Bengaluru?s retail moving on a progressive track
Bengaluru?s retail moving on a progressive track

Indian retail destinations are undergoing a metamorphosis; established malls and main streets are becoming more sophisticated as shopping destinations and a number of new locations are emerging.

This report delves into the potential of such upcoming, new retail catchments and analyses each onefrom a 360 degree view point. In our report, we have taken into account the seven major cities of Mumbai, Delhi-NCR, Bengaluru, Chennai, Kolkata, Pune and Hyderabad.

The most natural reason for the emergence of new retail micro markets is that Indian cities are now overflowing at helms, leading to creation of new residential catchment areas. Retail malls and main streets are perhaps the leading parameters of social infrastructure.

In a sense, this reflects the increasing financial wherewithal of Indian consumers and their willingness to make purchases. That said, there is no one-size-fits-all strategy that works. Each micro market attracts a unique class of shoppers and the main challenge of retailers is to tailor–make product mixes in order to best cater to the demand of the consumers. For instance, High Street Phoenix in Lower Parel, Mumbai and Phoenix Market City in Kurla, Mumbai are not and could not be a replication of each other. Whilst the micro market of Lower Parel can draw luxury shoppers, Kurla is unlikely to. As is true for most real estate related business decisions, location holds the key; structuring a business model synchronized to the expected footfalls will be the deciding factor of success or failure.

A specific interesting trend that we came across is that despite global interest and international retail brands flocking to India, foreign brands occupy insignificant space in emerging main streets compared to domestic brands.

Main streets

HSR Layout and Sahakar Nagar in Bengaluru have witnessed sizeable penetration of foreign brands (above 20% occupancy) reflecting the tastes of the catchment and the quality of supply present here. However, main streets such as Kothapet inHyderabad, Kharadi in Pune and Ambattur (MTH Road) in Chennai witnessed lesser levels of penetration from foreign retailers. Another interesting fact is that across the main streets, “apparel and footwear” brands had maximum penetration by area, followed by the “food and beverages” (F&B) brands, alluding to consumer preference when it comes to retail segments.

Emerging retail locations definitely have a cost advantage. On an average, we estimate that rentals are 20-30% lower in these micro markets when compared to established retail locations. Currently , Dwarka (Ashirwad Chowk) in Delhi-NCR commands the highest main street retail rental, while Kothapet in Hyderabad commands the lowest main street retail rental amongst the 14 new emerging main streets.

The main factor that will drive growth potential is consumer purchasing power and hence, a stable and confident job market is essential. India is just coming out of a tepid job growth scenario, which has eroded consumer confidence significantly. As India’s macroeconomic statistics improve, people will feel more comfortable and shop beyond their basic needs. Economic indicators are now positive and retailers should identify and establish bases in high-growth emerging locations and (in somecases) benefit from first-mover advantages.

]NEW RETAIL

FRONTIERS WHAT IS AN EMERGING MAIN STREET?

Main streets initially develop in and around city nodes such as near transport hubs, railway stations or at the heart of the city. As the city expands its precincts, far-flung residential areas start developing a mixed-use fabric along the streets. Select streets start emerging and witness progressively higher footfalls, which then lead to concentrated retail development along these avenues. This report takes a look at such new and emerging main streets that have evolved in recent years due to the developmentof new residential pockets or densification of certain areas.

For the purpose of the study, we have concentrated on seven major cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR and Pune. These major cities are reeling under severe urbanization pressures and their geographical limits are being redrawn and extended to encompass the surging settlements. Two new main streets, which have witnessed maximum activity level in terms of enquiries and retail real estate transactions in last couple of years, have been chosen from each of these cities for the study.

Post-conducting an extensive demand-supply analysis, we have zeroed in on these new emerging main streets and will discuss their characteristics and potential in the following sections.

WHAT IS AN EMERGING MAIN STREET?

