IMPACT OF MERCHANDISING IN RETAIL STORE PREFERENCES OF INDIAN CUSTOMER

NAME: GOKULAKRISHNAN.K.R REG NO: 10MBA1021 SUBJECT: RETAILING

INTRODUCTION TO INDIAN RETAIL INDUSTRY:

The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 2530% annually. The India retail industry is expected to grow from ` 35,000 crore in 2004-05 to ` 109,000 crore by the year 2010. In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of nonbranded items.

Growth of Indian Retail

It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is

also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is expected to grow to US$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total market share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of the total retail market.

Major Retailers in India

Pantaloon:

Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket Big Bazaar. It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across the country.

RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and beauty care outlets Health & Glow.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach ` 90,000 crores by 2010.

AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of retail. It will invest ` 80009000 crores by 2010.

Retail formats in India

Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories.

Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch.

Departmental stores: are general retail merchandisers offering quality products and services.

Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered.

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.

E-trailers: are retailers providing online buying and selling of products and services.

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

Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine.

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.

Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

DATA AND SURVEYS RESULTS: The survey revealed that the urban Indian retail consumer, values product attributes freshness as well as unobservable attributes such as place of produce or environmental friendliness and is not driven by the low-prices only. Products (and retailers) that do not share enough information regarding the production methods tend to be preferred less by the urban Indian consumer. For retailers interested in the Indian market or those seeking to enter the retail trade, it is important to note that consumers, on an average,

Value the transparency in the supply and production chain Do not use price as the primary factor to make purchase decisions there exist distinct consumer groups.

Prefer fresh products, but products that are not local are also well accepted.

Prefer environmentally friendly products and attach high utility to products that represent this information pictorial on the packaging

Do not accept anymore products with no information.

Urban Indian customers appear to fall into 3 major groups depending on their product and purchase choices.

Environment conscious group This group was the largest (nearly 44%) among the respondents, These consumers attach maximum value to environmental impact of the products purchased. They prefer local produces and are willing to pay a small premium to get products that have these characteristics.

Health conscious group 26% of the respondents belongs to this group. This group prefers products that are not treated with pesticides and are particularly sensitive to health issues.

Price dependent group 21% of the respondents make their product choices by considering the price alone and they are not heavily affected by the method or place of production. They also do not worry substantially about the environmental impact of the products purchased.

Challenges facing Indian retail industry

The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower Low retail management skill

The Future

The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth rates, the consumer spending has also gone up and is also expected to go up further in the future. In the last four year, the consumer spending in India climbed up to 75%. As a result, the India retail industry is expected to grow further in the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%.

India retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort.

Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity. In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.

Classification of India (Customers) on the basis of Research: Research Conducted by Future Group future group2 research classifies Indian Customers into three sets and provides a base to the retailers in segmenting the Indian market. The research shows that serving class consists of approximately 55% of the population, the major one & only 14% are in the upper middle class, regarded as consuming class. It indicates that retailers should target this segment (India 2) rather than focusing on India one only, and should formulate their strategies according to the needs and expectations of serving class, to flourish in the market

Recognizing and Responding to Shopper Differences at the Store Level:

The advent of social media and online communities is making the world smaller. With consumers seeking more personalization and intimacy at their local retail stores, the costly days of stack it high and watch it fly are over. Retailers can no longer tie up their working capital in excess inventory that will require significant markdowns to clear. Traditional broad-brush planning and buying strategies based solely on historical data are no longer effective when it comes to offering consumers the right products.

To get closer to their customers, retailers are tapping into demand-driven clustering exercises that are augmented by detailed demographic and geographic shopper data. A major big-box retailer and JDA Software customer is combining performance along with descriptive consumer data to get a highly accurate snapshot of local consumers that provides descriptive residence information, their family lifestyle, how frequently they go out to eat, their level of education and more. Armed with such granular information, this retailer is shaping future assortments, grouping similarly performing stores and then conducting more consumer research to determine what other products they are likely to buy.

By managing a rich set of attributes and leveraging multidimensional data from one category to another, the retailer is able to reveal and address the unique customer profiles that distinguish each store. As that insight accumulates season after season, the company will be positioning its decision makers to tailor an entire store for every category and every type of consumer who likes to shop there.

Emerging Trends in Consumers Income & Consumption Pattern: NCAER study and some other data published by different research & consulting sources indicate the following trend in Consumer income and put the following projections about the Indian retailing: 1) Growing Prosperity: Making Indian Consumers Great: As per Indias Marketing White book (2006)3 by Business world, India has around 192 million households. Of these, only a little over six million are affluent that is, with household income in excess of INR215, 000. Another 75 million households are in the category of well off immediately below the affluent, earning between INR45, 000 and INR 2, 15,000. This is a sizable proportion which offers excellent opportunity for organized retailers to serve. 2) Increase in the Sizable Disposable Income: Business communities believe that sizable disposable income in India is concentrated in the urban areas and well off and affluent classes; income distribution in India is unequal compared to other Asian economies. In fact, the 20 million middle class home in rural India equals the number in urban India4 and thus have the same purchasing power. Therefore, there is significant and considerable opportunity for organized retailers in the rural areas as well. There is no denying that the rural market holds immense promise for the organized retail but companies ponder over, how to serve that market profitably. Unlike the urban market, it is less developed in terms of infrastructural facilities. 3) Place is no more important: The Major issue is to find out a suitable business model and retail format to fit local taste and preferences. Of course, cost of doing business in rural market would be lesser, as compared to urban market but reaching out to the mass is a concern. For example the most successful and the largest incorporation, Wal-Mart

