Consumer Perceptions Towards Different Retail Formats in India

Abstract: The study attempts to identify perceptions of consumers towards existing retail formats in India. To have in-depth study of consumer perceptions, the basis on which consumers have been segmented keeping in view the products to be sold need to be understood. Customers of today carry out extensive research in gathering maximum information about product to be purchased, occasion for which the purchase is to be made as well as from where the purchase is to be made. Their evaluative criteria include price, brand reputation, distribution, promotion, personal selling. The factors causing planned vs unplanned purchasing behaviour and consumer decision process model need to be understood thoroughly. The customers remain in dilemma about outlet choice vs brand choice. Retail is an emerging sector in India. Marketers are leaving no stone unturned to influence the customers by offering them in various ways, at various locations, in various forms resulting in emergence of various retail formats throughout the country. Customers are highly influenced by image of the retail outlet, its attributes, product range, variety, services, employees behaviour, dcor, music and marketing strategies. For this, we need to understand the process of outlet selection, consumer choice and shopping behaviour, the shopping process, shopper types and shopping strategies, choice decisions during shopping process, attempts made by marketers to close the gap between expectation and performance and so on. The retailers should put in efforts focusing on attracting the customers towards the store outlets on continual basis by focusing on their distinct features, thus, adding to the retail formats, followed by persuasion of paying a visit to the store causing a positive impact on the prospects by their effective formats, convincing them to make first purchase, in turn, followed by repeat patronage. Customers of today are not focusing only on the purchase, however, less it is; they are equally concerned with external as well as internal environment of the retail format. Their pre-purchase experience is highly influenced by family members, friends and channels of communication in comparison to competitive offerings. Moreover, needs, perceptions and experiences of customers vary to a great extent which a marker needs to identify and thus make offerings accordingly.

Western wear taking Indian apparel market by storm

A slight slowdown in economic growth and a depreciating rupee value had minimal effect on growth in either the value or volume of apparel sales throughout the 2006-2011 review period. The influence of Western wear infiltrating the Indian culture remained one of the biggest driving factors boosting growth in volume sales. More people are travelling abroad much more frequently and becoming exposed to Western fashion. The increasing disposable income across key cities, comfort fitting and rich appeal are major factors that are driving sales of branded apparel. Whats more, a growing number of people working in the middle- and senior-level management are buying new varieties of Western clothing, spurring this industry to new heights.

Plentiful discounting, seasonal offerings draw consumers

Cotton prices saw a drastic decrease in 2011 and this triggered manufacturers and retailers to offer steep discounts to clear their stock. The festival discounts and seasonal promotions became a key trend to attract consumers, where retailers capitalised effectively on the trend that in India festivals are particularly special occasions for which consumers aspire to purchase new clothing. This festive discount offering has made huge business revenues for manufacturers and retailers during such occasions in the form of, for example, year-end sales, Dasara or Diwali super dhamaka (huge savings) offers, as well as Christmas and New Years sales.
Foreigners making bold moves, but domestic players also strengthening

Global brands are making their mark and increasing their presence across tier 1 and tier 2 cities, whilst at the same time, regional local brands are also upping their competitive presence. Zara increased its number of outlets to six stores in 2011 and is planning to open another four stores in 2012. Other players such as Mango, Arrow and Diesel are also following the same trend. Several global players including Massimmo Dutti, GAP, Banana Republic, and Old Navy may make a further push in 2012 now that the central government has given the nod to 100% FDI in singlebrand retail. Joint ventures including Arvind for IZod and Page Industries, national owner of Speedo, will also increase the presence of global brands in India. Certain local players have also strengthened their presence, investing in aggressive expansion in opening their own exclusive brand outlets (EBOs). Players such as Black Bird, F Square, Ramraj and Mustard in southern India proved tough competition to the national and international brands, these small domestic brands are growing by over 25% annually. These brands are also expanding their base to other parts of India to become national players.
Apparel specialist retailers still represent key retail channel

Approximately 95% of value sales of apparel went through clothing and footwear specialist retailers in 2011, with exclusive brand outlets and specialist clothing stores the main channel for consumers to shop for apparel. However, department stores and leisure and personal goods retailers witnessed strong growth as new shopping malls opened up and offered a wide range of different brands under one roof.
Bright outlook for apparel industry over the forecast period

Value sales of apparel are projected to be very strong over the 2011-2016 forecast period, driven by a growing shift in preference towards Western clothing and branded products, particularly across tier I cities. Companies are also expected to branch out to tier 2 and tier 3 cities outlets across India, which represent as yet an untapped market for branded apparel. The increasing disposable income in these cities, comfort fitting and rich appeal are the major factors that are expected to drive the apparel market towards long-term growth.
Sample Apparel Market Research Report

Sample Apparel Data

Delivery: Files are delivered directly into your account within a few minutes of purchase. Overview Discover the latest market trends and uncover sources of future market growth for the Apparel industry in India with research from Euromonitor's team of in-country analysts. Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections. If you're in the Apparel industry in India, our research will save you time and money while empowering you to make informed, profitable decisions. The Apparel in India market research report includes:

Analysis of key supply-side and demand trends Detailed segmentation of international and local products Historic volumes and values, company and brand market shares Five year forecasts of market trends and market growth Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

What is the market size of Apparel in India? What are the major brands in India? How dynamic is the growth of clothing and footwear internet sales? What is the performance of womens clothing vs mens clothing? What % of clothing and footwear sales goes through grocery retailers?

