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One of the key determinants of a retailer's success is the format he uses to present to his target customers. A retailer can chose a format based on the kind of store design he wants to render, the locality he would like to establish, various products and
THE consumer spending in India has mounted to 75 per cent in the last four years. By year 2013, the organised retail sector is expected to grow at a CAGR of 40 per cent .The organised retail has propelled the industry at large and made it look towards newer and extended segments. Besides the general grocery and apparel stores, investors are now looking at other lucrative options. One such growing segment is the specialty retail, which is why we have chosen it as our issue focus this time.
The specialty retail is one-of-its-kind retail format that offers products targeting niche segment. A specialty store is a store, usually retail, that offers specific and specialised types of items. These stores focus on selling a particular brand or a particular type of item. The specialty of these stores is that they sell on value rather than on price. Whether you see a chain of organised florist or an exclusive bookstore, they all form a part of the specialty retail. From accessories, music stores, home furnishings, stationery to telecom and many other categories fall under the umbrella of specialty retail.
There are various formats under the specialty retail, based on location, ownership, merchandise, price size or concessions. For your benefit and convenience, we have classified the specialty retail based on the area required for store operations. So, we have kiosks and carts, which require few square feet, small formats operating in less than 500 square feet, mid-size formats within 500-2,000 square feet and large formats operating in over 2,000 square feet. Though no one format can have the luxury of being the most favoured, as every format has its boons and banes, still, kiosk, carts and vending machines top the priority list for franchisors and franchisees. The preference for this format is in good number because it entails low-investment, low risk and high returns. However, the escalating demand for specialty retail stores and products has paved way for small and large formats too.
As in every business, there's a word of caution. A franchisee should first select the market that will buy his product and then enter the segment. As these stores target niche categories compared to retailers who target masses, one has to pick and choose the brand carefully he needs to invest into. The franchisor and franchisee should also be careful about the marketing, visual merchandising and promotional strategies because all these factors have to be unique and selective, unlike the brands targeting masses. Besides, the specialty stores can't afford to lose a single customer due to bad service because they don't have that many products that they can make a sale from then and there. Therefore, before you take your pick, be sure of your product and the business strategy.