Introduction:-

India started its Retail Journey since ancient time. In Ancient India
there was a concept of weekly HAAT, where all the buyers and sellers gather in a
big market for bartering. It takes a pretty long times to and step to shape the modern

retail. In between these two concepts (i.e. between ancient retail concept and the
modern one there exist modern Grocery/ mom and pop shops or Baniya ki Dukan.
Still it is predominating in India So the Indian retail industry is divided into two
sectors- organized and unorganized. The Indian retail industry is now beginning to
evolve transformation that has swept other large economies. There is a vast change
in Indian retail, the liberalization of the consumer goods industry initiated in the mid-
80’s and accelerated through the 90’s has begun to impact the structure and conduct
of the retail industry. The concept retail, which includes the shopkeeper to customer
interaction, has taken many forms and dimensions, from the traditional retail outlet
and street local market shops to upscale multi brand outlets, especially stores or
departmental stores. Hence, focusing on two aspects of retail marketing i.e. store
retailing and non store retailing. Store Retailing as the departmental store, which is
a store or multi brand outlet, offering an array of products in various categories under
one roof, trying to cater to not one or two but many segments of the society and Non
store retailing as the direct selling, direct marketing, automatic vending. The most
important debate concerning the implications for the expansion of the organized
retailing in India revolves around whether it is going to have positive impacts on the
economy as a whole as compared to the traditional unorganized form of retailing.
According to one camp, it has overall positive impacts in terms of generating more
number of employments, new diversified forms of employments, and improving the
nature of retail employment (higher salary, more job benefits, security of job,
employability etc). This form of retail sector is also looked upon as a huge sector
having immense business opportunities for entrepreneurs and capital investors.
Moreover, organized retailing is considered to be efficient and apt to cater to the
diversified and changing nature of the consumer demands in growing economies like
India. The general benefits of organized retail also include improved supply-chain,
improved marketability of farmer’s produce and it is also expected that it will
contribute to heightened economic activity. The extensive research brought me to
conclude that departmental stores are soon emerging on the top priority lists,
amongst the shopping spree in Mumbai, as they seem to derive immense pleasure as
shopping is considered as a experience now rather than a task and exposure to variety
under one roof in their extremely busy lives, when they don’t have time for things.
The organized retail food and grocery stores make constant efforts to induce
customers to visit the store by discount offers. Most of these stores believe in
creating not just a marketing activity with its customers, but rather favor relationship
building with him so as to convert first time customers into a client. They provide
better parking facilities to customers and the facility to examine the product. They
also offer a wide range of payment options to customers. India is currently the
twelfth largest consumer market in the world. According to a study by McKinsey
Global Institute, India is likely to join the premier league of the world’s consumer
markets by 2025 improving its position to the fifth. But this growth is not going to
happen is smooth way. Any change always comes up with some friction and Indian
retail sector is and will be witnessing the same friction. Indian retail sector is still in
its nascent form if we consider its full potential. While most of the developed market
of US and Europe and also some SE Asian emerging market economies have reaped
the benefits of modern retail, India has not yet entered into advanced phase of
modern retail forms. Unorganized retailing, on the other hand, refers to the
traditional formats of low-cost retailing, for example, hand cart and payment
vendors, and mobile vendors, the local Grocery shops, owner manned general stores,
paan / beedi shops, convenience stores, hardware shop at the corner of your street
selling everything from bathroom fittings to paints and small construction tools; or
the slightly more organized medical store and a host of other small retail businesses
in apparel, electronics, food etc. Small-store retailing has been one of the easiest
ways to generate self-employment, as it requires limited investment in land, capital
and labor. It is generally family run business, lack of standardization and the retailers
who are running this store they are lacking of education, experience and exposure.
This is one of the reasons why productivity of this sector is approximately 4% that
of the U.S. retail industry. Unorganized retail sector is still predominating over
organized sector in India, unorganized retail sector constituting 98% (twelve
million) of total trade, while organized trade accounts only for 2%. The road side
hawkers and the mobile (pushcart variety) retailers. The Grocery stores (the Indian
equivalent of the momand- pop stores of the US), within which are: i. Open format
more organized outlets, ii. Small to medium food retail outlets.

