Carrefour-Future Group deal in the pipeline

The world's 2nd largest retailer Carrefour would soon be operating cash and carry outlets,hypermarkets & supermarkets in India.The group CEO Lars olofsson declared in a press conference about his strategy to expand in the emerging markets and the rumors are that Indian Retail giant Future Group would be the prospective partner for the multi billion dollar venture.This deal would be the second attempt from an overseas retail giant to tap the ever growing Indian retail market after Walmart who has inked a deal with Bharti to operate in the Indian market and has already started to operate in the Northern India region.The Prospective partner will be declared in few months but one thing is for sure..................THE RETAIL MANIA IS HERE TO STAY AND GROW

Conglomerated Watchdogs

If we look at the major concerns faced by the Big and Small Retailers in the present context Shrinkage will be among the most challenging ones.Shrinkage is percentage of loss of inventory between manufacture and point of sale.It occurs due reasons like shoplifting, employee theft, administrative errors and supplier fraud.

Lets have a look at the most common yet non-remediable problem:- Employee theft

All retailers, big and small, though fearful of the problem, refrain from making reference to impact of this menace that is affecting their bottom-lines and operating efficiency.So what can be done???????

Recently, According to a report in Economic Times,Big retailers like Biyani's Future group,Raheja group, Spencer’s Retail, Reliance Retail and Aditya Birla Retail have now decided to join hands with a view to combat the growing menace that is directly killing their profits.This move is said to be taken in order to combat lower margins due to such activities.

According to the second annual Global Retail Theft Barometer 2008 Survey, which covered 920 large retailers across 36 countries, India had the highest shrinkage rate of 3.10% during the year, an increase of 6.9% over last year.The irony in this decision is that large players who are very competitive and are not ready to compromise on any issues have joined hands for this problem which shows the impact which employee thefts has on their profit margins.

Under this initiative these players will create a blacklist of employees who are found guilty of theft and indulging in unethical practices and rude behaviour with customers.The blacklisted employees will find it extremely difficult to get employment with another retailer once such lists are prepared and become available to members of the group.This measure is originally sourced from the IT industry which is also surrounded by problems like Data theft and duplication.Retailers Association of India (RAI), is also planning to create a list on similar lines.

Now, after understanding the whole picture and the remedial steps taken by companies most of the questions are answered except one.Big Retailers have formed ways to identify employees who are engaged in such activities but have they ever thought of forming a conglomerate body which can identify potential employees .which can help the employees to excel and concurrently allow the organization to grow with the help of employee motivation.I hope these big shots can look into this problem with an altogether different perspective for the beeterment of the industry.

Changing Trends

As Organised Retailing is strengthening its hold in the Indian Territory, what can be implemented next to reach customers and create value for them? According to Mr. Baker, a retail consultant, developing countries like ours can learn from the recent trends in the Retail industry. Some of the significant ones he has mentioned about are - Mobile marketing, pop up shops and customization.

Consumers in developed countries opt into a retailer’s mobile marketing program, by giving him both mobile phone number and explicit consent to be contacted with promotional offers. The retailer thus builds a database of customers with whom he has the authority to conduct real-time communications.

In case of Pop up shops, Retailers, in order to cater to the needs of untapped communities (remote areas in Indian case), set up temporary stores. This practice is followed by renowned retailers like Target, Gucci etc.

Customisation is prominent in USA & European Countries. Retail chains are making a greater effort to tailor merchandise assortments to local markets. For example, US drug store retailer CVS offers customisable gift cards whereby visitors to its website are able to create virtual gift cards with a personalised look and feel, incorporating customer-selected colours, fonts and greetings. This practice is also observed in India where different e-commercial ventures cater to customised photographs, gifts etc.

Lastly, I was going through the articles of a newspaper where I came across this unique practice of Second Hand Retailing. It is an industry in its own with a separate governing body known as the National Association of Resale and Thrift Shops (NARTS) in the U.S. This Trend has been recently observed after recession which saw a change in the psyche of consumers who are now not hesitant in going for Used products which has resulted in an increased turnover of the second hand sector.

So what can be inferred from the above mentioned practices?.......The answer is...there is enough scope to implement different strategies in a country like India which offers varied opportunities to all the players in the Market.

RETAIL MANIA: - Is It here to stay?

Gone are those days when we used to go to the nearby Mom and Pop stores and vegetable markets & used to bargain with the local vendors until we were satisfied that we got a good deal. The Unorganised market, though a dominant force, is losing its hold from the most lucrative and ever growing industry in India. Retail mania is on the way to pave a new path altogether, Be it Biyani’s Future group or Raheja’s Retailing venture, From the Tata’s Westside to the Reliance retail Group ,Huge investments made by this giants is testimony of the fact that the Retail mania is here to stay .

The Industry has seen downside like the Cash crunch in Subhiksha and Debt burden Of Vishal Retail Ltd which ultimately forced the two to go for Corporate Debt Restructuring .Yet the Retail Mania was able to have a smooth ride over the topsy-turvy roads characterised by bottlenecks like opposition from the unorganised retailers, strict FDI norms for foreign players in Multi Brand Retailing, High Real estate prices etc.

The Recent Conglomeration between India’s Bharti and U.S.A’s Walmart to start their Retail venture in India (with the duo’s one outlet already in operation in Amritsar) and talks between Future group and Carrefour Mega alliance adds more spice to the stupendous Retail flavour. With other players entering the Indian market focusing on capturing tier 2 and 3 cities, we will get to see the real colours of this industry sooner or later.