'Let's go shopping' are probably the three words that have signalled the creation of more wealth and economic transformation than any other activity in recent times. Yet, retail as we know it, is undergoing radical change, the result of which will render it unrecognisable.
There are three broad trends in retail, all of which will find a place in India sooner than later.
The first is the 'commodification' of need-based products. Leveraging on global supply chains and manufacturing centres located in China and other developing countries, retailers are today able to offer goods at prices that are — after correction for inflation — the lowest they have ever been.
Players such as Primark for clothing and Walmart for much else can be viewed as the driving force behind the control of inflation in the developed world. Without their ability to seek out and relentlessly pursue the price advantage, shoppers would certainly have seen higher inflation.
The second type of retail is experiential retail, which combines elements of entertainment, often with an underlying social mission — in some instances even political statement — with the act of shopping. In its early days, Body Shop was such a brand. Of course the ultimate brand that communicated such a message was Khadi and Village Industries Commission.
As long as brands such as these remain distinctive, they will find a place in the minds of the consumer. In today's global market, an esoteric brand can open several hundred branches across the world while continuing to serve loyal customers through the internet.
The third trend in retail is the rise of luxury – this has coincided with a massive increase in the number of people with surplus incomes who have a desire to communicate their newly acquired status to their peers.
Luxury, once the preserve of the aristocracy and the wealthy, has become democratised with the advent of mass production techniques, and brilliant marketing. Just as the democratisation of travel can have an office-worker live in a palace, albeit for a night, the same person can wear products that were once the preserve of the truly rich.
Urbanising India can benefit from the transformation that retail brings, and harness its power to fuel tangible economic growth. Never before in human history has wealth been created on this scale and across the world. As millions enter the middle classes, they will have the money to go shopping, creating vast opportunities for retailers, manufacturers and all those who provide intermediary services.
The writer is MD, FabIndia