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From $1.8 bn to $5 bn by 2015: Boom for modern retail?

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From $1.8 bn to $5 bn by 2015: Boom for modern retail?

Sales at modern trade stores are up 31 percent since last year across India’s socio economic spectrum. In fact, for certain food and household items like packaged rice, breakfast cereal, cleaning products etc. modern trade outlets account for significant portions, sometimes half of the total category sales. As per Nielsen’s report on Modern Retail, Indian shoppers are expected to increase spending on FMCG at modern retail stores from 1.8 billion USD to 5 billion USD by 2015.

While the scenario looks rosy, there can be no denial that age-old Kirana stores still rule the roost and are a first choice for billions of consumers in India. The rules of the game have changed. While big enterprises are fuelling in monies to lure customers to Modern Retail, Kirana stores are also coming of age and offering every possible comfort and deal to shoppers, including choice.

Marketers, Manufacturers, Retail Chain owners and thinkers, all got together at the annual conference of Nielsen, Consumer 360, to discuss the changing rules of Shopper Marketing in today’s age.

One reality everyone agreed to was the fact that Modern Retail and Traditional retail will continue to exist together for some time and that both will have to innovate and provide superior services in order to keep the customer glued.

“Kirana stores have an edge over modern retail as they are situated at the focal point of convenience, follow the most successful home delivery model, provide credits and a host of other benefits to the consumers. Modern Retail, though is aspirational and gives choice, needs to gear up in terms of services to make the consumer experience hassle free,” said Thomas Varghese, CEO, Aditya Birla Retail Limited that owns supermarket stores under brand ‘More’ and hypermarket stores ‘More Megastore.’

Biju Kurien, President and CE, Lifestyle Reliance Retail however is quite optimistic about the success and growth of Modern Retail in India. He elaborates “There has been an attitudinal shift in the habits of consumers over the last couple of years. By 2050, 2/3rd of the entire population would be habitual to these formats. The generation born in 90’s would be the influencers of purchase. Their choices and preferences will be entirely different from Kirana loving shopper.”

Speaking on the factors that Modern Retail, however needs to tap, in order to covert present aficionados of Kirana, Kurien added “Assortment of products, easy access, soothing design, accessible parking, speedy check outs and a respect for the local taste of consumer are some things modern retailers should take care of in order to let the existing consumer also evolve in his shopping habits.”

“Can Modern Retailers think about the Home Delivery Model?” asks Tarun Arora, EVP-Head of Marketing, Godrej Consumer Products. He stresses on the fact that Consumer should be treated as King. “Services from traditional stores are just a call away. Modern Retailers have to think if they can give similar experience to consumer,” he advises.

Concluding the session, Roosevelt D’Souza, ED, Nielsen India says “Any format that has the capacity to entice the shopper will define the rule of shopper marketing. We are a deal driven economy. Both the formats will exist but the one who is more experimental, provides deals with low price and high value, brand choices that consumers want will win the game.”


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