Retail Sector-India
Executive Summary Retail Context for Innovation Study Objectives & Approach Key Learnings from the Innovation Study Implications for Retailers About RAI and Booz & Company
The Indian Retail industry is today at cross-roads – many challenges threaten the true potential for “profitable growth”
Projected Organized Retail in India
US$ Billion 731 116 455 33 422 615
Key Challenges faced by Indian Retailers
% responses, RAI – Booz Retailers Survey 2013¹
Organized Retail Unorganized Retail
Real estate rental Real estate quality Slowing consumerism
74% 52% 26% 25% 25% 24% 21% 16% 14%
2011
2016 (With FDI)
MRP* constraints Poor consumer sentiment Strengths of kiranas
Key Drivers of Growth Increasing consumerism on the back of continued economic growth Improved back-end infrastructure Expected investments in the form of FDI
Low supplier fill rates Relative strength of suppliers Competition from foreign retailers
* Maximum Retail Price 1) RAI-Booz survey was conducted in January 2013; total no. of respondents was 410 Source: IBEF, Centrum Research, Literature Survey, RAI – Booz Retailers Survey, Booz & Company analysis
2 | Successful Innovations in Indian Retail
A balanced approach to innovation can help retailers transform challenges into opportunities for “profitable growth”
Key Learnings: “What” Innovations Work
1
Innovation Cases
evaluating the big bets” 2
“Execute well on small ideas while
Small and simple ideas can be implemented much more easily and can have real impact on consumers and economics This needs to be balanced and pursued in parallel with more resource and investment intensive big bets Success is not linked only to the ingenuity of innovation… … but in being able to tailor an existing practice to address time and situation specific consumer/ market need Adapting and adopting these practices can deliver benefits Retailers face significant supply side challenges which directly impact
The Indian Retail industry is today at cross-roads – many challenges threaten the true potential for “profitable growth”
Projected Organized Retail in India
US$ Billion 731 116 455 33 422 615
Key Challenges faced by Indian Retailers
% responses, RAI – Booz Retailers Survey 2013¹
Organized Retail Unorganized Retail
Real estate rental Real estate quality Slowing consumerism
74% 52% 26% 25% 25% 24% 21% 16% 14%
2011
2016 (With FDI)
MRP* constraints Poor consumer sentiment Strengths of kiranas
Key Drivers of Growth Increasing consumerism on the back of continued economic growth Improved back-end infrastructure Expected investments in the form of FDI
Low supplier fill rates Relative strength of suppliers Competition from foreign retailers
* Maximum Retail Price 1) RAI-Booz survey was conducted in January 2013; total no. of respondents was 410 Source: IBEF, Centrum Research, Literature Survey, RAI – Booz Retailers Survey, Booz & Company analysis
2 | Successful Innovations in Indian Retail
A balanced approach to innovation can help retailers transform challenges into opportunities for “profitable growth”
Key Learnings: “What” Innovations Work
1
Innovation Cases
evaluating the big bets” 2
“Execute well on small ideas while
Small and simple ideas can be implemented much more easily and can have real impact on consumers and economics This needs to be balanced and pursued in parallel with more resource and investment intensive big bets Success is not linked only to the ingenuity of innovation… … but in being able to tailor an existing practice to address time and situation specific consumer/ market need Adapting and adopting these practices can deliver benefits Retailers face significant supply side challenges which directly impact