Retail Destinations

A.T. Kearney’s Global Retail Development Index (GRDI) ranks 30 emerging countries on the urgency for retailers to enter the country. The scores are based on 25 variables across four primary categories: economic and political risk, retail market attractiveness, retail saturation levels and time pressure (difference or addition between gross domestic product and modern retail area growth). Vietnam's leap from fourth in the 2007 GRDI to first place in 2008 was driven by strong GDP growth of 8%, changes to the country's regulatory structure favoring foreign investors, and increasing consumer demand for modern retail concepts. India, Russia and China, the top three countries in last year's GRDI, remain important retail investment destinations, but high real estate costs and growing competition have decreased their attractiveness relative to prior years and forced retailers to look for opportunities in tier II and III cities. According to GRDI 2008 report, the Middle East/North Africa region is clearly the world's hottest region for retail expansion. The strong Euro supporting investment in the region, consumer familiarity with modern retail concepts and petrodollar wealth are the primary factors making the region an attractive retail destination. Among the gulf countries, Saudi Arabia, with a robust 9 percent growth rate and low retail consolidation is among the most attractive global retail destinations.

While Eastern and Central Europe as a whole remain attractive for retail investment, the ‘window of opportunity’ for large-scale supermarket and convenience store build-outs will likely close over the next year or two, according to the GRDI. The opportunity for entry into Eastern Europe is for wave-2 retailers — do-it-yourself, consumer electronics and apparel retailers — as multi-level fashion malls and mixed-use centers are cropping up throughout the region. India continues to be one of the most attractive countries for global retailers today. The retail market opportunity is larger than ever at $510 billion and spending patterns and consumer maturity are growing faster than most global retailers had forecast. But challenges have emerged which could potentially slow the pace of growth for global entrants. Foreign players entering India today face stifling regulations, a clouded political atmosphere, soaring real estate costs and a fiercely competitive domestic retailer group. In China, the countryside has turned into the next retail battleground, despite China's drop to number four in this year's GRDI. China remains one of the fastest-growing economies in the world. Although its per capita GDP remains low given China's large population, consumer spending has more than doubled from the mid-1990s and continues to grow rapidly in the large southern and eastern cities.

Stylish Retailing

There is a trend towards offering extended product ranges that are focused onto a particular customer type; this is called lifestyle retailing. It is a real understanding of how far a lifestyle can extend and formulating a product offer that reflects the approach to life and the choices a consumer would make. A lifestyle retailer can be a generalist or specialist. A generalist lifestyle retailer would offer a wide variety of product categories, with shallow but very specific orientation to the products. A specialist lifestyle retailer might offer both depth and variety, but targeted to very specific lifestyle needs. The introduction of lifestyle format is not an easy one to undertake as it involves lot of innovative activities. But the companies generally lose the ability to innovate as they develop and mature. To allow innovation to occur firm must acquire a dual mode of operation one made of the existing business and a very different approach for new embryonic business. Research findings highlight that recipe of success of lifestyle retailing not only lies in product and design but also in managing the customer relationship management and designing organizational structure to manage innovation. In Britain, there is no consensus on what the concept means and further there is no theoretical and empirical research on the concept as it means somewhat different things to different people.

Retailing in India in the lifestyle segment as well as the value retail segment is in the nascent stage. The opportunity is really big for any player in the retail sector. Lifestyle has been a trendsetter of sorts in the Indian retail industry. In India we have used international experience and expertise to redefine the retail environment which has reached new heights of customer delight. Today, there are five major lifestyle retailers in India; Lifestyle, Westside, Shoppers' Stop, Globus and Ebony which alone account for a little over 200,000 square feet of retail space. ITC’s Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Pantaloon also sees spurring further growth in lifestyle retailing focus. The most recent example is of Madura Garments Lifestyle Retail Company, a 100% subsidiary of AV Birla Nuvo, is working on setting up 12-14 stores to meet the fashion needs of the urban Indian man.

Midnight Retailing

It was close to midnight and the crowd wasn't showing any signs of letting up. The DJ was still spinning fast paced music and finger food and non-alcoholic energy drinks kept coming. And the hosts weren't complaining that the party was stretching into the wee hours. The "party", which kicked off at 10pm and lasted until 2 am, was hosted by denim marketer Spykar Lifestyle Pvt. Ltd and had already generated three times the revenue that a similar sale by the company during normal day-time hours at the Bandra store in Mumbai. The midnight-sale by Spykar has become one of the many retail innovations that stores are using to get more shoppers into their stores. In Midnight retailing, the retailer invites loyal customers, celebrities and media and much like a "happy hour" in a bar, retailers offer steep discounts during such "off" hours or on certain days when foot traffic is normally slow. This recent practice is result of weak sales in a slowing economy or as sales gimmicks to attract media attention-such.

