Physical stores still scores high for retailers even as they adopt online retail
11 December 2024, Mumbai
A new study by NeoGrowth, titled ‘Unlocking Generational Preferences among Indian Retailers’, reveals an interesting dynamics of India's retail landscape. While digital adoption is on the rise, physical stores remain key, even for retailers embracing online sales. This highlights a unique blend of tradition and technology shaping the future of retail in India. NeoGrowth's survey of nearly 3,000 MSMEs across 25 cities looks into the generational divide among retailers, uncovering distinct approaches to business and funding.
Physical stores rules retail
Physical stores reign supreme with almost 90 per cent of retailers across all age groups preferring to sell via brick and motor stores. This preference is even more pronounced among experienced retailers (those over 50 years old), with 96 per cent favoring physical stores. It holds strong even for those who have ventured into online sales as well, indicating the enduring importance of brick-and-mortar establishments in the Indian retail landscape. "This highlights the continued importance of face-to-face interactions and personalized service in the Indian retail landscape," says Arun Nayyar, Managing Director and CEO of NeoGrowth. “MSMEs are the biggest drivers of India's economic growth, and their adaptability is crucial in today's dynamic market."
However, this doesn't mean that retailers are ignoring the digital revolution. The study also reveals a strong embrace of technology, with retailers using digital tools for marketing, customer engagement, and inventory management. Notably, younger generations are leading the way in adopting new technologies, reflecting a shift towards a more blended online-offline approach.
|
Age group |
Preference for physical stores |
|
Young (18-40 years) |
89% |
|
Middle-aged (41-50 years) |
89% |
|
Experienced (>50 years) |
96% |
Despite challenges, 75 per cent retailers express confidence in India's business environment, with experienced retailers (over 50 years old) displaying the highest levels of optimism.
Insights on fashion & apparel sector
While the study doesn't specifically focus on the fashion and apparel sector, the findings offer valuable insights for this dynamic industry. The fashion and apparel sector exemplifies this trend. While physical stores remain crucial for providing a tactile experience and personalized styling advice, online channels are increasingly important for reaching wider audiences and showcasing new collections.
Social media engagement is also high on the agenda. For fashion retailers, engaging with younger audiences on social media platforms is crucial. This allows brands to showcase new collections, build brand loyalty, and drive online and offline sales. By blending online and offline experiences, fashion retailers can create personalized journeys for their customers. This could include offering online styling consultations, in-store pickup for online orders, and exclusive in-store events for online followers.
While the future of retail in India appears bright, challenges remain. The study identifies funding as a key concern for many retailers, particularly younger entrepreneurs. Access to capital and navigating complex financial processes can hinder growth and innovation. "It's crucial to provide adequate support and resources to these businesses," says Nayyar. "Simplifying access to finance and offering tailored solutions can empower retailers to thrive in this competitive market."
Looking ahead, the NeoGrowth study provides valuable insights into the evolving landscape of Indian retail. It underscores the importance of both tradition and technology, highlighting the need for retailers to adapt and innovate to meet the changing demands of consumers. As India's economy continues to grow, the retail sector is poised for further expansion, driven by the entrepreneurial spirit and adaptability of its diverse generations of retailers.
