APPAREL RETAIL MANAGEMENT

UNIT I

Retailing, current global and Indian retail scenario in garment and fashion, key drivers of
Indian apparel retail business, growth of organised apparel retail in India; understanding
the Indian retail economics, foreign direct investment in Indian apparel retail.

Retailing
What is the meaning of clothing retail?

 Apparel retailing stores typically buy clothing and accessory products from
manufacturers and wholesalers, and then market the products to general consumers
without altering the original clothing.

 The business of buying clothes from manufacturers and selling them to customers is
known as retail

What is retail management?

Retail management is a process that store leaders participate in to encourage sales, enhance store
associates' performances and exceed customers' expectations. These practices aim to build
customer loyalty and improve efficiency. They also may help teams stay aligned, progressing
toward common goals. Here are some of the areas retail management focuses on:

current global and Indian retail scenario in garment and fashion

Retailing in India is one of the pillars of its economy and accounts for about 10 percent of its
GDP. The Indian retail market is estimated to be worth $1.3 trillion as of 2022. India is one of
the fastest growing retail markets in the world, with 1.4 billion people.

How big is the Indian retail market?

The Indian retail market is growing and is estimated to be US$ 600 billion. It is one of the top
five retail markets in the world by economic value.

2. What percentage of e-commerce is fashion?

The apparel and accessory industries in the US accounted for 29.5% of all e-commerce sales in
2021. Whereas, in India, apparel e-commerce is about 25%.

The Indian economy is growing by 8% a year. Business in India is booming over the years. The
stock market increase by nearly 40% in 2005. Many foreign investors become interested to
invest in India. There are about nine million small grocery shops in India

The fashion industry is poised for a significant shift towards sustainability in the coming years.
Consumers are becoming increasingly environmentally conscious, driven by concerns about the
apparel industry’s ecological impact. This growing awareness is leading to a sustained demand
for eco-friendly fashion options.

As a result, many brands are incorporating sustainable practices and materials into their
production processes. Retailers must adapt to this evolving consumer preference by offering eco-
friendly products and actively working to minimise their carbon footprint in order to remain
competitive and relevant.

Fashion Retail Current Scenario in India:

The Indian retail market is expected to demonstrate a promising year-on-year growth of 6% to

reach USD 865 billion, by 2023, from the current USD 490 billion. The share of apparel in
India's retail market is 8%, corresponding to a value of USD 40 billion. In addition to fashion
apparel, the growing demand for fashion accessories makes the Indian fashion market both
interesting and lucrative.

The Indian fashion retail market has witnessed several fascinating changes and challenges in
recent years, which are indicators of the country's evolving fashion retail market. The challenges
associated with these changes need to be addressed in the most efficient and prudent manner in
order to harness the concomitant benefits.The trends emerging within the Indian fashion market

Key Drivers of Indian apparel bussiness

• Kids Wear Increasing brand /fashion consciousness and spending on kids

• Women's Western wear Increasing urban women population and women corporate workforce
• Plus Size Apparel High and increasing share of obese population in India and lack of existing
ready to wear brands in this space
• Lingerie Increasing fashion consciousness and need for better retail experience for women's
innerwear
Workwear & Uniforms Growing modernization and increasing image consciousness and
compliance amongst corporates
• Technical Textiles Increasing government infrastructure spending and growing sectors like
healthcare, automobiles etc.
• Home Textiles Increasing urban households and corporate interiors

Growth of Organizsed apparel retail in Indian

India being one of the fastest growing economies in the world administers a strong platform for
manufacturers, distributors and customers. Retailers are continuously trying to unlock the true
potential of the industry by incorporating latest technologies such as Artificial Intelligence based
data analytics, CRM tools etc The organised retail sector in India accounted for 18.5% of the
total retail market in 2022. This is expected to grow to 25% by 2025..

The Retail Industry in India is segmented as;

 Organised Retail
 Unorganised Retail

Competitive Landscape

Increase in Income Level

An increase in income level generally means people have more purchasing power. With rising
income levels, a greater number of households are being added to the consumption class. This
leads to an increase in demand for retail goods.

Increasing Awareness

As a result of increased literacy levels in the country, exposure to the western culture, fign
magazines, newspapers and other factors, there has been an increasing customer awareness
among Indians. Today’s customers are more selective over the brand and quality of the products
they purchase.ore

Brand Consciousness

The major portion of India’s population comprises Millennials making around 35% of the total
population. This set of customers are more conscious about brands and willing to spend more to
satisfy their needs.

