Some of the factors posing challenge to retailers irrespective of forms are as under –
1. Technological Advances:
Technological change is bringing in lot of changes in the product and delivery. One of the biggest changes is in application of hardware, software, and accessories due to Internet, including social network sites like facebook, and Myspace, YouTube, virtual worlds, and Web analytics. Other areas of change due to technology are customer relationship management, database management, and marketing automation. Our lives are affected by technology, and a change in one sector compels change in another.
2. Customer Dynamics:
People born after independence but employed/ occupied before 1990-91 do not think or behave as the generation Y. However, some of the senior citizens are healthier, more active, and many are affluent. On the other hand people belonging to generation Y are technology-savvy young people think, act, talk, write, and otherwise communicate differently. The cyber-world is their space, and they want connectedness more important than privacy and they are more demanding and price does not matter much to them.
3. Industry Consolidation and Ownership Change:
Many joint ventures, particularly in wholesale trade we find foreign partners. Similarly in single brand retailing we have foreign partners, and very soon there is going to be 100% FDI in multi-brand retailing. The entry of corporate world is a new phenomenon in India.
4. Merchandising Policy:
With the advent of liberalisation and globalisation now different assortments from cheap to expensive, nationally branded to private labels, and branded to generic products are available.
5. Supply Chain Initiatives:
Shorter lead times for merchandise production and faster time to market are the objectives of all supply chain members. Products are launched globally. Radio frequency identification (RFID) uses radio wave technology to detect inventory, user authentication, asset protection, people and other elements.
6. Emergence of China:
China’s unexpected rise has created ripples politically, socially, legally, environmentally, and competitively. Chinese economy continues to flourish despite violations of human and intellectual property rights, and infringement of child labour laws. Recently General Motors in India has said that it will sell cars in India designed in China.
7. Multichannel Emphasis:
Most of the firms have decided to go in for online retailing as well. The power of multichannel is helping them through online business to convert the push strategy to pull strategy.
8. Organised Retail Crime:
Stealing of goods, refund scams, conducting illegal price changing, and committing credit card frauds are wreaking havocs. Counterfeiting and violation of copyright laws are other crimes against the retailers affecting profitability worldwide.
9. Customer Privacy and Security:
The chief concerns are capture and use of personal data by retailers, and safeguards against fraud, data, and identity theft, and unauthorised use of personal information. Phishing, an unscrupulous practice, is very common on the internet.
Sustainability refers to the maintenance and sustenance of our planet. Through conserving energy, using ecologically friendly materials in manufacturing, and reducing consumption of harmful materials in the manufacturing of products, and reducing consumption of harmful objects, sustainable development can be achieved.