started in the rural market where as competition started in the urban market. This retailer has proved that it is important to understand how do you operate your business model rather than where you do it. Given the increasing urban exposure of rural India, the urban and the rural upperincome groups can form an interesting continuum market, giving it a scale of 23 million households, or 115 million consumers. 4) Increasing Potential in Rural Markets: NCAER data shows that for 199899, for a basket of 22 FMCG products it tracks, a total of over Rs 91,500 crore was spent. Of this, 37% was spent by the two lowest- income groups in rural India, and only about 20% by the top two income groups in urban areas. This is, perhaps, the best and only statement of the structure and potential of the Indian market. Hence, marketers have to worry about purchasing power of consumers not where do they reside. For example there are nearly 42,000 rural haats, average number of sales outlets per haat is 300 and average sales per outlet is INR 900 and average foot fall in a haat is about 4,500. In rural India there are 50 million 5) As per NCAER data no. of Household having income of < 90,000 per annum in 2005-06 was 1,32,249 ( 000) is projected to come down to 1,14,394 by 2009-10 which indicates that middle class is growing and they are emerging as real customers.( Annexure:1,2,3,4) 6) Higher Proportionate Rural Expenditure: While an average City-dweller may be spending almost twice than his counter-part in rural areas but in terms of allocation of his budget to key segments, the villager has sprung a few surprises. According to the latest data on household Consumption expenditure, rural India is allocating almost 10% of the monthly household Budget for fuel & Lighting while an average urban household spends 9% under the same head. (Annexure: 11) .Still it remains attractive because of intense competition in Urban India. In value terms, however there is a sharp difference with rural Indian households earmarking Rs. 60 a month as consumption expenditure,

compared to Rs.110 in cities and towns. After all, at Rs.19 a day or Rs. 625 a month, the average consumption spending too is low in rural areas, compared to Rs. 39 a day or Rs.1171 a month in urban India. The rapid rise in incomes will lead to an even faster increase in demand for consumer durables and expendables. Result by; the ownership of goods will also go up significantly by getting empowered through rise in the size of the great Indian middle class 7) Young Population: By 2010 almost half of our citizens will be in the working age group of 20-24 years. A youthful, exuberant generation, bred on success will not drive the productivity but also set a spiraling effect on consumption & generation of income. Currently the country has a population of over one billion, 60% of which is under 30 years of age. This means majority of the population is young and working class with higher purchasing power. The low median age of population means a higher current consumption rate which augurs well for the retail sector. Consumer spending in India has grown at over 12 percent since mid-1990s and 64 per cent of Indian GDP is accounted for by private consumption. Over the last decade, the average Indian spending has gone up from INR 5,745 in 199293 to INR 16,457 in 2003-04 and is expected to grow around its trend rate of 12 per cent per annum. 8) Fundamental Changes in Indian Economy: There are fundamental but significant changes underway in our economy. In January 2006, the government announced that foreign companies can own up to 51 percent of a single brand retail company, such as Nike or Adidas. This decision would certainly encourage retailers such as Zara5 and Gap6 to enter this market. Tesco is planning to enter the market through a partnership with Home Care Retail Mart Pvt Ltd and expects to open 50 stores by 2010.

WAVES OF CHANGES IN INDIAN RETAIL SECTOR IN 21ST CENTURY The waves of changes that have transformed the Indian retail industry are: 1. The first wave of change which has revolutionized the Indian retail sector was LPG means liberalization, globalization and privatization. According to BMI India retail report -2011, 100% FDI is permitted under automatic route for trading companies for cash and carry trading and wholesale trading. FDI up to 51% under government route is allowed in retail trade of single brand products. The consumer affairs ministry has given green signal to allow 49%. FDI in multi-brand retail SEBI has notified the increase in the retail investment limit to US $4,391.19 in initial public offer (IPOS). So, the proposed FDI norms will open up strategic investment opportunity for global retailer to invest in India. 2. The second wave which began 10 years later is customer relationship management in retailing which now transformed and paved the way for CEM (customer experience management). To withstand the global competition and compete successfully in the 21st century retailers must focus on customer buying experience. 3. The third wave of change which is a continuous one is Uniqueness of Indian customers and their changing preferences. So, the retailers in this 21st century must make continuous efforts in understanding customers perceptions and must create diversified and innovative retail formats. Differentiate or die, is the current trend in 21st century. 4. Indian customers shifting from unorganized kirana stores retail format to organized retail formats like hypermarkets and malls. 5. Spreading fad and fashions consciousness of Indian retail customers.

STASTICAL DETAILS :

During the last few years, the Indian retail market has seen considerable growth in the organised segment. Major domestic players have entered the retail arena and have ambitious plans to expand in the future years across verticals, formats, and cities. For example, companies like Reliance, Tata, Bharti, Adani Enterprise, have been investing considerably in the booming Indian retail sector. Besides, a number of transnational corporations have also set up retail chains in collaboration with big Indian companies. The Indian retail sector is highly fragmented and the unorganised sector has around 13 million retail outlets that account for around 95-96% of the total Indian retail industry. However, going forward, the organised sectors growth potential will increase due to globalisation, high economic growth, and changing lifestyle. Moreover, high consumer spending over the years by the young population (more than 31% of the country is below 14 years) and sharp rise in disposable income are driving the Indian organised retail sectors growth. Even small towns and cities are witnessing a major shift in consumer lifestyle and preferences, and have thus emerged as attractive markets for retailers to expand their presence. Although the growth potential in the sector is immense, it is not without challenges that could slow the pace of growth for new entrants. Rigid regulations, real estate costs, high personnel costs, lack of basic infrastructure, shrinkage, and highly competitive domestic retailer groups are some such challenges. Additionally, resource constraints at shopping mall projects are also delaying completion and disrupting many retailers entry strategies.

Global retail sales was estimated to be around US$ 12 trillion in 20072; however, in 2008, the slowdown in the global economy, especially in the US, and credit crunch, decreased consumer spending. On a global level, the economy performed robustly till 2007, but the US crisis spread over to Europe in early 2008, and its impact was felt in the Asia-Pacific region by mid-2008. India has the highest number of retail outlets in the world at over 13 million retail outlets, and the average size of one store is 50-100 square feet. It also has the highest number of outlets (11,903) per million inhabitants. The per capita retail space in India is among the lowest in the world, though the per capita retail store is the highest. Majority of these stores are located in rural areas.

