Traditional demographic variables cannot clearly identify the complete characteristics of an evolutionary retail market, as consumers in the same demographic group have diverse psychographic makeups. Therefore, psychographic factors influencing consumer behavior have to be understood more closely by organized retailers. Further, organized retailing itself has a tremendous influence on consumer behavior. Thus, consumer behavior and organized retailing have reciprocal influences on each other.

The retail sector is one of the fastest growing ones in India, catering to the world's second largest consumer market. The Indian consumer market is estimated to grow at 13% annually from $322 bn in 2006-07 to $590 bn in 2011-12. Organized retail, which constituted a low 4% of total retail in 2006-07, is estimated to grow at 45-50% per annum and attain a 16% share of the total retail market by 2011-12.

So far, the prominent organized retail sector players have been largely restricted to urban areas. In fact, their emergence and growth has been phenomenal in metropolitan cities and in other large cities. However, of late, organized retail has started making inroads even into smaller cities. Infrastructure constraints, huge distribution costs owing to large geographical area, fragmented market, and absence of national distribution nodes and networks, are the main limitations faced by organized retailers today in India.

The Indian retail sector is still predominantly unorganized. However, organized retail units are fast emerging and becoming the preferred choice of consumers, especially in urban areas. This development is attributed to a number of factors. Firstly, economic liberalization has facilitated the entry of multinationals into the cash-and-carry business and single brand retailing. Multinational companies are also taking advantage of India's low-cost labor and raw materials to make India a sourcing hub, as well as a market for their products. Secondly, increasing income levels and a growing sense of brand consciousness among India's middle and higher income groups have led to increased popularity of organized retail units.

The changing consumer behavior is increasingly shaping organized retailing and is, in turn, evolving with new found options and opportunities. On the sociocultural side, the growing number of nuclear families, general improvement in education levels and, most importantly, continuous rise in women's economic independence through jobs, as well as entrepreneurship, has made women play a more proactive role in shopping for the family. This has led to an increasing number of customers availing of convenience options such as supermarkets, where most of the shopping for daily necessities can be done under one roof.

Marketing Mastermind Magazine, Consumer Behavior, Organized Retailing, Economic Liberalization, Retail Sectors, Indian Consumer Market, Retail Markets, Economic Development, Grocery Segments, Urban Markets, Socioeconomic Strata.