New Delhi: Imposing glass buildings with posh interiors, huge discounts displayed right at the entrance, customer service executives holding loyalty card forms and seeking a few minutes of your time: is any of this familiar? Given the way malls are sprouting across our cityscapes and retail outlets fast multiplying, most of us are going to experience these moments.
Dattaguru Hegde, head retail solutions and delivery, MindTree Consulting
According to industry estimates, the organized retail sector in India occupies around 4% of the $350 billion retail market, which is expected to hit the $635 bn mark in 2015. Large Indian corporate houses like Reliance, Tatas and Birlas have diversified into retail and are expanding in a big way to capture market share.
Top global retailers like Metro, McDonalds, Wal-Mart, Staples and GAP are not lagging behind in expansion and have entered, or are entering, India through cash & carry, franchise, licensing or single brand formats. Even the few mom -‘n’- pop stores which are there are fast modernizing store layouts to buck the trend.
However, during expansion, retailers need to have a long term view to address important business and technology issues, so as to enhance customer experience and improve market share and profit.
Appropriate formats to suit the Indian market
In developed markets like the U.S, large formats like hypermarkets and super centre stores work well. However, considering Indian customer shopping patterns, small to medium store (with few items) formats such as convenience stores and supermarkets would be able to drive customer traffic in the city centre and developed localities of tier-1 and tier-2 cities.
Mid-segment and price-sensitive customers still purchase their grocery on a daily or weekly basis, compared to upscale customers who do it on a monthly basis. So they look for such formats to shop in their neighborhood within one or two kilometres.
In specialty segments like electronics, home furnishing and merchandizing, large store formats would be successful. Here, the customer shopping style would be different, wherein he enjoys his weekend shopping and also looks for varieties (breadth and depth).
Enhancing customer experience
To attract customers, retailers have been focusing on promotion schemes, loyalty programmes and few in-store strategies. However, they need to focus on enhancing customer experience in areas of points of sale (POS), customer complaints and parking spaces, too.
Adequate parking space in stores
A time-conscious customer who wants to do quick shopping and sees a ‘No Parking’ sign in front of a convenience store or supermarket would try to locate another store in the neighborhood where there is ample parking space. Only a few retailers have copied convenience and supermarket formats from markets of developed nations, but not all elements.