Changing Consumer Preferences Towards Organised Retailing From Unorganised Retailing

Changing Consumer Preferences Towards Organised Retailing From Unorganised Retailing

Relentless March of Evolution

Evolution is unstoppable. The entire Universe itself seems to support evolution with all its focus and force. That is why the earth today is ruled by Homo sapiens though the micro-organisms had a distinct first mover advantage. Evolution enhances the sophistication of life, no doubt, but it also makes living easier through excellent organisation and intelligent design. 

Everything evolves. Retail is no exception!

Indian Retail Sector

The word ‘retail’ is derived from the French verb ‘tailler’, meaning ‘to cut off’ in terms of tailoring. It is the sale of products in small quantities to the final consumers.  The retail sector in India is a coexistence of the modern organised retailers and the traditional unorganised retailers or kirana stores. While the kirana is often conveniently located, has a low-cost structure and customer intimacy, modern retailers offer product width and depth with an enhanced shopping experience.

As of 2020, India’s retail market was 12% organised. But the pandemic changed that and accelerated the growth of organised retail. By 2025, approximately 30-35% of the Indian retail market will be organised.

You may ask – How are we so confident?

Changes Driving the Revolution and Evolution

To start with, organised retail in India has been growing at an average compound annual growth rate (CAGR) of 26% with furniture & furnishings growing at about 12% and pharmacy growing at a whopping 41%. Being leaders in custom designing, manufacturing and installing high-quality fixtures & furniture in consumer environments, we have seen this growth first-hand over the past decade.

Income levels have been rising with more people choosing to build a career, more women entering the workforce and thus, dual incomes in families. The per capita GDP (gross domestic product) in India has grown at an inflation-adjusted 60% in the last decade.

The mindsets of consumers too have undergone paradigm shifts where they increasingly prefer convenience and comfort in their shopping experience. The consumer today is well-informed, looks out for bargains and additional perks and is not hesitant to use credit cards. There is also an increased brand-consciousness and brand-awareness.

Organised Retail – Ticking All Boxes

Organised retail is tailor-made to fulfil all consumer aspirations. With all products across brands well classified and available in a single space, it offers the choice, convenience and comfort that a kirana shop or mom-and-pop store can never have.

It is entirely self-service which allows the shoppers to indulge in an experience or quickly pick and leave as per their preference. The store ambience created with masterful merchandising and lights adds to the experience.

These large super-stores offer the best deals thanks to their bargaining power. They also offer other perks like quick, computerised billing and facilities like parking space and acceptance of credit cards.

Finally, the consumer receives value added services like memberships, customisation and home delivery which are almost absent in unorganised retail.

Organised Retail – Here To Grow

Having catered to the furniture & fixture requirements of many renowned brands including FABIndia, Flying Machine, Soch, BIBA, BBQ Nation, Indian Terrain and the list is endless, we can confidently say that the retail revolution and evolution is ON in India.

75 Years Of Independence

It has been a chequered yet exhilarating journey of 75 years from 1947 to 2022; from when India achieved political independence to the time it is on the verge of achieving complete social, cultural, economic and international dominance! It definitely makes our jaws drop in awe when we realise that the country’s GDP has grown over 500,000 times from a mere 0.00001 Trillion USD in 1947 to nearly 5 Trillion USD expected in 2025. But the most heartening aspect of this growth has been its stability as the Indian economy stands firm despite 3 black swan events – demonetisation, Covid-19 pandemic, Russia-Ukraine conflict – in a span of 6 years!

Early years of growth

The independence at the stroke of midnight on 15th August 1947 itself was a big turning point for a country that had been steadily deindustrialized by (not so) Great Britain. The entrepreneurial spirit began in 1946 with the Kaira District Co-operative Milk Producers Union Ltd. (the earlier avatar of AMUL) and got a balanced push with the adoption of a mixed economy in 1948. Initiating the 5-years plans under the Planning Commission, brought about rapid industrialization with intense focus on the capital goods and heavy industries in the 1950s.

 Revolutions galore

As war times loomed and India faced threats of shortages and sanctions, the resilient people came up with the Green Revolution in the 1960s that made the country self-sufficient with respect to food and then, the White Revolution in the 1970s that ensured an abundance of nutritious milk. This has been the largest program for dairy development ever in the world! Each crisis propelled India to greater heights. The collapse of the Soviet Union, spike in oil prices and the huge balance-of-payments crisis for India in the 1990s led to the liberalisation revolution with economic reforms so powerful that there was no looking back.

 A World Superpower

 The first evidence that India was on its way to becoming a superpower was the harnessing of the super nuclear power! Then came the phenomenal achievements in outer space with the latest being the travel to Mars in the first attempt itself at a tenth of the cost that any nation has been able to achieve. Taking giant strides in health and life expectancy (which has more than doubled from 32 in 1947 to 70 in 2022), India is today the world’s largest producer of vaccines and generic medicines.

 The entrepreneurial spirit that launched India in 1947 appears to be reaching its zenith in 75 years with more than 105 Indian unicorns (companies with a billion dollar valuation) with a combined valuation of USD 338.5! At the helm of the giant FAANG (Facebook, Alphabet, Amazon, Netflix & Google) companies are all Indians. It only goes to show that when Indians unite and decide to move forward, the country surges and the world benefits too!