From the very beginning shopping for festivals or birthdays has been more like a project or a mission in our house rather than being fun. Why? Because it involved a lot of running around to and many shops to go to, just for few items and that too at great distances. I remember the time as a kid going with my parent for shopping. We would go to the main market and from thereon go to a shop which had the largest collection so that we did not have to run everywhere for multiple items. Years passed and we heard of malls being planned. It was exciting to know that once a mall comes in we would have a single point to hang out and finish shopping agendas quicker. If you are a retail management student the following piece might interest you. Why does anyone want to go to mall? In a few words I might say; its a one point shopping zone, convenient, gives multiple options and have to admit it is fun as well. There’s a vibrant atmosphere to the mall than to the bazaar near by. I don't have to walk much, I am offered tea in the stores I walk and moreover I am in an air-conditioned, clean and exciting environment. I have multiplexes nearby and can eat out as well while shopping. So many reasons. The retail segments have inculcated a shift in consumer behavior in so many ways. The consumer now understands the importance of convenience in shopping. The good customer service given in the retail outlets at the mall brings more value to the customer than before. The sweet part of the concept of retail is that there is a sense of justification created in the mind of the customer for the money he parts with when he makes a purchase. He is told he is given value for money. Now the customer who was running around from shop to shop in a bazaar has tasted the comfort of shopping in style. So it is written in the books. The Indian retail industry is the fifth largest in the world. It has organized and unorganized sectors, mostly unorganized which are now moving to organized retail.The boom in retail has not gone unnoticed. Millions spent on this sector offers many boons to the mass. The main two are:   1. Employment Opportunity: It cannot be argued at any point that this sector has created a dearth of opportunities for this generation. Youngsters and fresh boarders are chosen for simple job description. Just see how many opportunities a mall or retail store provides. They hire executives and managers for sales. There are agencies hired for security. There are hundreds employed for housekeeping. Just one mall employs around thousands and creates opportunities for business for hundreds more in terms of advertising, promotion, projects,quality control and so on.   2. Revenues: As I mentioned above, revenues generated through the mall are immense. One revenue that is earned by the government is for providing license for it to keep running. Secondly the taxes that are paid. Apart from this there is a flow of revenue to all segments. The mall earns through rent,promotions,events etc.The government earns through taxes, penalties etc. And needless to state, thirdly the brands that rent the shops earn through the footfalls. Right? But the picture isn't always what we see the above points mentioned are merely a mirage to the so called retail boom as we call it. Stores are facing a struggle constantly. The truth is that retail outlets struggle to maintain their profits on a regular basis. How many outlets do we find bustling with footfalls today in all shops? Is every outlet running in profit? Why are stores being shut down in malls and moving to shopping complexes?I do see footfalls in places like Pantaloon or Big Bazaar or maybe even at Relaince,but what about the stores nearby like Levis, Wrangler Monte Carlo or Metro Store,. Aren’t they often deserted? If you take a deeper look to the retail segment and look into the management theories, the reality has larger volumes to say. Retail has limiting factors that have to be acknowledged. And those factors also impact the current scenario. Let’s take a look at this with each fact in context with today’s scenarios. 1. Costs involved: The retail outlets that commence come in after huge investments. All the lightings and music that attract us in the mall, the AC and parking, the elevators and the fun provided to us in the mall comes a t a huge price. Malls and retailers have to buckle up to come up with that investment, plan to ensure revenue inflow and execute well chalked out business propositions that ensure the flow of cash and generation of profits. Current Scenario: Since malls need to make profits, they rent out their space to brands. The rent these brands pay are pretty huge. Each store in the mall has to make up for the rented space, stock they hold, utilities they use, salaries they pay and advertising/branding they do. In our country, with the taxes soaring high, the malls are forced to raise their space price which in turn becomes a huge expenditure for the stores