Mr. Naveen Prakash, AGM, Corporate Talent Acquisition at one of India’s largest retail chain – Spencer’s Retail, visited the IME department for a talk on Recent Trends and Opportunities in the Management of Retail Businesses in India.
Mr. Prakash started the talk with an introduction to the retail market in India. With a total size of USD 530 billion, 47% of the market is urban, out of which 31% is modernized, while only 3% is modernized in rural India. The potential is to grow to USD 800 billion by 2017, with an even split between urban and rural areas and three-fold growth of modern retail in rural areas. This is the kind of potential the modern retail business holds in India. Also, apparel, furniture, jewelry and medicine have been the fastest growing sectors in retail.
Within the retail business, Mr. Prakash told the students that it is the repeat customers who actually drive the revenues, and the aim of Spencer’s is to focus on this segment. The driving idea behind the firm’s efforts is to bring to the consumers those products that are inconvenient to find anywhere else. He apprised about how building preference has been the aim of Spencer’s and not merely profitability, for it will be a definite outcome if the preference has been built.
Mr. Prakash acquainted us about the importance of understanding the psychographics of customers and making strategies accordingly. As an example, he related to the audience about Spencer’s smaller sized “hyper stores” in many localities instead of a few big ones, for providing a convenience that the Indian people majorly look for when shopping for grocery and another day to day items.
Another aspect which was discussed was less profitability in food products as compared to non-food products. But nonetheless, to maintain brand positioning, Spencer’s has been putting majorly food products in their smaller stores.
Talking about the scenario of the retail business on the whole, Mr. Prakash mentioned the importance of increased efficiency of back-end operations to the overall profitability. Also, since delivering absolutely everything to everyone was not feasible, targeted marketing becomes crucial. In order to create awareness of the offerings, tapping omnichannel i.e. both online and offline channels necessary as well as curtailing the losses in the back end is a must.
Mr. Prakash concluded with a briefing about the importance of noticeably understanding and implanting a single strategy that the firm wants to go for, be it selling volumes or capturing market share or any other. He parted with a message to the students about the huge potential in this sector a relatively low threat due to the large size of an untapped market and opportunities of growth.