What is Retail Marketing
Retail marketing is not just buying and selling but also rendering all other personalized consumer services. With the RM picking up it has given a new look for various fast moving capital goods (FMCG) goods. This not only increased the demand for various goods in the market but also made retail marketing the second largest employment area, the first being agriculture. Today’s retail market is satisfying diverse needs of its consumers.
The consumer’s needs range from as basic as food & food services to as luxurious as jewelry items. In this chapter, we analyze prominent retail sectors around the world, their structure, and the key players in that sector. The retail sectors are prominently divided into Food, Clothing & Textiles, Consumer Durables, Footwear, Jewelry, Books-Music-Gift Articles, and Fuel.
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India is the nation having the most chaotic retail advertises. Customarily the retail business is controlled by Mom and Pop having Shop in the front and house at the back.
Over 99% retailers work in under 500Sq.Ft of zone. All the stock was obtained according to the test and vim and likes of the proprietor likewise the evaluating was done on promotion hawk premise or by observing at the face. Benefits were aggregated in moderate moving and non-moving stocks which were to end up excess or expended in-house. In this way benefits were vanished without their insight. The Manufactures were to disseminate merchandise through C and F operators to Distributors and Wholesalers.
Retailers happen to source the stock from Wholesalers and reach to end-clients. The stock value used to get expanded, as it were, till it comes to from Manufacturer to End-client. Offering costs were to a great extent not controlled by Manufacturers. Marking was not an issue for larger part of clients. Over 99% clients are value delicate and not quality or Brand Sensitive in the meantime they are Brand cognizant moreover. For the most part the records of exchanging and home are not looked after independently
Week after week Bazaar in numerous little tows was held and every one of the items were on the scene including domesticated animals. Dealing was the unwritten law of market. Instructive capability level of these retailers was constantly low. Thus showcase was controlled by modest bunch of merchants and/or Wholesalers. For all intents and purposes there was just a single configuration of retailing and that was mass retail.
Retailer to customer proportion was low, for every one of the classifications no matter what. Varity regarding quality, Styles were on territorial premise, group based and really low range was accessible at any given single place. Indiscreet purchasing or utilization is limited to nourishment or vegetables and so on. Having additional combine of pants or Shirts or Casuals and Formals and relaxation wear and games wear and distinctive match of shoes for events is till date is an extravagance for greater part populace aside from those living in Metros.
Buying energy of Indian urban purchaser is low and that of Branded stock in classes like Apparels, Cosmetics, Shoes, and Watches Drinks, Food, Jeweler, are gradually saturating the life saver of Indian City people. Anyway electronic and electrical home apparatuses do hold proper picture into the psyches of shoppers. Brand name does make a difference in these white products classifications. In the coming circumstances additionally greater part of sorted out retailers will think that it’s hard to keep adjust with rest of the unbranded retail advertise which is extremely gigantic.
Retailing in India can be projected to the development of the Corner stores (Kirana) taking into account the comfort of the shoppers. While the government support for rural retail, domestic model of store chains run by Khadi and Village Industries Commission. During 1980s as a moderate change, Indian economy has opened up.Textile organizations like Bombay Dyeing, Raymond’s, S Kumar’s and Grasim saw the rise of retail chains. Afterwards, Titan effectively made a sorted out retailing idea and built up a progression of showrooms for its premium watches. The last 50% of the 1990s saw a crisp influx of contestants with a move from Manufactures to Pure Retailers.
For e.g. Sustenance World, Subhiksha and Nilgiris in nourishment and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. 1995 onwards observed a rise of strip malls, for the most part in urban regions, with offices like auto stopping focused to give an entire goal experience to all fragments of society.
The Emergence of Organized Retail in India
The emergence of first phase of organized retailing in India can be traced back when a shopping center into existence in the year 1869 with Mumbai Crawford Market.
After that, in the year 1874 Hogg market, popularly and better known as new market came into existence in Calcutta (Now known as Kolkata) this shopping center was designed by an East Indian Railways Co. Architect R.R. Banya and was named after the then municipal commissioner of Calcutta Sir Stuart Hogg. Earlier the Hogg market even had a garden with a beautiful fountain adding to its ambience and benches too for tired shoppers.
Today, the New Market continues to be a premier shopping area in Kolkata despite a part of it being incinerated in late 1985. Its red-brick Gothic clock-tower today bears testimony to the past Grandeur of this first shopping center in India. Economic reforms starting back in 1991 have enabled India to capitalize on this large pool of educated people. Since the relaxation of foreign investment rules in 2004 India has become the top destination for multinational corporations looking to outsource operations and is now the second largest beneficiary of foreign direct investment.
Within India’s fast-growing economy, real estate has emerged as one of the most appealing investment areas for domestic as well as foreign investors By the end of 2006 Other factors that are contributing to the booming real estate prices include a more mature mortgage market, modern attitudes to home ownership (the average age of a new homeowner is now 32 years compared with 45 years a decade ago).
