered retailing in the late 1980s with the introduction of Pantaloon shops across the
country, using franchisee formats. In the late 1990s, the Company forayed into the
departmental store format. Pantaloon Departmental Stores were amongst the first stores,
which capitalized on the private label advantages. Almost 75 percent of the merchandise sold
in the stores is private label, which gives higher profitability. The Company entered into the
hyper market format in 2001, which it believes is the next phase of retail development for a
price-conscious consuming nation like India and is, therefore, going to concentrate on this
format for future growth.

Pantaloons entered retailing as a form of forward integration from apparel manufacturing to

retailing.

 In big bazar average consumer spends of Rs. 550 per visit.

 At food bazar It is close to Rs. 400.

 At pantaloons the average revenue per consumer is much higher at Rs. 1,150.

 At dscount store big bazar, Mr. Biyani says his co-branded credit card programme with
ICICI Bank is a big hit and has gone on to become the second largest co branded credit
card programme in the country in less than a year.

 We have more than 150,000 consumers enrolled into the programme and all this has
happened in less than a year he says.

 Pantaloons big success in retailing because of by a strong preference for own label
apparel brands rather than manufacturer owned brands this provides a huge margin to the
company 70% of its fashion labels are in-house.

 Pantaloons is in expansion mood in a dynamic way in the next two years. Currently
having 13 stores and wishing to add another 20 in two year and looking at Rs. 10,000 –
1100 crore of business.

PIRAMYD

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Piramyd Retail & Merchandising Ltd, which runs full line department stores catering to the
middle and upper middle class in Socio-economic classification AI, A and B. Mr. Kiushor
Iyer is the ED and CEO of the organization. The company’s intention to expand from t e
current 3 stores 17-20 the new stores will be located in the north and west, apart from
Kolkatta.

Piramyd has to have all the leading National and International brands having seen the
perception of its customers and fashions.

Recently pyramid opened its first store in Delhi giving a big competitor edge to the existing
retailer, like Ebony, Bigjos, Pantaloons and lifestyle and west side.

It has a wide range of in-house brand also which keeps a comparatively better margins.

Top 10 Retailers Worldwide

Rank Retailer No of stores Sales in US$

owned Millions

1 Wall-Mart Stores Inc. 4178 $180,787

(USA)

2 Carrefour Group (France) 8130 $61,047

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 3 The Kroger Co. (USA) 3445 $49,000

4 The Home Depot, Inc. 1134 $45,738

(USA)

5 Royal Ahold (Netherlands) 7150 $45,729

6 Metro AG (Germany) 2169 $44,189

7 Kmart Corporation (USA) 2105 $37,028

8 Sears, Roebuck and Co. 2231 $36,823

(USA)

9 Albertson's, Inc. (USA) 2512 $36,726

10 Target Corporation (USA) 1307 $36,362

Source: economic times industry report .

Studies by consulting firms like A.T. Kearney, KSA Technopak, and McKinsey & Co. in
India have indicated a huge potential for retailing in the country. Drawn by the magic number
of Rs 1, 60, 000 crore that is expected to be the size of the retail industry by the end of the
first decade of this millennium, several companies from the organized sector have also
jumped into the fray.

In this millennium, like in the last, customers will want to spend time with their family and
friends. They may like to visit malls on weekends where everything will be available under
one roof. India will benefit from these developments because of increased consumption
through retailing and the corresponding increase in employment created by retailing.

RETAIL MARKETING IN INDIA

Retail marketing is the most important part of the entire logistics chain in a business
especially in consumer related products. Without proper retailing the companies can't do their
business. Retailing is the process of selling goods in small quantities to the public and is not
meant for resale. Retail is derived from the French word retailer, meaning to cut a piece off or
to break bulk.

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There are various ways of making goods available to consumers like:

 Company to distributor to wholesaler to retailer to consumer

 Company to salesperson to consumer

 Company to consumers (online/ phone/ catalog ordering)

These three are among the most common ways of making the goods available to consumers.
But in India the three layered system of distributor, wholesaler and retailer, forms the
backbone of the front-end logistics of most of the consumer-good companies.

In this system the company operating on all India basis appoints hundreds of distributors
across the country that supplies to various retailers and wholesalers. Wholesalers in turn can
either directly sell in the market or can supply to retailers. The current retailing system
prevalent across the country is highly fragmented and unorganized. Anyone with some
money and some real estate can open a small shop and become a retailer catering to the
locality in which he opens the shop.

There are a number of reasons behind this fragmented retail market. Some of the major
reasons being:

 Poverty and lower literacy levels.

 Low per capita income.

 Savings focused and less indulgence mindset.

 Poor infrastructure facilities like roads etc.