Main streets initially develop in and around city nodes such as near transport hubs, railway stations or at the heart of the city. As the city expands its precincts, far-flung residential areas start developing a mixed-use fabric along the streets. Select streets start emerging and witness progressively higher footfalls, which then lead to concentrated retail development along these avenues. This report takes a look at such new and emerging main streets that have evolved in recent years due to the developmentof new residential pockets or densification of certain areas.

 

For the purpose of the study, we have concentrated on seven major cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR and Pune. These major cities are reeling under severe urbanization pressures and their geographical limits are being redrawn and extended to encompass the surging settlements. Two new main streets, which have witnessed maximum activity level in terms of enquiries and retail real estate transactions in last couple of years, have been chosen from each of these cities for the study.

Post-conducting an extensive demand-supply analysis, we have zeroed in on these new emerging main streets and will discuss their characteristics and potential in the following sections.

 

 

 

DRIVERS FOR EMERGING MAIN STREETS

DRIVERS FOR EMERGING MAIN STREETS

URBAN SPRAWL

TRANSPORT AND ACCESSIBILITY

Main streets have traditionally evolved as a communal hub, where a wide variety of local shops are present in the prime locations. Today, chaotic main street shopping co-exists with organised, hassle-free and convenient mode of shopping in malls. Indian consumers are also exploring different retail avenues such as online shopping with home delivery options and click and collect centres. Though the share of these alternative formats is slowly increasing in India, shopping destinations such as main streets and malls maintain their appeal as new locations emerge. The major drivers facilitating the emergence of new main streets are:

Rapid urbanization and population explosion in India have led to the emergence of new suburbs and satellite towns with alternate commercial areas, around which, new retail neighbourhoods have developed. Alternative retail options have started sprouting in these far-flung locations in order to reduce the dependence of residents on established retail hubs situated at the heart of the city.

 

 As populations in the city are increasing through natural growth and migration, retailers are increasingly looking at setting up their outlets as close as possible to their consumers in order to ensure that their markets expand. Whilst it is usually the local and unorganised retailers who try and capitalise on the first mover advantage in new and emerging retail locations, organized retailers lead the pack in setting up outlets, typically belonging in the food and beverages (F&B), mid-range fashion and accessories.

Increasing congestion in established retail destinations has resulted in increasing the travel time and well as the travel cost for fuel, parking, etc. Further, increased car ownership has resulted in an increase in demand for adequate parking facilities for shoppers, which has been difficult to cater to in established main streets. Consequently, new retail streets that are easily accessible through various means of transport have good potential to mature into established main streets.

 

As the retail sector is increasingly getting organised through the entry and expansion of organised retail players and retail real estate developers, new retail markets are emerging across cities.

Organised retailers are not only setting up shop in traditional retail markets, but are also seeking new emerging markets in order to widen their buyer base. Further, unorganised retailers are shifting from established retail markets as they are being squeezed out by the organised retailers who pay higher rents.

Initially in the first 2 to 3 years, new main streets are dominated by mom and pop stores, local tailoring, hardware, home improvement, F&B and other stores as rents and capital values are cheaper and organised players are not willing to take on the high risks associated with these emerging new markets.

However, as these markets gain traction in terms of increasing consumer base and availability of quality real estate options, organised players (usually in the mid segment) start setting up shop.

The final yardstick of success of any retail outlet is the profitability that retailers can expect in the retail destination. Most brands have a set format for a retail store that includes the size of the store, expected frontage, building quality, store interiors (design and materials), etc. Thus, the fit-out costs are standardized over all locations and the initial capital expenditure is in similar range across the cities for a particular brand.

As the product pricing is also same across the country, the profitability of a store is usually affected by the ratio of the average trading density or the revenue earned to rent paid. Emerging main streets are competing with established main streets by offering much lower rentals and increasing revenue generating footfalls, which make these locations pretty lucrative for brands.

