Unit 4 - Apparel Retail Industry in India PDF

Unit- 4 Apparel retail industry in india ======================================== **Structure** 4.0 Objectives 4.1 Introduction 4.2 Retail and Apparel 4.3 Organized and Unorganized Retailing in India 4.4 Retail Formats in India 4.5 Growth of Indian Apparel Retail 4.6 Opportunities and Challe...

Unit- 4 Apparel retail industry in india ======================================== **Structure** 4.0 Objectives 4.1 Introduction 4.2 Retail and Apparel 4.3 Organized and Unorganized Retailing in India 4.4 Retail Formats in India 4.5 Growth of Indian Apparel Retail 4.6 Opportunities and Challenges 4.7 Let Us Sum Up 4.8 Keywords 4.9 References and Suggested Readings 4.10 Check Your Progress-- Possible Answers **4.0 objectives** Retail has been around for centuries. It is a world of selling products that make people's life comfortable and happier. As we are studying about apparel industry in detail, the knowledge of retailing becomes important. According to the Rating Division of Credit Analysis and Research Limited (August 2019) the current share of apparel in India's retail market is 10%, which is expected to demonstrate a promising growth in the coming years. Hence, in this Unit we will study about the importance of retailing and after reading this Unit you would be able to: - Understand the retail scenario in India; - Differentiate between organized and unorganized retail; - Identify the various retail formats and - Visualize the growth of Indian apparel retail. **4.1 INTRODUCTION** Retailing is one of the largest industries in India and one of the biggest sources of employment in the country. Although the retail industry has existed in our country for centuries, it is only in the recent past that it has witnessed such a tremendous growth. With strong fundamentals developing in the Indian economy in the liberalized environment since 1991, and due to other factors favouring the growth of apparel industry (refer section 1.4, Unit 1, Block 1 and section 4.5 of this Unit), India has observed a major retail boom in recent years. The growth and success of Indian retail is possible due to the entry of corporates like -- The Piramals (Pyramid), Rahejas (Shoppers Stop, Globus), ITC (WLS), Tatas (Westside) and Future Group (Pantaloons). Encouraged by India's growing retail business many multinational companies have also started making a beeline to enter into India's retail market including Ted Baker, **Under Armour** and **American Eagle Outfitters.** According to a recent study by A.T. Kearney's Global Retail Development Index, 2019, India is the top developing country for retail investment and the size of India\'s retail sector is expected to reach at around \$1.4trillion by 2021. Also according to the latest report of IBEF (India Brand Equity Foundation, Jan 2019), India is the world's fifth largest global destination in the retail space. **4.2 RETAIL AND APPAREL** **Retail** The term Retail has originated from the French word *retaillier* meaning 'sale in small quantities'. **Retail is the process of selling of goods or services to consumers through different channels; usually in small quantities and not for resale. Retailing is the set of marketing activities designed to provide satisfaction to the end consumers. It involves:** - **Understanding the needs of the customers** - **Developing good assortment of merchandise** - **Displaying the merchandise in an effective manner so that the consumers find it easy and attractive to buy** ***Who is a Retailer?*** A retailer is the key player in the marketing process as he regularly interacts with the end consumer. Retailers comprise street vendors, local *kirana* stores, shopkeepers, supermarkets etc. A retailer is the last entity in the distribution channel. Retailers include all businesses and individuals who actively participate in the transfer of ownership of goods to the end users. A retailer usually plays the role of an intermediary, who links the producers, wholesalers and other suppliers with consumers (Fig. 4.1). **Apparel** Apparel is defined as clothing but the retail apparel industry not only consists of clothing, it also includes accessories and footwear for all segments of society - men, women or children. The clothing market for men and women includes active wear, casual wear, essentials, formalwear and outerwear. The children's wear market includes baby clothing, toddler clothing and both boys and girls active wear, casual wear, essentials, formalwear and outer wear. For any apparel retailer it is important to offer a good selection of merchandise in order to attract and retain customers. Keeping too less or having too many options can be confusing. Therefore, it is important to find a balance between product variety and assortment. *We will study in detail about 'Merchandise Planning' in Block 5 of Course 2.* **4.3 ORGANIZED AND UNORGANIZED RETAILING IN INDIA** The retail industry in India is divided into two sectors -- organized and unorganized. Organized retailing refers to retail setups that are owned by companies (private or government) who have the license to sell their products and are registered for sales tax, income tax, etc. Here the customer walks into the stores for buying their necessary products. These include hypermarkets, supermarkets, departmental stores, malls etc. Unorganized retailing, on the other hand, is a low cost retailing format consisting of small and medium stores owned by an individual or family operating on proprietary or partnership basis. Their activities are not regulated under any legal provision. Unauthorized small shops like chemists, small grocery stores, convenience stores, kirana stores, paan shops, corner shops, general stores among various other small retail outlets form the unorganized retail sector. While the unorganized sector has deep penetration into rural India, the organized sector is largely concentrated in big cities.  