In 2004, The high Court of Delhi defined the term 'Retail' as a sale for final
consumption in contrast to a sale for further sale or processing (i.e. Wholesale): a
sale to ultimate consumer. (High court of Delhi)

A retailer is a person who is involved in the act of selling goods and services to
the individual consumer for end use at a margin of profit.

In India retail industry is going under a transition phase from unorganized to

organized retail. Unorganized retail consist of kiryana shops, general stores, corner
shops in and around the locality, are traditional kind of shops which are being owned
and operated by the same person on a small scale with very less operational cost.

In India, organized retail sector is also flourishing. The mind set of people is
changing and they are moving towards the organized retail outlets for shopping.
Organized retail outlets are the outlets which are licensed for trading activities and
registered to pay tax.

In India, there are so many popular formats of retailing like Mom-and-pop

stores, mass discounters, warehouse stores, category killers, department stores,
boutique, E-retailers, franchise etc.

These day in India organized retail industry is booming but still it is not
reached to the desired growth when it is compared with the developed countries.
There are so many major and minor challenges faced by the Indian retail outlets.

Retail industry is the largest industry in India, with an employment of around

8 per cent to over 10 per cent of the country's Gross Domestic Product. Retail
industry in India is expected to rise 25 per cent yearly being driven by strong income
growth, changing lifestyles, and favorable demographic patterns.

It is expected that by 2016 modern retail industry in India will be worth US$
175- 200 billion. India retail industry is one of the fastest growing industries with
revenue expected to amount US$ 320 billion and is increasing at a rate of 5 per cent
yearly. A further increase of 7-8 per cent is expected in the industry of retail in India
by growth in consumerism in urban areas, rising incomes, and a steep rise in rural
consumption. It has further been predicted that the retailing industry in India will
amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

Shopping in India has witnessed a revolution with the change in the consumer
buying behavior and the whole format of shopping also altering. Industry of retail in
India which has become modern can be seen from the fact that there are multi- stored
malls, huge shopping centers, and sprawling complexes which offer food, shopping,
and entertainment all under the same roof.
 India retail industry is expanding itself most aggressively, as a result a great
demand for real estate is being created. Indian retailers preferred means of expansion
is to expand to other regions and to increase the number of their outlets in a city. It
is expected that by 2010, India may have 600 new shopping centers.

In the Indian retailing industry, food is the most dominating sector and is
growing at a rate of 9 per cent annually. The branded food industry is trying to enter
the India retail industry and convert Indian consumers to branded food. Since at
present 60 per cent of the Indian grocery basket consists of non- branded items. India
retail industry is progressing well and for this to continue retailers as well as the
Indian government will have to make a combined effort.

Labour Laws in India’s Retail Sector:-

Labor regulations for India’s retail sector fall under the jurisdiction of
the state governments and are contained in the Shops and Establishments Act (SEA)
(Amin, 2008). The SEA is a state legislation and contains various laws relating to
working conditions of the employees. The main provisions of the Act include
compulsory registration of shop/establishment within thirty days of commencement
of work, minimum wages, regulation of hours of work per day and week, guidelines
for spread-over, rest interval, opening and closing hours, closed days, national and
religious holidays, overtime work, rules for employment of children, young persons
and women, rules for annual leave, maternity leave, sickness and casual leave, etc.,
rules for employment and termination of service; obligations of employers,
obligations of employees, communications of closure of the establishment within 15
days from the closing of the establishment.

To get a better idea of what specific provisions in the SEA entail, we

list some of these provisions for the state of Maharashtra, the most prosperous state
and the retailing hub of India. Retail shops in the state are covered by the Bombay
Shops & Establishments Act of 1948. The Act was established in 1937 but
underwent substantial changes in 1948 and some modifications thereafter. Currently,
the Act stipulates that under normal circumstances an employee cannot be required
or allowed to work for more than nine hours in a day and 48 hours in a week (Section
14), any work beyond the stipulated working hours (overtime work) must be paid at
double the normal wage rate of the employee, an employee must be allowed an
interval of rest of at least one hour after five hours of continuous work (Section 15)
and his spread-over cannot exceed eleven hours in a day (Sub-sections 16 & 17),
every shop must remain closed on one day of the week and no deduction of wages
is to be made for the closing day (Section 18), women are not allowed to work either
as employees or otherwise after 9:30 p.m. (Sub-sections 33 & 34A), young people
in the age group of 15-17 years are not allowed to work after 7 p.m. and for more
than six hours in a single day (Sections 33, 34 & 34A), an employee is entitled to
annual leave with pay for 21 days for 240 days of work (Sub-sections 35-37) and all
provisions of the Maternity Benefit Act of 1961 and Workmen‟s Compensation Act
of 1923 apply to every shop covered by the Act.