 Restrictions on intra-state good movement.

 High taxes.

 No exposure to media.

 High import duties on imported goods.

 FDI in retailing is not allowed.

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  Retailing is not considered as a business or industry by

the government.

 Hitherto none of the business schools in India were offering specialized courses
on retailing.

 Expensive supply chain.

Besides this there is other reasons too, which led to stifling of growth of organized segment
of retailing sector and which instead led to highly fragmented market.

Today in India we have more than 12 million retail outlets and most of then are family run
and locally owned. There are very few nationally present retail stores. In India the process of
buying and selling at these unorganized retail outlets, is highly characterized by bargaining
and negotiations. But slowly with

increasing influence of media and urbanization the market is shifting towards organized
segment. Seeing the huge market size of retail business in the country and the current level of
organized segment, many players have jumped into the fray and many are waiting for the
right opportunity to enter it.

Retailing in 1990s

On account of the liberalization drive in the 1990s, several structural and demographic
changes that are taking place are helping the industry to grow. The GDP has grown by
6.6percent in the last decade resulting in increased income levels and higher purchasing
power for the population. Increasing literacy levels, increasing number of working women,
increasing urbanization, higher international travel by Indian population and increasing media
penetration has raised aspiration levels of the population, resulting in demand for better
shopping experience and larger variety of goods. India has close to 54percent of population
below the age of 25, which translates into higher prospects for increased consumption levels
in the future. Finally, interest rates have also declined in the past few years further propelling
the consumption demand.

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These factors were the key drivers for the retail wave in the country. Notable among the early
entrants were players like Shoppers Stop, Pantaloon, Ebony, Foodworld, Subhiksha, etc.
Initially, the growth in organized retail was very slow and concentrated mainly in metros,
with south India holding its ground as the pioneer in organized retail growth, on account of
the low cost of real estate. Due to the high investments required in the early stages and the
fact that real estate was the key deciding factor for success of stores, real estate developers
have been the major players in the industry (see Table).

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 Sponsors

Group Retail Business

Rajan Raheja – Real Estate Developer Globus – Chain of departmental stores

K, Raheja - Real Estate Developer Shopper’s Stop - Chain of departmental

stores

Hiranandani - Real Estate Developer Haiko supermarket, Loft shoe stores and
Hakone mall.

Tata – Diversified Business House Westside – chain of department stores

DS Group - Real Estate Developer Ebony - chain of department stores

RPG – Diversified Business House Foodworld supermarkets, Giant

hypermarkets, Health & Glow beauty
and health stores.

DLF – Real Estate Developer DLF malls

ITC - Diversified Business House Wills Sport – Chain of apparel stored.

Source: Fitch

In the early 1990s, as the players were lower down on the learning curve many faltered in
their models, and growth of the industry remained slow. The second half of 1990s saw
several players making losses and exiting from the business. The worst years for the industry
were 2000 and 2001, as the stock market downturn, which reduced customer confidence and
spending, had a direct impact on the performance of the industry. The industry recovered
starting 2002. It now appears the efforts and learning’s of the players in the

last decade are beginning to pay off; the organized retail industry has established firm roots
and is beginning to grow.

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Present Retail Scenario In India

 Retail experts find Indian industry promising

 Retail sales to touch Rs. 30,000 crore by 2005

 Mall Mania: The developing mall culture in India

 Emergence of region-specific formats

 Emergence of discount formats

 Entry of international players

Retail experts find Indian industry promising

The retail movement in India has acquired the critical mass that is required for rapid
acceleration in terms of industry growth as well as geographical spread. The Indian retail
industry can no longer be called nascent.

The spread of super stores to the northern cities such as Delhi, Chandigarh, Jaipur and
Kolkata is evidence of the fact that organized retailing in India has emerged from its southern
bastion.

The retailing boom is being driven by increased expectations as well as changing shopping
behavior of the urban Indian consumer. With the increasing number of nuclear families,
working women, greater work pressure and increased commuting time, consumers are
looking for convenience. And, convenience is defined as having everything under one roof,
longer hours and multiplicity of choice.

On the supply side, the current inefficient supply chain in India, particularly for food items
has led a few players to consolidate their operations to take advantage of economies of scale
and match consumer expectations in terms of delivery as well as space. So, we have a
situation where both demand and supply side dynamics are fuelling the growth of organized
retailing in India, although improvements in the supply chain are yet to fully match with
consumer expectations.

25
The future growth need not necessarily come only from the big metros, where there already
exists a good retail network. The fact that big Indian retail chains are moving into places like
Indore or Chandigarh is an important indicator of future growth. For the Rs. 5000-crore
organized retail industry it is, perhaps, time to tap the relatively smaller cities.

