Retail Marketing Strategies For Un Organised Retailers

Topic: Retail Marketing-Strategies for small unorganized retailer in the era of organized retailing.

Current Status of Retailing in India

The size of the retailing industry in India is estimated to be in the order of Rs. 7200 to 8100 billion (US $ 160-180 billion), with organised retailing estimated to be approximately 2 % (Rs 160-180 billion) of the total retailing industry in the country. Food and grocery retailing is estimated to contribute to around 50% (Rs 3500-4000 billion) of the total sales from retailing. The number of total retail outlets in the country is estimated to be around 12 million. The retail sector is the second largest employer of the country after agriculture. According to the National Readership Survey of 1999, 6.6% of the urban adults and 2% of the rural adults are estimated to be shop owners.

India's unorganized retail entrepreneurs may be uneducated. But they are not street-stupid, but street-smart, who know and sense every pulse and breath of the Indian consumer.

Dominance of the unorganized sector

The unorganized sector has dominance over the organized sector in India, especially because of the low investment needs. As we know Retailing is the principal link between the producer and the consumer and plays a major role in price formation therefore Unorganized retailers can play their role effectively only by establishing an efficient and cost-effective supply chain. They are the most important link in the supply chain. They should develop such a supply chain which will reduce the wastage and transaction cost thereby reducing the cost of inventories. A reduction in the cost of inventory management will lead to a reduction in the final price to the consumer.

We feel if the small unorganized retailers abide the following retail marketing strategies, they will definitely flourish in the Era of organized Retailing.

1. Re Establishment of Customer base

In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy. The organized new generation Indian retailers (Shoppers Stop and Westside) have recruited senior retail persons from abroad, who have the expertise in setting up systems and procedures, but they are going to take a long while to tune into the psyche of the Indian consumers.

2. Service Delivery Mechanism:

Small stores should focus on personalized service to customers. They should personally attend to the customer and should try their best to satisfy him. The customer feels important when he walks-in in such a store. Nobody will personally attend a customer in a Mall. And the customer sometimes finds it tiring to rummage through all those piles of clothes stacked on the racks. In a small store, the sales person opens each garment and shows it to the customer. Again in some stores alterations and other miscellaneous repairs are done promptly. Some even give a life time free warranty of stitching and repair on their garments.

3. Phenomenon of Discounting and Free Home Delivery:

In a middle class-dominated, price-sensitive market like India, price manipulation is a strong weapon in the arsenal of the small independent retailer. Small retailers should promote discounting phenomenon in order to retain customers for their stores. Free Home delivery mechanism will build a rapport with the customers and will also make the small retailers abreast about specific needs and necessities and simultaneously enhances the comfort zone of the customer. And ultimately that customer moves a step forward in the ladder of loyalty.

4. Customer Information System:

Small retailers should think about their customers as individuals, analyze their shares of customers and calculate their lifetime values. Traditional Mom and Pop stores need to build data bases using in-store data collection and launch frequent shopper rewards, carry on an interactive communication with them, make special offers, and