Month: December 2017

Small retail stores are just waking up to the fact that websites are ingenious tool for raising awareness of the brand and also increasing sales. At this point in their business it is highly unlikely that they have the spare funds to buy all the equipment necessary to set up their own server room, and it is equally unlikely that it is economically feasible for them to pay the high monthly fees on a dedicated server with an online hosting company. It is in this situation that a company would find perfect to use for a virtual private server.

Virtual Private Servers were introduced to bridge the gap in cost and flexibility between a shared server space and a fully-fledged dedicated server. A small business is the perfect user of a VPS service because they have very little spare funds that need to account for the fact that their business might grow in the future, and they may need more on this server further down the line. A retail store would need server space primarily for setting up their website in order to showcase their stock and provide information to customers wishing to visit their store.

Some larger stores will also set up online store fronts that are capable of handling orders placed via the Internet. Using a shared server space for any of this would be far too risky as there is a high chance of downtime and shared servers are known to have resource Allocation problems. Virtual Private servers make use of separate hardware and software components so that companies get the same performance and stability and they would with dedicated server at a fraction of the price.

As a retail store grows it will need more space on its computer system to host client and customer details and be able to share this with other stores around the country and even the world. VPS hosting offers the chance to upgrade the service with little hassle as possible and no interruption to the service, which is an important factor for stores that operate online ordering and do not have high-end computer staff in their workforce to deal with problems if they arise.

Most VPS services include the use of the hosting sites on-site maintenance team who can help with queries and problems as they occur to take the responsibility out of the client’s hands so that they can concentrate on doing their business.

Technology is changing the shopping habits of buyers. Compete recently conducted a survey that reported a rapid increase in the number of people using their mobile devices for shopping. In fact, half of the population using smartphones and tablets are being converted into mobile shoppers. And it is just not the convenience of mobility that encourages buyers for mobile shopping as a considerable number of consumers do mobile shopping at home.

Based on the buying trends of the people, it is predicted that mobile market is expected to hit $1.5 trillion in 2013 and the figure is mostly likely to double in 2017, reaching more than $3 trillion. There are various technological developed that contributed to the growing popularity of mobile shopping.

One of such technologies is the image recognition technology that allows buyers to shop for items using their mobile devices by snapping a photo. All you need to do is take a picture of the item you want to buy and the technology will recognize the image and will take you to a website selling the same product. This is one of the main ingredients of any augmented reality retail shopping and is making mobile shopping a popular trend. Image recognition is also using 3D objects these days, though it was initially limited to product catalogues, TV ads and print ads.

The mobile apps, specifically the augmented reality apps for smartphones and tablets, have also proved beneficial for m-commerce. These augmented reality apps put an individual picture on the product, which the buyers need to scan using the app. In return, the augmented reality app will provide information about the product including its ingredients, prices, manufacture and expire date as well as information about its quality, user reviews and other additional data. Brands like Sephora triggered 150% growth in their mobile shopping using such AR technology.

Mobile shopping can also be benefitted by online brand engagement. Many retailers and m-commerce companies are using the mobile version of social media channels like Facebook, Pinterest and Twitter to promote their product offerings to empower brand value. They use tools like opportunity for comments, “Like” buttons and pictures to grow brand awareness.

Thus it is clear that it is worth investing on mobile applications. More than half of the mobile shoppers install at least a shopping application on their tablets and smartphones and many of them using more than one application. And among these shopping apps the most popular are the mobile shopping retailer apps, coupon applications and loyalty card organizers.

Thus, retailers must focus more on creating killer mobile applications for better sales and growth in their m-commerce. And while developing applications to facilitate mobile shopping experience of their consumers, they must make sure that the app is unique. Instead of mirroring your main site, offer some exclusive content through your app to encourage your buyers to download them and use them again and again. Also, the app should be simple and easy to use. Add push notifications to your app and make it social by integrating popular social platforms. Finally, to allow more interaction with your m-commerce site, link the augmented reality app the in-store activities.

The retail industry in India is emerging to attract new investments in the retail sector in the country.

Bharti Retail Ltd operates about 80 stores and owns a chain of grocery outlets and easyday market hypermarkets to cater to the retail market in India . Owned by billionaire Sunil Mittals Bharti Group, the company plans to open 140 retail stores in India in 2010, said Raj Jain, managing director of the groups venture with Wal-Mart Stores Inc.