The Indian retail sector is highly fragmented. More than 90% of the Indian retail market is controlled by the unorganized retailers and only 10% is served by the organized trade players. Thus, the unorganized sector remains to be the glowing strength of Indian retail industry. It is projected that by 2021 traditional retail will hold a major share of 75 percent, organized retail share will reach 18 percent and e-commerce retail share will reach 7 percent of the total retail market according to the latest report of IBEF (Jan 2019) (Fig. 4.2).The organized retail market in India is still at a very nascent stage and is growing at a CAGR of 20-25 percent per year. **4.4 RETAIL FORMATS IN INDIA** **Classification of Retailers** Retailers can be classified according to their selling processes as store based retailers and non-store retailers (Fig.4.3). Following section describes the categories and discusses the advantages and disadvantages of various retail formats. **Store Based Retailers** Store based retailers operate at fixed locations. Their stores are located and designed to attract a high volume of walk-in customers. These retailers offer a wide variety of merchandise and use mass media advertising to attract customers. They typically sell merchandise for personal or household consumption. These retailers can be further classified on the basis of various parameters (Fig. 4.4) as follows: \(i) Ownership \(ii) Retail Strategy mix \(i) **By Ownership** Stores can be divided into five categories depending on the ownership basis. - Independent stores - Chain stores - Franchise stores - Leased department stores - Consumer cooperatives ***Independent Stores:*** These are owned by a single retailer. This retailer does not own any other store. The entry barriers for setting up an independent store are low as licensing procedures are simple and initial investment is low. Therefore, there are many new entrants, which leads to competition. *Advantages* - Located at convenient location - Retailer can decide on the store timing, product variety and pricing - Cost of setting up an independent store is low as these stores employ few people and do not carry much assortment - The owner takes all the decisions therefore it saves time *Disadvantages* - No exposure to modern tools and techniques for managing various retail functions - Productivity is low as retailer depends on labour-intensive methods for ordering, stocktaking, merchandising and accounting - Retailers are not able to negotiate with suppliers for better price, quantity discount etc. - These retailers fail to attract customers from distant locations as they do not promote themselves in the media - They have limited number of customers from nearby location ***Chain Stores:*** These stores have two or more outlets that are commonly owned and controlled. These stores have centralized buying and merchandising system. Some examples of chain stores are listed in Table 4.1. **Category** **Name of the Retail Chain** ---------------------- ------------------------------- Footwear Bata, Liberty Photo film Kodak Cards and Stationery Archies, Hallmark Clothing Raymonds, Benetton Watches Titan Food Chains Dominos, Pizza Hut, McDonalds Consumer Durables LG, Samsung *Advantages* - Chain retailers purchase in bulk at low cost from the suppliers/manufacturers. They bargain heavily with suppliers over the price, quantity discounts and reorder services. Therefore these stores offer products at less than maximum retail price (MRP) - With many stores, spread along the geography, they can afford intensive promotion - Centralized decision making system and use of latest technology increases the efficiency of chain stores *Disadvantages* - No customization of strategies for every location in terms of price, promotion and product assortment - It is not possible for the top management to control the activities of each and every member in all the stores - The initial cost of establishment is high ***Franchise Stores:*** A franchise store can be defined as a store based on a contractual arrangement between a franchiser and a franchisee which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. The concept of franchising has become very popular in India (Fig. 4.5). Companies like Peter England, Raymond, McDonalds and Pizza Hut etc. have adopted the strategy of franchising to establish and expand them in the Indian market. *Advantages* - **Expansion of franchisor**- Franchisors are able to expand rapidly across countries and continents using the capital and resources of their franchisees - **Legal considerations**-The franchisor is relieved of many of the mundane duties necessary to start a new outlet, such as obtaining the necessary licenses and permits - **Operational considerations**-The need of franchisors to closely scrutinize the day to day operations of franchisees (compared to directly-owned outlets) is greatly reduced - **Quick start**-Franchising offers franchisees the advantage