KEY EMERGING MAIN STREETS

Various market forces guide the development of new main streets, each of which, witnesses a unique combination of growth factors and hindrances or bottlenecks. In this section, we have attempted to outline various market forces, which have shaped the current retail landscape in the emerging main streets of the seven cities under study

 

HSR Layout (27th Main)

Located between Hosur Road and Sarjapur Road, two main arteries of the city, HSR Layout 27th Main Street emerged as a retail main street due to the residential pockets that have  mushroomed in HSR Layout because of the growth of IT-ITeS hubs in Electronic City and along the south-eastern part of Outer Ring Road. The residential catchment for this main street includes Sarjapur Road, Jakkasandara, Hosur Road and the Outer Ring Road (ORR) stretch near Sarjapur-ORR Junction. The lack of malls and retail locations within a 5 kilometre radius and the presence of a prominent educational institute - the National Institute of Fashion Technology, have also acted as vital catalysts for the emergence of this location. Further, the proposed metro connectivity is expected to make this location more attractive in future.

 

Sahakar Nagar

Formed as a co-operative housing society for government employees, Sahakar Nagar today enjoys the benefit of being the sole retail destination between Hebbal located about 3 kms away and the Bengaluru International Airport (27 kms away). Since limited retail space is present in northern Bengaluru, Sahakar Nagar also caters to a large cosmopolitan population from Hebbal, Yelahanka, Thanisandara Road, Jakkur and Jalahalli. The demographic profile of the catchment consists of not only employees from IT-ITeS industries in North Bengaluru, but also from large number of employees working at the international airport. The anticipated malls in Thanisandra Road and Yelahanka will further boost the retail activity in north Bengaluru.

 

ANALYSING RETAIL DYNAMICS

IN EMERGING MAIN STREETS

PRESENCE OF DOMESTIC AND FOREIGN BRANDS

Emerging main streets across the seven major Indian cities have  witnessed a dominance of domestic brands as compared to foreign brands. Ashirwad Chowk in Delhi NCR, NSC Bose Road in Kolkata and HSR Layout and Sahakar Nagar in Bengaluru have recorded the highest share of foreign brands, each recording more than 20% of total space absorbed by foreign brands. The presence of foreign brands is significantly lower in all other emerging main streets attributed to factors such as demography,disposable income, easy accessibility and quality of retail space available that are considered unfavourable by foreign retailers but are not a deterrent to domestic ones.

 

SEGMENT MIX ACROSS EMERGING MAIN STREETS

Emerging main streets across the top seven cities have witnessed mixed trends. Whilst some streets have emerged as a F&B hub, others have emerged as apparels and footwear hubs, but almost all segments are present across all main streets. Apparels and footwear were noted as the most demanded retail segment and constituted 24% of the total retail space taken up across cities, followed by F&B accounting for 16% of the total space taken up.

The above two segments satisfy the basic needs of the residents and so, in each of these main streets the space take-up of these segments is the highest. The lowest percentage of space was taken up retailers in the segments of Clinic / Pharmacy (3%), Salon & Spa (4%) and Automobile and Mom & Pop stores stood at 6% each.

Except automobiles, most of these segments have small space requirements and so the entire space take-up is small. Further scope of each of these segment in each of the 14 emerging main streets can be gauged through the graphs below:

 

 

 
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Same Day Delivery: The Best Way To Grow Your Online Store in 2023
Same Day Delivery: The Best Way To Grow Your Online Store in 2023
 

In today's fast-paced world, where convenience and speed are paramount, same-day delivery has emerged as a crucial factor in the success of online businesses. As an online store owner, implementing a reliable same-day delivery service can significantly enhance your customer experience and drive growth for your business. This article will explore the importance of same-day delivery and provide valuable insights on how to leverage this service to grow your online store in 2023.

The Rise of Same-Day Delivery

In recent years, same-day delivery has become a game-changer in the e-commerce industry. Customers now expect their purchases to arrive quickly, and businesses that can meet these expectations gain a competitive edge. Same-day delivery offers the convenience of instant gratification, eliminating the waiting time between purchase and delivery. By providing this service, online stores can enhance customer satisfaction and loyalty.