Evolution of organised retail The share of organised retail in developed countries is much higher than developing countries like India. In 20063, the share of organised retail in the US was around 85%, in Japan it was 66%, in the UK it was 80%, while in developing countries like India, China and Russia it was 6%, 20% and 33%, respectively. The concept of organised retail had occurred much later in developing economies than the developed economies. Modern day retail came into existence in three successive waves. The first wave took place in the early to mid-1990s in South America, East Asia excluding China, North Central Europe and South Africa. The second wave of organised retail occurred during mid-to-late 1990s in Mexico, Central America, South-east Asia and South Central Europe. The third wave of organised retail boom started in the late 1990s and early 2000 in some parts of Africa, Central and South America, South-east Asia, China, India and Russia and continues to grow at a rapid pace. Rising household expenditure in BRIC countries drives organised retail The household expenditure in Brazil, Russia, India and China, or the BRIC countries, is growing at a faster rate than the developed countries like the US, UK, Japan, Germany, and France, indicating the higher growth potential for the retail sector in these countries that have a large consumer base. Household expenditure (at constant prices) in developed countries like the US, UK, Germany, and Japan has witnessed an average annual

growth of 3.2%, 2.5%, 0.2%, and 1.0%, respectively, during 2004-2007, but the expenditure in the BRIC countries has been much higher. The developed countries are witnessing a continuous fall in domestic demand and high dependence on export earnings, which are the reasons for lower household expenditure. In current times, the global demand is weakening, owing to economic slowdown, and this worry is looming large over the retail sector.

The consumer market in the developed countries is saturating, and therefore, big retail companies in those countries are increasingly expanding their footprint in emerging countries like India, China, and Russia. Even though 100% FDI is not permitted in the retail sector, India continues to attract leading global retailers to start retail business through local alliances. For example, recently, Wal-Mart has opened its first store at Amritsar (Punjab) in a joint venture (JV) with Bharti Enterprises, and it is also planning to expand its footprint to other parts of India. The fact that the penetration of organised retail in BRIC countries is much lower than the developed countries is acting as an added advantage for these retail giants.

Major global retail markets This section provides a brief overview on the retail industry in major global markets on the basis of phases of retail lifecycle. Organised retailing in most economies typically passes through four distinct phases:

In the first phase, new entrants create awareness of modern formats like hypermarket, supermarket, department stores etc and raise consumer expectations

In the second phase, consumers demand more modern formats as the markets develop, thereby leading to a strong growth

In the third phase, the high rate of growth leads to a stage of mature market

In the final phase, the domestic market reaches a saturation point leading to limited growth, so retailers explore and evaluate new markets across the globe

Retail in India: Industry Structure The retail industry in India is highly fragmented and unorganised. Earlier on retailing in India was mostly done through family-owned small stores with limited merchandise, popularly known as kirana or mom-and-pop stores. In those times, food and grocery were shopped from clusters of open kiosks and stalls called mandis. There were also occasional fairs and festivals where people went to shop. In the twentieth century, infusion of western concepts brought about changes in the structure of retailing. There were some traditional retail chains like Nilgiri and Akbarallys that were set up on the lines of western retail concepts of supermarkets. The government set up the public distribution system (PDS) outlets to sell subsidised food and started the Khadi Gram Udyog to sell clothes made of cotton fabric. During this time, high streets like Linking Road and Fashion Street emerged in Mumbai. Some manufacturers like Bombay Dyeing started forward integrating to sell their own merchandise. Shopping centres or complex came into existence, which was a primitive form of todays malls.

Since liberalisation in early 1990s, many Indian players like Shoppers Stop, Pantaloon Retail India Ltd (PRIL), Spencer Retail ventured into the organised retail sector and have grown by many folds since then. These were the pioneers of the organised Indian retail formats. With the opening up of foreign direct investment in single-brand retail and cashand-carry formats, a new chapter unfolded in the retail space. Many single-brand retailers like Louis Vuitton and Tommy Hilfiger took advantage of this opportunity. The cash-and-carry format has proved to be an entry route for global multichannel retailing giants like Metro, Wal-Mart and Tesco. Booming Indian economy spurs consumption The Indian economy posted a remarkable CAGR growth of 8.9% during FY04-FY08, which increased the per capita income and in turn, the disposable income of a large section of the population. Growth in the retail trade depends on the fundamentals of an economy. The Indian economy grew at a robust rate over the last five years, riding high on the high growth in the service sector (10.5%) and the manufacturing sector (9.4%) as compared with 7.4% and 4.1% during FY99-FY03. The rise in per capita income and the resultant rise in disposable income stimulated consumption during this five-year period, thereby resulting in a spurt in retail trade. Furthermore, according to the Mckinsey Global Institute (MGI), the average real household disposable income is likely to grow by 5.3% during 20052025 and reach Rs 318,896 per annum as compared with 3.6% in the previous 20 years, which indicates the huge potential for the retail sector in India.

Private Final Consumption Expenditure, per capita income and retail sales are positively related The private final consumption expenditure (PFCE) and GDP growth are indicative of the growth in the retail sector. In the past consumers, especially young consumers in the age group of 15-34, increased their consumption expenditure with an increase in their earnings; these young consumers totalled around 400 million and constituted 35% of the total population. Due to the consequent boom in the Indian retail sector many foreign and Indian players entered the Indian retail sector.

