June 25, 2011

Trust is a Must: Future of Retail in India

If you examine the reasons for failure of organized retail in India many factors have been cited by various experts but no one has pointed out the most critical issue of absence of trust as the prime culprit. After all there is enough growth in economy leading to healthy demand for goods & services, some players have deepest pockets too, there is reasonably good transport backbone and India has quite a few well established fmcg majors present for long enough periods too.

We witnessed huge customer interest in buying at such outlets in the beginning & any research could reveal that customers could return to buy from organized retail if the players could get their act together. Quantity, prices, packaging, buying convenience, availability, variety and experience are few given factors that are in favor of organized retail.

Though most retail players failed due to absence of managerial competency for such operations particularly in marketing function lacked the understanding & creativity required to maintain a robust interest of customers in the stores. Across the board players focused on product images to lure the customers without strategizing the brand pull in an effective manner.

Retail is a service but the organized retail players choose to run the biz without regard to the basics of services marketing. Only if Reliance Fresh, Big Bazaar, Spencers etc could learn few lessons from professional service marketers and trained & retrained their teams on a continuous basis they can pull off the act in a powerful manner. There is lack of training, sense of belongingness & trust among the people working at the outlets. 

It’s very important for the retail players to craft a suitable training programme for their team to keep them involved in the business with a degree of pride. Without inculcation of pride among the team working at the outlets its impossible to run such an operation. We must keep in mind that we are not USA or Europe where people generally trust each other. We are a society that’s fractured by insidious mistrust that keeps people from behaving like a cohesive them. First step towards success of retail is to build a trustworthy team that in turn could inspire trust of the buyers, Till such mindset is achieved even Walmart would have to struggle in Indian market. 

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