Speaking at a seminar on retail opportunities Retail 2002 organised by the Confederation of Indian Industry (CII) here on Wednesday, Mr Nagesh pointed out that the conventional small stores in the country are headed for a facelift and entrepreneurs will have to tap the vast potential available.
Defining the profile of the current breed of small stores in India, he said they are located mostly on the high streets which might well convert into strip malls in the future. These stores are generally first generation proprietor-owned shops located in high streets which will gradually get converted into leased second store located in a shopping mall, Mr Nagesh said.
A key feature for these small stores in future will be customer loyalty associated with these stores and not the brand loyalty of a product alone. The stores are also slated to see the entry of large number of women entrepreneurs, Mr Nagesh said.
Inventory management will be the key to the survival of small stores. They should be more focused on inventory management and retail everything in some categories rather than retail something in every category, Mr Nagesh cautioned.
Outlining the future of department stores in India, Mr Nagesh said segmentation will happen at the top level with upmarket department stores catering to the A1+ segment while the current stores will cater to the middle market.
Department stores being high investment projects will first penetrate into A class and B class cities and eventually penetrate into all towns with a population in excess of one million. The profitability of these stores will depend on the kind of customer service they will offer and the merchandise they can offer to get the share of customers wardrobes, Mr Nagesh added.
While the small stores will increase their reach and penetration, department stores will drive width and wardrobe expansion. Eventually, the small and big stores will see a convergence in department stores or the malls and both format of stores will co-exist with large-scale changes happening in the next two-three years, Mr Nagesh said.