The chart above shows that during FY95-FY00, the PFCE (constant prices) increased by 5.4% per annum. Later on, from FY01 to FY03, PCFE declined to 4.0%. Again during FY03-FY07, it went up to 6.2% per annum. During these time periods, the retail sales, the per capita income, and the real GDP growth followed a similar trend as the PFCE, which made it evident that there is a positive correlation between real GDP and PFCE on the retail sector. During FY08, the PFCE as a percentage of GDP at factor cost at constant prices remained very high at 62.2%; hence, the overall retail sector growth received a major impetus during this period. There have been striking changes in Indias consumption pattern over the past 50 years owing to the ever-increasing media exposure, changes in lifestyle, growing urbanisation, coupled with an increase in the education levels among others. The Indian retail industry has matured tremendously over the years, and has become more process-driven, standardised, qualityassured, and brand-driven. Industry segmentation Organised retail can be segmented in two ways - segmentation by verticals and by channels. Verticals are segmented on the basis of the type of

merchandise offered; similar merchandise can be clubbed together to form a vertical, for instance food and grocery. Channels are the means through which retailers sell their merchandise; for example, store channels of retailing that comprise different formats like hypermarkets, supermarkets and department stores and non-store formats like online retailing, vending and kiosks. Major retail segments Food and grocery: In 2007, the food and grocery segment was valued at Rs 7,920 billion, and it enjoyed a dominant market share of 62% in the total Indian retail sector; however, there was a completely opposite scenario in the organised retail segment. The food and grocery segment is the second-largest in the organised retail and has an 11.5% share that is valued at Rs 90 billion. Initially this segment grew at a slow pace due to the presence of an established retailing system led by kirana stores, a highly-fragmented food supply chain, and the lack of a developed food processing industry. Nilgiri was one of the earliest retailers that started a chain or stores in different parts of the country. However, the growth of Nilgiris stores was limited as it was challenged by a weak supply chain and an under-developed food processing industry. Post-liberalisation, organised retailers saw a renewed opportunity in the food and grocery segment. Few food and grocery retailers Food Bazaar: PRIL ventured into food retailing with Food Bazaar in Apr 2002. Initially it was a part of Big Bazaar but later on it started operating as a standalone outlet in addition to being a part of Big Bazaar. The store offers a wide range of fruits, vegetables, FMCG products and ready-to-cook products. It uses a concessionaire model for wet groceries, and it sources staples from APMC or farmers (where the state permits). Food Bazaar

attracts high footfalls due to innovative initiatives like live-grinding, live bakery, fresh juice corner etc. In Aug 2007, the store ventured into another retail format that served the food and grocery segment called the KB Fair Price shop. This store is modelled on the concept of low-frills neighbourhood store of 1,000-1,600 square feet. The Fair Price store follows a pricing model that is 20% lower than the prevailing market price. More: Aditya Birla Retail Ltd forayed into the retail business in 2006 by acquiring Trinethra Super Market Ltd, the south-India based retail chain. In May 2007, the company launched its own brand of stores called More in Pune. The supermarket store has a minimum size of 2,500 square feet and offers fruits, vegetables, staples, personal care, general merchandise, pharmacy, poultry and dairy products. Reliance Retail: Reliance Retail Ltd, a subsidiary of Reliance Industries Ltd, has an aggressive plan to expand its retail network across India. It entered the food and grocery segment in November 2006 through its convenience store format Reliance Fresh. The store offers a range of fruits, vegetables, personal care, home care and kitchen utensils. It focuses on building a strong relationship with the agri-business value chain and sources directly from wholesalers. Fashion and accessories Fashion and accessories is the largest category in organised retail and had a 38.1% share valued at Rs 298 bn in 2007. In terms of total retail, this category held the second position with a 9.5% share valued at Rs 1,313 bn. The segment has driven the retail boom in India and has opened many opportunities for large as well as global retailers to enter the segment. Despite the high rental, many global retailers like Gas, Gucci, Levis, Benetton, Marks and Spencer have opened their stores in India, and also have plans to increase their presence.

The mens wear segment had the highest share of 40.2% in the Rs 1,313billion fashion and accessories market in 2007 while the womens category accounted for 34.8%, followed by the kids wear and uniform category at 24.9%. Demand in the branded apparel segment is increasing as consumers are upgrading to premium brands due to changing preferences. The premium segment has seen the fastest growth in value owing to the rising preference for formals at Indian workplaces, the new offerings from international brands, and the increasing willingness on the part of consumers to pay a premium for quality. The apparel retailers are also pushing themselves to the accessories segment to attract more customers. Few fashion and accessories retailers Pantaloons: The first Pantaloon store was opened at Gariahat in 1997 in 8,000-square-feet area. Over the years, the store has undergone several transitions. When it was launched, the store mostly sold external brands. Gradually, it started retailing an eclectic mix of external brands as well as private labels. Initially, it positioned itself as a family store targeted across age and gender groups but later it shifted its focus towards being a fashion store and gave more emphasis on the youth. As on Dec 2008, Pantaloons had around 44 stores spread across major cities in India. Shoppers Stop: Shoppers Stop is one of the largest retailers in India. It primarily caters to the lifestyle segment and offers customers both domestic and international brands. The store recently revamped its branding by introducing a new symbol. Shoppers Stop has lifestyle retailing as its core housing brand across categories like apparels and accessories. The store operated at 26 locations in 12 cities as on Dec 2008. Koutons: Koutons Retail is a leading manufacturer of readymade and fashion wear brand. It was established as Charlie Creation Pvt Ltd in 1991 for manufacturing and exporting garments. Later in 1998 Koutons was established to provide affordable mens wear to the masses. Koutons also entered the womens segment in Apr 2008 by launching its brand Les Femme, which caters to young women in the 16-34 years age group and