Mall Mania: The Developing Mall Culture in India

Modern malls made their entry into India in the late 1990s, with the establishment of
Crossroads in Mumbai and Ansals Plaza in Delhi. By early 2001, several mall projects were
announced. According to market estimates, close to 12 million sq. ft. of mall space is being
developed across several cities in the country, of which 10 million sq. ft. is expected to be
operational by end of 2003 (see Table below). With this, rentals for retail properties have
shown a marked decline, which has brought down the break-even levels of the retail projects.
Moreover, retailers would now have access to retail-specific properties, which will increase
their efficiencies.

26
 Mall Development in India

Mall Location Rate / Sq. ft.

Crossroads Tardeo, Mumbai 225-250

Ansals South Ex, Delhi 175-200
Nirmal Lifestyle Mulund, Mumbai 75-90
Runweals Mall Mulund, Mumbai 75-90
Karnavat Mall Thane, Mumbai 65-85
Raheja Mind space Malad, Mumbai 60-80
Jog’s Mall Andheri, Mumbai 55-75
Cable Corporation Borevali, Mumbai 55-75
Ansals East Delhi 75
Sahara Gurgaon 50-70
MGF Malls – Metroplitian Gurgaon 65-85*
& Plaza
DLF Gurgaon 65-85
Shipra Noida 80-180
Forum KolKotta 100
City Center KolKotta 55
Rave 3 Kanpur 45-55
Inox Baroda 75
Forum Bangalore 70-90
Spencers Plaza Phase III Chennai 70

*average for the metropolitian is Rs. 60 per sq. ft..

source: Chesterten Meghraj. Industry Reports

Till some time back, there were only few international style shopping malls in India --
Spencer in Chennai, Crossroads in Mumbai, Ansals Plaza in New Delhi and Sriram’s Arcade
in Kolkata. By the end of 2004, that number jumped to many.

27
It looks like a virtual stampede, major players with a cumulative investment of Rs 375 crore
are set to change cityscapes across India. In the next one year, close to 40 lakh square feet of
retail space will be developed. In three years, this will rise to 70-lakh sq ft.

As the retail industry evolves, consumers want more variety before making their purchase
decision. A study on consumer outlook suggests that over 80 percent of consumers want a
wide range of products at hand while shopping. This signifies that people are finally ready for
multi-option complexes.

Many old-time corporate are seriously considering using their idle assets. It makes sense for
landowners to develop it and keep the returns rather than sell it outright or even lease it,
especially when there is opportunity here. It is perhaps the best way to use an idle real estate
asset.

The limited kitty of brands has yet another significant knock on effect on the typical size of
Indian malls. In the US and South-East Asia, malls are as large as 50 lakh sq ft. Spencer is by
far the largest mall in India - it occupies 7 lakh sq ft and even that is dwarfed by Asia's largest
mall, the 4-million sq ft mega mall in Malaysia. Even the 26 malls that are being planned are
likely to measure between 50,000 sq ft and 2 lakh sq ft. The Indian mall cannot offer too
many choices in terms of brands. So, developing a very large mall can never be sustainable.

There's a flip side though -malls even as small as 80,000 sq ft, like Shopper's City in Kolkata
or the Esplanade Mall at Kochi, can be sustained.

Emergence of Discount Formats

Larger discount formats, popularly known as hypermarkets, are now emerging as major
competitors to both unorganized and organized retailers. Penetration of organized retail into
the lower strata of income groups and consumer demand for increased value-for-money has
improved the prospects of these formats. These formats span across the entire range of
merchandise categories. Big Bazaar, promoted by Pantaloon and Giant, promoted by the RPG
Group, are examples of this format.

28
Entry of International Players

A large number of international retailers have evinced interest in India, despite the absence of
favorable government policy for foreign players (see Table below). A number of the major
brands have entered the country through licensing agreements with Indian players to
capitalize on the opportunities available in the sector.

International players

International Players Retail Ventures In India

Landmarc Group, Dubai Lifestyle Chain of Departmental Stores

Metro, Germany Hypermarket

Shoprite, South Africa Supermarket, Hypermarket

Nanz, Germany Supermarket

Marks & Spencer, UK Apparel Retailer

Mango, Spain Apparel Retailer

McDonalds, USA Food Retailer

Dominos USA Food Retailer

Tricon Restaurant, USA Food Retailer

Source: Industry Reports

29
 FACTORS THAT WOULD MAKE OR BREAK THE
INDUSTRY

Issues and Challenges Facing Retailing

Despite the size and the phenomenal potential that exists, retailing is among the lesser-
evolved sectors of the Indian Industry. Retailing as an industry is yet to be recognised in
India. The policy environment is currently seen to be unfavorable to organized retailing.

