emerging trends in retail industry (1)

7/29/2019 Emerging Trends in Retail Industry (1)

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EMERGING TRENDS IN RETAIL INDUSTRY

Authors

B.Geetha, V.Gopi Chandra

I MBA

SRK Institute of Technology, Vijayawada

Abstract

The retail industry is a sector of the economy that is comprised of individuals and

companies engaged in the selling of finished products to end user consumers. Multi-store retail

chains in the U.S. are both publicly traded on the stock exchange and privately owned.

Consumers are challenging the industry to adapt to the ways they live and shop today.

Supported by emerging technologies, consumers will be more focused than ever on price and

convenience

Changes in consumer shopping habits and emerging technologies are driving change

across the retail industry. Verizon Business, which delivers integrated, secure IT solutions to

many of the worlds largest retailers, predicts the following five trends will shape the retail

industry in the coming year.

The penetration of organized retail will happen much faster in the coming decade, even in tier 2

and tier 3 cities, because of the changing demographics of our population and a healthy rate of

economic growth. With good underlying economic growth, increase in disposable income,

increased awareness due to penetration of broadband and mobile devices with internet

accessibility, the demand for consumer goods will rise.


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Introduction

Retail

Retail consists of the sale of physical goods or merchandise from a fixed location, such as

a department store, boutique or kiosk, or by mail, in small or individual lots for directconsumption by the purchaser.

What is the Retail Industry?

The retail industry is a sector of the economy that is comprised of individuals and

companies engaged in the selling of finished products to end user consumers. Multi-store retail

chains in the U.S. are both publicly traded on the stock exchange and privately owned.

Retailer

A retailer is a person who sells goods in small quantities.

Classification of Retail Industry

The classification of retail industry is of two types

1. Organised sector.

2. Un-Organised sector.

Organised Sector

The Indian retail industry is divided into unorganized sector and the organized sector.

Organized sector consists of the retail shops which are registered, licensed (where applicable)

and pay sales and income taxes. It also consists of big malls which provide a jubilant shopping

experience with all the glitz and glamour.

Various types of organized sectors are as follows:

1.Hypermarkets/supermarkets: Large self-servicing outlets offering products from a

variety of categories.


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2. Departmental stores: Stores are general retail merchandisers offering quality products

and services.

3. Convenience stores: Stores are located in residential areas with slightly higher prices

goods due to the convenience offered.

4. Shopping malls: The biggest form of retail in India, malls offers customers a mix of all

types of products and services including entertainment and food under a single roof.

5. E-trailers: These are the retailers providing online buying and selling of products and

services.

6. Discount stores: These are factory outlets that give discount on the MRP.

7. Vending: It is a relatively new entry, in the retail sector. Here beverages, snacks and

other small items can be bought via vending machine.

8. Category killers: small specialty stores that offer a variety of categories. They are

known as category killers as they focus on specific categories, such as electronics and

sporting goods. This is also known as Multi Brand Outlets or MBO's.

9. Specialty stores: Retail chains dealing in specific categories and provide deep

assortment. Mumbai's Crossword Book Store and RPG's Music World are couple of

examples.

Unorganized sector

1. Mom-and-pop stores: They are family owned business catering to small sections; they

are individually handled retail outlets and have a personal touch.

Retail industry trends in retail marketing to watch in 2011

Consumers are challenging the industry to adapt to the ways they live and shop today.

Supported by emerging technologies, consumers will be more focused than ever on price and

convenience


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across the retail industry.

Verizon Business, which delivers integrated, secure IT solutions to many of the worlds

largest retailers, predicts the following five trends will shape the retail industry in the coming

year:

1. Mobile commerce demand will spike. Consumers have high expectations for mobile

commerce, or m-commerce, which enables them to make purchases, view coupons and

scan for competitors products all on a mobile device. Customer demand for m-

commerce, however, will outpace retailers ability to deliver it. Retailers must adapt their

IT systems and processes to support m-commerce, or risk alienating customers.

Consumers are challenging the industry to adapt to the ways they live and shop

today. Supported by emerging technologies, consumers will be more focused than ever

on price and convenience

Ravi Bagal, Verizon Business

2. The cloud goes main stream: Cloud is no longer a buzz word. Retailers will turn to the

cloud (Web-based computing delivered as a service) more and more as they look to

control cost and reduce complexity while boosting agility. Retailers will look for secure,

flexible options that enable them to shift critical IT applications to the cloud. Cloud is a

natural fit for retail, given the fast pace of change and seasonal demand spikes of the

business.

3. Ownership of brand shifts from retailer to consumer: Consumers are relying more on

discussions and customer evaluations that take place over social media to drive product

selection, as opposed to supplier or retailer advertising. Consumers will increasingly

ignore store associates and instead conduct research on their own or via their mobile

device while in the store.

4. Security and compliance continue to be concerns: New technologies will require

increased protection of consumer personally identifiable information such as social

security (or national identification) and credit card numbers. Also, with the October

release of the updated PCI DSS, retailers must quickly get up to speed on changes to the


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standard and incorporate them into their IT processes. Updates to the standard will force

retailers to take a much closer look at securing virtualisation technology and improving

risk management capabilities.

5. Shopping in silos will disappear: Previously, retailers operated their various customer

touch points as separate business units, using distinct staffs and business processes for

their Web sites, bricks-and-mortar stores, and mobile commerce engines. Customers,

however, now expect one seamless, consistent store experience, whether they are visiting

the store or its Web site, or shopping from a smart phone.

Importance:

The penetration of organized retail will happen much faster in the coming decade, even in

tier 2 and tier 3 cities, because of the changing demographics of our population and a healthy rateof economic growth. With good underlying economic growth, increase in disposable income,

increased awareness due to penetration of broadband and mobile devices with internet

accessibility, the demand for consumer goods will rise. With better systems and processes in

place, all this is bound to assist in increasing the penetration of the organized retail sector in

India. According to report by McKinsey & Co., the organized retail market in India is expected

to grow to 25-30% by 2015 of the total retail market in India from 8% in 2008. Its value is

estimated to be around US$450 billion by 2015.

Sector wise GDP growth rate in India for 2010- 2011

Sector GDP Growth Rate

Manufacturing 9.8 percent

Farming 4.4 percent

Construction 8.8 percent

Mining 8 percent

Service 9.8 percent

Sector wise GDP growth rate in India for 2010- 2011


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Sector GDP Growth Rate

Manufacturing 9.8 percent

Farming 4.4 percent

Construction 8.8 percent

Mining 8 percent

Service 9.8 percent

Conclusion:


across the retail industry. With the five predictions made by Verizon Business, which delivers

integrated, secure IT solutions to many of the worlds largest retailers may bring some changes

in the recent market trends.

emerging trends in retail industry (1)

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