Apparel Retailing sector of India

Due to tremendous change in the lifestyle of Indian customers the apparel retail is revolutionising at a fast pace. This article highlights the current trends and challenges in segment.
  • BY Shrishti Rai

    Feature Writer, BusinessEx

  • |
  • Sep 01,2017
  • |
  • 14 Mins Read

Apparel Retailing

Retailing is bringing finished products to the end user. It is set of activities, which aims at bringing goods to the notice of the customers through marketing processes and then finally selling them in stores. In modern retail, capturing data and its processing is an important activity that also aids inventory management. The goods sold by the retailers are usually for the personal use of buys and not for business related use. Due to tremendous change in the lifestyle of Indian customers, there has a buzz in clothing retail. Especially in the metro cities, big foreign apparel brands are setting up stores and are receiving great response from fashion enthusiasts. Recently Abercrombie & Fitch decided to set up its first store in India.

Indian apparel & fashion industry is expected to grow at a CAGR of 12% over the next five years to become INR 3,94,000 crore from the current estimation of INR 2,21,000 crore, according to a survey by A T Kearney. A Technavio's report forecasted that online fashion retail sector in the country is set to grow at a CAGR 64.87 % in terms of revenue over 2014-2019.

The brand clothing segments in country’s market together with stiff competition is creating a big market with a mix of both imported product and those produced locally in a huge country like India.  The organized retail players are structure a new era of the Indian market, with the help of various factors accelerating the same, like rising income level and disposable income among Indians due to intra sector growth such as IT & BPO. In Indian retail sector, marketers are moving towards new setups such namely departmental stores, hypermarkets, supermarkets, speciality stores and shops in malls.  The branded segment in apparels is showcasing extraordinary growth with men’s branded apparel market is growing at 21.8% and branded women apparel segments represent 35% of the overall apparel market that is growing at a whopping 23% every year.

Trends in Apparel Retailing

Reign of foreign players- Big brands namely H&M, Forever 21, Zara are becoming increasingly popular amongst the fashion-oriented people. More and more stores are opening up even in tier 2 & 3 cities, given the demand amidst the customers.

Incorporation of technology- Digital payment options at retail stores e.g. POS machines, E-wallets. Retailers to forecast demands and other desirable information are using big data. Happiness meters at stores to measure customer’s satisfaction meters and records suggestions towards measurements.

The rise of the organised sector- There has a paradigm shift in the industry towards being organised. People are demanding branded and quality products and hence are rising which provides standardised products. Thus, there is an intense rivalry in the sector.

Customer Relationship Management- Retail is not anymore about the products but is about overall customer experience and hence there is a need of CRM. CRM refers to different practices, strategies and technologies, which can be used to analyze customer interactions and data to derive inferences that will help improve overall customer experience and throughout the customer lifecycle, The aim of this activity is to enable desirable customer interaction which in turn will lead customer retention and growth.

Multi brand showrooms- Many showrooms are present in the market, which are providing multi label options under one roof e.g. Shoppers Stop, Pantaloons. Buyers prefer such stores because they can get their hands on a variety of products under one roof.

The movement towards online retail- With the arrival of the era of e-commerce in India finally, retail has been disrupted. People now can order their clothes and everything else that they need from anywhere and get them delivered to places of their convenience.

Challenges in Apparel Retail

  • Too many players- It has been discussed that the industry has organised, unorganised and foreign players present in the market leading to intense competition in the sector. The buyers have many choices before they finally make a purchase from one.
  • Brand Sensitivity amongst customer- People can stick to a brand and have notions about the best fit and quality. It can be really hard to impossible making these people shift from their favourite brands.
  • Sustainable production- Consumers in today’s world are highly sensitive towards the environmental and social initiatives of the company. They would like to know how sustainable and eco-friendly is your manufacturing process and it matters while they make a decision about the brand to pick.
  • Heterogeneity in the market – In the US there are only four stores available for every 100 persons but in our country, there are almost 15 stores per 1000. This is due to the varied taste of Indian women in dressing style. Urban indian women may be dressed in dresses, jeans, skirts along with Indian options like sarees, suits, kurtas. In addition, more and more stores are needed to offer different types of garments.
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