The young working population is shifting to the more Western philosophy `buy and repay’ as opposed to `save and buy’. GDP growth has reached 9.1% and property prices are increasing by an average 30% cade since 1994. Real estate is able to sustain such fast growth because the demand for property continues to outstrip supply .Government and industry analysts forecast a shortfall of 20m units in urban areas. Cushman and Wakefield have reported that there is an urban shortage of more than 12m homes in the 45-50 cities with a population of more than 1m.
The demand increases by approximately 1.5m homes each year. Other factors that are contributing to the booming real estate prices include a more mature mortgage market, modern attitudes to home ownership (the average age of a new homeowner is now 32 years compared with 45 years a decade ago). The young working population is shifting to the more Western philosophy `buy and repay’ as opposed to `save and buy’The liberalization of Foreign Direct Investment (FDI) rules is also encouraging interest in the country and its real estate market from investors around the world. 2006 has seen further relaxation of FDI rules, widening opportunities for those looking to invest in India.
In February the Government enabled foreign investment in the construction and development sector. In order to spur investment in the vital infrastructure sector 100% foreign direct investment (FDI) is now allowed under the ‘automatic route’This is the first time that the Indian real estate market has been fully opened up to global investors. Over 150 private equity funds including JP Morgan, Goldman Sachs, Morgan Stanley, Deutsche Bank and Blackstone have raised over $10bn to invest in Indian Real Estate.
Where are the investment hotspots? Unlike many other parts of the world the Indian real estate boom is by and large based on sound fundamentals. India consistently proves its long-term potential. However, being such a large and diverse country there are naturally many different markets, each with their own pitfalls and potential. Whether Bangalore, Pune, Calcutta or Chennai or even already sky-high Mumbai and Delhi, the Indian real estate market has the potential to meet the requirements of most investors criteria Retail (incl. shopping malls) India has huge potential for retail expansion and the sector is growing in the region of 10% a year.
Organised retailing currently accounts for only 2-3% of the market compared to 70% in developed countries. Jones Lang Lasalle say the sector is “undergoing structural change, with leading domestic retailers going through rapid growth, format migration and consolidation India’s Boom has acquired further momentum with international giants beginning to test the waters and the country’s big business groups taking bold new steps.
At the same time, in a bid to fortify their existing presence amid growing competition, the early entrants are re-tailoring their strategies to suit the new market landscape. Clearly, the next wave of the retail boom is upon us All these mega moves are, however, not without their own set of problems, some of which already seem daunting. Skilled manpower shortage. Supply chain issues and adequate land for setting shop are proving to be major hurdles for these chains.
But what make $300 billion the Indian retail market suddenly hot despite all the odds are the changing demographics, economic boom and the fact that only 5% of the Indian retail market is currently in the organised sector. According to AT Kearney, organised retail is expected to grow at a rate of approximately 35% per annum till 2010. Which is why the retail sector, piggybacking on the robust growth of the Indian economy, in the coming years.
Today from linen to cakes and fruits to fishes everything is available at the New Market Atta reasonable price and this has made the New Market sustain its popularity among the metro customers of Kolkata. The tenant mix of this first shopping center is unique as it has a large number of 2000 stalls which are organized in an order of merchandize.
There are rows of stalls dealing with one particular line of Goods. A retail researcher by name Christine Furedy in 70s has observed in her article in the capital on 24th Dec. 1979 tracing the emergence of the New Market, thus “The most complex retail business of late nineteenth century Calcutta, establishment which were to dominate the modern retail sector, were the departmental stores.
Although everyone has closed its doors, many Calcutta’s still remembered the name or recognize their converted, subdivided building: Francis, Harrison andHathaway; Hall and Anderson; the Army and Navy stores; white a way; laid low and Co. In their scope and outreach these shops rivaled those to be found in cities of the same size in Britain, Europe or the United States”.
The second phase of development of organised retailing can be traced back to the year 1931 when Bata shoe Co. took lead in opening its chain stores at various cities ; towns. It was followed by DCM and Raymond’s extensively. The earliest seed of the so-called specialty malls can be traced to shopkeepers who stocked goods of the same product category in a particular locality. If one were to go back to the early 80s, it can be said that organised retail, to a great extent was visible in the functioning of stores such as ‘Akbarally’ in Mumbai and ‘Nilgiris’ and ‘Spencers’ in Chennai.
These stores later evolved into multi-chain outlet and were the first to bring on the ‘onset of organised retail’ in India. The evolution of PDS (Public Distribution System) of Grains in India having its origin in the rationing system introduced by the British during World War II was example of single largest retail chain in the country the canteen stores Department and the Post Offices in India are also among the largest network of outlets in the country, reaching populations across state boundaries. The Khadi and Village Industries (KVIC) were set during post-Independence and today it has more than 7000 stores across the country.