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“BRIDGING THE SKILL GAP
IN THE
INDIAN RETAIL SECTOR”
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OVERVIEW OF INDIAN RETAIL INDUSTRY:
Indian robust macro and micro economics fundamentals, such as :
1. robust GDP growth
2. higher incomes
3. increasing disposal income
4. favorable demographics and supportive government policies
These will accelerate the growth of the retail sector. Indian retail industry
is perhaps one of the most challenging, dynamics and exciting markets to
operate in. India is an economy of $1.43 trillion and expected to reach
$2.0 trillion by 2020.sixty percent of Indian total population lies between
15 to 35 years. Top ten cities of India account 10% of total population;
however account one third of disposal income. Organized retail, accounts
for around 5% of the total Indian retail market. Organized Retail has been
growing at an impressive rate of 35% to 45% Y-O-Y in the last few yearsCompared to 9-10% growth in the overall retail industry. Unorganized
retailing contributes to about 95% of total retail revenues. Unorganized
retailing which involves the local kirana shops, paan/beedi shops etc
continues to be the backbone of the Indian retail industry.
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SEGMENT BASED ON RETAIL PRODUCTS:
1. food and grocery
2. Jewellery
3. Clothing,textiles and fashion
4. Watches
5. Footwear
6. Health care and beauty care
7. Pharmaceuticals
8. Consumer durables
9. Mobile handsets
10. Utensil, furniture
11. Entertainment
12. Books, music
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SHARE OF VARIOUS SEGMENTS OF ORGANISED RETAIL:
Sl no Consumption
category Share in
Organized
Retail
Extent of
Penetration
1 Clothing, Textiles and
Fashion Accessories 38% 23%
2 Food and Grocery 11% 1%
3 Consumer Durables,
Home Appliances and
Equipments 9% 12%
4 Out of Home Food
(catering) services 7% 8%
5 Furnishings, Utensils,
Furniture - Home and
Office 6% 11%
6 Mobile handsets,
Accessories, and
Services 3% 10%
7 Entertainment 3% 5%
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IMPORTANT FACTORS FOR INDIAN RETAIL SECTOR:
1. Leveraging technology
2. Efficient Supply Chain management
3. Rural market penetration
4. Customized solution
5. Customer relationship management
CORE PROCESS IN RETAIL:
1. Store operation
2. Merchandising
3. Logistic and distribution
4. Marketing
5. Procurement
6. Corporate services
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DISTRIBUTION OF HUMAN RESOURCE BY EDUCATION LEVEL IN
RETAIL INDUSTRY:
5%
30%
10%
40%
15%
POST GRADUATE
GRADUATE
DIPLOMA
XII
CLASS X PASSED OUT
DISTRIBUTION OF HUMAN RESOURCES BY EDUCATION LEVEL
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FUNCTIONAL DISTRIBUTION OF EMPLOYMENT IN ORGANIZED
RETAIL:
Major proportion of the employment in the retail sector is in front-end/retail assistant
profiles in stores. The function/activity-wise distribution of human resource in the
Organized Retail sector is shown in the following figure. Store operations account for
75%-80% of the total manpower employed in the Organized Retail sector
As there are very few courses which are specific to retail, graduates/post graduates
from other streams are recruited. Persons with education up to 12th Standard and 10
th Standard account for 55% of the workforce. The education profile of the human
resource will vary for retailers in small cities and rural areas where X/XII pass peopleaccount for a higher share of the workforce.
75%
8%
8%
9%
FUNCTIONAL DISTRIBUTION OF
EMPLOYMENT IN INDIAN RETAIL INDUSTRY
STORE OPERATION
MARKETING
MERCHANDISING
OTHERS
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SHARE OF CITIES OF OPERATIONAL MALL SPACE IN INDIA :
Tier 1 : includes Delhi NCR, Mumbai, Bangalore, Chennai & Kolkata
Tier 2 : includes Hyderabad, Pune, Ahmedabad , Chandigarh, Jaipur & Luckhnow
Tier 3 : includes cities like Agra, Allahabad, Ludhiana, Kanpur etc
TIER-1
CITIES, 68%
TIER-2
CITIES, 18%
TIER-3
CITIES, 14%
TIER-1 CITIES
TIER-2 CITIES
TIER-3 CITIES
SHARE OF CITIES OF OPERATIONAL MALL SPACE IN INDIA
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SKILL REQUIREMENTS AND SKILL GAPS IN STORE
OPERATIONS:
(A)FUNCTIONAL SKILLS:
1. Responsible for the day-to-day management of a department/ store
2. Proficient with spreadsheet and word processor tools to analyze sales and
generate sales reports
3. Understanding of various aspects of customer behavior. For e.g the profile
of customer as user/buyer will have impact on selection of merchandise.
