Emerging Trends in Retailing

🖋Gita Sarma
Assistant Professor
Department of Commerce
C. K. B. College, Teok, Jorhat



Retailing has been playing a major role in increasing productivity across a wide range of consumer goods and services. Retailing is the second largest industry in the United States, both in number of establishments and number of employees. It is also one of the largest employers worldwide. The retail industry employs a large chunk of world’s population.

Wal-Mart is the world’s largest retailer. Wal-Mart has become the most successful retail brand in the world due to its ability to leverage size, market clout, and efficiency to create market dominance. Forbes Annual List of Billionaires has the largest number from the retail business. Retailing is one of the most important industries in India. But all of them have not yet tested success and achieved break even because of the heavy initial investments that are required to compete with other companies already present in the market. The India Retail Industry is gradually inching its way towards becoming the next boom industry.

In simple words, Retailing is what Retailers do. Retailing refers to all the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. The various reasons for the popularity of the modern retail lies in its ability to provide easier access to variety of products, freedom of choice and many services to consumers. The Indian retail is dotted by traditional market place called bazaars or haats comprising of numerous small and large shops, selling different or similar merchandise.

Retailing involves a direct interface with the customer and the coordination of business activities from end to end-right from the concept or design stage of a product or offering, to its delivery and post –delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic in the world today.

Reasons for growth in Retailing:

Organised retailing is a recent development. It is the outcome of socioeconomic factors. India is standing on the threshold of retail revolution. Retail industry, one of the fastest changing and vibrant industries that, has contributed to the economic growth of our country. Within a very sport span of time, Indian retail industry has become the most attractive emerging retail market in the world.

Healthy economic growth, changing economic profile, increasing disposable incomes, changing consumer tastes and preferences are some of the key factors that are driving growth in the organised retail market in India. Some of the factors responsible for the growth of organised retailing are as under:  

Ø  The changing face of customers: With the emergence of families where the women are also working, the women are also having the say in retail purchases as against the earlier times. This customer shift has also repositioned the merchandise mix at the retail stores.


Ø  Growing disposable income:  More Indian households are getting added to the consuming class with the growth in income levels. The increasing job opportunities in various industries such as retail, IT enable services, and financial services have also played its part in the same. This will enhance the growth in retail in India.



Ø  Changing age profile and disintegration of joint family: The age profile in India is changing, which is likely to increase the consumption in the coming years. The country is believed to have an average age of 24 years for its population as against 36 years for the USA and 30 years for China. A younger population tends to have higher aspirations and spends more as it enters the earning phase.


Ø  Increasing nuclear families: The splitting of joint families into nuclear families has also led to increase in the demand.

Ø  Growing easier credit opportunities: The growth of easier credit opportunities through the bank loans, credit cards has made the availability of hard cash easier in the hands of the customer.


Ø  Liberalisation of FDI policy: The FDI route has open for the foreign retailers to enter in the retail sector. This has made the entry of various single and multi brand foreign retailers in    India and open their store which has increased options for the customers.


Rise in Income: Increase in the literacy level has resulted into growth of income among the population. Such growth has taken place not only in the cities but also in towns and remote areas. As a result, the increase in income has led to increase in increase in demand for better quality consumer goods. Raising income levels and education have contributed to the evaluation of new retail structure. Today, people are willing to try new things and look different, which has increased spending habits among consumers.


Ø Media Explosion: There has been an explosion in media due to satellite television and internet. Indian consumers are exposed to the lifestyle of countries. Their expectation for quality product has risen and they demanding more choice.



Foreign Direct Investment:

It is one of the important reasons for the growth of retailing in India.

Foreign Direct Investment (FDI) is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country. The key features of FDI is that it is an investment made that establishes either effective control of, or at least substantial influence over, the decision making of a foreign business.FDI in retail means that global retailers such as Wal-Mart, Carrefour, Nike, Tesco and other can set up mega deep discount stores in the country by their own or through joint venture with Indian firms.

FDI in single brand-retail (SBR) implies that a retail store with foreign investment can only sell one brand under one roof. Contrary to this, FDI in multi brand retail (MBR) implies that a retail store with foreign investment can sell multiple brands under roof.

