Small Retailers' Achieving Competitive Advantage through Innovative Services

The service sector has emerged as the largest and fastest growing sector of the Indian economy. Services constitute a major portion of India's GDP with a 57% share in GDP in 2013-14. Retail has a large share in the total service sector in the country. There are 14 million outlets in the country and only 4 percent of them are larger than 500 square feet in size. India has about eleven shop outlets for every thousand people. These are typically family owned and operated stores (KPMG 2014). The entry of large retailers has changed the retail landscape in India. The penetration of large retailers is expected to increase from 7.5% in 2013 to 10% in 2018 at a robust CAGR of 19-20% during the same period (Ernst&Young 2014). To meet the competition from large retailers, small retailers have adopted innovative services to attract, satisfy and retain customers.

This is an empirical research paper based on primary data collected by administering questionnaires to small food and grocery retailers in Bangalore. Information from large retailers has been collected by using an interview schedule. The study revealed that adoption of innovative services such as new customer services adopted and the technology use have facilitated small retailers achieve a competitive edge over large retailers.

The research findings will assist small retailers to understand the need for adopting innovative services to develop a competitive edge over large retailers. The study outcome will provide an insight over the debate that the entry of large retailers has impacted the survival and growth of small retailers. The limitations of the study are: it is based on the data provided by small retailers and the study is confined to Bangalore city.