The Indian retail industry has undergone a series of developments over the past many years and it has emerged as one of the most dynamic and fast-paced industries due to both the growth of brands present in the country as well as the entry of slew of new players in the industry. According to IBEF, total consumption expenditure is expected to reach nearly US $ 3,600 billion by 2020 from US $ 1,824 billion in 2017. It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment. This makes India one of the world’s largest global retail destinations and retailers are leaving no stones unturned to grab this opportunity and offer the best of retail experience to the discerning consumers.
Leaving aside offline retail, the country has also gone big with its e-commerce game, driven by robust investment in the sector and rapid increase in the number of internet users. Also, luxury market is growing phenomenally, supported by growing exposure of international brands amongst Indian youth and higher disposable income. Catering to these changes, the retail industry has morphed into a new and modernised version of its old self and has incorporated digitisation, technology upgradation, etc. The year 2019 has defined the market through emerging technologies that have entirely changed the way consumers interact with the brands; there has been a considerable shift in preferences. Consumers are enormously spoilt for choices and retail brands essentially need to run by the code to get the attention of the customers. According to Statista, the market value of apparel across India in the year 2017 was approximately Rs.5 trillion and this is estimated to reach over Rs.9 trillion by 2023. It is a huge market which is only going to get bigger with time and it pays to abide by the retail trends and be future-ready. So what really is working today?
Its all about the experiences
Experience has become one of the key drivers in retail segment today and it draws the focus towards a customer-centric approach where he/she interacts with the product or brand rather than being just a passive participant. Today’s generation chooses to invest in experience rather than products and the retail brands need to attend to these needs. They no longer want to visit the store to only buy the product but they aspire the experience an offline store has to offer to him/her. Also, it has to be noted that experience does not only mean splurging on tech-savvy gadgets but what creates a difference is adding the personalised touch to the overall retail process. Fashion brands like Fabindia, Adidas, Project Eve, Puma, etc., are now moving in this direction. “We believe that experience is the biggest proposition for offline retail as much as convenience is a key to online. And, that’s precisely the reason for launching a first-of-its-kind Puma store in India. With a focus on bringing technology, sports and experiential retail under one roof, our first interactive store showcases an immersive brand space,” asserts Abhishek Ganguly, Managing Director, Puma India. With digitally connected offerings, engagement zones and an in-house customisation studio, the brand’s flagship store is spread over 7,500 sq.ft., spanning three floors. According to ASSOCHAM, experiential retail is set to drive the Indian retail market which will reach US $ 1.1 trillion by 2020.
Augmented and virtual reality
Brands are today gearing up to disrupt offline retail by offering experiences that are intuitive, immersive and something that would create memories. Retail brands are now experimenting with virtual commerce which leverages the virtual and augmented reality devices. Augmented reality (AR) is different from virtual reality (VR) as it overlays holograms on top of the physical world around us. According to few experts, by 2020, the retail industry is slated to be the top spending industry on AR and VR and this will become the norm. AR engages the consumers in the best possible and most interesting ways, whether used to virtually try clothing or beauty products online, or at an offline outlet. For example, IKEA is embedding technology in its India operations. The retail brand is offering an AR app which lets people experience, experiment and share how good design transforms a space. IKEA is one of the first home furnishing brands in the world to bring this technology to the consumer. Patrik Antoni, Deputy Country Manager, IKEA India, says, “The development of AR is a game-changer and an accessible tool for real-life decision making. In addition to digitally placing IKEA products in a room, the app allows people to capture the setting and share as an image or video with friends. They can then purchase the products directly through the IKEA website.” Internationally, brands like GAP have infused augmented reality (AR) into their stores.
