26 November 2022, Mumbai:
Key tenets of the retail industry Indian retail sector has been a point of discussion in trade discourse with noises/conversations around putting the customer at the center powered by business models, newer connectivity models on the back of the 5G rollout wherein live streaming, near real-time data, is taking you where your customer is heading to.
And levers like the burgeoning middle-class population, one life one chance syndrome, and where the debate on Spenders vs Savers drives consumerism.
Growth of Conventional Retail
One of the recent studies put out by consulting firm McKinsey & Co. is of great interest to the industry giving insight on conventional retail," Conventional retail starts to see shrinking space under its feet expected to fall from 85 percent currently to a much lower level of 65-70 percent in the coming say 4-5 years and surprising none as we have seen e-commerce and modern trade retailers are leapfrogging & clocking an increase of 30 percent or thereabouts".
The thesis," Increased internet penetration will enable India to become the second largest e-commerce market by 2034 globally from its current ninth rank. By 2030, 1.3 billion Indians will be able to access the internet and smartphones with 500 million online shoppers" says AkshayGulati, Co-founder, of Shiprocket, a logistics software platform.
Emerging technologies for Services and Solutions
As cliché goes technology is an enabler. The evolving technologies marching retail to the future enable retail transformation given retail industry is on the cusp of revolutionary growth. Modern retail alongside the rejig in conventional retail is responding to the fast-changing consumers' buying perceptions and preferences.
Essentially these dynamic technologies have started to help companies realize the greater purpose and meaningfully achieve the most complex business objectives.
The CBRE report recommends retailers infuse more technology in stores. Already, apparel retailers are using technology like virtual trial rooms and smart mirrors to for customers to ‘experience’ the outfit or accessory instead of actually putting them on.
The changing landscape
In hybrid mode, the cliché goes like this," The best of the two worlds". Given that the 'Online and offline channels in a very competitive environment' were once two altogether different worlds but no more particularly with the rise/dominance of e-commerce more importantly the emergence of mobile e-commerce, the line between online & offline is only becoming thin. As trade is trying to address a very different set of customers.
Digitization of retail
For a fashion retail brand, digitization means re-imagining how shopping in a digital world should play out, rather than merely digitizing the shopping process for a physical world. The digital transition is greatly impacting almost every industry. Effective data management or business management are just two aspects of this transition: cost savings and improved productivity.
After studying the possibilities of digital technologies, fashion retail firms have started integrating technology into every aspect of their operations. Geographical limitations are no longer an issue thanks to technology, as customers can now shop anywhere.
Innovations in payments
A case in point is a recent innovation hack e-tailer Amazon has demonstrated helping stores set up online outlets. Amazon has launched a new initiative called smart commerce that will help offline stores set up their own digital store-fronts in addition to selling on its India marketplace.
Another classical example is demonstrability comes from Snapdeal's e-marketplace with the integration of Cashfree Payments’ product ‘Cashgram’, Snapdeal will be able to process refunds with only the customer’s mobile number or email address, with credits automatically flowing to the customer’s UPI-linked bank account, or wallet.
The ability to analyze client behavior, however, is a crucial talent. Let us look at some of the infectious In-store solutions enhancing customer engagement driving sales and volume growth. Visual merchandisers present, arrange, and display goods in shops and storefront windows, which are essential locations where buyers may view, choose, and purchase goods.
Personalization of the customer journey This is driven by the demand for plug-and-play outlets, particularly for small, independent firms. Showrooms with personalized designs are becoming more popular.
Improving In-store experience can help retailers not just boost sales, but also increase customer engagement, according to the findings of a report by realty consultancy CBRE released earlier this year.
Customer of the day
Direct touch with clothing and textiles, smells and odors, and music selections should all be in keeping with the brand, store type, and target demographic. That is a big debate point that customers are looking for engaging, immersive, and convenient experiences that give them a reason to visit stores instead of making online purchases.
As a result, experiential retail is counterbalancing the growing popularity of e-commerce, and ensuring profitability by increasing the brand’s physical presence, the report adds.
Retailers are favoring dynamic and flexible lease contracts as they meet rapidly changing consumer expectations.
The fashion industry has come to understand that adopting a direct-to-consumer (DTC) approach gives a retail brand more flexibility over how it presents itself to customers due to the sector's warming up to digital methods.
Retailers may develop at-home experiences, interact directly with customers, and foster brand loyalty by using subscription boxes.
Logistics & supply chain
The number of e-commerce logistics shipments is expected to grow by four times in the next five years.
Thanks to new-age tech-enabled players who have entered India’s logistics arena, it is now easier for small- and medium-sized businesses to transport goods, and there is a drastic increase in the speed and efficiency with which parcels are delivered.
Data Is The New Oil
Since many retail businesses still view their data infrastructure as a cost center, they should use the data to continually enhance every aspect of their operations to turn it into a profit center.
The majority of apparel/retail firms plan to increase supply chain transparency by 2027 but obstacles remain, a global survey by KPMG and Serai finds.
There is a tremendous possibility for any firm in the world to develop new goods and services across business lines by combining internal data with external data.
Ajay Banga, Mastercard’s CEO, added that data is even more valuable than oil, considering that oil is a scarce and finite resource, while data is inexhaustible and only increases.
Competitive Pricing is Tricky
When setting prices for items, it is essential to consider the target market's comfort level with price and purchasing power.