Given the huge investments that need to be made, a look on the Foreign Direct Investment
Policy in the sector might be needed. Complex sales tax rates, octroi and excise structures are
major deterrents. Other impediments to growth of retail include the bureaucracy, inflexible
labour laws and multiple licensing requirements. Real estate in India is also not geared to
facilitate organized retailing. The various crumbling issues affecting retail trade are discussed
in detail as under:

 Restrictions on Foreign Direct Investment

The Indian economy is highly regulated and the most significant regulation is the
restriction of foreign ownership. Globally FDI is a popular source of funding for any
business activity but prevailing laws of land do allow FDI in retailing.

A strong FDI presence in retail sector is expected to not only boost the retail scenario, but
also act as a driving force in attracting FDI in upstream activities as well. This will be more
prominent in food processing and packaging industries because many large retail chains also
promote their own brands by way of backward integration/contract manufacturing. The status
of organized retailing in some South East Asian countries that allowed FDI in retailing has
been given in Table below:

30
 Country Organized Retailing Traditional Retailing

Malaysia 50 percent 50 percent

Thailand 50 percent 50 percent

Philippines 35 percent 65 percent

Indonesia 25 percent 75 percent

South Korea 15 percent 85 percent

China 10 percent 90 percent

India 2 percent 98 percent

Source: economic times

There are indications that finally that dismantling of barrier is around the corner because
world’s largest retailer wants to enter India as they consider India, Russia, and China to be
the big bets. Wal-Mart people want to increase its buying from India to US$ 5 billion in fact
recently it signed a deal with liberty footwear’s of India to source and stock its range in their
stores and talks with dairy major AMUL are also in advanced stages. Also Britain’s largest
retailer Tesco also wants to enter India and has already established an IT-BPO centre in
Bangalore its 1st outside UK.

So, the pressure is building up and in view of the demands made by industry and the need to
boost the retail trade, the government is actively considering removing the restrictions. A
recent note circulated by the Ministry of Commerce has proposed permission for FDI up to
100 per cent in retail trade subject to government approval on a case-to-case basis. However,
this permission, if it is given, will be with lots of strings attached.

Besides following rules on minimum capitalization, the foreign entrants will be expected to
neutralize the outflow of foreign exchange (repatriation of dividends) by way of export
earnings on a year-to-year basis. The erstwhile NDA government announced in April 2004
that it will be allowing 25 percent FDI in select retail sectors.

31
 The final permission was awaited but with the change of government at centre and
communist parties having a decisive role in new electorate, all aspects will be appraised
afresh and the wait might prolong but sooner or later it has to come.

The biggest opposition to allowing 100 percent FDI is the feared exit of the small retailers.
Currently, moves are on to counter these apprehensions and the players are keenly awaiting
the final decision from the Government.

 Land and property Laws

There is a shortage of good quality retail space and rents are high for what is available.
Compounding these shortages are the following problems.

 One of the drivers of property prices is the high demand for space in the cities. This
demand is exasperated by the flow of black money (undeclared for tax purpose) that is
generally invested in the property sector.

 Only Indians can own property in India, which complimenting the restrictions placed
on FDI, restrict the entry of foreign players.

 Stamp duties on property deals are significant (12.5percent in Gujarat and 8percent in
Delhi). The lease alone can cost up to 6-10 per cent of sales while it's just 3-5 per cent
globally.

 The initial urban planning of cities was done with smaller plots in mind which along
with rigid building and zoning laws make it difficult for procurement of retail space.

 The urban land ceiling act and rent control acts have distorted property markets in
cities, leading to exceptionally high property prices.

 The presence of strong pro-tenancy laws make it difficult to evict tenants and make
people reluctant to give real estate on rent. The problem is compounded by problems
of clear titles to own

32
 Labour laws
The labour laws instituted to protect store workers are not flexible enough to support the
modern formats of retailing. These rigidities in the law constrain the operations of
modern- retail outlets.
Working hours are restricted, with shops required to close one day of the week and the
hiring of part-time employees is difficult, however in Bangalore, the State Government
has permitted flexibility in the use of labour without doing away with the associated
benefits accruing to it.

 Taxes

 Corporation tax is 38percent and this would be even higher at 45percent for a foreign
business.

 Even essential basic foodstuffs are taxed (8percent on milk).

 The varying sales tax rate across states make supply chain management an even more
difficult task for retailers.

With the expected introduction of Value Added Tax (VAT) in April 2003, some of the sales
tax anomalies in the supply chain could get correct over a period of time. However, retailers
might also be additionally burdened as given below:-

Changing tax structure: Retailer margins to come under VAT net

In the tax regime contemplated from April 1 2005, VAT will be imposed at every stage
between the manufacturer and the final consumer. Thus, margin payable to the distributor and
the retailer will also be taxed.