Get trend focused with multichannel retail
One format does not fit all markets and the retail brands have understood this simple truth. To be able to succeed in such a competitive market, the retailer needs to be available to the consumer in different formats – be it online or offline. A seamless omnichannel strategy is what will go a long way in today’s retail scenario. An increasing number of pure play online retailers are today entering into bricks-and- mortar space and they open for themselves a new lease of benefits like an improved buying experience for their consumers that includes the option to buy online and pick up from or return to an offline store and vice versa, an integrated supply chain system, brand visibility through an offline presence, etc. A number of online players in the likes of ShopClues, Vajor, Jaypore, and even the giants like Amazon and Myntra have entered the offline space. “Every business needs to tailor-make strategies based on the market they are in. Although e-commerce is growing at a fast pace, there is still a large section of the consumer base that prefers the offline shopping experience, especially among the older segment, who like to see, feel and try the product before investing in it. We want to provide customers with an immersive, interactive experience, which is beyond just a cash transaction,” maintains Puneet Chawla, CEO & Co-Founder, Jaypore.
Apart from being omnichannel, offline retailers are also experimenting with different formats like hypermarkets, large format stores, small format stores, kiosks, etc., depending on the catchment area and target audience.
Organised rather than unorganised
Retail industry is India has been highly unorganised since ages and there was no supply chain management or quality check or customer experience in place and it was only a transactional process where customers would go to the kirana stores or departmental stores for their needs. With changing times and rising disposable incomes, growing urbanisation, consumerism, popularity of nuclear family structure and tremendous growth in number of educated and aware population, uroganised sector is gradually moving towards an organised one. Furthermore, globalisation and the entry of international retail majors have changed the game for good and this has given a push to the number of home-bred brands coming up and even competing against these global players. Roopak Ganguly, Head – Retail Operations and Marketing, V Bazaar Retail, opines that the unorganised markets of Tier-2 and beyond towns too are now shifting to organised retail and value retail chains have become a go-to place for them for their fashion and other needs. “Retail in these areas were largely about local corner shops, owner-manned general stores, convenience stores, departmental stores, pavement vendors, etc. But the digital penetration and desire to look good slowly fuelled the growth of value retail chains which provide the consumers with low priced products that are of a lot of value to them. The rapid growth in the segment is even posing a threat to traditional retailers who have been ruling the market for years now,” he adds.
Integration of disruptive technology
With the advancement in technology and tech-enabled processes, retail industry is gradually moving closer to creating a human-interaction free experience for the consumers. Automation is the next big thing in retail and giants like Amazon (internationally) have already introduced the cashierless technology (Amazon Go) and are also piloting the robot delivery space with Amazon Scout, its cooler-sized robots, to facilitate automated, last-mile delivery to customers in a neighbourhood outside Seattle.
Automation retail is the new trend that is attracting the interest of both small and large retail brands and the market has become a hotbed of technological innovations. Technologies like IoT, drones, AI/ML, robotics, digital traceability, 3D printing, AR/VR and blockchain are and will continue to disrupt the industry. Sharad Venkta, CEO, Toonz, avers, “Technologies like data analytics will be used to gain and retain customers using AI and this will be the differentiating factor. With the help of technology, brands will be able to garner more and more data so that the customers are able to interact with the brand and then take recommendations from them on the same.”
A number of retailers now provide a screen to customers to use and search their purchase history or wish list items or order products that are physically not present in the store and also provide magic mirrors for letting their customers try on garments virtually without actually having to try it.
Be social media-savvy for better reach
In the age of social media dominance, no retail brand can function and be in the favourite list of millennials without connecting with them on social media platforms. Even the runway trends from Milan and New York are transmitted instantaneously through channels like Instagram, Snapchat, Youtube etc. In fact, a number of fashion shows as well as retail brands have also gone ahead to try see-now buy-now models on social media platforms. Devangi Nishar, Creative Director, Aza Fashions, says, “Retailers that are unable to deliver instant gratification will not survive, as customers are no longer ready to wait 3-6 months to get access to fashion trends, and copycats rush to deliver the same thing in a shorter timeline. Brands that leverage social media channels to have an open conversation with followers will be able to occupy more mind and eventually wallet share. It is perfectly normal to begin a conversation on Snapchat, continue it on Instagram and culminate it in a purchase through WhatsApp.”