Organized Vs.
Unorganized Sectors
• The Indian retail industry is divided into organized and unorganized sectors.
• The unorganized retail comprises of the local baniya or kirana shop, paan
and beedi shops and the other owner manned general stores .
• These retailers normally do not pay taxes and most of them are not even
registered for sales tax, VAT, or income tax.
• On the other hand, the organized retail comprises of the licensed retailers
who are registered for sales tax, income tax etc. and it comprises of the malls,
supermarkets, hypermarkets etc.
Organized retail
• ‘Organized Retail refers to the set-up of any retail chain supported by a
well defined Supply Chain which usually has a small number of
middlemen when compared to the unorganized sector.
• Due to a number of factors like cutting down of middlemen, removing
of bottlenecks along the supply chain, efficiency in the processes, etc., the
end user is rewarded with a better product at a cheaper price as against
the unorganized retail sector.
• As the consumer base is growing each minute, the organized retail
sector is believed to have a huge growth potential.
Unorganized retail
• Unorganized retailing refers to the traditional formats of low cost retailing for
example, the local kirana shops, owner manned general stores, paan-bidi
shops, convenience store, hand cart and pavement vendors.
• Traditional or unorganised retailing contributing to over 95% of total retail
revenues.
• The unorganized retailing comprises of ‘mom and pop’ stores or ‘kirana’
stores.
• Trading hours are flexible and the retailer to consumer ratio is very low due
to the presence of several kirana stores in the locality.
• More than 99% of retailers function in less than 500 Sq. Ft of area. The
pricing was done on ad hock basis or by seeing the face of customer.
Significance of Organized Retail
• Experience Shopping to Middle Class
• Employment generation
• Increasing efficiency in agriculture
• Rapid economic growth
• Potential untapped market
• Deep Assortment of product or broad choice to customer
Challenges to organized retail
• Regulatory barriers
• Unfavorable taxation structure
• Lack of integrated IT usage
• High competition
• High training cost
• Constant changes in shopper preferences
Multichannel retailing
• Multi-channel retailing is a marketing strategy that offers your
customers a choice of ways to buy products.
• A true multi-channel strategy covers purchases from a store, purchases
from a website, telephone ordering, mail orders, interactive television,
catalog ordering and comparison shopping sites.
• The aim of a multi-channel retailing strategy is to maximize revenue
and loyalty by offering your customers choice and convenience.
The Multi-Channel Retailer
• A retailer that sells merchandise or service through more than
one channel. By using a combination of channels, retailers can
exploit the unique benefits provided by each channel.
Why are Retailers Using Multiple Channels
to Interact with Customers?
üCustomer wants to interact in different ways
üEach channel offers a unique set of benefits for Customers