A lot is always said about the potential for growth of organized retail sector in India. There is a lot to be gained from the economies of scale, efficient supply chains and higher consumer welfare. These gains might help compensate, to an extent, the social cost of elbowing small retailers out of business.
In spite of all this, the share of organized retail in the overall retail pie of India is pegged at around 10.2% (Source). One key issue faced by the organized retail is with regards to in-store operations: Shelf space decisions, managing displays and in-store promotional activities etc. A lot of research has gone into determining how these operational decisions impact overall sales of particular items. Organized retailers in the west use this research to manage their in-store operations in an organized and scientific manner. This is where, I believe the Indian retailers need to catch up on. This McKinsey Insight August 2015 article talks about an activity based approach to reduce store operations cost. Do check it out: http://bit.ly/1NTsJBb
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November 2019
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