The person should be able to communicate these insights to the salespersonnel
4. Understanding of the local market to provide inputs for the CRM initiatives,
sales promotion and in-store advertising. Awareness of local festivals and
other important occasions
5. Knowledge of offerings of competing stores/brands
6. Ensure optimum stock levels and avoid stock outs
7. Co-coordinating with logistics. Optimum inventory levels have a major
impact on the store top-line and bottom-line
8. Ability to negotiate with vendors to resolve issues relating to the quality
and price of products
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(B)SOFT SKILLS:
1. Strong communication skills to interact with the store employees and
customers. Depending on the format, it is required to have proficient
Knowledge of English and/or the relevant vernacular language
2. Written communication skills (English) for sales and other routine reports
3. Man management skills to motivate the store
4. Ability to maintain inventory, achieving targets and maintaining store
margins.
(C)SKILL GAPS:
1. Inadequate understanding of cross functional activities such as logistics, in
store marketing and merchandising is limited
2. Man management skills to keep the employees motivated in the
Demanding work environment
3. Ability to adapt quickly to the changing customer/market trends
4. Insufficient knowledge of completion both in general and specifically local
to the catchment area of the store
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SKILL REQUIREMENTS AND SKILL GAPS IN TRANSACTION
PROCESSING (BILLING ASSOCIATE):
(A)FUNCTIONAL SKILLS:
1. The ease of transaction is a key factor in ensuring customer convenience.
Key responsibilities involve accurate and quick transaction processing.
2. Requisite computer skills. Understanding of transaction software/hardware
such as bar code reading machines, etc.
3. Knowledge of handling credit/debit card payments
4. Total cash &credit-card transactions and compare with cash register
receipts and enter the results in financial records, reporting cash surpluses
or shortfalls
5. Solving minor transaction software problems
6. Knowledge of offers underway in the store and its implications on billing
(B)SOFT SKILLS:
1. Good interpersonal skills to interact with the customers in a friendly
manner. Ability to handle customers with patience when credit-card
transaction is not approved, a requested item is out of stock or a refund
cannot be issued
2. Good oral communication skills to interact with the store employees and
customers. The executive should be able to communicate and explain the
billing amount to the customers
3. A working knowledge of English and vernacular language
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(C)SKILL GAPS:
1. Inadequate knowledge of processing of transactions and managing cash
2. Inadequate knowledge of software related to transaction processing
3. Inadequate soft skills – ability to interact with customers in the
Presence of a long queue
SKILL REQUIREMENTS AND SKILL GAPS IN CUSTOMER
SERVICE REPRESENTATIVE:
(A)FUNCTIONAL SKILLS:
1. Knowledge of current sales promotion schemes of the company and
ability to communicate the same to the customers
2. Ability to sell – i.e., selling skills
3. Knowledge of policies regarding exchanges
4. In depth knowledge of store offerings. The person should be aware of
the offerings of competing stores/brands. For e.g., in case of sales
person
5. engaged in apparel retail, knowledge of type of fabrics, styles, etc. of
competing brands would be important
6. Knowledge of product features such as :
i. brand options
ii. warranties
iii. features and benefits
iv. use/application
v. shelf life/use by dates
vi. care and handling
vii. storage requirements
viii. product
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7. Ability to guide the customers to the relevant sections of the store. This is
important for formats such as supermarket and hypermarket which are
spread over a large area
8. Knowledge about the merchandise in inventory to help customers find the
desired merchandise which is not on display.