The Benefits 

Implementing same-day delivery for your online store comes with a myriad of benefits. Firstly, it gives you a significant advantage over competitors who offer only standard shipping options. By providing fast delivery, you increase customer satisfaction and loyalty, leading to repeat purchases and positive word-of-mouth. Additionally, same-day delivery enables you to tap into the impulse buying behavior of customers who prefer instant gratification.

Implementing Same-Day Delivery for Your Online Store

To integrate same-day delivery into your online store, you have several options.

  • Partnering with Local Delivery Services: One approach is to collaborate with local delivery services. By partnering with established courier companies in your area, you can leverage their existing infrastructure and expertise in handling last-mile deliveries. This partnership allows you to offer reliable and efficient same-day delivery to your customers without investing in delivery operations.
  •  Utilizing Third-Party Logistics Providers: Another option is to utilize third-party logistics providers (3PLs) specializing in same-day delivery. These companies have extensive networks, advanced tracking systems, and expertise in time-sensitive deliveries. By outsourcing your delivery operations to a trusted 3PL, you can focus on your core business while ensuring reliable and speedy order fulfillment.
  • Establishing In-House Delivery Operations: For larger online stores with high order volumes, establishing in-house delivery operations may be a viable solution. This involves hiring and training your own delivery personnel, acquiring delivery vehicles, and optimizing your logistics processes. While it requires a significant investment, having full control over the delivery process can offer greater flexibility and customization.

Overcoming Challenges in Same-Day Delivery

While same-day delivery offers numerous advantages, it also presents challenges that need to be addressed to ensure smooth operations.

 

  • Managing Inventory and Warehousing: Efficient inventory management and warehousing are critical for successful same-day delivery. It is crucial to have real-time visibility of stock levels and optimize your warehousing locations. Consider taking advantage of the 3rd Warehousing concept by establishing warehouses in different cities to minimize transit time and improve delivery speed.
  • Optimizing Delivery Routes and Logistics: Planning efficient delivery routes and optimizing logistics play a vital role in same-day delivery. Utilize route optimization software and leverage data analytics to identify the most efficient routes and streamline your delivery operations. This ensures timely deliveries while minimizing costs and resources.
  • Handling Customer Expectations and Support: Customers have high expectations when it comes to same-day delivery. It is essential to set realistic delivery timeframes and communicate them clearly to customers. Additionally, provide proactive updates on order status and offer exceptional customer support to address any concerns promptly. Transparency and responsiveness are key to maintaining customer satisfaction.

Tips for Successful Same-Day Delivery
To maximize the benefits of same-day delivery, consider implementing the following tips:

  • Investing in Technology and Automation: Leverage technology to automate various aspects of your delivery operations. Utilize inventory management systems, order tracking tools, and delivery management software to streamline processes and improve efficiency. Automation reduces errors, enhances visibility, and enables faster order processing.
  • Ensuring Efficient Order Processing: Efficient order processing is crucial for same-day delivery. Optimize your order fulfillment workflow to minimize processing time. Implement systems that enable seamless order capturing, inventory updates, and order prioritization based on delivery deadlines. This ensures quick and accurate order processing, setting the foundation for speedy delivery.
  • Adopting a Customer-Centric Approach: Place your customers at the center of your same-day delivery strategy. Understand their preferences, anticipate their needs, and personalize their delivery experience. Offer delivery options such as time slots or on-demand delivery to cater to their convenience. By providing a delightful and hassle-free delivery experience, you foster long-term customer loyalty.

Conclusion

In the competitive landscape of online retail, offering same-day delivery is no longer a luxury but a necessity. By implementing a reliable and efficient same-day delivery service, you can differentiate your online store, enhance customer satisfaction, and drive growth. However, it is essential to address challenges such as inventory management, logistics optimization, and customer support to ensure successful same-day delivery operations.

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Naveen Pandey, MD, AIPEX WORLDWIDE (OPC) PVT LTD

Naveen Pandey is an accomplished Managing Director with a proven track record of success in the logistics and supply chain industry. He currently serves as the Managing Director at AIPEX WORLDWIDE (OPC) PVT LTD, a leading company in the field.

 

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