As retailers and wholesalers would be taxed under VAT, their margins will decline.
Companies, in turn, will come under pressure to increase trade and distributors margins to the
extent of the tax being paid by them, thus pushing up the cost of the product. The MRP could
therefore increase in order to neutralize the impact of VAT on margins. Goods with a long
distribution chain between the manufacturer and final consumer, such as FMCG items and
consumer durable, would be the worst affected.

33
 Roadblocks in Retail Development

Factors Description Implications

Barriers to  FDI not permitted in pure  Absence of global players

FDI retailing
 Limited exposure to best
 Franchisee arrangement practices
allowed

Lack of  Government does not  Restricted availability of

Industry recognize the Industry finance

Status  Restricts growth and scaling

up

Structural  Lack of urbanization  Lack of awareness of Indian

Impediments consumers
 Poor transportation
infrastructure  Restricted retail growth

 Consumer habit of buying  Growth of small, one-store

fresh foods Administered formats, with unmatchable cost
pricing structure

 Wastage of almost 20%-25%

of farm produce

High Cost of  Pro-tenant rent laws  Difficult to find good real

Real estate in terms of location and

 Non-availability of
size
Estate government land, zoning
restrictions  High land cost owing to
constrained supply
 Lack of clear ownership titles,
high stamp duty (10%)  Disorganized nature of

34
 transactions

Supply Chain  Several segments like food  Limited product range

Bottlenecks and apparel reserved for SSIs.

 Makes scaling up difficult
 Distribution, logistics
 High cost and complexity of
constraints – restrictions of
sourcing & planning
purchase and movement of
 Lack of value addition and
food grains, absence of cold
increase in costs by almost
chain infrastructure
15%
 Long intermediation chain

Complex  Differential sales tax rates  Added cost and complexity of

Taxation across states distribution

System  Multi-point octroi  Cost advantage for smaller

stores through tax evasion
 Sales tax avoidance by
smaller stores

Multiple  Stringent labor laws  Limits flexibility in operations

Legislations governing hours of work,

 Irritant value in establishing
minimum wage payments
chain operations; adds to
 Multiple licenses / clearances overall costs
required

Customer  Local consumption habits  Leads to product proliferation

Preferences  Need for variety  Need to stock larger number of

SKUs at store level
 Cultural issues
 Increases complexity in
sourcing & planning

 Increases the cost of store

35
 management

Availability of  Highly educated class does  Lack of trained personnel

Talent not consider retailing a

 Higher trial and error in
profession of choice
managing retail operations
 Lack of proper training
 Increase in personnel costs

Manufacturers  No increase in margins  Manufacturers refuse to dis-

Backlash intermediate and pass on

intermediary margins to
retailers

Source: Market Participants, Fitch

Factors that would lead to growth

 Increasing growth in disposable income.

 Increasing demand of products by consumers.

 Changing life styles.

 Better product and shopping options available with consumers.

 Relaxation of a number of regulations by government.

 Rethinking on existing Real estate laws (like governmental plans for ULCA).

 Restructuring in Tax regime (like uniform sales tax for all states).

 Increased investment and focus on infrastructure by Government.

36
 RESEARCH

METHODOLOGY

37
 RESEARCH METHDOLOGY

There are many factors that affect the flow of visitors to organized retailing outlets and to
attract a consistent volume of traffic it is imperative that the retailers consider them and to
ensure that it works. In order to understand what consumers feel about the same a study was
conducted among different age groups, sex and income.

Research Design

A mix of exploratory and descriptive research.

RESEARCH INSTRUMENT

Questionnaire

SAMPLE SIZE

50 Consumers

38
OBJECTIVE
OF
THE STUDY

39
 OBJECTIVE OF THE STUDY

1. To understand the factors that influence shoppers to visit organized retail outlets.

2. To find out ways to leverage these factors so that there is an increased flow of walk-ins
into these organized retail outlets.

40
 DATA ANALYSIS
AND
INTERPRETATION

41
 DATA ANALYSIS

1. How frequently do you visit a shopping mall?

Once in two month - 8/50

Once a month - 18/50

Twice in a month - 11/50

Once a week or more - 04/50

None - 02/50

On patterns of visit - 7/50

42
2.. Which day in a week normally do you prefer going to a mall?

Sunday - 25/50

Monday - 05/50

Tuesday - 02/50

Wednesday - 0

Thursday - 0

Friday - 05/50

Saturday - 11/50

No specific day - 02/50

43
3. When you visit a mall, you go

Alone - 05/50

With family - 10/50

With friends - 35/50

44
4. What do you make generally purchase from malls?

