Its been too much silence from my end for my readers I guess. The last post was made by me in the last year and most probably the global economic meltdown made me mum. Was unable to get the motivation to back in this sphere. You may name it a 'Hibernation" phase of mine, where experienced many people at Chennai in a new work place and have learnt many lessons of corporate leadership and entrepreneurship. Honesty is not always the best business practices at India may be where, there would be always a status quo exists inbetween corporate ethics and corporate obligations towards employers v/s employees. We'll discuss this topic may be in some other forum again.
SCOPE OF RETAILING: FMCG 2 : In my last discussion we started a topic on retail management practices in India, which left unfinished and allow me to gain back my momentum. The word ‘retail’ is derived from the French word ‘retailer’, meaning ‘to cut a piece off’ or ‘ to break bulk’. In simple terms, it implies a first-hand transaction with the customer.
Retailing can be defined as the buying and selling of goods and services. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable.
Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today.
TYPES OF RETAIL OPERATIONS:
Retail operations enable a store to function smoothly without any hindrances. The significant types of retail operations consist of:
• Department store
• Specialty store
• Discount/Mass Merchandisers
• Warehouse/Wholesale clubs
• Factory outlet
Retail Management System targets small and mid-size retailers seeking to automate their stores. The package runs on personal computers to manage a range of store operations and customer marketing tasks, including point of sale; operations; inventory control and tracking; pricing; sales and promotions; customer management and marketing; employee management; customized reports; and information security.
THE EMERGING SECTORS IN RETAILING:
Retailing, one of the largest sectors in the global economy, is going through a transition phase not only in
It is the non-food segment, however that foray has been made into a variety of new sectors. These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon,
RETAIL INDUSTRY IN
Retail sales, which amounted to about Rs7,400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%.
In a developing country like
Retailing is a `technology-intensive' industry. It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1,200 point-of-sales counters of JC Penney to its corporate headquarters. Successful retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and thereby, save cost. Wal-Mart pioneered the concept of building a competitive advantage through distribution and information systems in the retailing industry. They introduced two innovative logistics techniques - cross-docking and electronic data interchange.
Today, online systems link point-of-sales terminals to the main office where detailed analyses on sales by item, classification, stores or vendor are carried out online. Besides vendors, the focus of the retailing sector is to develop the link with the consumer. `Data Warehousing' is an established concept in the advanced nations. With the help of `database retailing', information on existing and potential customers is tracked. Besides knowing what was purchased and by whom, information on softer issues such as demographics and psychographics is captured.
Retailing, as discussed before, is at a nascent stage in our country. Most organized players have managed to put the front ends in place, but these are relatively easy to copy. The relatively complicated information systems and underlying technologies are in the process of being established. Most grocery retailers such as FoodWorld have started tracking consumer purchases through CRM. The lifestyle retailers through their `affinity clubs' and `reward clubs' are establishing their processes. The traditional retailers will always continue to exist but organised retailers are working towards revamping their business to obtain strategic advantages at various levels - market, cost, knowledge and customer.
With differentiating strategies - value for money, shopping experience, variety, quality, discounts and advanced systems and technology in the back-end, change in the equilibrium with manufacturers and a thorough understanding of the consumer behaviour, the ground is all set for the organised retailers.
It would be important to note, however, that the retailing industry in
Because of the increasing number of nuclear families,working women, greater work pressure and increased commuting time, convenience has become a priority for Indian consumers. They want everything under one roof for easy access and multiplicity of choice. This offers an excellent opportunity for organized retailers in the country who account for just 2% (and modern stores 0.5%) of the estimated US $180 billion worth of goods that are retailed in
GROWTH OF RETAIL OUTLETS IN
ccording to a report by the Centre for Monitoring Indian Economy (CMIE), investments in organized retailing – which include shopping malls, retail chains etc.- doubled from Rs.1,000 crore in January 2000 to Rs. 2,000 crore in January 2001.
TRENDS IN RETAILING:
The single most important evolution that took place along with the retailing revolution was the rise and fall of the dotcom companies. A sudden concept of `non-store' shopping emerged, which threatened to take away the potential of the store. More importantly, the very nature of the customer segment being addressed was almost the same. The computer-savvy individual was also a sub-segment of the `store' frequenting traffic.
Internationally, the concept of Net shopping is yet to be proven. And the poor financial performance of most of the companies offering virtual shopping has resulted in store-based retailing regaining the upper hand. Other forms of non-store shopping including various formats such as catalogue/mail order shopping, direct selling, and so on are growing rapidly. However, the size of the direct market industry is too limited to deter the retailers. For all the convenience that it offers, electronic retailing does not suit products where `look and see' attributes are of importance, as in apparel, or where the value is very high, such as jewellery, or where the performance has to be tested, as of consumer durables. The most critical issue in electronic retailing, especially in a country such as ours, relates to payments and the various security issues involved.
Recent trends include:
• Retailing in