One concern is whether labor laws in the SEA are actually enforced. In
light of the current retail reforms and the pace at which retail sector is growing in
the country there is an urgent need for enforcement of labor laws for the retail sector
as it is evident that a substantial number of retail stores find labor regulations as
burdensome, a finding which is confirmed by a number of surveys.

Employment status:-

In organized retailing, labour is managed and controlled by the

corporate office of each retail store (Shaoni & Bino, 2008). These corporate offices
have hierarchical managerial structures which govern the entire operations of the
retail chain right from procuring of raw materials to sale of the product in the front-
end retail outlets. Organized sector retail offer jobs which have the benefits of
permanent employment such as Employee Provident Fund, Gratuity, pension and
medical benefits .Some companies also offer annual paid leaves. Salaries offered by
the retail sector are now increasing with the increase in demand for staff in the
diversity of roles that are being offered. There is a scope for rapid promotion
depending upon the performance and abilities of the employees, which is monitored
and evaluated regularly. All of the benefits mentioned are applicable to employees
who are on permanent rolls. All the following statutory provisions related to
following acts are applicable to retail industry: Shops & Establishment, Provident
Fund & Miscellaneous Provisions Act, Employee State Insurance Act, Bonus Act
Minimum Wages Act and Maternity Benefit Act.

Challenges faced by the retail sector:-

The challenges facing the Indian organized retail sector are

various and these are stopping the Indian retail industry from reaching its full
potential. Indian Retail Industry has seen an unprecedented growth for the last 15
years. The size of the middle class population has been soaring since then. People
have higher disposable incomes. Retail industry benefited from this change of
mindset and lifestyle. The retail industry is seeing the transition from being
unorganized to being organized in nearly all sectors- apparels, entertainment,
automotive, service and others. With advancement comes the problems and inspite
of a bright future for organized retail in India some facts have to be considered to
positively initiate the retail momentum and ensure its sustained growth. India is now
on the radar of global retailers. Accelerated development of retailing industry in the
country and building brand value of domestic products is essential not only for
marketing our consumer products more efficiently, but also for the development of
our own retailing industry. To become a truly flourishing industry, retailing in India
needs to cross the following hurdles:

 Shortage of skilled manpower:-

Front-end/retail assistant profiles in stores form
a major proportion of the employment in the retail sector while store
operations account for 75-80% of the total manpower employed in the
organized retail sector. Unfortunately, there are very few courses specific to
the retail sector and graduates/post graduates from other streams are recruited.
Further, retail training opportunities such as niche courses for areas like
merchandising, supply chain and so on are limited. A cohesive effort to
develop skills within the sector can have a significant potential impact on
productivity and competitiveness, both within the sector and on the wider
economy.
 Lack of industry status:-

Due to the absence of „industry status‟, organized

retail in India faces difficulties in procurement of organized financing and fiscal
incentives. The Government should grant the much needed ‟industry status‟ to the
sector so that the sops that come with it helps promote both big &small retailers.

 Policy induced barriers:-

Organized retail in India is managed by both the

Ministries of Commerce & Consumer Affairs. While the Ministry of Commerce
takes care of the retail policy, the Ministry of Consumer Affairs regulates retailing
in terms of licenses and legislations. There is a need to govern retail operations
through a single apex body. A single agency can take care of retail operations more
effectively, especially with regard to addressing the grievances of retailers. The
development of the retail sector can take place at a faster pace if a comprehensive
legislation is enacted.

 Real estate:-

Lack of sophisticated retail planning is another major challenge

the sector faces. Available space is easily interchangeable between commercial and
retail use. In most cities, it is difficult to find suitable properties in central locations
for retail, primarily due to fragmented private holdings, infrequent auctioning of
large government owned vacant lands and litigation disputes between owners. Real
estate prices in some cities in India are amongst the highest in the world. The lease
or rent of property is one of the major areas of expenditure; a high lease rental
reduces the profitability of a project.