9. Ability to watch out for security risks and thefts, and know how to prevent
or handle these situations
10. Ability to cross sell
11. Ability to describe merchandise and explain use, operation, and care of
merchandise to customers
(B)SOFT SKILLS:
1. Good communication skills are a must for customer interaction. The
executive must be able to understand both the explicit and implicit
customer requirements such as :
(a) Size, color etc (in case of garments)
(b) price range (value for money)
(c) Usage ( For personal use or for gifting)(d) Convenience
(e) Flexibility
2. Ability to understand product information, store policies and procedures
3. Ability to interface effectively with customers - Great emphasis is attached
to adhering certain levels of behavioral norms/etiquettes while interacting
with customers. There is a code of conduct conveyed to employees in this
regard
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(C)SKILL GAPS:
1. Inadequate product specific knowledge, especially at the entry level
2. Inadequate understanding of sales promotion, marketing and other
schemes
3. Inadequate communication skills and interpersonal skills is the major
concern as it is relatively easier to bridge gaps in functional skills
SKILL REQUIREMENTS AND SKILL GAPS IN
MERCHANDISING MANAGER /SENIOR MERCHANDISING
MANAGER:
(A)FUNCTIONAL SKILLS:
1. Ability to conceptualize and execute window and in-store display
2. Ability to position signage at key locations
3. Responsible for the overall feel of the stores and for creating a pleasant
shopping ambience. The look and feel has to be consistent across stores and
need to be modified at suitable intervals to sustain customer interest
4. Ability to understanding of visual merchandising concepts, designing store
layouts, visual displays in store windows and on the sales floor. This is required
as retail space in a store is limited and has to ensure that the “retail brand” is
communicated properly
5. Understanding and knowledge of current market trends - ability to ensure that
items in high demand get more share of the shelf space. For e.g. , an apparel
retail merchandiser should know the colors, designs which are doing well at the
6. Sale counters and gives more focus to the same
7. Knowledge of products and customer behavior
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(B)SOFT SKILLS:
1. Good oral communication and interpersonal skills to liaison with
Marketing/purchase and other departments
2. Adequate reporting skills
3. Knowledge of data analysis and the requisite tools such as spreadsheet to
analyze sales trends
4. Shortage of people with knowledge of merchandising concepts. Also, the
number of SKUs (Stock Keeping Units) handled in a retail store is very large and
hence it necessitates prior experience
5. Inadequate understanding of merchandising and its impact on the same – e.g.,
ease of access, relative position in the shelf, location in the trading area
6. Responsible for executing merchandising strategy
7. Ability to liaise with stores and purchase department.
8. Understand the store layout, display scheme and merchandising strategy and
customize it for different stores (stores may be different in size and may have a
different customer profile)
9. Routinely visit stores and ensure that the merchandising scheme is being
implemented appropriately
(C )SKILL GAPS
1. Shortage of people with knowledge of merchandising concepts. Also, the number of
SKUs (Stock Keeping Units) handled in a retail store is very large and hence it
necessitates prior experience.
2. Inadequate understanding of merchandising and its impact on the same – e.g., ease
of access, relative position in the shelf, location in the trading area.
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3. Soft skills required for co-coordinating with other departments.
SKILL REQUIREMENTS PURHASE MANAGER/ CATEGORY
MANAGER:
(A)FUNCTIONAL SKILL:
1. Centralized purchase helps the organized retail firms to exploit the
advantages Of Scale. The manager should able to negotiate better pricing
and other payment terms with the suppliers.
2. Good understanding of the products purchased
3. Ability to track inventory levels
4. Knowledge of various sourcing alternatives and ability to search/select
various vendors
5. Ability to liaise with logistics and merchandising departments
(B)SOFT SKILLS:
1. Good oral and written communication skills are important to liaison with
the store managers and vendors
(C)SKILL GAPS:
1. Inadequate negotiation skills
2. Shortage of skilled people especially at the Manager levels
3. Soft skills required for co-coordinating with other departments
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SKILL REQUIREMENT FOR PURCHASE EXECUTIVES:
(A)FUNCTIONAL SKILLS:
1. Routinely interact with the various vendors and ensure that the delivery of
merchandise takes place in a timely manner. Identifying and screening of new
vendors.
2. Understand the characteristics of merchandise from probable vendors and
communicate the promising vendors to the senior management
(B)SOFT SKILLS:
1. Key responsibility is to ensure proper availability of merchandise in the retail
outlets.
2. Responsible for maintaining the warehouse operations. Should able to come up
with continual improvements to drive down the logistics cost.
3. Design and modify the logistic schemes in terms of location of warehouses and
transport mediums.
4. Negotiate with warehouse owners for leasing agreements and transport
operations
(C)SKILL GAPS:
1. Inadequate skills to customize the merchandising plan to varying
requirements of individual stores2. Insufficient soft skills to liaison with the stores and purchase
departments.