of starting up a new business quickly based on a proven trademark and formula of doing business, as opposed to having to build a new business and brand from scratch - **Expansion of franchisee**-With the help of the expertise provided by the franchisors, the franchisees are able to take their franchise business to that level which they wouldn\'t have had been able to without the expert guidance of their franchisors - **Training**-Franchisors often offer franchisees significant training, which is not available for free to individuals starting their own business *Disadvantages* - **Limited pool of viable franchisees**-In any city or region there will be only a limited pool of people who have both the resources and the desire to set up a franchise in a certain industry - **Control** -For franchisees, the main disadvantage of franchising is a loss of control - **Price**-Starting and operating a franchise business carries expenses. In choosing to adopt the standards set by the franchisor, the franchisee often has no further choice as to signage, shop fitting, uniforms etc. The franchisee may not be allowed to source less expensive alternatives **Conflicts -** The franchisor/franchisee relationship can easily cause conflict if either side is incompetent ***Leased Department Stores:*** A department in a retail store that is rented to an outside party is called a leased department. It means that a floor space within a store is rented out and it runs as a separate business. This arrangement is also known as *shop-in-shop* arrangement. For example, Lifestyle has leased out its floor space to Qwikys to run a coffee shop. Generally department stores lease out space to players whose products will add variety to the merchandise offered by the store. *Advantages* - Department stores can reduce their cost by giving space on lease - Store gets regular monthly income in the form of rent - The initial cost of setting up the department store is reduced as the expense is shared between both the parties - The leased department could increase the store traffic *Disadvantages* - Conflicts between leased department and the store can badly affect the image of the established store - In case of any dispute with the leased department, customer will blame the store - Leased department has to manage within the operating hours of the store - Leased department individually cannot attract traffic **Intext Activity1** Visit a mall/market/ shopping huband list down the names of any five leased departments in a retail store. ***Consumer Cooperative:*** Consumer cooperatives are retail operations owned and managed by its customer members. This kind of format is common in food retailing. In many cases, consumer cooperatives are started by the residents of an area. These residents believe that the existing retailers in that area are either charging too much or provide poor quality goods/services. **Check Your Progress I** **Note:** Use the space provided for your answer 1. Throw some light on the evolution of India's retail industry. 2. Differentiate between Independent, Chain and Franchise Stores? 3......................................... runs the business under an established brand name and follows the business pattern given by the franchiser. \(ii) **By Retail Strategy Mix** Depending on the retail strategy mix the retailers can be classified into two groups: - Food retailers - General merchandise retailers **Food Retailers** Food is one of the largest segments of the India's retail sector. The growing online food delivery market in the country is further fuelling its growth. According to India Brand Equity Foundation, the Indian food and grocery market is the world's sixth largest, with retail contributing 70 percent of the sales. Food and grocery accounts for the largest share in revenue in India and by 2020 it is estimated to constitute more than 60 percent of the total revenue in the Indian retail sector, followed by the apparel segment. Food industry too is ruled by traditional retailers at present but organized retailing is also showing impressive growth with the rise of modern retailing formats. Some of the retail formats used by food retailers are as follows: - Convenience stores - Conventional supermarkets - Food based supermarkets - Hypermarkets ***Convenience stores:*** Convenience stores are relatively small stores that are located near the residential areas. For the convenience of the customers, they open up for long hours on all the days of the week. They carry wide variety of products with limited assortment of merchandise. Convenience stores may not carry all the items available in the supermarket but they are very conveniently located for the customers. In these stores, traffic is less and billing is faster unlike the supermarket. ***Conventional supermarkets:*** Conventional supermarkets are similar to department stores but unlike department stores, these stores focus on food and household maintenance products. These stores earn very limited revenues from the sale of non-food items. Main feature of this format is the *self-service operation*. Shopping cart or basket is provided to the customers to pick up whatever they want. This self-service arrangement allows the supermarket to reduce cost and provide a large volume of goods and services. Self-service also enhances impulse buying. Supermarkets provide a wide variety of merchandise with deep assortments. Some supermarkets follow *every day low