In developing countries like India, the unorganised retailers play a dominant role by offing products or services to the consumers at the convenient locations with effective selling and buyer’s retention strategies. But due to the recent changes in the field of retailing and with the entry of big domestic corporations as well as multinational and foreign companies in to the field of various retailing ventures, the existing unorganised retailers have also been forced to change their existing business structure. The perception of consumers, industrialists, academicians, and policy makers in respect of the organised and unorganised retailers keep on changing. These sectors are also in a dilemma of these kinds of issues emerging in today’s retail markets. 

Reality check

The Indian retail sector accounts for over 20% of the country’s gross domestic product (GDP) and contributes 8% to total employment. The cumulative foreign direct investment inflows in single-brand retail trading, during April2000 to June 2011, stood at 69.26 million USD. Studies like the MasterCard Worldwide Index of Consumer Confidence have ranked Indian consumers as some of the most confident in the world. The more confident the  consumers are about the strength of the economy, their personal finances, their career growth, etc. the more they tend to increase their consumption, purchase non-essential products, experiments with products, brands, categories, etc. Besides, the country’s rural population of 700 million presents an opportunity for retail and consumer companies that cannot be ignored. The current estimated value of the Indian retail sector is about 500 billion USD and is pegged to reach 1.3 trillion USD by 2020.

The presentation level of modern retail (currently 5%) will increase six-fold the current 27 billion USD to 220 billion USD in 2020. The Indian retail sector is expected to grow at a CAGR of 15 to 20%. Factors driving the organised retail sector include the following:

Minor Trends  

The retail world is shifting and it’s important for our business to stay ahead of our curve.

Ø  Use of Social Media: the companies have started making use of the social media. It has become the important tool for reaching the target market through social media promotions, making communities online, listening the views of the consumer through various promotions.

Ø  Use of Mobile Commerce: The mobile technology is used for selling and making the payment for the retail goods. It is assumed that by 2020, there will be more mobile users than PC users. M-Com will completely reconfigure the shopping experience for retailer4s and designers.

Ø  Better sourcing options: The availability of easy and economical sourcing options from both within and outside the country is available now; the consumers can even order foe one unit of an item which is not available in the domestic country through online retailers. This has made the cross border trade much easier.

Ø  Use of Sophisticated Technologies: the retailers are using more data storage based technology to satisfy the customer and to satisfy him in much efficient way. Taking the example of Amazone.com, they store the information about each customer online. The next time when the customer visits, he is asked the login ID and is suggested the required products by the website itself.

Ø  Know Your Customer:  The companies today are very much focusing on KYC norms. This is because in this age of competition the companies can take no chance that the customer is not served well, gets dissatisfied and leaves the company.

Ø  New Payment Option: The customer today is more comfortable to purchase goods and services due to the emergence of newer payment options such as credit cards, debit cards where the customer is not required to carry the hard cash all the time.

Ø Convenient Delivery Timings: The customer can now chose the option of getting the goods delivered at his doorstep and that too at the convenient delivery timing.

Major Trends:

(a)   Emergence of Online Retail: The growth of technology in India has brought about the revolution on India primarily due to the convergence of computers based systems and the emergence of Internet Service Providers. The internet connects the computer systems at various remote locations and allows the exchange of information between various parties. According to the editor-in –chief of International Journal of Electronic Commerce, Vladimir Zwass, “Electronic Commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunication network”. Electronic commerce is denoted as E-Commerce. E-commerce is the destination where business takes place via the telecommunication network specially the Internet. It is a service that defines different goods which are ordered by the customer to a place defined by the customer. It can also be referred to as the form of virtual retailing. These online supply chains are becoming norm in most of the industries together with the shopping on the internet or on digital TV. Various transactions include the orders sent by the vendors to supply orders, the online receipt received from the supplier, the online payments made by the customer, and the track of the payments.

E –commerce has a number of advantages such as savings in costs, efficiency enhancement, product and service customization and so on. At the same time various limitations revolve around the e-commerce such as reliability and security concerns. The retailers adopting this channel of retailing need to understand the limitations and to efficiently minimise the negative impact and maximises the advantages.