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India hosts global fashion brands

India being a rapidly growing luxury market in the world has emerged as a key destination for the high end international fashion brands.Read on to explore the current developments in the luxury fashion segment in India.

As per a report, the Indian Fashion Industry has the potential to increase from its net worth of Rs 200 crore to Rs 1,000 crore in the next five to ten years. The total market size of fashion sector in India is approximately Rs 20,000 crore. Further, the size of the branded fashion is nearly one fourth of the total size out of which designerwear covers nearly about 0.2 percent of the branded apparel market. Today, India is an important spot on every International fashion brands international business map. Indian consumers are aware of international trends and have lots of exposure to western fashion sensibilities. There are several well known global luxury fashion brands that have made in road in the countrys market before with many more brands eyeing this booming market. These foreign brands are readily leveraging the potential of the Indian market. The global fashion majors have opted different modes of entry into India including; Joint Ventures, Licensing, Distribution and Franchise route. Thriving market Major push to the Indian fashion has come from factors like increasing number of deep pocketed consumers and retail spaces such as malls and boutiques, fashion consciousness among the age group of below 45. The fashion phenomenon has gripped youth, men and women alike not only in Metros but also in Tier II and III cities. In spite of the presence of many local brands, foreign brands have always caught the fancy of consumers here. Brands fashioning way to India Several apparel brands like Tommy Hilfiger, Marks Spencer, Peter England, Ralph Lauren Polo have marked fashion retailing in India offering world class fashion and shopping experience. Their designer ensemble collections are expensive and mainly target the affluent consumers. New entrants The fashion majors such as Icnonix, LVMH, Roberto Cavelli and Elle are among the new entrants in the Indian fashion scene. Iconix Brand Group from the US has entered into an equal joint venture (JV) arrangement with Reliance Brands. Reliance will launch the Iconix's 20 fashion and lifestyle brands in India. The JV by the name of Imaginative Brand Developer India Pvt. Ltd will own large brand portfolio including; Waverly, Mossimo, Ed Hardy, Peanuts, Cannon, London Fog and Ocean Pacific in the country. It will grant the license of these brands to retailers and interested parties to establish stores on royalty basis. Soon the other brands are also expected to be rolled out. Reliance Brands is also bringing in LVMHs brand namely Thomas Pink clothes and accessories for men and women to India. For this company has entered an exclusive long-term agreement with luxury house Louis Vuitton Moet Hennessy (LVMH). The first store will open by the year- end in Mumbai with more stores to follow in the top five metros. Elle, the France-based couturer has signed a licensing agreement with Arvind Lifestyle Brands (ALB), an Indian apparel maker. By the terms of the agreement, Arvind Lifestyle will retail brands women's fashion wear in India. ALB plans to open six exclusive Elle outlets in Delhi, Bangalore and Chandigarh along with selling the brands products through shop-in shops. Roberto Cavalli has collaborated with Infinite Luxury group via franchising agreement to open the brands first store in India. The Indian boutique will house the womens and mens prt--porter collections, as well as accessories, eyewear, timewear and kidswear. The new store is scheduled to open to the public by the summer 2012 in New Delhi. Twist in the tale Indian governments recent move to liberalise policy for 100 per cent FDI in single brand retail with government approval has redefined the retail scenario in India. Until recently, for single-brand retailers, 51 per cent FDI was permitted. The new policy is set to facilitate those retailers including fashion majors who would like to have full ownership of their India operations.

However, there is no denying the fact that whole ownership may pose many infrastructural and logistical challenges for the foreign retailers to operate in the Indian market. Further, the proposed 100 per cent FDI policy includes stipulations to protect domestic SME sector. They are:a) The products to be retailed by the global chains should be of single brand only and be sold under the same brand internationally. b) Single brand retailing would cover products which are branded during manufacturing and the foreign investor should be owner of the brand. c) In respect of proposals involving FDI beyond 51 per cent, the mandatory sourcing of at least 30 per cent would be from Indian small scale industries/village and cottage industries, artisans and craftsmen. The glitch The above mentioned clause pertaining to mandatory sourcing of at least 30 per cent from domestic small and cottage industries cannot be uniformly applied to all companies. It is true especially in case of luxury sector as it cannot be expected to source from SMEs. Besides, the foreign players sell exclusive products manufactured in own countries. Thus, the proposed FDI stipulations that companies also make India a sourcing hub may deter a luxury fashion retailer to opt this entry mode. Experts suggest this section calls for amendment. Finally Indian governments decision to allow 100 per cent FDI in single brand retail received mixed reactions from various quarters. It may impact the brands decision whether to enter the India market via FDI route or prefer other popular business models like Brand Licensing, Retail Distribution and Franchising.