price* (EDLP) policy. Here the goods are priced lower than the maximum retail price (MRP). ***Food based supermarkets:*** A food based supermarket is larger and more diversified than a conventional supermarket but is usually smaller than a hypermarket. The size of the store ranges from 25,000 to 50,000 square feet. The entry of supermarkets has caused a huge change in the psyche of the Indian consumer. Supermarkets have appealing surroundings, hygienic environment, and better product display along with the availability of a wide variety of brands- all attracting customers away from the neighbourhood kirana stores and towards the supermarket. Now-a-days supermarkets are also offering store-specific membership cards for their loyal customers. Foodworld, Sabka Bazaar, Food Bazaar are some of the major players in this format. ***Hypermarkets:*** A hypermarket is a blend/mix of supermarket and a department store. They are mainly located on the outskirts of major towns and cities and operate on a very large scale. They offer products ranging from fresh groceries to clothes, jewellery, hardware, sports equipment, motor accessories, books, consumer durables, electrical equipment, computers and many others. Hypermarkets provide consumers with a combination of good prices, shopping experience and convenience, product range and quality. Indian players in this format are Big Bazaar, Hyper City, Reliance Retail etc. The size of a hypermarket ranges from 30,000 to 100,000 square feet. These stores are designed to allow customers to have one-stop shopping experience. They have business models focusing on high-volume, low-margin sales. **General Merchandise Retailers** In general merchandise retailing, the strategic merchandise mix ranges from a shallow to deep assortment of goods and services. On the basis of location, merchandise, price, store atmosphere, service and promotional mix, retailers are classified into: - Department stores - Specialty stores - Discount stores ***Department store:*** Department stores are large retail outlets that offer wide variety and deep assortment of goods and services. These stores provide a one-stop shopping experience to customers. They stock a wide variety of merchandise ranging from apparel, toiletries, cosmetics, toys and jewellery to appliances and furniture. They usually sell goods at fixed prices with guarantees and allow exchanges and refunds. They operate as retail chains across the country. These stores have large layout with an environment that pulls people and makes them spend more time shopping. Department stores have knowledgeable sales staff to help the customers in shopping. These stores often provide discounts and offers to the customers. The major players with this kind of format are Shoppers Stop, Westside, Pantaloons, Globus and Lifestyle. According to the US Bureau of Census, a store should satisfy the following criteria to be considered a department store: 1\. A department should employ a minimum of 50 people. 2\. The store should generate atleast20% of its total revenue from the sale of apparel and soft goods. ***Specialty Store:*** Specialty stores offer a large range of selections within a single merchandise category. They are general merchandise stores that sell limited lines of closely related products or services to select group of customers. They offer particular product line with deep assortment to its customers. Major players in the Indian market include Planet M, Music world, Crossword (Fig. 4.6) etc. These stores mostly attract customers with a pre-defined mindset. These stores also have strong customer loyalty programs. There has been a move towards specialty mall too. Gold Souk of Gurugram is one such example of specialty mall. Specialty store can be further classified into: - *Single line specialty store*: It concentrates on one or few related product lines. - *Limited line specialty store*: It concentrates on more than one product line at a time. **Check Your Progress II** **Note:** Use the space provided for your answer 1........................ are relatively small stores that are located near the residential areas. ***Discount store:*** Discount store format is a type of department store, which sells products at prices lower than that of other retail outlets. These stores offer a wide variety of goods, limited service and low price. Mostly discount stores are large in size. They purchase in bulk directly from the manufacturer at deep discounts and then pass the benefits to their customers. Walmart is the largest discount retailer in the world. In India, the major players in this format are The Loot, My Dollar Store, Max Retail, Brand Factory. **Non-Store Retailers** Although non store retailers serve the general public like the store based retailers but they differ in their retailing methods (Fig. 4.7). Non-store retailing takes place in two ways: I. Traditional II. Non traditional **I. Traditional Non Store Retailers** Traditional non-store retailing involves variety of retailing methods. These are discussed in the following pages. ***Direct Marketing:*** The Direct Marketing Association describes direct marketing as an interactive marketing system that uses one or more advertising media to yield a measurable response and/or transaction at any location. Here the customer is informed about the product through non-personal media like TV, radio, magazine, newspaper, internet etc. The customer places an order through telephone