India’s Retail Evolution

As we understand, retailing involves all activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Simple retailing is maturing into a more microscopic and systematized process.

The era of rural retail industry could be categorized into two formats: weekly markets and village fairs. Primarily weekly formats catered to the daily necessities of villagers. Village fairs were larger in size with a wide variety of goods sold from food, clothing, cosmetics and small consumer durables. The traditional era saw the emergence of the neighborhood ‘Kirana’ store to cater to convenience of the Indian consumers. The era of government support saw indigenous franchise model of store chains run by Khadi & Village Industries Commission. The KVIC has a countrywide chain of 7000 plus stores in India. This period also witnessed the emergence of shopping centers with car parking facility. The Modern era has a host of small and large formats with exclusive outlets showcasing a complete range of products. The department stores and shopping malls targeting to provide a complete destination experience for all segments of the society. The hyper and super markets are consistently trying to provide the customer with the 3 V’s. (Value, Variety and Volume)

Over the last three years, this sector has witnessed an exorbitant growth due to the establishment of numerous international quality formats to suit the Indian purchase behavior, the improvement in retail processes, the development of retail specific properties and the emergence of both, domestic and international organizations.

Retailing sector is the second largest employer in the country with almost over 12 million retail outlets in India and only 4% of them being larger than 500 square feet in size. Although retailing in India is fairly fragmented, organized retailing is gaining momentum rapidly growing at almost 25-30% per annum and is forecasted to touch a figure of Rs I,50,000 crore by 2010. The economy is projected to grow at 8.1% in 2005-2006 having grown at a steady pace of around 6% over the last 10 years.

Organized retailers are the contemporary formats by which shoppers have the edge of a world class shopping experience. Fine examples of these formats are Pantaloon, Shoppers Stop and Trent. Organized retail may broadly be classified into the following formats-

Malls The largest form of organized retiling today. Malls are located mainly in metro cities, in proximity to urban outskirts, this format ranges from approximately 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof.

Hypermarkets They are typically large, starting from 40,000sq. ft plus are usually located outside the city limits. This format comprises of a multiple division layout, and usually has an” industrial- look” interior. Hypermarkets generally provide daily necessities and grocery like items. Pricing is competitive and they also offer volume discounts.

MBO’s Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

Super Markets Large self service outlets, catering to varied shopper needs are termed as Super markets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from a size of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

Discount Stores As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.

Convenience Stores These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.

Departmental Store Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.

Exclusive Store Ranging from a size of 500 sq ft to 5,000 sq ft. & above, this format is owned/ managed by the Company or through its franchise. These can offer single brand as well as multiple bands.

Specialty Store These formats focus on a specific product category, Medium sized layout in strategic location. Specialty stores provide a large variety base for the consumers to choose from.

Despite the presence of the basic ingredients required for growth of the retail industry in India, it still faces substantial hurdles that will retard and inhibit its growth in the future. One of the key impediments is the lack of FDI. This has largely resulted in limited capital investments in supply chain infrastructure, which is a key for development and growth of retailing and has also constrained access to world-class retail practices. Lack of proper infrastructure and relatively high cost of real estate are the other impediments to the growth of retailing. While the industry and the government are trying to remove many of these hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this industry.

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The Evolution of Internet Marketing

Internet marketing is characterized as effectively leveraging your online advertising so you can get a target market that responds to your advertising positively–e.g., purchasing products or availing of services from you. There are some important factors that are critical in the success of internet marketing. These are marketing and promotion, web development and web design.

There are actually many kinds of internet marketing. Search engine marketing refers to advertising your products in search engines such as Google, MSN, and Yahoo. E-mail marketing, on the other hand, provides product or service information to consumers through e-mails or subscription to mailing lists.

One of the most popular Internet programs, affiliate marketing, means commissioning small businessmen to carry your product line in exchange of percentage of sales. Interactive advertising is done through setting up of blogs and forums where you can encourage people to say their opinion about your product or service or even about your company in general.

Viral marketing uses social networking communities to market their products. Such sites have large audience reach, found in different parts of the world.

Internet marketing relies on some known business blueprints. This includes P2P, B2B, and B2C varieties. The first model, peer to peer, entails people to exchange information and even merchandises among themselves. B2B, or business to business, is made up of companies that are making business transactions with each other. Lastly, B2C refers to direct sales to consumers.

PPC or pay per click advertising is one model known to generate big revenues through ads. With this scheme, advertisers will only have to pay every time the user clicks on the ad to drop by their website. The bidding is based on keywords that advertisers think are most searched by their target market in search engines, especially if they’re searching for a particular product.

Every time the user’s keyword directly matches with that of the advertiser, their ads will be featured in the Search Results page. Majority of these search engines make use of this scheme, as evident by MSN AdCenter, Yahoo! Search Marketing, and Google AdWords.

PPA, or pay per action, is similar to PPC, since it also dwells on ads. However, with PPA, an advertiser only gets to pay when there’s an action undertaken by the user, such as a click on the ad, filling out a survey or questionnaire, or through purchase of a product. eBay, AdContext and Google AdSense are some of the classic examples.

Every day there are newer schemes employed when it comes to marketing products. Soon they’ll attain such prominence enjoyed by PPC or PPA. And the evolution of internet marketing will never put to its final rest.

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