dealing with them. 2.Footfalls: The mall has an equal responsibility to bring in footfalls within its boundaries so that the stores gain business. The management plays a key role here for both the mall and store-owners to encash on every offer possible to ensure there are footfalls. Current Scenario: Well our malls do fulfil their bit of bringing footfalls through events, advertisements etc. But how many of these footfalls get into the stores. And even if they do get into stores, how many are converted to valuable customers. The truth about today's customer is that HE IS AWARE. Businesses have to acknowledge that growing inflation has put a check on the spending habits of the middle and upper middle class. So the concept of comfort and convenience of shopping may not work as a universal theory for the Indian retail sector. Which brings me to the next point! 3. Margin of Discount: In any vendor chain, you will find that if a company retail outlet is compared to the company dealer, the margin of discount lies more with the dealer. Why? Well because he purchases from the company and then is free to sell at what price suits him best. But a company cannot afford to do that. The discount provided by a company outlet would be less so that they can earn more profit. Current Scenario: Well Selling Price minus Cost is Profit. So if I being a retail store will give fewer discounts to the customer I will earn more profit. But the customer is more interested in discount. Why would he buy a Levis Jean for Rs 2000/- when he can get it at half the rate or even less at MAX or Big Bazaar. In parched times like today, when the pocket is tight I may compromise with quality and go for a cheaper option. Wouldn’t you agree?   4. Competition: There is a competition created which the retail stores have to battle. Low discounts and limited footfalls do add to the plight of retail outlets. The product has many competitors available which makes it easy for the customer to just walk-in and compare. Current Scenario: The same brand faces competition within the same roof. For example I may want to buy a simple bed sheet and in the mall I may get a Bombay Dyeing Store, A Welspun store. Now I can compare the two easily. And if the mall has a hyper mart like Big Bazaar as well, I might find the same brands there for a cheaper rate. Cut throat competition!   As a retail manager, I have been interested in the sudden boom of the sector I worked in. I also was always told about the famous Wal-Mart story and his management techniques that just created pure magic in his country and how Wal-Mart transformed retail. The same spell would woo customers in the Indian society if retail was launched on a high note. So I was told then. Big players like Pantaloons and Reliance have no doubt changed the face of retail by providing multiple options and low-prices but can never replicate the Wal-mart success story.   You see the Wal-Mart Success was not in providing low prices to the customer of their time or the entertainment capped within the four walls of the mall. It was neither in the bulk offers or big discounts they gave nor on the innovative ideas to bring in footfalls. I do agree that all these were contributing factors to its becoming huge. But while copying the Wal-Mart way, our retailers seem to overlook the main thing. Wal-Mart was good bargainers with its vendors to provide sustainable margin for profit. So, even when Wal-Mart kept its prices low, they had good margins to sustain and make profit. Reliance, Big-Bazaar may have got that, what about all the other stores in the mall.   With growing market demand, the industry is expected to grow at a pace of 25-30% annually in 2005 which slowed down a bit and came down to 22% from 2007 onwards. The good news is that recession had not hit retail in India so badly...even slow paced; retail is trying to pull in revenues. The wake-up call bell has already been pressed. And no doubt there are lessons learnt from huge mistakes made.  Disastrous examples like Subhiksha who had to close 1600 outlets in 2009.Its wipe out was a awakening call to retailers who are trying to formulate a model of sustenance. There are many pitfalls to fathom in this sector at the moment. If the retailers now focus on: A. Stabilizing at a single location rather than expansion or opening a store on every nook and corner of every city. B. Managing inventory wisely and bargain for profitable margins and increase customer discounts. C. Lowering operational costs of the store. D. Coming up with smarter and innovative ideas like online portals to inform customers than just depending on footfalls or walk-ins.   Tough? YES! But retail is an interesting sector to work with. Its a platform for innovation and has a dearth of opportunities to grow. The road to progress may be slow paced and the journey slippery but this industry has a lot to offer. A few amendments made would definitely bring in a promising future.