or mail. *Advantages* - The initial cost or investment for direct marketers is comparatively less than that for retailers using other retail formats. This is due to smaller inventories and absence of displays and fixtures. - Prime location is not required in direct marketing. - A wide geographic area is covered by direct marketer's promotional activities. This reduces the total cost of the firm. Therefore, the retailer can offer its products at a lower price than any store based retailer. *Disadvantages* - Customers do not have any opportunity to see and feel the products they wish to buy. Therefore this limits the scope in the Indian market as the Indian consumers want to see, touch and feel the product before they purchase them. ***Direct Selling***: As per Direct Selling Association, direct selling is a method of marketing and retailing consumer goods directly to the consumer that relies neither on direct mail, product advertising nor fixed retailing outlets. Direct selling encourages convenience shopping as well as personal touch or feel of a product. It is also known as door to door selling because the salesperson approaches customers directly to sell a product or a service. ***Vending Machines***: A vending machine involves coin or card-operated dispensing of goods. It does not require the sales person. It facilitates round the clock sales. Machines are placed wherever they are most convenient for the customers. These machines are generally installed in the busy market places. Retailing through vending machines is also called automatic vending. Customers use pre-paid cash cards, coins or credit cards to purchase the goods from the vending machines. Goods sold through these vending machines include soft drinks, coffee etc. Banks use automatic vending machine called Automated Teller Machine (ATM) to make banking more convenient for the customers. ***Catalogue Marketing***: Catalogue marketing is form of direct marketing where the seller prepares catalogues of merchandise or products (Fig. 4.8) and sells directly to the customer. The catalogues are generally in printed form but can also be distributed in the form of CDs. To avoid printing and distribution costs, the catalogues are being increasingly made available online. It refers to sales made through catalogues mailed to a selected list of customers. In these catalogues basic product and pricing information is given along with the instructions for placing an order. Example: Avon is a good example of a company successfully leveraging this channel to sell its range of cosmetics. ***Telemarketing***: Telemarketing is the most interactive marketing medium available. Telemarketing allows the marketer to answer questions of their prospects, address their concerns, and overcome their objections. To provide more convenience and service satisfaction to the customers, goods and services are sold through telephone contact. This method is useful for customers who want to avoid traffic congestion and parking problems. Telemarketing allows retailers to provide information on new merchandise and upcoming sale events to their customers. **Telemarketing provides the marketer with immediate feedback & valuable information that can be quickly analyzed.** Telemarketing is the only form of \ advertising that requires an immediate response. ***Television Home Shopping:*** It is a medium of marketing through which retailers demonstrate a product and describe its benefits and uses. If a customer wants to purchase the product, he can order it through email or telephone. **II. Non-Traditional Non Store Retailers** A significant rise in computer literacy in India over the last decade coupled with growing popularity of the internet among literates, professionals and youth has brought about a drastic growth of online commerce in the country. ***E-commerce/ E-tailing:*** Electronic retailing (also called as e-tailing or online retailing or internet retailing) is a retail format in which the retailers communicate with customers and offer products and services for sale over the internet (you will study in detail about E-commerce in Unit 5, Block 2 of this Course).Internet purchases have seen a remarkable increase since a decade. According to the study by Forrester Research, China is the largest market for e-commerce globally. After China, comes US and then India, which is the fastest growing market. We live in a dynamic world where there are more numbers of mobile phones than number of members in the family. From communication to bill payment, hiring a cab, bank transactions, ordering food, shopping etc., and people have started using online services. The study shows that in Asia Pacific, a fifth of total retail sales will take place online by 2021. The next emerging market in retail is online retail in the Indian retail growth story. Varying lifestyles, increasing time paucity and the ease to buy stuff online has paved the way for Indian consumers to have a 'consumer friendly & unperturbed online shopping experience'. With such a growth of internet users and increasing mobile users, e-commerce in India is a huge emergent business. The launch of 4G services, free or reduced rate of broadband have been by and far the driving forces for increased online sales. Other than services, the online retail is rapidly catching up in additional product categories, including the touch-and-feel experience categories such as 'apparel'. Online stores such as