He added that Wal-Mart can open a large number of retail stores in India if the government allows foreign direct investment in the South Asian countrys retail industry.

The company awaits policy changes in the retail market in India. The Bharti-Walmart JV runs the BestPrice Modern Wholesale stores to cater to the retail sector in North India. This is a 50:50 cash and carry joint venture between Bharti Enterprises and WalMart. The company will require additional manpower as it plans to open more cash-and-carry stores in the retail sector in the country. At present, it has two stores in India (in Punjab) and employs 450 workers.

The government has been in talks to open the multi-brand retail sector for FDI. At present, up to 51 per cent foreign investment is allowed in single brand retail and 100 per cent FDI in wholesale, but none in multi-brand.

The company has recently launched the second Bharti-Walmart Training Centre in New Delhi by entering into a public-private partnership with the Delhi Government. The centre would enroll up to 2,000 students a year to impart free of cost training in sectors, such as retail, BPOs and hospitality. The centre was inaugurated by Sheila Dikshit, Chief Minister of Delhi and would work to fill up the shortage in skilled workers for organised retail and cash-and-carry stores.

At a recent function, the Daniele Smadja, Head of the Delegation of the EU to India, said “We would like India to further open its economy to EU investments.

Furthermore, Nokia India is focussing on the retail distribution model. It is for the first time the worlds largest mobile phone company has initiated a retail distribution model for its services venture.

In yet, another format of the retail market in India, the major retail players proved to be a boon to the small food processing vendors as they helped the latter put in a system which in turn attracted FMCG companies to hire the same vendors on account of quality.

Similarly the retail market in India is foraying into various sectors. Retail in healthcare sector is witnessing an immense interest from private equity investors. The upturn in the retail industry in India is attracting PE investors, gearing them to maximise their profits with the highest deal volumes being in various sectors including retail. According to V Jayasankar, Head, Private Equity, Kotak Investment Banking, There is high level of interest in the retail sector as it directly feeds on consumption.

Additionally, the airport retail market in India is witnessing a renaissance with the fast pace of development in the expanding airport facilities in the country and the increasing number of passengers. With people on a constant move the target audience is easily available and the round the clock mode of retail sector available on airport gives that strategic advantage to the retail players.

Indian unorganized retail sector & its challenge

India is the only one country having the highest shop density in the world, with 11 outlets per 1000 people (12 million retail shops for about 209 million households). Rather we can see the democratic scenario in Indian Retail (because of low level of centralization, low capital input and due to a good number of self organized retail).

India started its Retail Journey since ancient time.

In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a pretty long times to & step to shape the modern retail. In between these two concepts (i.e. between ancient retail concept & the modern one there exist modern kirana/ 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.

Organized retail sector refers to the sectors undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate retail formats of the exclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, hand cart and pavement vendors, & mobile vendors, the local kirana 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.

Characteristics of unorganized retail-

Small-store (kirana) retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labour. 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 reason 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 reasons might be-

1. In smaller towns and urban areas, there are many families who are traditionally using these kirana shops/ mom and pop stores offering a wide range of merchandise mix. Generally these kirana shops are the family business of these small retailers which they are running for more than one generation.

2. These kiran shops are having their own efficient management system and with this they are efficiently fulfilling the needs of the customer. This is one of the good reasons why the customer doesnt want to change their old loyal kirana shop.

3. A large number of working class in India is working as daily wage basis, at the end of the day when they get their wage, they come to this small retail shop to purchase wheat flour, rice etc for their supper. For them this the only place to have those food items because purchase quantity is so small that no big retail store would entertain this.

4. Similarly there is another consumer class who are the seasonal worker. During their unemployment period they use to purchase from this kirana store in credit and when they get their salary they clear their dues. Now this type of credit facility is not available in corporate retail store, so this kirana stores are the only place for them to fulfill their needs.

5. Another reason might be the proximity of the store. It is the convenience store for the customer. In every corner the street an unorganized retail shop can be found that is hardly a walking distance from the customers house. Many times customers prefer to shop from the nearby kirana shop rather than to drive a long distance organized retail stores.

6. This unorganized stores are having n number of options to cut their costs. They incur little to no real-estate costs because they generally operate from their residences.

