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Retail sector
- 2. 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. • It involves the sale of goods from a single point (malls, markets, department stores etc) directly to the consumer in small quantities for his end use. • Retailers form the last part of the distribution channel before products reach the customer. Retailing of products is done through supermarkets, retail chains, kirana stores, and online platforms. Thus, retailers satisfy demand identified through a supply chain. • Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services.
- 3. INDIAN RETAIL INDUSTRY Indian is one of the major retail players globally, specifically, the fifth largest global destination in the retail space. It accounts for over 10 per cent of the country’s gross domestic product (GDP) and around eight per cent of the employment. Investment Scenario - India’s retail sector attracted US$ 970 million from various private equity funds in 2019. Government Initiatives -The Government of India has taken various initiatives to improve the retail industry in India. Government of India has allowed 100 per cent FDI in online retail of goods and services through the automatic route, thereby providing clarity on the existing businesses of E- commerce companies operating in India.
- 4. Retail industry faces Monopolistic Competition • Large number of players Retail industry has a large number of players in all sectors, which increases competition among them. For eg. Shoppers Stop competes with other clothing retailers like Big Bazaar, Reliance Trends, Max etc. • Product Differentiation As a result of high competition, retailers have to make sure their products deliver the extra edge over the competitor. For eg. Starbucks have created a special place for themselves. • Entry and exit barriers Retail industry has low entry and exit barriers. • Price makers Retail players have considerable power in fixing their prices. However, their power is limited due to high price elasticity of retail products and competition.
- 5. Types of retail Organized retail Unorganized retail Food and grocery Clothing and footwear Entertainment Sports Books Equipments Other
- 6. Food and grocery Clothing and footwear Entertainment, sports, books Other
- 8. Price of the commodity Price of related commodities i.e. substitutes or complementary goods Level and distribution of income. Tastes and preferences of consumers Size and composition of population Easy access to credit Advertisements and Growing consumerism Environmental factors and Seasonal factors Demographics
- 9. Cost of factors of production and commodity Price of related goods Price of Competitor’s products Number of suppliers Technology factor Goal of the firm Business Expectations Government policy Organized and Unorganized retailers Environmental factors
- 10. • Consumer shift towards online shopping - In the wake of COVID-19 crisis, as social distancing norms and fear of getting infected trigger a bigger consumer shift towards online shopping, increasing the appeal of an online or omnichannel proposition for brick-and-mortar retailers • Technology Shift - Many bricks-and-mortar retailers are adding or augmenting their online presence. • Long term Effects - A weak economic environment, large scale job losses, and lower household income will hurt consumer sentiments and spending. Most of the retail members of the Retailers Association of India (RAI), the industry body representing the organised retail segment, believe the impact of COVID-19 may last at least 9–12 months and revenue may be impacted by 30–50% over nine months (Q2–Q4, FY 2020-21)