 The ‘kiranas’ continue:-

The very first challenge facing the organized retail

industry in India is competition from the unorganized sector. Traditionally retailing
has established in India for centuries. It is a low cost structure, mostly owner
operated, has negligible real estate and labour costs and little or no taxes to pay.
Consumer familiarity that runs from generation to generation is one big advantage
for the traditional retailing sector. On the other hand, organized sector have big
expenses to meet and yet have to keep prices low enough to compete with the
traditional sector.

 Lack of adequate infrastructure:-

Poor roads and the lack of a cold chain infrastructure

hamper the development of food and grocery retail in India. The existing
supermarkets and foods retailers have to invest a substantial amount of money and
time in building a cold chain network.
  Multiple and complex taxation system:-

The sales tax rates vary from state to state, while

organized players have to face a multiple point control and system there is
considerable sales tax evasion by small stores. In many locations, retailers have to
face a multi point octroi with the introduction of Value Added Tax (VAT) in 2005,
certain anomalies in the existing sales tax system causing disruption in the supply
chain are likely to get corrected over a period of time.

 Others:-

Absence of developed supply chain and integrated I.T.

management, intrinsic complexity of retailing – rapid price changes, constant threat
of product obsolescence and low margins, political and local agitation.

The retailers in India have to learn both the art and science of retailing by closely
following:

 How retailers in other parts of the world are organizing, managing, and coping
up with new challenges in an ever-changing marketplace.
 Indian retailers must use innovative retail formats to enhance shopping
experience, and try to understand the regional variations in consumer attitudes
to retailing. Retail marketing efforts have to improve in the country -
advertising, promotions, and campaigns to attract customers; building loyalty
by identifying regular shoppers and offering benefits to them; efficiently
managing high-value customers; and monitoring customer needs constantly,
are some of the aspects which Indian retailers need to focus upon on a more
pro-active basis.
Problems faced by retail outlets:-

The Indian Retail Industry is still developing and needs a lot of

improvement to become a flourishing Industry. There are so many problems faced
by Indian Retail Industry like unorganized display, parking problem, credit card
issues, few promotional activities , long billing queues, less number of trial rooms,
Competition, less skilled human resource, government policies , tax structure,
unorganized retail sector etc. Indian retail Industry needs more substantial
investment from leading Indian and foreign players. Following are the problems
faced by the Indian retail outlets :-

1. Lack of Technology Adoption:-

The availability, feasibility and adoption of
technology is the major challenge faced by the Indian retail outlets.
Technology is being used for the day to day functioning the retail out lets like
billing and payments, prevention of shrinkage, keeping record of stock, supply
chain management. But the scope of technology is wider. Other softwares can
be used like RFID for understanding customer preference, CRM for customer
relationship management and ERP tools for other activities of the outlets.
Indian retail outlets need to adopt technology and use different high end
softwares for managing the functioning of retail outlets.
2. Lack of Infrastructure and Logistics:-
Lack of infrastructure and logistics is the
another challenge faced by organized retail industry. Inefficient infrastructure
and logistics is resulting in inefficient processes. This is the major hinderance
of the retailers as non-efficient distribution channel is very difficult to handle
and results in huge losses. Infrastructure does not have strong base in India.
Organization and Globalization are compelling companies to develop
 infrastructure facilities transportation including railway system has to be more
efficient. Highway has to meet global standards. Airport capacities and power
supply has to be enhanced. Warehouse facilities and timely distribution are
other areas of challenge. To fully utilize India's potential in retail sector, these
major obstacles have to be removed.
3. Scarcity of Skilled Workforce:-
The Indian organized retail players spend
more than 7% of the sales towards personnel cost. Huge cost is incurred in
training of the employees. The retail industry faces attrition rate as high as
50% which is very high as compared to the other sectors. Industry has to pay
more in order to retain the trained man power. Store operations accounts for
70-80% of the total man power of the organized retail sector. Unfortunately,
there are very few specific courses for retail industry. Graduates and Post
graduates from the other streams are hired and are trained in retail sector.
4. Frauds in Retail:-

Retail shrinkage is one of the primary challenge that

companies would have to face. Retail shrinkage is the difference between the
value of the stock as per the books and the actual stock available in the outlet.
Frauds, including vendor frauds, theft, shoplifting and inaccuracy in supervision
and administration are the challenges that are difficult to handle. This is so even
after the use of security techniques such as CCTV and POS system. As the size
of sector increases, this would increase the number of thefts, frauds and
discrepancies in the system.