What Type of Retail Space?

A great retail space for your business needs to be the right type of space in the right location. The previous portions of this article addressed location. This section will address options for the type of retail space.
Impulse versus Destination

Some purchases are made on impulse and other purchases are made after careful planning. Retail for the carefully planned shopping will be termed destination retail. Starbucks is a great example of an impulse purchase. You see a Starbucks location and decide to pullover and have a coffee and perhaps a pastry. Have you noticed how Starbucks almost always has incredible locations?
Impulse

If they are in a shopping center, they’re almost always in an end-cap location. If they are part of a larger shopping plaza, they typically have the best a location within the shopping plaza. If the retail space you are seeking involves impulse purchases, you should see prime space. Great visibility and great access are both important. Even though it will be painful, you probably need to pay for the very best possible location.
Destination

If you are seeking retail space for destination retail, an incredible location is not necessary. You need to be in the right area but you do not necessarily need the finest location within the shopping center. Almost all destination retail has a convenient location with good visibility. While access is a factor for destination retail, it is much less important in comparison to impulse purchase retail.
Types of Retail

Following are various types of retail space:
Freestanding store
Strip center
Neighborhood Center
Community Center
Regional mall
Power centers
Definitions
Anchored retail space has a retailer who generates an amount of traffic. The anchor is typically a larger store or perhaps even a set of larger stores. A grocery store is the anchor for most neighborhood shopping centers. Department stores have typically been the anchors for regional malls.

Shadow anchor refers to a shopping center (typically a strip shopping center) which has a mall by virtue of being proximate to a major retailer. Target, Wal-Mart, Sands, Costco and IKEA are all stores which would be good draws for a shadow anchor shopping center.

End-cap is the space at the end of a shopping center, typically at the end of a strip center.

In-line space is space in a shopping center which is not at the end. In other words, it is space between the two ends of the shopping center.

Select a Type of Space

The optimal retail space for your business will be obvious in many cases. If you’re planning a gas station/convenience store, you would clearly not open it within an enclosed shopping mall. If you are planning a department store, you would not open it in a strip center.

Tradeoffs

However, there are variations in judgments regarding the best location for a retail store for many types of businesses. Many retailers have a combination of in-line shopping store space and freestanding stores. A freestanding store will likely be more expensive. However, a freestanding store gains more visibility. In most cases, you can effectively place advertising or signage on each side of the building. Your business has much better visibility in comparison to in-line space.

Prime Space?

An end-cap space in a shopping center which is perpendicular to the street also has excellent visibility. Restaurants frequently locate in end-cap spaces. If your product or service is an impulse purchase with a relatively low price point, give serious consideration to obtaining premium retail space. Consider paying the additional cost for either a freestanding location or end-cap. Enclosed regional malls can provide a good option for impulse purchases or high-end merchandise.

Regional Malls

Enclose regional malls have recently bifurcated into either prime or secondary/tertiary quality malls. The prime malls are doing great. They tend to be full and have an excellent array of tenants. The secondary and tertiary malls are doing fairly to poorly. In many cases, the highest and best use of the property has changed. Many second-tier regional malls are either being redeveloped as retail, perhaps as a power center, or are being scraped and rebuilt in a variety of land uses.

Destination Retail

Conversely, if your product or service relates to destination retail, consider cost-effective retail options. In some cases, space in a neighborhood shopping center where the anchor tenant has gone dark (anchor tenant has left the states but is still paying rent) they provide a great overall location and a modest price for rent. For tenants who need larger retail spaces, second-generation grocery store space can be a great option. And the big boxes also provide retail space typically in a good location at much more moderate prices. As Wal-Mart has revised their basic template, they have vacated many medium-sized retail stores. In general, second-generation retail space provides a much less expensive cost of occupancy than first-generation space.

The Market Research and Consulting division of OConnor & Associates provides information necessary to make decision to commercial real estate professionals. Occupancy and Rental Data, ownership and management information are routinely gathered for four major land uses multifamily, office, retail and industrial. This information allows investors to compare competitive properties, facilitate business decisions and track market and submarket performance. In addition the data is useful to brokers who for example continually monitor Houston retail space leasing, Houston office space leasing, Houston industrial space leasing, Houston apartments, Dallas apartments, Ft. Worth apartments, Austin apartments, and San Antonio apartments.