Flipkart.com, Amazon.com, Myntra.com, Fashion&you.com, Zovi.com etc. offer variety of apparel, display, choice, discounts and delivery, which make it easy and convenient for the consumers to shop. Retailers and brands such as Pantaloons, Shoppers Stop, FabIndia, Madame, etc. also manage online sales and have seen an incredible increase in the number of orders placed online. Consumers can browse as per their liking and time availability through more variety with respect to colour, budget, size etc. and can simply evaluate price and quality of merchandise online. -- -- The advantages of online sales from the retailers' side is that this sales channel offers no or very low real estate cost. One can reach much larger target group who are accessible across multiple locations and no staff trainings are required. The audience can have a comfortable virtual experience, equivalent or better than an in-store experience and for that the most essential investment required is in software technology. ***M-commerce***: Use of mobile phones have increased so much that it is not just a device to make calls, but an important medium to fulfill all the financial needs for friends and family. Now, mobile phone technology has made another leapfrog to pave its way for a new trend called mobile commerce (M-commerce) where the financial transactions are made using mobile devices. According to a report by Boston Consulting Group, there is an ample scope for M-commerce in India. At present, India has over 800 million mobile subscribers. Following are the M-commerce services available in India: - Bill Payments - Money Transfer - Retail Transactions - Movie Ticketing - Travel Ticketing The above mentioned retail formats are available in the organized and unorganized retail sector in India. There are many new formats with different combinations which are gradually experimenting in the market. **4.5 GROWTH OF INDIAN APPAREL RETAIL** You have already read about the size of the India's retail market in section 16.1. In this section let us understand how apparel has contributed to the growth of Indian retail. India is increasingly growing as a market for fashion products and there are many forces working together to bring about this growth. Some of them are described below: - - - - - - - - - - *Socio economic factors:* There is an increase in the percentage of earning population in India falling between 16-60. The median age of 26 years of the working population highlights it to be one of the major reasons of growth in the spending habit of the population. Young earning population is considered to have higher spending habit. - *Splurge of middle income group*: Steady growth has favourably affected the personal income in India. The middle class forms the backbone of the Indian market with the young middle class population that is fuelling the growth. Building on the middle class, upper middle class and higher income class will pave positive path for demand in niche and branded products. All the reasons stated above make India too important to be ignored by the national and international players. India is all set to evolve from an increasingly important sourcing hub into one of the most attractive consumer markets in the world. **4.6 OPPORTUNITIES AND CHALLENGES** Retailing has witnessed such a drastic transformation over the past couple of years that its very explanation has undergone a sea change. A manufacturer no longer can rely on sales to take place by ensuring mere availability of his product. Today, the world of retailing is much more than simple merchandising. U C Mathur in his book on Retail Management said "It is about casting customers in a story, reflecting their desires and aspirations, and forging long-lasting relationships. As the Indian consumer evolves they expect more and more at each and every time when they step into a store. Retail today has changed from selling a product or a service to selling a hope, an aspiration and above all an experience that a consumer would like to repeat." In different sectors, producers and service providers have immense opportunities in urban markets in capturing and delivering enhanced value to the consumers through retail. For instance, in Chennai, manufacturers/service providers have combined their own manufactured products and services with those of others to generate value. Cavinkare, Lime Lite, Marico's Kaya Skin Clinic and Apollo Hospitals' Apollo Pharmacies are examples, to name a few. Only innovative concepts and models may survive the test of time and investments.  Nevertheless, the manufacturers and service providers will more and more face a host of specialist retailers, who are ahead in using modern management techniques, supported with unrestricted financial resources. Organized retail appears inevitable. For retail industry in India, the conditions have never appeared better and brighter. The manufacturers and service providers would certainly face lot of challenges when market power shifts to organized retail. Quality control programs ensure high profitability, customer satisfaction and enhance customer experience. A retailer should understand the requirement of customers. It is not what products a retailer has to offer, but what customers want. Quality has to be integrated in the process on the basis of customer feedback which will enhance customer loyalty. Quality control program like Lean Six Sigma in retail can minimize errors in operation, reduce customer dissatisfaction, waste reduction etc. Ensuring the quality is yet a challenge for the Indian retailers. The unorganized retail sector lacks trained or skilled manpower, prior training of trade practices, work ethics etc. But with organized retail picking up in the country, the demand for skilled retail professionals has increased. So other than eyeing expansion, organized retailers look for skilled employees who can take up the challenges in this competitive field. As a result, retailers such as Spencer's and Bharti Wal-Mart have set up their respective institutes 'Pragati' and 'Bharti Training Centre' to train the manpower according to their respective needs. **Check Your Progress III** **Note:** Use the space provided for your answer. 