Organized retail [Can be used as slides]

Retailing, no marks for guessing this is the most active and attractive sector of the last decade.
A definition of retailing is essential in order to be in a position to assess the impact of retailing and its future potential.
Attractiveness, accessibility and affordability seem to be the key offerings of the retailing chain .

India Retailing
Stands as the Second largest employer in India after Agriculture Sector
Density wise highest in world. Around 12 Million outlets
5.5 outlets per 1000 population
Still evolving as an industry
Untapped large scale rural retail
Highly unorganized
India ranked 5th in the Global A.T Kearney Retail Development Index

Emerging trends
The rise and fall In the dot com companies
Concept of ‘not store’ shopping emerged
Virtual shopping has resulted in store based retailing regaining upper hand

Retail management skills
Benefits of organized retailing
Need for specialization is felt in in areas like strategic management, merchandise management, store management and administrative management

Opportunities
Lack of resemblance as a retailing industry In the modern sense
It presents international retailing specialists with a great opportunity
It was only in the year of 2000 that the global management consultancy AT KEARNEY put a figure to it Rs.400,000 crore which will increase to 800,000 crore by 2005
Retailing in India is thoroughly unorganized
No supply chain management prospective
As much as 96% of the 5 million-plus outlets are smaller than 500 square feet in area which means India’s per capita space is 2 feet which is the smallest in the world
Just over 8% of India’s population is engaged in retailing. There is no data on these sector’s contribution to GDP

Challenges
Competition from unorganized sector
Low prices to compete with unorganized sector
Organized retailing has to cope with the Indian middle class psychology

Customers in retail

Indian Consumer
Ensuring high profits, high margins and low prices
wider choices of products and cheaper prices
generate more employment and wealth
The local retailers will start offering better discount

Ensuring high profits, high margins and low prices wider choices of products and cheaper prices
generate more employment and wealth
The local retailers will start offering better discount

Customer behavior
Retail marketing has come as a boon to the Indian consumers
Change in customer’s perception
Convenience, quality and hygienic surroundings

The Informed Consumer
Increase in consumer awareness
accountability is more pronounced
The consumer also seeks to purchase where his feedback in more valued

Quality of organised retail
Globalization has changed the Indian consumer market. The concept of product quality and service delivery which were earlier not a very engraved in the consumer psyche , are now very much demanded and delivered for in the new age format of organized product retailing

Impact on farmers
Lack of proper technical assistance
No proper awareness of Market prices
Low grade products to the consumers

How can these Barriers become Opportunities?
Quality of Retail has Improved by cold storage & warehousing by the Retail giants
Effective transportation & Modern distribution channels
No Middlemen involved
ITC’s E-Choupals ensures Technological assistance, frequent weather reports
E-Choupal services today reach out to 3.5 Million farmers
Other Retail giants such as Reliance fresh from Reliance group, Field fresh from bharti Group and etc provide better logistics management services & storage facilities .

Employment in retail
Unorganized Employment
Major sector of employment after agriculture
Wages are not based on industry standards
Mom and Pop shops / Kiranas and Mandies are the major sources of employment and income.
Wages are in form of the profit made after sales.

Pros of Unorganized Sector
96 percent of the total retail trade in the country is in the unorganized sector
Unorganized sector employs 40 million Adults translating to 160 million dependents (1:4 ependent ratio)
Job potential, the retail industry is the second largest employer, employing about 4-5 percent of the total work force.
Small-scale retailing provides livelihoods to about 20 million urban workers and 12 million rural vendors.

Cons of Unorganized Sector
Highest tax evasion
Low priority given in maintaining standards and quality
Lot of wastage of food and resources is attributed to unorganized sector
Do not contribute to development of infrastructure such as storage and roadways
Prices of commodities are found to be high due to lot intermediaries.
Wages / Salaries are not based on any industry standard

Pros of Organized Sector
Tax evasion unlikely
Quality is given substantial priority
Growth in Organized Sector attributes to growth in rural sector.
Lesser wastage due to better Supply Chain Management and storage facility
Take part in development of Infrastructure
Bring in technological know how.
Bring in disintermediation as a result help in bringing down cost. The net result is that consumers and farmers get benefited.
Structured salary based on industry standards
Work Life Balance maintained to a considerable level

Cons of Organized Sector.
May break up the existing established system of supply chain causing job losses and political instability.
Families who rely on employment may get impacted as organized sector may lead to large scale closures of small scale retailers
Organized Sector Employment Woes
Paucity of trained retail store level personnel
Organized Sector Employment Woes
Paucity of trained retail managerial skill set
Solution to woes and other abnormalities created by Organized sector
Engage Unorganized sector and train them
Start up institutes or tie up with institutes to over come the potential HR shock.
Institutes and Government should participate with private sector to overcome the skill gap.
Outsource to unorganized for carrying out non-core function whereby providing employment.
Solution to woes and other abnormalities created by Organized sector

Infrastructure & Retail
What is infrastructure
Present marketing operations
In corporation of existing market management
Policy context of infrastructure
Infrastructure issues related to retail market
Inter regional transportation issues
Policy issues for central banks in retail payments

Technical issues
Improvements in infrastructure
Improved physical distribution
Socio economic advancement of specific group
Survey and records
Criteria for selection
Organized Retail's impact on GDP
Organized Retail vis-à-vis GDP
Retail accounts 10% of the country’s GDP
The parallel economy “Black Money”
It facilitates easy flow of goods
It generates huge employment
Helps farmers grow thus I say GDP grows
It brings in retail giants
It would lead to increase in exports

We would no more be just selling Taj Mahal to the world