3. Insufficient ability to ensure timely delivery of merchandise during
peak demand season.
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SKILL REQUIREMENTS FOR SENIOR MANAGER:
(A)FUNCTIONAL SKILLS
1. Key responsibility is to ensure proper availability of Merchandise in the retail
outlets.
2. Responsible for maintaining the warehouse operations should able to come up
with continual improvements to drive down the logistics cost.
3. Design and modify the logistic schemes in terms of location of warehouses and
transport mediums.
4. Negotiate with warehouse owners for leasing agreements and transport
operations
(B)SKILL GAPS:
1. (Stock Keeping Units) handled in a retail store is very large and hence the logistics
task is more demanding in the retail environment. Availability of experienced
Logistics personnel is a key challenge
SKILL REQUIREMENTS FOR MARKETING MANAGER/SR.
MARKETING MANGER/ MARKETING OFFICER :
(A)FUNCTIONAL SKILLS :
1. Knowledge of data analysis and the requisite tools like spreadsheets to formulate
loyalty programs and other CRM initiatives.
2. Ability to monitor the various CRM initiatives to gauge their effectiveness and
make suitable modifications from time to time
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3. Understanding of customer profile to develop in store marketing campaigns and
sales promotion activities.
4. Ability to understand customer behavior. Should be aware of the seasonality
factors to ensure proper timing of the sales promotion schemes.
5. Ability to coordinate with media agencies Knowledge of CRM/sales promotion
activities of competing retail outlets. Should be able to
Develop schemes which can break through the clutter
(B)SOFT SKILL:
1. Oral Communication skills are essential for coordinating with the various store
managers and ensuring that the various campaigns are executed properly.2. Good writing skills (English) to generate routine reports. Good knowledge of
vernacular language is also desirable for better marketing communication
(C)SKILL GAPS:
1. Ability to translate marketing knowledge to a retail perspective
2. Insufficient ability to quickly adapt to changing market dynamics and modify the
marketing campaigns. Creative approach to the various
3. Campaigns are also desirable.
4. Inadequate soft skills for co-coordinating with other departments
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SKILL REQUIREMENTS FOR MARKETING MANAGER/SR.
MARKETING EXECUTIVE/MARKETING ASSOCIATE:
(A)FUNCTIONAL SKILL:
1. Knowledge of the various marketing, sales promotion, CRM schemes. Should be
able to communicate the same to the stores in an effective manner.
2. Ensure that the marketing strategies are being implemented at the stores
appropriately
3. Get feedback from the stores to customize the schemes according to the customer
profile in the catchment area and communicate the same to the senior
management.
4. Liaise with vendors for marketing collaterals and ensure that they are properly
used in the stores. Promotion, CRM schemes. Should be able to communicate the
same to the stores in an effective manner.
5. Ensure that the marketing strategies are being implemented at the stores
appropriately
6. Get feedback from the stores to customize the schemes according to the customer
profile in the catchment area and communicate the same to the senior
management.
7.
Liaise with vendors for marketing collaterals and ensure that they are properlyused in the stores
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(B)SOFT SKILLS:
1. Good oral communication skills for interacting with the stores and
other departments
2. Reasonable knowledge of English and vernacular language is a must
(C)GAPS:
1. Insufficient ability to understand and communicate the varying
requirements of individual stores – the Requirement of stores
differs based on locality and format.
2. Communication of the various schemes to the stores in an effective
manner.
FACTORS LEADING TO DIFFERENCE IN SKILL INTENSITY
ACROSS RETAIL SEGMENTS:
1. Complexity of the product
2. Nature of supply chain
3. Changes in the product nature
4. Level of customer involvement
5. Store characteristics
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APPROACH TOWARDS NEW SKILL BUILDING INITIATIVES
1. Skill building programs for store-job
2. Skill building programs for non-store jobs
CONCLUSION :
Megacities (Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad,
Ahmedabad and Pune), Boomtowns (Surat, Kanpur,bhubaneswar, Jaipur,
Lucknow, Nagpur,patna, Bhopal & Coimbatore) and Niche cities
Faridabad, Amritsar, Ludhiana, Chandigarh and Jalandhar) would account
for most of the human resource requirement in retail industry.
Hence it is very much important to bridge the skill gap in Indian retail
industry by keeping in eye that it is going to be the fastest growing sector
of the next decades if government of india is going to approve FDI in retail
sector.