includes apparels like t-shirts, partywear, lycra, semi-formal shirts, denims, capri pants etc. Koutons has also launched its brand Les femme for women & Koutons Junior for kids. Few renowned brand of Koutons are: Koutons mens wear, Les Femme, Koutons Junior and Charlie Outlaw. Footwear In 2007, the footwear segment had a 1.1% share in the total retail market and was valued at Rs 160 billion while it had a 9.9% share in the organised market and was valued at Rs 77.5 billion. In the same year the organised footwear market recorded a fantastic growth of 49% over 2006 while the overall retail market grew by just 16.4%. The changes in consumer behaviour and attitudes reflected in the increasing demand for newer styles and different types of footwear. The market currently offers many brands that cater to every target segment. The Indian footwear market is moving at a brisk pace presently to cater to the domestic demand. Moreover, the influx of international brands is inducing the otherwise price-conscious customers to shell out more bucks for their favourite brands. The footwear market is experiencing a changing consumer preference for casual and younger style due to media penetration and due to the increasing awareness about international trends and lifestyle. There already are a large number of players, both domestic and international, in the semiformal, formal and casual segment but the casual segment dominates the Indian footwear market with a 75% share. Branded sports wear is also growing at a faster rate than the other segments and the key players in this segment are Adidas, Reebok, Nike, Puma et al. Few footwear retailers Reebok: In 1995, Reebok forayed into the Indian retail market. Today Reebok is one of the frontrunners in the Indian sports wear industry. Reeboks offerings include apparels, footwear and fitness equipment and products. Its footwear offerings are mostly in the trainers and sneakers

segment. Reebok recently has introduced its new lifestyle vertical Reebok Classic. Bata: Bata India is one of the most well-known and largest footwear retailers in India. The retailer manufactures and markets different types of footwear that includes rubber, canvas, leather, and plastic footwear. It markets footwear under the brand names of North Star, Power, Ambassador, Marie Claire besides dealing in international brands like Dr Scholl and Hush Puppies. Bata has a strong distribution network structure of wholesalers and distributors. Khadims: Khadims forayed into footwear retailing in 1993 and is one of the most renowned retailers in east India. Khadims markets its own products besides few others and specialises in womens and childrens footwear. The retailer has a presence in multi-brand outlets (MBOs) across the country in addition to its own exclusive outlets. Home and office improvement In 2007, the home and office-related retail segment was valued at Rs 455 billion in the total retail market while it was valued at Rs 50 billion in the organised retail market. In the same year the segment had a 6.4% share in the organised retail. Home and office improvement is another important segment of the organised retail as people have started spending more on discretionary items. Presently the segment is growing at an impressive rate. Due to the salary hikes and rise in the double-income households, the lifestyle needs of the young and flourishing India are surging and consequently, consumers are going for renovation of their homes. The concomitant rise in investments in furniture, home accessories and furnishings, has added to the segments boom. Few home and office improvement retailers Godrej Lifespace: On Apr 1, 2003, Godrej & Boyce Manufacturing Company Ltd launched a new retail division. The division was established to present a

new concept in retailing by displaying and selling under one roof the Godrej range of home and office furniture, appliances, security equipment and locks. Later in 2005, the showrooms were branded as Godrej Lifespace Stores. Home Stop: Home Stop is one of the premium home improvement stores that offers a wide range of merchandise. It stocks various national and international brands that cover all the home needs like home dcor, furniture, bath accessories, draperies and health equipment. Home Stop currently operates three Home Stop stores, one each in Mumbai, Bangalore and New Delhi. Home Town: Home Solution Retail (India) Ltd (HSRIL), a subsidiary company of Pantaloon Retail, is designed to cater to the home furnishing and improvement market. The format is designed as a one-stop destination that offers a complete range in consumer electronics, furniture and other home products. HSRIL operates five retail formats: Collection-i, Furniture Bazaar, Electronics Bazaar, Home Town and e-zone. Electronics In 2007, the electronics segment had a 4% share in the total retail segment and was valued at Rs 575 billion while it had a 9.1% share in the organised electronic retail segment valued at Rs 71 billion. The electronics market has seen a proliferation of brands and product categories in recent years. All international brands from Japan, Korea, the US, Europe and China have been launched in India and have been trying to build a pan-India dealer network. The lifestyle category has seen higher growth in India on the back of changing consumer preferences and a consumption boom. Few electronic retailers eZone: eZone is an electronics specialty retail format from HSRIL by Kishore Biyani-led Future Group. The first eZone store was launched in 2006 in Indore and was followed with a second one in Bangalore. eZone offers a range of personal products like computers, laptops, handy cams,

MP3 players and mobile phones, entertainment products like plasma/LCD, flat TVs, home theatre systems, DVD players, and stereosystems, home products like refrigerators, air conditioners, washing machines and microwave ovens, among other kitchen appliances. Viveks: In 1965, B A Lakshmi Narayana Setty founded Viveks in a 200square-feet-shop in Chennai. Today Viveks is one of the largest consumer electronics and home appliances retail chains in India. Viveks Ltd is a public limited company that runs two retail brands Viveks and Jainsons. The store was transformed into a public company from a family-run company when 14 stores of Jainsons were bought over in 1999. Later on in 2001 two stores of Premier and in 2002 Spencers Super Store were purchased. Viveks has recently absorbed Spencers into the Premier brand. Viveks grew from three stores in 1995 to more than 35 stores as on Dec 2008. Catering services In 2007, the catering service in organised retail showed a tremendous growth of 44.7% over the previous year. It was valued at Rs 713 billion in the total retail market and at Rs 57 billion in the organised retail market. The catering services market is divided into fast food, cafes and restaurants and others. India is a buoyant market for this segment with over a billion people with different food habits, religious festivals, and various regions. Each region has its own traditional food, dietary habits and its own food specialities. In recent times many international food chains have entered India, which has made this segment more dynamic and its growth, fast-paced. The key growth drivers of the segment in India are: the changes in Indian demographics, young working population, nuclear families, rise in double-income household etc. Few catering service retailers Yum! Restaurants: Yum! Restaurants is present in India through its brands Pizza Hut and KFC. In 1995, KFC, which mainly serves chicken products, set foot in India. After taking into account the vegetarian population of India, KFC recently modified its menu and launched a vegetarian fare, which now constitutes 40% of the product categories. Pizza Hut entered India in 1996