Apparel - 32/50

Accessories - 24/50

Utility - 15/50

Jewellery - 0/50

Cosmetics - 14/50

Books - 10/50

Consumer durables - 5/50

45
5. Age Group ( in years )

15-25 - 35/50

25-35 - 13/50

35-45 - 02/50

46
6. Gender Ratio

Male - 31/50

Female - 19/50

47
LIMITATIONS

48
 LIMITATIONS OF THE PROJECT

 Reluctance of the concerned staff members to provide information,

 Small sample size,

 Lack of Time & Resources.

 Lack of Interest of the respondents.

49
SUGGESTIONS

50
 FINDINGS AND SUGGESTIONS

Retailers must consider these factors in order to enhance that they come out with program
marketing innovations that pull the customers to their malls.

Factors that influence visit to a shopping mall

Discount

Not at all Some what Important Extremely

important important important

Discount 10 42 26 22

Majority of the respondents felt that discounts offered by the retailers are an important factor
that attracts them to the stores. This makes it imperative for the retailers to come out with
attractive discount schemes to lure the visitors to their stores.

Display

Not at all Some what Important Extremely

important important important

Display 11 20 37 32

51
The display and layout of store is an important factor that pulls the consumers towards
shopping malls. Good interior which facilitates display of items in an attractive way is
necessary to elicit response from the target consumers.

Location

Not at all Some what Important Extremely

important important important

Location 13 27 31 29

Respondents have felt that location is an important factor that influences them to visit a
shopping mall. This is especially important in large cities where shoppers would like to have
them located in areas that would be near to their residence. Time is a perishable commodity
and shoppers have the least tone to go shopping at a far away location.

Parking space

Not at all Some what Important Extremely

important important important

Packing space 11 19 31 39

Parking space is an extremely important factor for the respondents that make them choose the
right shopping mall. This could be understood as we see that most of the shoppers like to visit
with their family or friends for which they require four wheelers. There is a genuine lack of
parking space across the cities making the task of parking an arduous one. If this space is not
there, then it can act as an impediment against the shoppers from visiting malls.

Figures prove that the preferred way of visiting malls is with friends, followed by family and
lonely visit being the least preferred. Schemes that encourage people to come with their
preferred groups such as friends or family can be used to achieve report visits from them.

Food-joints

Not at all Some what Important Extremely

important important important

52
 Food joints 17 23 31 29

A food joint is an important factor that influences the consumers to visit shopping malls.
Eating out is slowly turning out to be a favorite past time for the urban middle class
consumers. When they com7e for shopping they look forward to munching something
different from what they get home. So shopping malls with eating joints attract consumers
better than the ones without.

Ambience

Not at all Some what Important Extremely

important important important

Ambience 9 25 31 35

Ambience attracts people. This goes along with shopping malls too. Aesthetically designed
interiors attract shoppers as this has an affect on their mind. It lifts their self-esteem to a
higher level. Satisfaction of aspirations of the consumers also happens when consumers visit
shopping malls that matches what they think where they should be visiting for shopping.
Hence this rated as important by the respondents.

Service

Not at all Some what Important Extremely

important important important

Service - 13 39 48

Service has become extremely important these days especially for any service unit in which
human touch is of crucial importance. Respondents have pointed out that quality of service is
an extremely important factor that influences their decision to visit a shopping mall or not.
Consumers always like to be pampered and it is here the kind of service provided by the
personnel come into picture. If they are able to give personalized service to the customers
then retailers are going to succeed in gaining and retaining clientele.

53
Personnel

Not at all Some what Important Extremely

important important important

Personnel - 27 40 33

Quality of personnel that provide service is also an important factor that has a high effect on
the shopper’s attitude towards a retailing mall. Their grooming and appearance along with
their ability to provide individual attention to the customers is considered by the shoppers
while performing a mall over the other.

Face to face with celebrities

Not at all Some what Important Extremely
important important important

Face to face 42 21 16 20
with celebrities

Celebrities are always wanted by the public. When it comes to shopping the respondents
have given it as the least important factor that influences them. This proves that they don’t
like to get distracted while shopping nor are they interested in wasting time meeting
celebrities.

Referrals

Not at all Some what Important Extremely

important important important

Referrals 21 36 18 25

Best form of getting increase in business is making use of the existing customer base to
promote the brand. Word of mouth communication between the shoppers and prospective
shoppers is the cheapest way to increase the footfall in a shopping mall. This is considered to
be an important factor by the respondents.

54
Product categories preferred

Shopping for apparels is the highest on the list of items bought from shopping malls.
Footwear also finds a place at the top. Apart from accessories and utility items bought from
malls, books are being taken as another source of attractions by the shoppers.

