RETAILING CHALLENGES RETAILING CHALLENGES IN INDIA RETAIL STRUCTURE

1. CHALLENGES IN RETAILING
The retail industry is one of the fastest growing sectors in the world. With more number of retailers
slowly expanding their business from brick and mortar to online retail stores, there is no looking
back for players in this industry.
But on the flip side, the retail industry is not entirely a bed of roses. Retailers constantly endure
various hindrances to improve their profits and simultaneously stay relevant in the market.
One of the major challenges for players in the retail industry is to adapt themselves to the constant
shifts and twists in the market.
Furthermore, savvy shoppers even tend to spend a lot of time researching their purchases – and
consider the entire customer experience before actually making a purchase.
With increased exposure to the internet and social media, retail customers are not gullible anymore
and are spoilt for choice. This puts retailers in a ‘do or die’ position to survive in the market.

3. Digital disruption
While ecommerce has its effect on brick-and-mortar stores, the market trends indicate that customers
prefer purchasing most products in-store. However, customers are using the Internet to do
reconnaissance work – that is, search online for product information, compare the best prices, and
identify complementary products.
However this disruption has created a significant challenge for Indian brick and mortar retailers to
create an operationally sustainable, relevant and engaging customer experience that inspires loyalty as
customers hop from store to web to mobile to social.

4. Technology advancements
At the present rate of development in the retail industry, keeping up with the technological advancements
is imperative for retail stores.
Transformation of payment processing and customer demand seems to be fueling the no line, on-
demand, or prepaid (online) options of completing in-store purchases. Digital wallets are now replacing
slow legacy payment systems. Without the right technology in place, retailers won’t be able to offer these
payment methods, potentially losing a chunk of their customer base.
In-store experience
Modern customers are extremely choosy owing to a large number of options they have in hand. What
could differentiate retail stores from one another is the in-store experience that they provide the
customers.
Shoppers want remarkable experiences when they enter a store. They want to enjoy personalized
experiences, interact with products, and engage their senses with creative sights, smells, tastes, and
touch.
Virtual reality, show rooming, and other experiential retail strategies can position retailers at the top of their
category when experiential retail is done well.

5. Poor Infrastructure
In India, infrastructure as cold-chain infrastructure is primitive, affecting the modernization of the food sector. In
order to succeed supermarkets would require volumes to be cost competitive, which would require operations
with hubs all over India. Indian infrastructure is not fully developed yet.
Roads and rail infrastructure needs to be developed. The Efficiency in the supply chain is far below the
International Benchmarks. A Strict Quality control increases the prices of the merchandise and the gap
between the Demand and Supply. Lack of robust storage facilities and underdeveloped transport logistics result
in huge product wastage. Warehouses in India are predominantly old, cramped and poorly ventilated and are
unable to fulfill requirements of modern retailers (fire sprinkler systems climate controls, levelled loading bays
etc.)

6. Customer data silo
Modern marketing makes it necessary for companies in the retail industry to engage with their
customers across many different channels.
From SMS to email and social media, multi-channel communications are vital to engagement,
which, in turn, drives the creation of the perfect customer experience. However, with so many
separate channels, it is common for customer data to become siloed.
If all the teams of a marketing department are not communicating effectively and working
together, customers can become overwhelmed with conflicting or repeat messages. This
flooding of marketing communications can have a negative effect and drive customers to
competitors offering a clearer and more congruent message.
High Costs for the Organized Retail Sector
Traditional Retailing has been established in India for some centuries. It has a low cost
structure, is mostly neither own operated and has negligible real estate and labor cost and little
nor taxes to pay. In contrast, players in the organized sector have high expenses to meet and
yet have to keep prices low enough to be able to compete with the traditional sector