and as on Dec 2008, there were 147 Pizza Hut and 45 KFC stores across 35 and 14 cities, respectively. McDonalds: McDonalds is a 50:50 joint venture partnership in India between McDonalds Corporation (USA) and two Indian businessmen. Hardcastle Restaurants Pvt Ltd owns and operates McDonalds restaurants in West India while Connaught Plaza Restaurants Pvt Ltd owns and operates these food outlets in the North. Caf Coffee Day: Caf Coffee Day is a division of Indias largest coffee conglomerate Amalgamated Bean Coffee Trading Company. Caf Coffee Day sources coffee from 5,000 acres of estates and is the second-largest coffee shop in Asia. It has ventured into formats such as music cafes, book cafes, highway cafes, lounge cafes, garden cafes and cyber cafes. Telecom In 2008 the telecom market in India was worth Rs 272 billion and had a 1.8% share in the total retail market while it had a 3.4% share in the organised retail segment and was valued at Rs 27 billion. The mobile and accessories segment exhibited tremendous growth in 2007. The Indian telecom sector emerged as the second-largest wireless network in the world after China with the recent spate in number of wireless subscribers. Few telecom retailers The Mobile Store: The Mobile Store, promoted by the Essar Group, is one of the countrys largest mobile retailers. Its a one-stop mobile solution shop that offers telecom products like mobiles, accessories, mobile connections and recharges, mobile bill payments, handset repairs, handset exchange, music and gaming devices and DTH, all under one roof, in a world-class shopping ambience. The shop had more than 1,300 stores spread across 200 cities as on Dec 2008. MobileNXT: Bangalore-based MobileNXT Teleservices Pvt Ltd has a panIndia presence and operates in the following three major retail formats:

standalone stores, store-within-a-store, and enterprise stores. This store is eyeing a pan-India network and hence has initiated a tie-up with Shoppers Stop, Star Bazaar, Mega Mart, and Landmark stores, for setting up storewithina- store in their outlets across the country. As on Dec 2008, the company was operating more than 36 stores that were spread across major cities in India. Pharmaceuticals In 2007, the pharmaceuticals market had a 3.5% share and was valued at Rs 488 billion in the total retail market; however, its share in the organised retail market accounted for merely 2.0% share at Rs 15.4 billion during the same period. The organised pharmaceutical retailer is known to implement innovative concepts and global standards to provide customers with an experience that is completely different from what an unorganised retailer offers. Few pharmaceutical retailers Apollo Pharmacy: In 1983, Apollo Pharmacy, a division of Apollo Hospital Enterprise Ltd, entered retailing by opening up its first store in Chennai. The retailer also took initiatives to provide medicines to the rural regions by tying up with ITCs e-choupal and Godrej Aadhaar. Apollo has also started expanding through the franchise route. It has recently launched a new concept, NurseStation, at its pharmacy outlets, where the nurses are available to attend the patients at their houses, or refer them to an Apollo Clinic nearby. As on Dec 2008, Apollo was operating at over 890 outlets across the country. MedPlus: In 2006, MedPlus Health Services Private Ltd was incorporated in Hyderabad to cater into the health care segment. The company has established a large number of pharmacy outlets chain across major cities in various states of the country, and are majority of those are spread across four southern states. It has over 600 pharmacy outlets spread across 63 cities/ towns in the country.

Beauty and wellness In 2007, the beauty and wellness segment grew at a tremendous rate of 65% over the previous year in the organised retail market. Its share in the total retail market, however, was just 0.3% and was valued at Rs 46 billion. In the organised market, the segment showed tremendous growth due to the rise in service sector employment. Few beauty and wellness retailers Reliance Wellness: In Oct 2007, Reliance Retail Ltd, owned by Mukesh Ambani, entered the beauty and wellness segment by opening its first store at Hyderabad. This store offers a wide range of products under the health foods, personal care, healthcare, and pharmaceuticals categories. Himalaya Drugs: The Himalaya Drug Company operates both exclusive retail outlet formats and shop-within-a-shop outlets. The stores offer an entire range of Himalaya drugs from pharmaceuticals, personal care, to baby care and animal healthcare products at competitive prices. The company emphasises on service, trained personnel and a quality shopping experience in their stores. Himalaya has also launched its online shopping website to make all its products conveniently available to its customers 24/7 and to reach a wider market, where its stores are not present. Jewellery In 2007, jewellery retail was worth Rs 694 billion and accounted for 5% of the total retail market. In the organised retail market, jewellery retail merely had a 2.9% share at Rs 23 billion. In the same year jewellery retail in the organised retail market recorded high growth of 36.9% over 2006 as compared with 15.3% recorded in the total retail market. Few jewellery retailers Gitanjali: Gitanjali Gems Ltd (GGL) is one of the largest, integrated diamond and jewellery manufacturer and retailer in India. It sources rough diamonds from primary and secondary source suppliers in the international market, cuts and polishes the rough diamonds and exports the diamonds to its

international markets. GGL sells diamonds and other jewellery through retail operations in India as well as in international markets. Its brand extensions include Gili, Asmi, Sangini, DDamas, Giantti, Nakshatra, Collection G, Gold Expressions, Vivah Gold & Kiah. Tanishq: In mid-1990s Titan Industries Ltd - promoted by the TATA Group entered jewellery retailing through Tanishq. Tanishq has set up production and sourcing bases by researching the jewellery crafts of India. Its factory, located at Hosur, Tamil Nadu, is spread across 135,000 square feet and is equipped with all modern machinery and latest equipment. As on Dec 2008, there were 115 Tanishq stores spread across major cities in India. Reliance Jewels: Reliance Retail Ltd entered jewellery retailing by opening its first store in Bangalore. The company aims to make Reliance Jewels a one-stop destination that offers consumers a wide range of gold and diamond jewellery. Timewear In 2007, the Indian watches market enjoyed a 2.9% share in the overall organised retail market as compared with merely 0.3% in the total retail market. The market size of the watch market was valued at Rs 44 billion in the same year. The size of this market has expanded due to the changes in consumer preference and the growing market for international watches in India. International players like Tag Huer, Rado, Omega, Rolex have even signed up Indian celebrities as brand ambassadors to tap the market. Few timewear retailers Citizen: Citizen has 38 exclusive outlets in 27 cities across India. The Exclusive Branded Outlets (EBOs) called First Citizen house the latest international range of Citizen Watches and display over 800 different watches. Besides, Citizen Watches are also available at Lifestyle, Shoppers Stop and more than 250 Citizen Corners (MBOs) across the country.