Most midnight openings occur at the mall-based specialty stores and outlet malls that felt overshadowed by all the action and attention lavished on the discount chains and department stores for opening at dawn. The “midnight madness” trend is part of an effort by smaller retailers to steal consumers from their bigger counterparts in an increasingly crowded marketplace comprising traditional bricks-and-clicks stores, retail web sites, eBay and other alternative outlets. By keeping malls open all night, their hope is to lure shoppers away from the competition. There will be giveaways and sales, playing off the same kind of door-buster frenzies offered elsewhere. There also is an expectation that the novelty of shopping in the middle of the night will be an attraction. One goal of Midnight Madness is to put some of the fun back into an experience that, in some cases, has turned dangerous as there has been trampling and shoving at door-buster sales, and some shoppers were injured on their way into Wal-Mart stores last year.
“ Shoppers will come if you give them a fun, festive atmosphere.”

Scented signals from consumers ...

Have you ever thought of the effect on your behaviour in a restaurant where lemon and lavender aromas were diffused and compared to a no-aroma control condition?
You’ll be surprised to know that odours have an effect on consumer behaviour. Experiments show that lavender—but not lemon aroma—increased the length of stay of customers and the amount of purchasing. The supposition is that lavender produces a relaxing effect is offered to explain the results. We can take this explanation as most probably correct because this is one of those behavioural aspects of humans on external factors which can’t be conclusively explained and justified with some numbers. Similarly various experimental studies have shown that aromas have a positive impact on human behaviour, emotions and cognition. It was also found that human behaviour is effected when diffusing a pleasant perfume and there increase in the performances of difficult cognitive tasks and there is also improved and rapid performance in computation task.

Scents appear to be relevant to two forms of consumption: product evaluation (for example scent products) and sale’s environment (for example ambient aroma). The scent that was appropriated with a product increased product evaluations. A pleasant ambient scent improved brand evaluations especially for unfamiliar brands while ambient scent increased recall of unfamiliar brand names. Helping behaviour is also positively affected by ambient aromas. Some researchers observed that people in a region of a mall with pleasant food odours (pastry, coffee shop) were more willing to accept a request for change from a male associate than persons in a zone with neutral odours (clothing shops, etc.). Research has shown that students agreed to spend more time on voluntary work when they were exposed to a vanilla or lavender odour before the request. Also, some other observers showed that people exposed to a pleasant odour during a learning task offered their collaboration more easily to the experimenter asking for help at the end of the task. Odours environment in a sales area seems to have a positive effect on consumers’ behaviour. The ambient aroma had a positive impact on the duration of time spent by consumers at a jewellery counter.

Ambient aromas also affect gamblers’ behaviour. During one weekend a slot-machine area in a Las Vegas Casino was odorized. The amount of money gambled in this area was compared to the amount of money gambled in the same area before and after odourization. The results showed that during the experimental weekend, the amount of money gambled was greater by an average of 45.1% compared to the weekend before and the weekend after the diffusion of the aroma. Researchers found no difference between the three weekends when comparing the amount of money gambled in a control slot-machine area which was non-odorized. The study also found that when the concentration was higher, larger amounts of money were gambled. As seen from various research results it is very clear how a consumer is unknowingly influenced by the aroma in his surroundings. Thus, pleasing scent can create a wonderful ambience and add to the customers’ shopping experience, particularly if it is sample of one of the products retailer is selling. In some cases, the best scent may be the absence of any noticeable scent at all, adding to the impression that the store and environment are clean. So make sure that you do notice the fragrance around you while visiting any place and figure out the behavioural changes you go throughout the course.

Click n Buy: E-retail

Retail is one of the more visible market sectors on the Web. In retail, merchants sell products and services directly to a buyer. E-retail, also called e-tail, occurs when retailers use the Web to sell their products and services. E-retailers constantly challenge the old ways of conducting business as they bring new products and services to market. New software tools make it easy for consumers to compare and assess the quality, image, and price of products. The result of this might be the shrinking of the already diminishing profits of today's vendors. The crowded field of competitors in B2C e-commerce indicates that achieving long-term success in Web retailing requires e-vendors to adhere to traditional economic and marketing principles and apply traditional marketing strategies A customer (consumer) visits an online business at the Web equivalent of a showroom: the electronic storefront. An electronic storefront, also called an online catalog, is the Web site where an e-retailer displays its products. It contains description, graphics, and sometimes product reviews. After browsing through merchandise, the customer makes a selection and adds it to the shopping cart. The shopping cart is a software component on the Web that allows the customer to collect purchases; it is trolley/basket equivalent of the retail showroom. Items in the cart can be added, deleted, or even saved for a future visit. When ready to complete the sale, the customer proceeds to the checkout. At this time, the customer enters personal and financial data through a secure Internet connection. The transaction and financial data automatically are verified at a banking Web site. If the bank approves the transaction, the customer receives an online confirmation notice of the purchase. Then, the e-retailer processes the order and sends it to the fulfillment center where it is packaged and shipped. The e-retailer notifies the bank of the shipment, and payment is sent via electronic channels to the e-retailer. Inventory systems are updated. Shipping information is posted on the Web, so the customer can track the order. The customer typically receives the order a few days after the. E-retailing presents a new way to shop. The store is open 24 hours a day with a few clicks…….