Organized retailing is not a bed of roses for the big players also. In addition to the advent of Internet, various issues glare at retailing. Some of them are
Human Resource:Â
Big retail shops do not confine their target segments for employees to undergraduates. Shoppers Stop broke the myth of MBAs not wanting to go into the retailing career. Cross Roads and Spencer also hire MBAs to manage their chains. However there still exists a gap between the supply and demand of professionals. Mr. Goenka, chairman RPG Group, hopes that one of the greatest challenges facing modern retailing in India is the availability of trained personnel. In order to address the problem RPG Group has set up a national retail Institute in Chennai, which, offers a variety of courses in retail management for frontline, supervisory and managerial post. Retaining the human resources is also a major challenge for these big retailers. The bigwigs like Crossroads offer high compensation and create a cohesive environment that makes an employee proud to be a part of such big retail chains.
Space and Infrastructure:Â
To establish a retail shop/ Mall, the real estate and the infrastructure are very vital. The expenditure and availability on both the accounts do hinder the growth of the retail chain. The land ceiling restrictions and other state restrictions on land use have prevented the growth of efficient retailing in the cities. An average investment of about Rs. 5 crore is required to establish a mall and that explains the rush of big companies into this business. Small and individual retailers find it difficult to pour in that much of investment. In addition to the initial investment, to combat e-tailing, expenditure has to be incurred on technological side. This makes the retail projects less attractive for the individual players.
Consumer Mindset towards Discount Stores:
In India the concept of discount stores like Wall-Mart, at which genuine, defect free international brands are available at 50% discount, is yet to catch on. Still, the major section of customers is conservative and choosy and prefers to go to a known retail shop than opt for a discount store. Very few discount stores like SM2, Mumbai are at present operational. Its reach is confined to major cities. Breaking the conventional mindset of the Indian consumers that discount stores do not sell inferior goods will take some time.
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