Earlier it was said that, “Indian’s do not buy online”. It is their nature that they generally compare price online and most of time they gather only the information for the products through internet. Rarely people choose the online mood for purchasing the item they had explored. There was news that the Network 18’s comparison site clocks more hits than its E-tailing website. But the times have changed now. Now most of the people i India have started buying online because of the numerous benefits they offer. The online retail has seen 30% increase year by year.

(b) Human Resource Management in Retail:      

Organised retail in India is expected to boom as it is currently at its nascent stage and the huge investments planned in this sector can be foreseen. However, in India attracting people to this industry and them retaining them is a challenge. Due to long working hours and the performance expectations, the employee gets demotivated. Human Resource Department plays an important role not only in selecting the right person for the right job but also in maintaining their motivation levels. Human Resource Management is the effective use of human resource in order to enhance organisational performance.

(c)   Increasing Role of IT in Retail:

In the course of supplying the product right from the factory premises to the retail store and then selling it over to the customer, the identification of a particular lot/product is very necessary. This product identification using the automatic technologies is completely based on the automatic data storage technique. The identification equipments collect the data about the product and store it in the data based. Some of the techniques in the supply chain of the retail industry are; Bar Code, Radio Frequency Identification (RFID).

(d)            Customer Relationship Management:   

The word CRM (Customer Relationship Management) has evolved as a buzz word in the retail sector, and is very important in evaluating the performance of the retailer. CRM is a business philosophy and set of strategies, programs, and systems that focuses on identifying and building loyalty with a retailer’s profitable customers. All the customers which are purchasing from a retailer have different needs and different buying behaviours. It is the general tendency of the retailer to manage and have relationship with the better and high value customers. The retailer makes such strategies such as effective Inventory Management, efficient and economical buying processes and managing the stores with the effective product display which make the shopping experience inside the store very pleasing for the customer. CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers.

Some of the challenges faced by the retailers in India include the lake of recognition as an industry hampers the availability of finance to the existing and new players. Real estate prices in some cities in India are among the highest in the world. In addition to the high cost of real estate, the sector also faces very high stamp duties on transfer of property varies from state to state. Poor roads, the lack of a cold chain infrastructure hampers the development of food and fresh grocery retail in India and multiple and complex taxation system.


The retail trade in India is highly fragmented in nature and it is often remarked that retail in India is nascent and mostly unorganised. What one sees of the retail sector in India is just the tip of the iceberg. As retail is not regarded as an industry in India it is difficult to get a correct picture of the size of this sector.

Retail transformation in India is not restricted to the metro cities but has rapidly spread to smaller cities and towns. The key drivers of change in India are the economic growth, the booming Indian middle class, favourable demographics, the changing family structure, changing consumption habits and rapid urbanisation. The booming Indian economy led India’s large conglomerates to venture into retail. While many brands have been drawn to the Indian market it is also true that a few brands exited the market. The growth of malls and the advent of specialised malls like DLF Emporio saw the advent of global luxury brands entered the country. The raising internet penetration has resulted in an increase in the number of people going online in the past few years. The introduction of modern communication technologies making it easier for Indians to transects online.

Globalisation is not new for retailers. In fact, it was the prime target for world’s leading retailers. In future, retailers will continue to look to enter new markets like Asia Pacific, Africa and South America as better growth as these regions continues, and they will look to improve their present operational performance in these markets to achieve sustainability. Retailers will not only be looking for growth in emerging markets; they will also look to innovate in multi-channel strategies, mobile and data analytics to maintain or grow their market shares in developed markets.



1)      Bansal, M. & Single, B. (2013).  Retailing Management. New Delhi: Kalyani Publishers

2)      Pradhan, S. (2017). Retailing Management Text and Cases Chennai: Mc Graw Hill Education (India) Private Limited

3)      Bhattacharyya, S. (ed.) (2017). Emerging Issue of Foreign Direct Investment (FDI) in India with special reference to NE Region.Dhing: Jagaran Sahitya Prakash.                               

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