5. Inefficient Supply Chain Management:-

Delivering the right goods at right time at right place is

very important . In India, there is lack of efficient Supply Chain Management. In
India supply chain management should be improved and more technology need
to be used to make the supply chain management effective and reduce the
inventory cost. .Savings can be used to provide extra discounts and benefits to
the customers and more money can be spent on customer retention.

6. Price War:-
There is price war between different retail organizations. Every
organization is trying to provide goods at low cost and offers various lucrative
promotional schemes. In such situation, it is difficult to attain customer loyalty
and companies keep marginal profit to provide the goods at competitive
prices.
7. Cultural Diversity:-
India's huge size and socio economic and cultural diversity
means there is no established mode or consumption pattern through out the
country. The manufacturers and retailers will have to devise strategies for
different sectors and segments which by itself would be challenging.
8. Complexity in Tax Structure:-
In India tax structure is very complex. This tax structure
complexity is another major challenge for Indian retail outlets. The sale tax
vary from state to state while organized player have to face multiple point
control and system. In many locations, retailers have to face a multi point
octroi with the introduction of Value Added Tax (VAT )in 2005. Certain
anomalies in the existing sale tax system causing disruption in the supply
chain are, however, likely to get corrected over a period of time.
9. Escalating land and rental prices:-
Huge growth of retail industry has created a huge
demand for the real estate. This is leading to increase in property prices.
 Starting a new store needs huge investment in purchasing a land. This huge
investment is also a challenge for the retail outlets. Rental prices are also
increasing, leading to increase in the over all costing.
10.Competition from Unorganized Retail:-
Competition from the unorganized retail sector is the
major challenge for the organized retail outlets. Unorganized retail sector
includes mom-and- pop kiryana stores. These are low cost structures normally
operated by the owners and has almost negligible real estate cost, labor cost
and they have to pay no or very less taxes and are very near to the residential
area or generally in the residential areas. They also have started offers and
discounts to attain customers loyalty and providing free home delivery
facilities. Kiryana stores also providing credit to the regular customers. So this
is the major challenge for the retail outlets.
11.Online selling companies:-
These days so many online marketing companies are
coming up. These companies are providing goods to the customer at their door
step and at lesser prices when compared with retail outlets. Online companies
are providing so many lucrative offers to the customers. So this is also a major
challenge for the retail outlets.
12.Power Supply Problem in India:-
Big organized retail outlets requires high volume of
electricity for lighting, airconditioning, escalators, cold storing, billing
system, lifts etc. In fact in the absence of power organized retail outlets cant
survive. There is a huge problem of electricity in India. Long power cuts are
very often in India. Because of inadequate power supply retail outlets need to
invest huge money on generators for power back ups. Tariff for consumption
 of power supply is also very high for retail outlets. This leads to increase in
the costing of the retail outlets.
13.High Cost of Operation:-
Retail outlets has to incur very high cost of
operation. This is on account of high labor cost, training cost of human
resource, social security to employees, high real estate cost and rentals, air
conditioning, power back ups cost, high maintenance cost, high electricity
tariffs, high taxes, investment in supply chain and logistics, investment in
technology, high investment in equipments and fixtures to give modern look
to the store, CCTV's cost etc. So retail outlets has to incur high cost of
operation still they have to provide goods to the customers at lower prices.
This is a big challenge for the retail outlet.
14.Government Opposition to FDI:-
Government opposition to FDI is the other
major challenge for organized retail. Retail is one of the few sectors where
FDI is restricted. In the era of Globalization and literalization the time is not
far when the retail sector has to face competition from international retailers.
FDI in retail will allow the foreign retailers to operate their functioning in
India which will lead to high competition and resulting in to low price of good
in Indian market. This will make Indian economy stronger.
15.Understanding customer:-
These days it is very difficult to understand the
customer behavior. So many factors plays an important role in effecting te
customer behaviour and loyalty such as product quality, service quality,
customer satisfaction, promotions, offers provided by other players in the
market. To attain the customer loyalty so much of efforts are required to
understand the customer behaviour and regular market survey is required.
 16.Ever-increasing customer demand:-
Ever increasing demand of the customers is
also a challenge to the retail outlets. These days because of Globalization
awareness among the customers is increasing. Customers psychology is
changing and becoming more demanding. They want to pay less for more and
more. Because of high operating cost it is very difficult to meet the customer
demand. So this is also a great challenge for the retail outlets of India.

