“Retailing” is the set of activities that markets products or services to final consumers for their own personal or household use.

Indian retail industry is in a transition phase. It is moving from an unorganized sector to becoming an organized sector. However, most of the retailing in our country is still unorganized. The retail spread out in US and India has a very wide gap. Although retailing in India is having an exponential growth, the road ahead is full of challenges.

The attitudinal shift of the Indian consumer in terms of “Choice Preference”, “Value for Money” and the emergence of organized retail formats have transformed the face of Retailing in India. With a growth over 20 percent per annum over the last 5 years, organized retailing is projected to reach US$ 23 Billion by 2010.

The Indian Retail growth can be attributed to the several factors including:

  • Demography Dynamics: Approximately 60 per cent of Indian population below 30 years of age.
  • Double Incomes: Increasing instances of Double Incomes in most families coupled with the rise in spending power.
  • Plastic Revolution: Increasing use of credit cards for categories relating to Apparel, Consumer Durable Goods, Food and Grocery etc.
  • Urbanization: increased urbanization has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale.
  • Covering distances has become easier: with increased automobile penetration and an overall improvement in the transportation infrastructure, covering distances has become easier than before. Now a customer can travel miles to reach a particular shop, if he or she sees value in shopping from a particular location.
NON FUEL RETAIL

Till a few years ago, petroleum retailing in India was a staid and dreary business. Cars, buses and two wheelers drove in, got the vehicles fueled, paid cash, and drove out. The environment started changing when Shell did a makeover of some petrol pumps as part of the economic reform process. Improved signage, use of credit cards, and carwashes soon became an integral part of the petroleum retail outlets.

While the contribution of non-fuel to the earnings is 39 per cent and 35 per cent in USA and France, in India, non –fuel retail contribution is less than 2 per cent of the total fuel sales. 

Earlier petrol stations were merely used for selling fuel; now they are quickly getting converted into multi-facility joints. The whole idea is to provide convenience to the customers. You can easily see those spanky outlets at the highways of Gurgaon, Pune or Hyderabad. The culture is surely getting in.

“Fuel forecourts with 24×7 convenience retail concepts (merchandise & service retailing) within cities and on the highways offer huge scope for expansion of retail. The concept has the potential to create excitement and initiate activities in small towns and cities as well” according to India Retail Report 2009.   

Convenience need gaps have been felt in various fields and research shows that the urban consumer today seeks convenience in shopping for their basic requirements so that their precious time is reserved for more productive activities. Petrol retail outlets provide an excellent framework for setting up convenience retail chains. Here, the consumer enjoys dual occasion of, opportunity of combining shopping with the fueling.

Hence, along with the strategic locations, the number of footfall in the petrol retail outlets gives petroleum retail companies the competitive advantage. Worldwide, petrol station convenience stores have developed into a serious business in itself with companies like BP, Shell, Exxon running their convenience store chains profitably. All of them have deployed best retail practices in their stores and offer a wide range of services including laundry, postal services, courier services, fast food etc.

Soon, because of the increasing populations and a surge in the demand, this idea of convenience retailing will gain centre stage. The agenda of non fuel retailing and convenience shopping is now being taken very seriously by Indian Oil firms they are now adding value not only for the customers but also to themselves. They are now differentiating the services, becoming more customer centric and leveraging on the competencies. Soon, we may also see big retail outlets opening at your nearby petrol fueling stations