Traditional Retailers on the Technology Track

The traditional retailers have visibly embarked on the technology track.

Computers, closed circuit television (CCTV), modern gadgets are now the latest in thing in the retail infrastructure scenario. Obviously the traditional retailers - owners of the mom-n-pop stores - are gearing up.

Most of the participants of this modernisation campaign are in it to be able to meet the stricter reporting requirements of the various government agencies. Their consultants - tax advisers and auditors - are insisting that they deploy the hi-tech reporting mechanisms to be able to better comply with the statutory reporting which, in India, is clearly headed towards the e-world.

Some of the retailers are modernising because their principals - the manufacturers and brand owners of their products - are insisting that they do so. I am aware of a couple of such principals who want their dealers to be online all through the day and use their common infrastructure of their billing and information requirements.

Their is yet another group of retailers that is upgrading because it is the in-thing. They use these modern tools to demonstrate that they in sync with the latest. For this group modernisation is more of a marketing gimmick. They like to be recognized as trend-setters in their group.

Then, there is one group that is upgrading because his neighbour has done it.

Whatever be the reason, the modernization will certainly help these small retail establishments survive the retail onslaught of the big business houses.

The retail onslaught has definitely slowed down.

The government interest in the retail onslaught (Previous Blog) has definitely slowed down the retail onslaught in India. The only news in the media now-a-days in the media is about the activities of the Reliance Retail venture.

This company which is a totally indigenous effort, with no foreign collaboration is going on with its retail programme. It has recently inaugurated its latest venture Reliance Digital, its foray into retailing digital products.

I certainly look forward to findings of the study that was requested by the Prime Minister's Office. The report should make interesting reading and pave out the path for future development in this sector.

Retail Onslaught has government attention

The Indian Government takes notice of the retail onslaught. Prime Minister Manmohan Singh has ordered a full study on the impact of the retail chains on the existing small businesses and retailers.

Sonia Gandhi, the chairperson of the UPA government had voiced concerns over the impact of the "transnational supermarkets" on the local shopkeepers and the Prime Minister's Office (PMO) reacted promptly on the issue. It has gone one step ahead and included the retail chains being set up by the major Indian business houses like the Tata, Reliance, Bharti etc. into the scope of the study.

It must be noted that all the previous governments of the country have always promoted self employment and entrepreneurship specially at all levels and the entry of the large corporates in the retails sector directly impacts this stand.

It appears that the government is keen on making a comprehensive retail policy. In a letter to the Department of Industrial Policy and Promotion (DIPP), the department has been asked by PMO to complete the study in a reasonable timeframe so that it may be used as an input in the policy that is to be made in the near future.

This announcement will certainly make the transnational retail houses and big Indian business houses apply the brakes on their ambitious retail plans in the country.

Let us wait and what the study uncovers. Meanwhile the the small retailers and shopkeepers who were getting scared of the on-coming retail onslaught have got a breather.

Some retailers have struck gold

I am posting on this blog after a long time, it been almost a month.

My work as a software developer has kept me overworked for the last few days. I have started work on a new web-site that is being developed by my company for providing information about Bilaspur in Chhattisgarh, India.

Meanwhile, so much has happened and there is so much to discuss about the changing retail scenario in India.

Most of the shopkeepers in some of the frontrunner cities that are in the immediate horizon of the new large retail players may be a worried lot. But, some of the savvy and open-minded shopkeepers who were located in the prime localities have struck a jackpot.

They have managed to encash the competition amongst the new players for prime location. They have leased out or rented their own shops to the new players who are scouting for premises for their proposed chain of stores. In fact, this solution has made them more than happy. The deals that they have struck will pay them more than what they would otherwise have earned from their shops at the end of the year.

More so, they now have the time and resources to pursue and investigate other options, options that will, hopefully, keep them busy for the day and add to their kitty.

Let us see how things unfold.

Retailing Business Model – Traders v/s Manufacturers

Day before yesterday, I had a discussion with a friend who has spent more than 20 years as a marketing man. He has represented several pharmaceutical companies in various capacities. He has worked in several of the possible positions, both in the field and at office and has been maintaining a bird’s eye-view on the developments in the retail sector.

Here is one interesting view point that emerged from the discussion.

Organized retailing has been in existence in our country for quite some time in two basic forms…

Manufacturer Retailing through Exclusive Showrooms

Organized manufacturer retailing has been in practice for a long time. Several companies, specifically in the textiles segment, have set up their showroom chains in the country in past. These showrooms had one common characteristic and that was they all displayed and sold only the products they themselves produced. These were exclusive showrooms.

There are umpteen examples where it was observed that such showrooms started with a bang, with all the company fan-fare and marketing strength. They did brisk business in the beginning. As time passed, people started wandering away in search of something new, something different and sales would decline. The very USP (unique selling point) with which these showrooms were launched – exclusivity – went against them.

Trade-Oriented Retail - Departmental Stores

Similarly, trade-oriented organized retailing has been around for quite some time now. It is visible in the form of single large departmental stores. The types of products that they offer cover a wider range and in every product category they competing products from competing manufacturers.

Again there are plenty of examples where we have observed that the wider the product range and variety the more customers are drawn to them. This retail model is very popular because it allows the consumers to compare a wider range of products before concluding their purchase.

It will be interesting to see which business model the new corporate giants planning to foray into the retail sector will be adopting.

The plans made public by these players so far reveals a mix of both models. Some have announced their plans of displaying products from various categories and multiple options within each product category. Some of the new retail players are manufacturers or brand owners who will be selling only products of their own brands.