Research Methodology:-

The study is designed as a descriptive and analytical one.

Considerable data are available both from primary and secondary data . The study is
carried out with the help of sample survey. The research problem and interview
schedule have been formulated and tested on the basis of the research objectives.

Sources of Data:-

The required data for the present study are collected both from
Primary and Secondary Sources. Primary data are collected with the help of schedule
designed for the Interview Schedule. The Secondary data are also collected from the
various standard text books, research articles, reports, leading newspapers,
magazines and journals. These have constituted a supportive literature for the
purpose of carrying out the research work.
Questionnaire:

Personal details:-
 What do you think about the legal age of alcohol use that is defined by law?

 About the TAKE CARE materials

 About the project TAKE CARE

 About the training

  General feelings about yourself

Broad analysis:-

More specifically, through various research exercises, five

clusters of trends appeared as having an impact on companies, the workforce and
consumers within the European retail and wholesale sector. This in turn affects the
labour market.

Regarding the scope, the focus is upon resulting working conditions and
forms of work. Therefore, a separate study will focus on job dynamics and skills and
hence were not analysed in depth in this study.
We have distinguished five broad clusters of trends that affect the labour market in
the retail and wholesale sector:

1.) Changes in the DEMOGRAPHIC STRUCTURE of Europe’s population, such

as ageing and diversifying national and cultural backgrounds, create challenges
concerning both the retention and attraction of both young and senior employees. As
well as responding to technological and digital revolutions, the sector needs to
consider the content of functional profiles and recruitment and marketing strategies
such as ethno-marketing. With respect to increases in migration flows, questions
have emerged regarding language skills and foreign-owned businesses in retail and
wholesale;

2.) ECONOMIC TRENDS such as recessions, globalisation and urbanisation all

create a variety of challenges and opportunities for the labour market in retail and
wholesale. Following the economic crisis, there were significant drops in
consumption levels and hence increased competition among companies; these low
growth numbers caused companies to reduce labour costs. Although levels of
employment are now at pre-crisis levels, for some countries this goes handin-hand
with increasing the level of service through longer opening hours. Globalisation has
meant increased global competition for jobs in the sector and increased demand for
multi-lingual and international trading skills. Finally, urbanisation, along with the
rise of e-commerce, has resulted in large retailers moving to (distribution) spaces
outside towns while at the same time strengthening concept, convenient and smaller
outlets in the heart of city centres;

3.) TECHNOLOGICAL TRENDS such as digitalisation, automation and 3D

printing disrupt and shape the world of work in retail and wholesale (and other
sectors). Digitalisation affects the way of working in the sector in terms of job
content, skills demand, job dynamics, forms of work, function profiles, and location
of work. The rise of e-commerce has fundamentally changed the way products are
bought and sold, and hence the content of jobs in the sector. Automation and
optimisation of business processes has transformed functions within the sector such
as cashiers and customer service staff;

4.) ENVIRONMENTAL CHALLENGES such as climate change and natural

resource depletion form a fourth cluster of trends affecting retail and wholesale and
its labour market. Labour intensive “green” jobs originating from ideas on how to
mitigate the effects of climate change, such as bike-delivery services and
environmentally friendly packaging developments, are only one example. In a more
pessimistic scenario, deterioration of working conditions and job losses due to
extreme weather conditions pose serious challenges to the retail and wholesale
sector. Increasing attention to economic and societal opportunities of the circular
economy as an answer to natural resource depletion poses further challenges and
opportunities to the sector. As the reduction in levels of consumption of new
products is the end-goal of the circular economy, the ability of retail and wholesale
companies to implement innovative strategies will be decisive;

5.) Finally, REGULATORY CHANGES with regard to opening hours, data-

protection and privacy, liability, international trade deals, and a framework towards
a European Digital Single Market affect to a varying extent the European retail and
wholesale sector and its labour market.