Titan: Titan is one of the largest manufacturers of watches in India. It offers product ranges that include the flagship brand Titan, Edge, Fastrack, Nebula, Raga, Steel, Regalia, Flip, Sonata, which is available in Titan and exclusive Sonata stores. As on Dec 2008, there were 245 exclusive Titan showrooms (World of Titan) across 122 Indian cities in India. Books, music and gifts Books, music and gift retailing were the earliest segments that witnessed a consolidation of business into organised formats. The combined share of this segment was 1.1% of the total retail market at Rs 164 billion in 2007. Organised retailers like Planet M, Music World, and Landmark dominated the music segment. Archies, a prominent gift retailer, has a presence on both high streets as well as in malls. The books and publishing business continues to thrive due to greater literacy levels and rapidly growing middle class and higher middle class population, English-speaking middle-class population. Moreover, new format chains like Crossword, Landmark, Oxford, and now, Odyssey, that fit into the leisure aspirations of people, are located conveniently, and offer an ambience conducive to browsing and book buying. As a result, the segment has been growing further. Crossword: Crossword was established in Oct 1992, is Indias leading bookstore chain and a wholly-owned subsidiary of Shoppers Stop Ltd. The company sells books and other products under the Crossword brand. Crossword sells a wide variety of products like magazines, CD ROMs, music, stationery and toys apart from books. Crossword provides customers with cafes, reading tables and cloak facilities at each of its outlets. Crossword customers can also shop for books using dial-a-book, fax-abook and email-a-book facilities offered by the company. Its other services include gift vouchers, apart from the return, exchange & refunds policy being followed by the company. Crossword bookstores are presently located in Mumbai, Bengaluru, Ahmedabad, New Delhi, Pune, Nagpur, Vadodara, Kolkata, Chennai, Jaipur and Hyderabad.

Entertainment In 2007, the entertainment segment was worth Rs 456 billion and had a 3.2% share in the total retail industry. This segment has been driven by the increasing base of young population in India, whose entertainment needs has been surging with the influx of malls and multiplexes that provide leisure retail, gaming, and cinema. Players in the segment are likely to gain greater market share as the consumer spend on entertainment is increasing. PVR cinemas, Fun Cinemas, Inox are the major players in the entertainment retailing space. Overview of formats/channels The Indian retail industry is categorised into different retail formats on the basis of the retail operation. The formats are basically defined on the basis of the size of the outlet, the pricing strategy followed, the type of merchandise sold, and also the location. Given below is a list of formats on the basis of the above-mentioned characteristics: Hypermarkets: Hypermarkets are big-box formats with an average size that ranges between 60,000-120,000 square feet, and they stock multiple lines of products such as food and grocery, general merchandise, sports goods, and apparels. Hypermarkets are mammoth outlets that are fewer in number but cater to a larger area (3-5 kilometre). HyperCITY, Big Bazaar, RPG Spencers and Shoprite Hyper are some major players in this format. Supermarkets: The average size of supermarkets range from 10,00030,000 square feet. They are a smaller version of hypermarkets that holds multiple lines of merchandise but is limited in number when compared with supermarkets. Supermarkets are spread across the city, are greater in number, but cater to a smaller area (1-2 kilometer). Foodworld, Food Bazaar and Spinach are some major players in this format. Convenience stores: Convenience stores offer easy purchase experience through easily accessible store locations. The stores are basically small in size (500-3,000 square feet), which allows quick shopping and fast checkouts. Subhiksha and Reliance Fresh are some major players in this format.

Cash-and-carry outlets: Cash-and-carry outlet is strictly not a retail format, but considering the business dynamics it follows it can qualify for a retail format. In a retail business usually a consumer has to purchase one or more products but under this format, the consumers have to buy a minimum volume of products or value specified by the cash-and-carry retailer. In this format the buyers are basically small retailers or catering service providers who purchase in bulk quantities. This stores size ranges from 100,000 square feet to 300,000 square feet. At present, Metro is a major player that falls under this format. Wal-marts alliance with Bharti and Tescos with Trent will also come under the cash-and-carry format.

Discount stores: The focus of these stores is to offer merchandise at a price that is lower than the market price, and to gain profit from volumes. These

stores keep merchandise mainly on the basis of its saleability. Usually these are no-frill stores with simple surroundings and less service. Big Bazaar and Subhiksha are some famous examples. Specialty stores: These stores usually specialise in one line/category of merchandise. As these stores are concerned with only one type of merchandise, they are able to offer a wider range of products at a lower price. Examples: Next and Vijay Sales. Department stores: These stores are typically lifestyle stores where most of the merchandise constitutes apparels and products other than food and grocery. These stores offer high quality service to consumers. These stores stock lesser merchandise than other formats since the merchandise is stored in a presentable manner. Notable examples are Shoppers Stop,