Frequency of visit to a shopping mall

From the data analysis it is evident that visit to shopping malls is not apart of a routine unlike
what we find in the west where consumers ship more often. This could be attributed to the
lack of spending power among the consumers and also a lack of awareness among them
about the efficacies of a big shopping mall. There are very few who visit once in a week or
more. Many of them don’t have a specific pattern of visit making it occasional.

Preference of a weekly day for a visit to the shopping mall

Data shows that consumers prefer going to the malls during the weekends with Sunday being
the most popular choice followed by Saturday. During the middle of the week we find that
very few visit the malls. This clearly throws light upon the significance of sales promotion
schemes during the middle of the week to attract consumers even during these days too.

55
RECOMMENDATION

56
 RECOMMENDATIONS

Recipe for success ( for retailers )

 Focus on the consumer:

It is clear that consumers have changed and they are looking for something different.
Understanding their evolving needs, aspirations and lifestyles is the underlying key to
success for any retailer. The primary emphasis should be on access, experience and
service and the secondary emphasis on product and price. There should be an effort to
improve service by having better trained sales staff, better availability of products, and
minor but important conveniences, e.g. delivery of goods either to the car or even home.
Collaborative advertising and promotion can then round off this effort

 Brand the store:

Branding the store will increase volume and enhance customer loyalty. Branding is
critical to maintaining competitive differentiation in an increasingly challenging retail
environment. However, the brand needs to be clearly communicated to the customer.

 Develop private label brand:

Private labels act as margin generators, increasing sales volume by positioning the label
as providing higher perceived value to consumers. In the long run, they also increase the
retailers’ bargaining power with national brand suppliers. Private labels generate
customer loyalty by providing exclusive products, which works towards differentiation
strategy, much sought after by the retailers.

57
 In terms of geography

Some entrepreneurs should put efforts in creating custom-developed solutions for tapping
the rural and semi-urban spending potential. Even in non-metro urban centers, there are
very good opportunities in looking at starting or expanding operations. Some cities that
should see greater organized retail action in the future would be Ludhiana, Chandigarh,
Lucknow, Nagpur, Ahmedabad, Surat, Pune, Kochi, Thiruvananthapuram, Guwahati and
Bhubaneshwar.

 In terms of format

Malls have a sustainable competitive advantage over other formats. Consumer

preferences are shifting towards malls from traditional markets. As a result of consumer
shifts, retailers also prefer to be located in malls in anticipation of higher footfall. KSA
Consumer Outlook 2000 shows that increasingly consumers prefer "All under One Roof”
destination for shopping as well as eating out and entertainment. These findings together
indicate an excellent potential for a mall with the following features:

1. a superior well-managed leisure experience

2. targeted at all members of the household

3. comprising of shopping, dining and entertainment, all under one roof

4. a wide range of products and services

5. proximity to homes

Recipe for success ( for government )

58
 Permit FDI in retail:

FDI has played a key role in rapid development of high quality retail in development of
several other developing countries. Allowing retail global retailers to invest in this sector
would attract the best practices as several retailers (such as Tesco, Toys’R’, Wal-Mart etc)
have already evinced interest in building business here. Though a strong united lobby is
against introduction of FDI in retail but if broad based reforms are executed we are likely to
see both employment and growth in retail

 Remove bottlenecks in the supply chain:

To adequately develop the upstream, policy makers need to do away with the constraints on
processing, manufacturing and distribution. Especially distribution part has to be focused
more as every year according to some industry estimates an whopping amount of Rs 50000
crores is in transferring, storage and distribution. Also government should stress on
building better infrastructure such as of roads, rail and ports etc so that delivery time could be
reduced and spoilage, breakage could be reduced to minimum.

 Organized market for real estate:

The objective here is to ensure a regular supply of real estate by ensuring transparency in
dealings. It can be done by ensuring proper rent laws by linking rents to market value,
making zoning laws more flexible and ensuring that usage norms take into account both
demand and supply without affecting balance both in rural and urban areas

Simplify the tax structure:

Government should ensure adoption of a uniform sales tax rate across country and introduce
VAT, also wherever Octroi is levied that should also be withdrawn.

59
 Flexibility of labour laws:

Permitting flexibility in the use of labour without doing away with the benefits accruing to
them will permit retailers to better organize operations and improve capacity utilization, it
will include permitting retail businesses to stay open all days of week, encouraging use of
part time labour etc.

 Ensure single window clearance for retail chains:

State Governments should make all licenses and permits available through a single agency at
least at the city level. Providing one time licenses for multiple stores in a chain will ease the
bureaucratic hurdle experienced by modern retailers.