The retail industry is everywhere. Literally. You don’t have to walk down
the street to your favorite shop anymore. Just turn on your smartphone and start
shopping online.

With the help of technology, retail is one of those industries that can
survive post-economic destruction. It’s always there, even when buyers don’t have
the funds to buy their products.

New forces and trends are shaping the retail landscape. Particularly, it is
the technological and economic trends that are having the deepest effect on it.
However, with time the competitive pressure is also growing which is because of the
growth in the number of players and proliferation of the e-retail. 2015 was an year
of whopping growth for e-retail. Amazon has grown by leaps and bounds. Since the
recession passed, retail sales globally have kept growing and by 2020 they are
expected to have grown to $28 trillion. Globally, retail is a major contributor to the
GDP of nations and also employs a very large workforce. However, there are several
forces in the macro environment that affect it and are going to shape its future. So
that they can exploit the changing demographic and economic trends, retailers are
expected to make better use of technologies like Cognitive intelligence and Artificial
Intelligence to better serve their customers and grow their market share. Here is a
PESTEL analysis to show how the various forces affect the retail industry.

POLITICAL FACTORS: ANTI-TRUST ISSUES

The revenue and profitability of any retail store are affected by

government policies. These regulations impact the economy, consumer buying
habits, and international trade laws. The only thing left for the company to do about
these changes is abide by them.
Each country must abide by their political regulations. The
regulations affect which products can be imported, exported, and sold in stores.
Stores offering food products must comply with health guidelines proposed by the
government. If they don’t, not only will the food by pulled from the shelves, but it
could also lead to legal troubles for the company.

It’s not only physical retail stores under scrutiny. We’ve seen shifts
in how e-commerce retail leaders operate over the last few years. Antitrust issues
and data breaches are causing the government to look into how data is stored, used,
and shared. This affects the retail industry, particularly big names like Wal-Mart
and Amazon, who provide products online.
When retail stores branch into other countries, they need to abide by
the policies in that country too. In some cases, this can be beneficial. But if the
country’s political parties are fickle, it can easily turn into a problem.
ECONOMIC FACTORS: NEARLY $30 TRILLION DOLLARS IN A
COUPLE MORE YEARS

Economic factors are always very important in the

context of trade and business. The state of the world economy decides the state of
sale and profits for the industry. The world economy has rebounded and is growing.
Economic growth means that people are going to spend more on shopping. However,
even in the time of recession, the retail industry had maintained impressive sales. In
2015, it achieved global sales of $20.8 trillion. Based on the economic scenario
worldwide, the retail industry is predicted to have grown to $28 trillion by 2020. The
labor market and the economy both are in very good shape and an increase in
disposable income has also boosted consumer confidence. All of these are very good
signs for the retail industry. The better the shape of the economy, the higher will be
the revenue and profits for the retail brands. Better economic scenario means a
growth in sales and overall better shape of the retail sector.

SOCIAL FACTORS: BUYING IN BULK AND COLLECTING ENDLESS

DATA

Consumer preferences are the main social factors affecting the retail
industry. For instance, people enjoy buying products in bulk. This is the exact
premise behind CostCo, a Canadian retailer. Here you can find food products,
clothing, and electronics, in large quantities. Stores other than CostCo now mass
stock various products to avoid running out quickly.
 These products aren’t bought by retailers on a whim. They use market
research to identify buying trends and shifts in consumer behavior. Understanding
these two things helps to find items more likely to boost profits.
Retailers who offer products online can collect data provided by their
customers. They can easily see which products people are buying, leaning towards,
or completely ignoring. Then, they shape their offerings based on this data. It’s a
never-ending process.

Companies set targeted ads to customers most likely to visit their stores and buy
from them. Larger retailers can achieve this easier than mom and pop shops. But
even smaller shops can benefit from offering discounts and sales on products. All
consumers love a good deal.

