Financial Daily from THE HINDU group of publications
Friday, Aug 05, 2005
Financial Daily from THE HINDU group of publications Friday, Aug 05, 2005 |
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Marketing
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Retailing `Retailers need to focus on individual identity' Our Bureau
(From left) Mr B.A. Srinivasa, Director, Vivek Ltd; Mr R. Sridhar, CEO and Managing Director, Integrated Brand-Comm P Ltd; Ms Hemu Ramaiah, Partner, Landmark; Mr Gibson G. Vedamani, CEO, Retailers Association of India, Mr N.V.R. Nathan, Director, Army Insistute of Fashion and Design, Bangalore, at Retail Colloquium in Chennai. — Bijoy Ghosh
Chennai , Aug. 4 MAJOR retailers believe finding ways to stand out is turning out to be quite a challenge, even as they foresee rapid growth for the sector. "There is a problem of differentiating ourselves. We are beginning to look alike," said Mr G. Sankar, Managing Director of Lifestyle International, at a seminar organised by the Retailers Association of India, a representative body formed last year. Lifestyle, which runs the eponymous store chain, tried stocking imported products as a differentiator. "But with duties, it's a constant challenge." Mr T. S. Ashwin, Managing Director of the bookstore Odyssey, said retailers should innovate in order to create a unique identity. "We don't make products, so the identity would be based on pricing, merchandise or ambience." And service is critical, as the customer has become more discerning than before, he said. The Indian retail market is estimated at a whopping $200 billion, of which organised retail is said to contribute a mere 2 per cent. The segment, however, is expected to grow at 18 per cent CAGR in the coming years. The factors being cited are increasing credit availability, rising incomes and more retail options than before. Although consumers are willing to spend more on entertainment and clothing, the grocery segment still remains price-sensitive, said Mr K. Radhakrishnan, Vice-President (Merchandising), FoodWorld Supermarkets Ltd. This is because, on an average, about 55 per cent of the income of an Indian is spent on food and hygiene items. The comparative figures for the US and the UK are 9 and 11 per cent, respectively. And successful retailing will be all about balancing the twin aspects of price and service. Citing the success of Wal-Mart, which operates on the principle of `Everyday low price,' he said the key is to consolidate. "When you are big, you can negotiate. It makes a difference with anybody." Ms Hemu Ramaiah, partner, Landmark, said book retailing involves hundreds and thousands of SKUs (stock keeping units), and it's becoming more difficult to merchandise because of consumer awareness, thanks to technology. Lifestyle's Mr Sankar also pointed out in his speech that increasing property cost and low productivity have been noticeable problems in the sector.
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