60
CONCLUSION

61
 CONCLUSION

India has the scale and the potential to transform itself into a retail powerhouse. It has been
rated as the fifth most powerful and most attractive emerging market for retail globally. Over
the next five years the market is certain to evolve significantly and we shall see growth of a
few retailers beyond the Rs 1000 crore turnover (USD 230 million), with significant
expansion in network size.

Here I would like to say that

t every retail outlet in Delhi is trying to be the best in this present
hyper competitive business scenario. It is also very clear from earlier pages that there is no
remarkable difference between the USP of the retail stores in Delhi. Though, in spite of not
having any difference they are still competing with each other. Even Ebony is trying to
follow the chain system and very soon they are planning to open their outlet in Gujarat.

Though retailing in India is still largely traditional but the advent of modern trade has started
to worry them and people are talking about the end of show for them but they have to
understand the fact that they have certain unique advantages over modern formats like an
unmatchable retail network across the country, proximity to customer, a very low almost zero
cost structure and service levels which modern formats cannot match in even a longer span of
time. Similarly modern trade has some advantages over traditional unorganized trade like
ability to offer better prices and service due to their strong bargaining power with
manufacturers which comes due to the scales at which they operate wider and deeper
merchandise and assortment, better efficient operations etc. Both the traditional and modern
trade can co-exist and flourish together, all they have to do is to identify their USPs, niches
etc and build up on them, after all it is the survival of fittest, those who will adapt according
to changing times will stand in the competition in the long run.

For the retail sector to achieve further growth, the spread of organized retailing has to become
a national phenomenon. According to KSA Technopak, a leading consulting firm, the
organized sector will grow to almost Rs.30, 000 crores by 2005, representing 6 percent of the

62
total retail market. The top 6 cities will account for 66 percent of total organized retailing.
Although many international retailers and brands still regard India as too difficult, they would
welcome the opportunity to create an appropriate joint venture, if they felt India was
changing. The growth of the organized retail industry in the country will mean thousands of
new jobs, increasing income levels and living standards, better products, and services, a
better shopping experience, and more social activities.

63
QUESTIONNARE

64
 QUESTIONNARE
CLASSIFICATON DATA

NAME ----------------------------------------------------
AGE ----------------------------------------------------
OCCUPATION ---------------------------------------------------
GENDER ---------------------------------------------------
INCOME ---------------------------------------------------

Q:1 - From where do you prefer shopping?

Shopping Mall -----------------------------
Traditional Market -----------------------------

Q: 2- How frequently do you visit a shopping Mall?

Once in two month ------------------------------
Once a month ------------------------------
Once a week ------------------------------
Your own pattern of visits -----------------------------

Q3: - Which days in a week normally do you prefer going to a

mall?
Sunday ----------------------------
Monday ----------------------------
Tuesday ----------------------------
Wednesday ----------------------------
Thursday ---------------------------
Friday ---------------------------

65
 Saturday ---------------------------

Q:4 - When you visit a mall you go?

Alone ---------------------
With Family ---------------------
With Friends --------------------

Q:5 - What do you generally purchase from malls?

Apparel -------------------------
Accessories -------------------------
Jewellery -------------------------
Grocery -------------------------
Cosmetics ------------------------
Books ------------------------
Consumer Durable -------------------------
Others -----------------------

Q:6 - Do you believe that the products in shopping malls are economical?
Yes -----------------------
No -----------------------

Q:7 - Does shopping from malls provide you value for money?
Yes ------------------------
No -----------------------

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Q:8 - Rank the shopping mall & Traditional market on the basis of following
factor?
1 - Unsatisfactory, 2-Satisfactory, 3-Good, 4-Very good

Shopping Mall Market

Discounts
Display
Location
Parking space

Food joints
Ambience
Service
Personnel
Referrals

.Q:9 - Which is your most preferred shopping mall and why?

----------------------------------------------
--------------------------------------------
---------------------------------------------

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BIBLIOGRAPHY

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 BIBILOGRAPHY

Reference Books:
Kotler Philip, Marketing Management-Principles in Marketing.

Burns & Bush, Marketing Research

Malik Shilpa, 2003, Retail real state malls in India

Websites:
www.infoshop.com, January 2005,"Indian Retail Industry: Strategies, Trends and
Opportunities"

Www.equitymaster.com, September 2004, "A tale of retailing”

www.fastmoving.co.za, March 2005, "Retail in India" .

www.rediff.com, march 2005,"Great homes, great malls coming!"

www.domain-b.com

www.indiainfoline.com/bisc/mmrm, “services to retail customers "

Magazines, reports and news:

Economic Times, ET knowledge series, Changing gears - Retailing in India.

Business Today, Pantaloon - Rajah of retail, mar ch 13 -15

Reports by Euro monitor international agency

Industry reports on retailing sector by CII, FICCI

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