Growth of Shopping Malls

The major portion of India’s population comprises Millennials making around 35% of the total
population. This set of customers are more conscious about brands and willing to spend more to
satisfy their needs.

Availability of Consumer Credit

Consumer credit in terms of consumer durable loans or credit cards, offer customers to pay the
price of a product in several installments at a minimum rate of interest. As this option provides
the convenience of not paying the full amount in advance, this may create demand for certain
products in the retail sector.

Challenges for Indian Retail Industry

Lack of Technology Adoption

One of the major challenges is the availability, feasibility and adoption of technology in the retail
industry. Retailers use technology in payments, scanning the products etc. but the scope is wider.
Softwares to understand the customer’s preferences based on their buying habits, CRM tools and
so on can be adopted for efficient functioning of the retail outlets.

Competition from Unorganized Retail

Unorganized retail consists of small retailers including mom-and-pop and kirana stores. They
operate near to or in the residential areas. These stores do not pay taxes and almost negligible
real estate & human labour costs. They also offer free home deliveries to attract customers.
These stores pose a major challenge for retail outlets in India.
Operational Cost
Retailers in India incur high cost of operations. Expenses such as store rents, utilities, labour
cost, warehousing costs, taxes etc. cannot be transferred to the customers as the majority are
looking for low cost goods.
Future Outlook
The retail industry in India is currently undergoing a major transition from an unorganized sector
to a more organised one. The ongoing covid19 pandemic has fueled this shift as most of the
retailers in the country are forced to adopt technology to move their business forward. Retailers
are expecting a surge in revenge shopping as most people were confined to their homes with
many losing their jobs in 2020. As a result the sales numbers for the retailers have plunged and
we expect a v-shaped recovery for the industry in 2021.

GROWING ACCEPTANCE OF DIGITAL PAYMENT SYSTEMS

One of the primary drivers of the online fashion retail market in India is the increasing
acceptance of digital payment systems. The convenience and security offered by online
payment options have instilled confidence in consumers.
 Furthermore, features such as 24/7 customer support, easy refund policies and
competitive pricing are additionally fuelling the growth. Online retailers have diversified
payment channels, including credit cards, e-wallets, cash on delivery, online banking and
cash on order, catering to a wide range of customer preferences
PARTNERSHIPS WITH PAYMENT PROVIDERS
 Online retailers are continually enhancing the payment experience for customers by
partnering with payment providers. This collaboration streamlines transactions and
enables retailers to focus on improving the overall shopping experience for their
customers. In future, these efforts are expected to drive further market growth during
the forecast period.
 The growing embrace of digital payments in India’s online fashion retail market is
driven by convenience, security and customer centric features that enhance consumer
 trust. Retailers are diversifying payment options and partnering with payment
providers for smoother transactions, expecting continued market expansion.

ENABLING OMNICHANNEL EXCELLENCE

 Seamlessly merging online and offline channels is paramount for retailers seeking to
deliver an uninterrupted shopping journey to their customers.
 This enduring trend underscores the importance of prioritising a unified shopping
experience that spans both digital and physical realms.By doing so, retailers can enhance
customer satisfaction and foster brand growth in an era where omnichannel excellence is
a key determinant of success.
STRATEGIC MARKETING INITIATIVES
 In response to increased competition and evolving consumer preferences, the apparel
industry is experiencing a surge in sales and marketing promotions. In an effort to
establish and reinforce brand presence, engage customers and drive sales, many apparel
companies are implementing innovative marketing tactics.
 These companies are diligently analysing sales data and customer behaviour to design
well-calibrated promotions that offer enticing incentives, such as discounts and
complimentary items, all the while ensuring sustainable profit margins.
EMBRACING SUSTAINABILITY
 The fashion industry is poised for a significant shift towards sustainability in the coming
years. Consumers are becoming increasingly environmentally conscious, driven by
concerns about the apparel industry’s ecological impact. This growing awareness is
leading to a sustained demand for eco-friendly fashion options.
 As a result, many brands are incorporating sustainable practices and materials into their
production processes.Retailers must adapt to this evolving consumer preference by
offering eco-friendly products and actively working to minimise their carbon footprint in
order to remain competitive and relevant.
LOCAL SOURCING AND MANUFACTURING
 The emphasis on local sourcing and manufacturing has grown in recent times and is
expected to continue in 2023. Brands and retailers are actively embracing this trend by
opting for locally sourced materials and domestic garment production.
 Though Indian online fashion retail market is poised for remarkable growth, challenges
related to payment preferences and accessibility must be addressed to unlock the market’s
full potential.As the market continues to evolve, businesses that adapt to changing
consumer behaviour and preferences are likely to thrive in this dynamic and promising
industry.
PAYMENT BARRIERS
 Despite the growth of digital payments, payment barriers persist as a significant
challenge. A substantial portion of the Indian population still prefers cash transactions
due to familiarity and concerns surrounding cyber safety.
 Inadequate access to banking services and digital payment infrastructure, especially in
rural areas, hampers the adoption of online fashion retail. Additionally, the complexity of
online payment processes can deter users unfamiliar with digital platforms. Overcoming
these challenges remains crucial for sustained market expansion.
HARNESSING AUGMENTED REALITY (AR) AND VIRTUAL REALITY (VR)
INNOVATIONS
 The fashion sector is experiencing a growing inclination towards adopting augmented
reality (AR) and virtual reality (VR) technologies..
 Furthermore, AR and VR hold the promise of curbing return rates, enabling consumers to
gain a more accurate understanding of clothing fit and appearance prior to committing to
a purchase.
  The adoption of AR and VR technology further benefits retailers by enhancing
engagement, reducing returns and providing valuable data insights. For customers, these
technologies improve the shopping experience, offer convenience and increase
confidence in their purchase decisions.
INDIAN RETAIL ECONOMICS:

Retail economics is an independent economics research consultancy focused on the UK

consumers and retail industry.

RETAIL ECONOMICS IS BUILT ON THREE CORE PILLARS:

1. Insight:
 Helping you understand the key economic drivers behind UK retail and consumer sectors.
 Giving you a competitive edge through deeper insights of the retail industry bycategory,
channel and region.
2. Data:

 Providing proprietary data on market sizes, market shares and forecasts enabling you to deepen
your understanding of the industry and the future outlook.
 Saving you valuable time by accessing all the need-to-know retail data in one place with quick
and easy downloadable time series data

3. Consultancy:
 Providing you with data visualization tools to compare and benchmark key
metrics vital for your business.
 Offering you bespoke and tailored reporting to transform information into
actionable insights.

WHO USES RETAIL ECONOMICS?

1. Retailers:
 Benchmark UK retail sales performance
 Concise, timely and succinct retail insights
 Forecast spending power, market performance and consumer confidence.

2. Financial legal property:

 Understand your client’s operating environment

 Communicate authoritatively.
 Quickly absorb key trends and statistics with our succinct and punchy retail insight reports.
3. Providers:
 Identify market opportunities.
 Integrate actionable insight into your business
 Secure your retail knowledge for upcoming events, meetings and sales pitches.
Foreign direct investment in Indian apparel retail.

 FDI Foreign Direct Investment, refers to the investment made by a company or an

individual in a foreign country to establish a lasting economic interest.
  FDI is an important aspect of globalisation and has become a major source of economic
growth for many countries.
 It allows for the transfer of capital, technology, and skills between countries, leading to
increased productivity and innovation. Additionally, FDI can create employment
opportunities and stimulate economic development in the receiving country.

Advantages of Foreign Direct Investment

 Increased Competition − The entry of international players and brands into the Indian
fashion apparel industry has led to an increase in competition, leading to higher standards
and better-quality products.
 Growth and Development − With the influx of foreign capital, the Indian fashion
apparel industry has experienced growth and development, with increased production and
exports. FDI contribution it makes towards economic growth.
 Introduction of New Technologies − FDI has led to the introduction of new
technologies and improved processes, making the industry more efficient and globally
competitive.
 Job Creation − The influx of foreign capital has created job opportunities, both directly
and indirectly, boosting the Indian economy.
 Concerns About Cultural Identity − There are concerns about the loss of traditional
Indian techniques and cultural identity with the increase of FDI in the industry.
 Improved Standards − The competition brought in by FDI has pushed the industry
towards higher standards, leading to better-quality products and a more efficient supply
chain.
 Global Connectivity − FDI has connected the Indian fashion apparel industry to the
global market, making it easier for Indian brands and products to reach international
audiences
Disadvantages of Foreign Direct Investment

 One of the main concerns is the potential for exploitation and loss of control by the host
country.
 When a foreign company invests in a local business, it may have significant control over
the operations and decision-making processes.
 This can lead to the transfer of profits and resources from the host country, ultimately
weakening their economy and limiting their ability to make independent decisions.