1. Differentiate between direct marketing and direct selling. 2. What are the reasons for the growth of Indian apparel retail industry? **4.7 Let Us Sum up** From the above Unit, you have learnt the concept of retail and the growth of Indian retail industry. The retail formats comprises of store-based and non-store based. The former is further classified on the basis of ownership, strategy-mix and the latter is classified as traditional and non-traditional. There are several reasons for the growth of Indian apparel retail. They are: increase in disposable income, new occasions, growth in the women's segment, fashion consciousness, urbanization and organized retail among others. Retail today has a new face from selling a product or a service to selling a hope, an aspiration and above all an experience that a consumer would never forget and like to replicate. There are few challenges which the industry is facing. A retailer should understand the requirement of customers. It is not what products a retailer has to offer, but what customers want. Quality has to be integrated in the process on the basis of customer feedback which will enhance customer loyalty. The unorganized retail sector lacked trained or skilled manpower, prior training of trade practices, work ethics etc. But with organized retail picking up in the country, the demand for skilled retail professionals has increased. So other than eyeing expansion, organized retailers look for skilled employees who can take up the challenges in this competitive field. **4.8 keywords** **Merchandise :** Goods to be bought and sold **Retail: Retail is the selling of goods to consumers; usually in small quantities and not for resale** **Soft Goods :** Merchandise that is soft to the touch, such as clothing and other textile goods **Wholesaler :** An intermediary entity in the distribution channel that buys in bulk and sells to resellers rather than to consumers **4.9 REFERENCES AND SUGGESTED READINGS** Gilbert, D. (2002).*Retail Marketing Management.* New Delhi: Pearson Education. Mehrotra, Nitin (2007).*Indian Retail Sector- A Primer.* Hydrabad :ICFAI University Press. Gupta, Sajal and Randhawa Gurpreet (2008).*Retail Management.* New Delhi :Atlantic Publishers and Distributors Limited Mathur U. C. (2010).*Retail Management Text and Cases*. New Delhi: I K International House. **Websites:** [www.moodys.com](http://www.moodys.com) accessed 25/09/2017 **Links:** [*http://www.fibre2fashion.com/industry-article/25/2464/women-customers-power-retail-growth1.asp*](http://www.fibre2fashion.com/industry-article/25/2464/women-customers-power-retail-growth1.asp) ** accessed 24/12/2019** ** accessed 24/12/2019** **accessed on 26/12/2019** ** accessed on 27/12/2019** **4.10 CHECK YOUR PROGRESS -- POSSIBLE ANSWERS** **Check Your Progress I** 1. Retailing has existed in our country from centuries. It started with mom and pop stores and kirana stores and is growing day by day with the change in income levels, lifestyle, taste and habits of consumers. During 1980's, with the opening up of the economy, the retail scene in India changed and leading retail chains were established. Subsequently, organized retailing started growing and by 1995, major retail outlets entered the Indian retail market followed by the opening of large retail formats like shopping malls, hypermarkets and supermarkets. 2. **Independent store:** owned by single retailer. The retailer doesn't own any other store. The licensing procedures are simple and initial investment is low. **Chain store:** have two or more outlets that are commonly owned and controlled. The chain stores have centralized buying and merchandising system. **Franchise store:** is a setup which is based on a contract between a franchiser and a franchisee. The franchisee runs the business under the established brand name and follows the business pattern as given by the franchiser. 3. **Consumer co-**operatives **Check Your Progress II** 1. Convenience stores 2. Conventional supermarket 3. Hypermarket 4. Department stores 5. Specialty stores 6. Discount stores **Check Your Progress III** 1. Direct marketing is an interactive marketing system that uses advertising media to inform the customers whereas direct selling is door to door selling as the sales person directly sells a product to the customer. 2. Reasons are as follows: 1. Increase in disposable income. 2. Desire to dress up for the occasions. 3. Clothing increasingly a form of self-expression 4. Large middle class population 5. Educated and working women force 6. Growth of organized retail 7. ***Increasing degree of brand consciousness of the Indian consumer*** 8. ***Focus towards online transaction and availability of credit options***