The world of retailing: An overview of retailing & Indian Retail

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Chapter2: Theories of Retailing:
The growth of retail formats worldwide is largely influenced by constantly changing social and economic scenario. One of the main reasons for emergence of new formats in retail sector is the consumer himself. Today's consumer is more demanding and is focused on what he wants. Consumer demand is the key reason for the emergence of various formats.
Retailers are influenced by factors like availability of real estate and increase in its prices. They are faced with the challenge of adding new services and need for differentiation which has led to specialization and the emergence of specialists. Supply chain complexities and the increasing pressure on margins have also forced retailers to look for new formats.
There are different theoretical perspectives to look into retail development. No single theory can be universally applicable or acceptable. The application of each theory varies from market to market, depending on the level of maturity and the socio-economic conditions in that market.
The theories that explain the process of retail development revolve around the importance of the investments in organizational capabilities, competitive pressure and the creation of a sustainable competitive advantage. It requires the application of strategic planning by retail organizations. Growth in retail sector is a result of understanding market trends and responding to the opportunities that arise in a dynamic manner.
Three retailing theories explain how different retail formats emerge, mature and are then replaced by another format.
1) Cyclical - where change follows a pattern and phases can have definite identifiable attributes associated with them.
2) Conflictual - the competition or conflict between two opposite type of retailers leads to a new format being developed.
3) Environmental - where a change in retail is attributed to the change in the environment in which the retailers operate.

Shadma Shahid is working as a PhD Scholar at Jamia Millia Islamia University, India. Her research focuses primarily on Retail Sector, Luxury Market, and Consumer Behaviour. She has authored several papers in Journal of international repute & has presented papers in various national & international conferences.

Dr Rahela Farooqi is an Associate Professor with Jamia Millia Islamia University, India. She is PhD & an MBA & has an experience of more than 15 years in teaching & research. She has authored several papers in Journal of international repute & has presented papers at various conferences in India & abroad. Her areas of interest include Marketing Management, Retail Management, Marketing of Services & Sales & Distribution Management.