Home Retail Retail Reality: How the sector is shaping up for future

Retail Reality: How the sector is shaping up for future


Retailing in India has come a long way with evolutionary patterns from corner shops, weekly markets, village fairs, individual stores to malls, supermarkets and hypermarkets. During the initial stages, this sector was completely unorganised and it was then carried forward by the textiles industry through dealers.

Retail Realty: How is the sector shaping up for future?
The main drivers for the retail evolution in India are the buying behaviour of the customer, increasing income of the middle class that is disposal, changing customer choice and the development in infrastructure

Major Influencers

The main drivers for retail evolution in India are buying behaviour of the customer, increasing disposable income of the middle class, changing customer choice and development in infrastructure.

The growth in the retail segment comes through innovative buying options like the ‘Big Billion Days’ by Flipkart and unique ideas like retailing sites like Stylecracker doing blogs on best costumes for the festival seasons. These unique ways of retailing products has defi nitely raised the bar of competition of innovation in selling products. Since the disposable income of middle-class Indian consumers has increased over the years, the biggest spenders in this demographic are the younger middle class earners who are aspirational.

The Indian retailing sector is a little different from other industries. India is always plagued with taking ideas from the West and implementing it without giving it a second thought. The Indian retail sector has always challenged the global retail players like Carrefour because unlike foreign retailing giants Indian retailers understand their demographic. In the end a successful retailer is one who understands the wants and the needs of the customers.

The Challenges

The organised retail industry is still facing stiff competition from the unorganised sector. Traditional retailing is still deep rooted in India and enjoys the benefits of low cost structures, owner-operated shops, thus resulting in low labour cost and no taxes to pay. Consumer familiarity with traditional formats for generations is the greatest advantage like picking up funky, colourful stuff at Linking Road in Mumbai or visiting Sarojini Nagar in Delhi for picking some ‘sasta’ stuff for themselves.

The Indian customer has no fixed consumption pattern as of yet unlike the shopping patterns abroad where customers have a set influx of money coming in. There are always various reasons why throughout the year one wants to shop whether it be a festival, necessity or otherwise.

The lack of retail space is another major problem for the organised retail industry. The real estate prices are still high and the required spaces in India are still not enough, making it very difficult for this sector to grow. Another minor but obvious problem is the availability of trained manpower, since retail chains want to be present in all the upcoming malls but very few take the time train their floor managers as well as the frequently changing staff makes it hard to train otherwise.

The Dynamics

The retailing industry has achieved a lot and has understood that the Indian customer is looking for an emotional connect with his choice of brand, for example brands like , had to localize its food chain to introduce the Restaurant has added a zing of Indian flavours in its food to cater to the right demographic of people. Hence any retail outlet has to be localized. The customers must feel a sense of belonging.

After localizing a brand what matters next is the adaptation. Some brands like , are still experimenting with their customers to understand the type of handbags that would be purchased by their customers. It would take time to get a grasp and completely understand what younger generation, middle class housewives, etc. would want to buy. The last but not the least, it is movement of brands from EBO’s to online platforms, making e-commerce a very successful business venture in India.

The Accessory Market

Accessories have always been a very important part of fashion. The belts, bags, shoes and jewellery add incredible value to a person’s look apart from helping underline individualistic style. As Indian consumers and their fashion sensitivities evolve, the demand for accessories has gone to another level. No longer it is just a category to complement apparel, now accessories have gone mainstream by shaping the journey of the consumer through the social strata in this changing brand and fashion consciousness scenario.

Malls have been a boon to the entire lifestyle industry. We are in an industry where buying and spending is mostly dominated by women in the country. Major part of our TG is working women who frequent malls for an easy and convenient shopping experience. This mall culture has not only changed the lifestyle of consumers in metros, but also in Tier II cities and is still evolving.

A major part of our target audience are the modern-day working women who not only want to sport the latest styles but also have the ability to make quick decisions about their fashion buys. Women are increasingly becoming aware of not just national but international trends as well not just in metros but across the country. An average buyer now has at least 2-3 bags to complement their wardrobes which have a direct impact on brand sales. However the women also want to know the brand they are buying and certain aspects appeal to them that ensures a winning edge for a brand.

There are few business challenges in the accessories category that needs to be addressed. One of the biggest challenge is the constant increasing of the real estate prices, both in Tier I and Tier II towns, due to which retail companies have to subscribe to the franchisee model to keep the infra costs low. The other challenge is the availability of skilled manpower, catering to the end-consumer. To address this challenge there is a need of robust collaboration between the educational institutes and various retail brands to
identify, educate and groom the requisite manpower that can cater the need of the fashion and lifestyle brands.

Regional Differences

The regional preferences that customers have are different according to age segments. The younger generation go for trendier and smaller looking bags like slings or haversacks that have fun colours and are very accessible with pouches for mobiles or keys, multiple sections with zippers to segregate things, etc. If one goes to see demographically then it’s the casual bags that are used more closely followed by the office bags that are chosen by a large segment of women in India. The price points that women are most comfortable with starts from Rs 1,500 upwards and has always been very favourable to the women shoppers who find it as affordable.

Talking about

To talk about my brand; Baggit as a brand has journeyed a long way in becoming successful because of its excellent team that works with 100 per cent determination to achieve customer satisfaction. We at Baggit are always on our toes and keep researching about the trends and the gaps that are available. We believe in beauty without cruelty and use materials that are non-leather and environmental friendly. Also, we make it a point to mix fashion and functionality together, and make sure to keep in mind the needs of the modern consumer before we design and manufacture our bags.

We make sure the product that we design have contemporary and modern styles along with keeping an eye on the pricing of the product.

At Baggit, our products are not only fashionable, but also a value of functionality which connects with our consumers, thus, making us a hit in the Indian market. We had also launched an affordable designer’s premium brand called ‘’ so that we can reach out to the growing fashion conscious segment of consumers that follow and set national and international fashion trends.