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Trend Forecast For 2014 In Retail

Monday, December 16, 2013

The slowdown in the economy over the past few months has affected almost all sectors. Retail is no exception. One of the most important reasons for this is very high inflation. Fortunately, the affect of slowdown in retail is not as bad as it is in other sectors like automobile, real estate etc. 

Year 2014 being an election year is expected to be slow in the first few months however, it would certainly pick up from 2nd quarter onwards. Like any other industry, retail industry is also hoping for a stable government after election which would boost the confidence of the investors and general sentiments in the market. Many new companies who have been studying the market over the past year and half are almost certain to set up shops by the third and fourth quarter of the financial year.

Growth for most of the retail companies this year has come through the increase in prices of the product. There has been very minor increase in the volume which has affected the bottom line. The phenomenon of discount sale was at its peak this year which I am sure is something that retailers would like to correct next year. The pattern of “Sale” needs to go through a dramatic correction if retailers would like to see a healthy growth in the bottom line and profitability. As far as consumers are concerned, they are going to see many new brands. Many popular international brands have been making right noises over the past few years but have not been able to set up shops in the country so far. Big retailers like H&M, Carrefour, Tesco, IKEA seems to be almost certain to open store in the year 2014-15.  This will not only give many choices to the consumers but will also help the existing retailers in bring more consumers to the shop.

The rise of income of the middle class and lower middle class is certainly helping the market dynamics. The branded products are increasingly becoming a choice for most of the consumers for urban and semi-urban areas. Shopping Malls in many cities are helping the retailers increase their volume. The Malls are able to induce the shoppers to spend more time on the shop floor by offering almost everything under one roof. Various options of entertainment, multiplex, food & beverage and services like ATM, florist, Drop boxes, large parking, Baby care room etc are helping the shoppers spend more time in the Mall. Consumers shopping habits have changed and reliance on mobile devices increased, retailers are looking at ways to embrace mobile/digital technology to better serve customers. There are more on focus on store experiences for lifestyle merchandising that brings the products/services to life to interactive displays that encourage exploration and the “hands-on” experiences.

E-commerce is also gaining ground in the market. Companies like Amazon.com, Flipkart, Jabong, eBay have understood the psychology of Indian consumers and they have been aggressively marketing their offerings. This has made the retail very exciting. With most of the urban and semi-urban population have internet access; this will also be an exciting format for the retailers as well as consumers. 
 

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