The Indian retail market is the only industry that keeps the consumer sentiment up even when the economy sees a downturn. The retailer in India never faces a drought in terms of buying. The only thing that stops the growth is rising realty cost and shrinking spaces which curbs the retailers to open larger and more retail stores at a fast pace. The brands are feeling the pinch but a strategized movement in various markets will help them grow better.
The problem area: Growing number of brands, coming up of malls, realty laws becoming stringent and space becoming costly, all these contribute into calling for a problem for retailers in India. The retailers, who looking at the growing spending power and aspirations among Indian consumers, want to grow their presence in the Indian market rapidly, but with rising realty costs they are unable to reach their target consumers. The store sizes have shrunk. Recently we saw all the big names in the retail sector who run large size stores have sought to shrink the size of the stores due to high operational costs and rentals.
The brands who want to penetrate further in markets have now curbed their plans and are planning to grow in a slower manner, which also puts down their target sales and further growth.
What needs to be done: The retailers in India will now have to work towards creating stores which offer value for space. Incorporating more workable equipments which also help in creating a clutter free store, will help them get more value from each square feet they rent, buy or lease. The visual merchandising will play a critical role along with limited inventories so that there are no stock ups at the store. Also a better understanding of markets the retailers want to move into will help them design the stores accordingly.
E-retail: a better prospect: What can also be the next big thing is the growth of e-retail. With space becoming constraint and the operational costs becoming high in terms of maintaining retail stores, e-retail has come across as a better alternative which not only eases the shopping experience for consumers but also lets retailers to sell better with lower operational costs. Today almost all big retailers in the country have their e-retail segment as well. This helps them reach consumers which they still have not touched upon. The internet penetration in India is growing and for people who have less access to brands through physical stores, e-retail proves to be a boon for them.