You can probably tell that I’ve held the view for some time now that the retail sector needs to pause for breath, and evaluate its growth strategies on some very fundamental parameters. (“Disclaimer”: Having invested 2 decades in the retail sector, I have an inbuilt bias towards the entrepreneurial and organic nature of retail, which is probably evident!)

As I was recently writing an article with the theme of “realism” echoing strongly, I came across this statement by Kishore Biyani of Future Group on 27 August: “I was an eternal optimist; now I have become a realist.” (Bringing Back Retail Realism, from MINT).

Now, with the India Retail Forum coming up next week, it’s interesting to read a mailer from the Retailers Association of India, with this wonderful quote from B. S. Nagesh, of Shopper’s Stop: “We have opened store after store and are in the process of opening many more – 100 … 500 … 1,000 … 5,000 and may be many more. Let us pause for a while for a reality check … Are our customers happy? Are our employees happy? Are our vendors happy? Are our stakeholders happy? Are we happy? …. The answer for all these questions ought to be ‘YES’ but in reality it is ‘NO’ for some. Where we have gone wrong? What do we have to do?… It’s time to share, reveal, reconcile and find ways to amend … And to open up, debate, consolidate and collaborate thoughts before we take the next step.”

I think we may finally get things back on track, with two of the most prominent leaders of the business asking the sector to reconsider and review.

When I wrote an article titled “The Myth and Reality of the Retail Revolution” 2-years ago (in August 2006), some friends looked at the title and said I was being pessimistic. I disagreed, and said that I was being realistic, especially since I ended it by saying that the real retail boom had not yet happened, and we had only scratched the surface. Organic growth will get us there – crash and burn won’t. (To judge for yourself open that article as a PDF – click here.)

What do you think?

The Third Eyesight Knowledge Series© comprises of workshops designed and developed to help functional heads, line managers and executives refresh and upgrade functional and product expertise.  

Third Eyesight’s next workshop in this series is focussed on Creating & Managing Lifestyle and Fashion Brands.

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The recent stock market mayhem brings to mind another ‘boom’ – the much-hyped retail boom.

Booms and busts are complimentary, and always follow each other (if history is a teacher which we would care to listen to).

We are already seeing the signs of what people might call a slow-down in the Indian retail market. (Those people would have built their business plans, made investments and planned expenditure based on 50-500% annual growth, and would see a 15-25% growth as a slowdown.)

But for the most part, retail is an organic business, and a 15-25% annual growth is far healthier for most companies. It allows for infrastructure and processes to grow in a planned way. It gives the companies time to mature their processes and their organizations, and build businesses that are more sustainable. It allows the development of brands that are more lasting.

Growing retail businesses over time also allows them to develop the ecosystem around them organically – in my opinion absolutely vital for a healthy economic and social environment.