India is & #BANNER1 & # a land of unorganised retail. Manish Shukla, managing director, Retailscape, talked about how it is possible to improve the retailing standards of the vast unorganised sector, which forms 95 per cent of the retail market in India, so that it can be beneficial for all manufacturers and marketers. He was speaking at In-Store Asia 2008.
Retailscape is an in-store marketing company that combines its strategic research methodology with retail focused research to provide end to end solutions to marketers' merchandising needs. Shukla said that the Indian unorganised retail market will not vanish easily, but will continue to rule for the next few years at least.
Around 38 per cent of the retailers studied were members of a retail body or association and 2 per cent of them believed that the membership did not make any difference.
The retailers spent 12-16 hours a day in their shops, six and a half days a week. They said they felt imprisoned in their shops. They were apprehensive about the big retail chains coming to the Indian market, but did not know who to approach for help. They firmly believed that retail grew the marketer's or the brand's business, but did nothing to grow their own business individually.
The consumers, on the other hand, wanted to choose their own brands and didn't like the retailer interfering in their decision making. However, they enjoyed the relationship they had built up with their 'kirana' store owner over the years, and said that it gave them a feeling of familiarity and belonging while buying their daily necessities.
Keeping these points in mind, Retailscape designed a programme called Fast Forward - Super Value Store for Hindustan Unilever Ltd (HUL). The idea of the programme was to convert local 'kirana' stores into bigger and better self-service retail outlets. The initiative was aimed at completely revamping and modernising the grocery outlet to give shoppers an enhanced experience. It would also help the 'kirana' stores retain clientele that was fast migrating to snazzy shopping malls around the corner.
The programme was initiated in 70 cities. The 'kirana' store owners typically had shabby interiors, which had not been painted in many years. The challenge was to get the shop owners to invest a sum of Rs 3 lakh initially in upgrading their shops. Those who accepted the initiative not only saw growth in the regular number of customers every day, but also recorded a 120 per cent increase in their turnover. This was possible because consumers were shopping now in better environments, had more variety and an improved product mix and, therefore, derived higher satisfaction levels from their shopping experience.
Some retailers who were reluctant to adapt to the format initially agreed later on, once they saw how others were profiting from it. Shukla said that if a format was successful, it got replicated automatically across markets. The Super Value Store format is now being adapted by the liquor giant, Diageo, in India.
Shukla said that brands should be able to communicate shopper insights to enable retailers to market their products successfully in stores. According to him, a retail revolution will unfold only when marketers empower the vast number of nano retailers in the country.