Challanges of retailing in india

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.

2. 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.

3. 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.

4. 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.)

5. 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