TECHNOLOGICAL FACTORS: A DIGITAL CATALOGUE FOR EASY

BROWSING

Retail stores use a variety of technology everyday. Like a point of sales

system. As well as cash registers to manage money after a sale. It’s standard for any
store. As technology advances, stores are adopting new systems, software, and
hardware. For instance, smaller stores are making the shift to computers or iPads at
the register. It’s fast and easy to use.
The retail industry has greatly benefited because of the internet. Not
only to streamline services, but also to reach audiences worldwide. Most companies
have a business website. It’s basically a digital catalogue for their products. Big
name companies are able to offer a selection online. The products are either shipped
to the customers’ home or the closest store for pickup.
 Amazon and Walmart are going head-to-head. Each company offers
retail products online, to be sold and shipped. Other small name companies can’t
compete on the same scale. That doesn’t mean they should avoid having a business
website or showcase their products online. It just means they don’t have the means
to meet the same demands as the bigger retailers.

ENVIRONMENTAL FACTORS: CONTAMINATION AND BLOCKCHAIN

TECHNOLOGY

More retail shops are offering food products. The state of the
environment affects the quality of the product and the selection. It also means having
to abide by more economic and political factors. For instance, corporations fear a
“soda” tax; it’s an increased tax for selling soda in stores. Likewise, some shops in
other countries have to pay a tax for offering fatty foods.

And what about food contamination?

Once a food, like lettuce, has E.coli, every store needs to toss out their lettuce. This
is costly for the companies. But now some stores like Walmart are looking to use
blockchain technology. It would allow farmers and manufacturers to input
information about food products in real-time. And should a problem arise, Walmart
could find the source immediately. Rather than spending weeks trying to locate
where the contamination started.
If other companies used this, they would know whether their lettuce is
truly contaminated. Because when contamination happens, every store in the chain
has to get rid of the product. Whether their food is actually contaminated or not.
Because we just don’t know.
 We also can’t forget about environmental issues inside of the stores either.
All retail stores need to meet the environmental requirements for consumer and
employee safety. This is set by the government. It’s non-negotiable.

LEGAL FACTORS:

The legal factors are also just as important for the retail sector. There are so
many laws related to business and employment that affect it. Labor laws are
particularly a big pain for the retailers who have to maintain low prices to remain
competitive. Walmart has had so many tussles with laws over labor related issues.
Apart from that, the other laws like product and packaging related laws also apply
to the retail sector. Overall, the legal scenario is quite complex and retailers have to
be cautious since any violation can result in big fines. Both Amazon and Walmart
have had to deal with their fair share of legal issues in the past. These laws and the
level of legal scrutiny differs from nation to nation and everywhere the retailers have
to be cautious about compliance.
 Classification of respondents on the basis of profession
Profession respondents Percentage
Service 42 42
Business 24 24
Housewife 13 13
Student 15 15
others 6 6
total 100 100

16%
service
business
14% 45%
housewife
student
others

25%
 Classification f respondents on the basis of age

Age Respondents Percentage

Below 24 30 20
25-34 45 30
35-44 50 33
45-60 20 13
Above 60 5 3
Total 150 100

3%
13% 20%
below 24
24-35
36-45
45-60
34%
30% above 60
 Classification of respondents on the basis of gender
Gender respondents Percentage

Male 75 50

Female 75 50

total 150 100

male
50% 50%
female
 Where do you work?
respondents Percentage

Pub/night club 50 33

Small shop/petrol station 50 33

Super market 50 34

total 150 100

34% 33% pub/night clubs

smallshop
supermarket

33%
 Which is your position?
Respondents Percentage

Owner 20 14

Manager 50 33

Employee 75 50

Temporary help 5 3

Total 150 100

3%
14%

owner
manager

50% employee
33%
temporary
 Weekdays: on average what are your working hours?
Respondents Percentage

Daytime 90 60

Evening/night 60 40

total 150 100

 40%
daytime
evening
60%

Weekend: on average what are your working hours?

Respondents Percentage

Daytime 90 60
Evening/night 60 40

Total 150 100

40%
daytime
evening
60%
 Educational background
Education respondents Percentage
Obligatory 9 year school 15 1
Secondary school 20 13
Vocational school 25 17
college 90 60
total 150 100

9 year school secondary school vocational school college

1%
11%

14%

74%