Growth Drivers Currently, organised retail is in a nascent stage of growth in India as it just has a 5.9% share in the total India retail trade. However, in recent years, organised retailing has been growing at a robust rate due to rise in the number of shopping malls as well as in the number of organised retail formats. The key factors of growth of organised retail in modern India are discussed in the following pages. Rising disposable income of Indian middle-class The Indian middle-class can be categorised into seekers and strivers, which is the consuming class and the prime target segment for retailers in India. In 2005, these two categories together constituted around 6.4% of total households in India but accounted for 20% of the disposable income. By 2015, the middle class is expected to constitute around 25% of total households and account for 44% of the total disposable income, and by 2025, the respective figures are likely to go up to 46% and 58%. The Indian

middle-class population and their growing disposable income levels will drive the future growth of organised retail in India6. Changing consumer preferences and shopping habits The prime reason for a paradigm shift in the shopping attitude of the Indian consumer is the change in their preferences and tastes. Due to the increasing use of IT and telecom, Indian consumers have become aware of brands and shops for lifestyle and value brands according to the need and occasion. Consumers will continue to drive the growth in the organised retail by expanding the market and compelling retailers to widen their offerings in terms of brands and in terms of variety. Changing demographics India is one of the youngest and largest consumer markets in the world with a median age of around 25 years, which is the lowest as compared with other countries. According to estimates, Indias median age would be 28 by 2020. It is expected that over 53% of the population will be under the age of 30 by 2020, which means that the potential for the Indian retail segment will be enormous. Another plus about this population is that they will be more dynamic than the previous generations because their consumption is driven by wants rather than needs. Thus, the organised retailing, which thrives on lifestyle products, is expected to receive a boost because of the young population by 2020.

Increase in working population India is the second-largest country in the world in terms of population, and is the largestconsumer markets in the world owing to its favourable demographics. In 2008 Indias working population (in the 15-49 years age group) constituted around 53% of the population as compared with 48.6% in the UK, 49% in the US, and 53% in Russia. Further, the increase in the number of working women has fuelled the growth in sales of discretionary

items. There has been a 20% increase in the number of working women in the last decade

OPPORTUNITIES IN INDIAN RETAILING IN 21ST CENTURY 1. UNTAPPED RURAL MARKET IN INDIA Indian rural market offers a sea of opportunity for retail sector. The urbanrural split in consumer spending stands at 9:11 with rural India accounting for 55% of private retail consumption. According to Singh, 12.2% of the worlds consumers live in India. Rural households form 72% of the total households. This puts the rural market at roughly 720 million customers. Total income in rural India about 43% of the total income is expected to increase from around US $220 billion in 2004-2005 to US $425 billion by 2010-2011, a CAGR of 12% (India knowledge@wharton, 2011) So the retailers can exploit the opportunities and tap the Indian rural market with focused attention and strategies. 2. INDIA-A VIBRANT ECONOMY Indian retail market is expected to be worth about US $410 billion, with 5%of sales through organized retail, means that opportunity in India remains immense. According to the Retail report, Expanding opportunities for global retailers released by A.T. Kearney, 2010 Indian retailing is estimated to grow rapidly up to US $535 billion by 2013 with 10% coming from organized retail. India topped the list of emerging markets for retail investment for three consecutive years. India is the second fastest growing economies in the world, the third largest economy in terms of GDP and fourth largest in PPP. India is rated among top 10 FDI destinations. From the above figures we can conclude that India is definitely a country for healthy investments and provides better opportunities for retailing. 3. YOUNG AND TALENTED POPULATION AND WORKING WOMEN CLASS: Increase in young and talented population and also the working women class have created high disposable incomes that lead to higher consumption and thus opened the doors for more opportunities for retailers

to flourish. 4. INTERNET REVOLUTION AND E-TAILING: Internet revolution and E-tailing are allowing global brand to understand Indian customers psyche and influence them even before entering the market. Due to the wide reach of media even in remote markets, consumers awareness on global brands are increasing and providing better opportunities for global retailers in India.

CHALLENGES IN INDIAN RETAIL SECTOR: 1.SUSTAINABILITY is the biggest challenge in the 21st century whether retailers accept it or not. Finance minister Pranab mukherjee in his budget speech 2010-11 addressed on the wastages in storage as well as in the operations of the existing food supply chains in the country. So, the retailers challenge in the 21st century is concentrate on developing a strong back-end support to help to reduce wastages which is estimated to be 40% of nations produce. 2. Tax structure is also one of the challenges in retailing because it favours small retail business 3. High costs of real estate 4. Poor infrastructural facilities. 5. Lack of adequate retail research on India. Considerable research has been directed towards retail attributes in western countries however limited attention has been paid in Indian retail context (Carpenter & Moore, 2006). 6. Shortage of trained manpower.

CONCLUSION AND SUGGESTIONS: The urban Indian consumer has grown to a large extent from being a price only driven buyer to a more discerning buyer who needs to be convinced about a product's attributes. Urban Indian consumers are aware of potential environmental impacts and the effect of bio-technology on farming. Retailers need to improve their communication related to products, the supply chain operations and provide better organized retail experience to meet the requirements of the informed urban Indian buyer who is willing to pay a price premium. The key attributes that act as motivational factors to drive customers to the store. The study provides an insight to test the effect of Indian customers perceptions on retail attributes in the changing business scenario in 21st century. Findings suggest that: Product attributes has more profound effect on customers than store attributes. Findings reveal that majority of the customers prefer to purchase from retail outlets on cash payment mode. This indicates that there are better opportunities for growth in Indian retail sector. This study concludes that originality of the product was given highest preference and Indian customers are more price sensitive and quality conscious. Findings also indicates that customers are more inclined to the retail store that offer better customer services, promotional offers and discounts. Location and customer relationship management are another important factors identified by the customers because they want to reduce the time, energy and psychic costs involved in shopping from a retail store. To compete successfully in this 21st century retailer must focus on

customer buying experience. Sustainability of the fittest and fastest in the market is the mantra of todays game plan. So the difference between a successful retailer and a failed one would be in Understanding customers perceptions Speed in reaching customers Updating with latest trends, ideas, and services and forming long term relations with customers. Therefore the future belongs to the multi-cannel retailers which provides all in one roof rather than the single- channel retail stores that offer a network of channels and store formats that are more transparent to customers delivering high value.