New ways to unlock value in retail
Monitoring and measuring the impact of data-driven initiatives against companyspecific metrics such as gross profit, revenue and inventory carrying costs, can offer significant benefits.
Organized retail in India is only 10 years old but the sector has shown excellent adaptability in absorbing some of the best practices and is moving to the next frontier in retail and brand practices. Most of these changes underway or afoot are good and progressive but they need to be handled with care. Some of these developments for the retail industry to pay close attention to are:
Retail experience: Nowadays, retail stores are providing unique experience to customers besides selling merchandise. For consumer experience and perspective, brick and mortar stores are still extremely relevant; however, customer experience is something that goes beyond the bounds of the physical retailer. For example, promotional features like the use of technology, displays and in-store designs, personalization along with service and operational excellence have been adopted and implemented by brands to attract footfall at retail stores. These initiatives help to build an important connect with consumers.
Confluence of online and offline retail: The trend is fast catching up with shopping centers in India. They are realizing the need to complement the physical ambience of stores with an online presence. Going ahead, e-commerce and brick-and-mortar will co-exist and finally reach a level of maturity and translating into sound business sense for omnichannel players.
Research-based investments: Big Data, fast data and data deluge is taking over the world of businesses, especially the customer-focused ones, by storm. Retail is no exception as more and more customers leave digital footprints with every transaction, interaction and engagement at every retail touch-point — online, mobile, social channels, in-store and even contact centers. Technology is enabling businesses to collect shopper data from these touch-points, analyze it and derive insights to make informed decisions, whether it is for providing a better customer experience, running marketing promotions, deciding on product assortment or gaining tighter stock control. Monitoring and measuring the impact of data-driven initiatives against company-specific metrics such as gross profit, revenue and inventory carrying costs, can offer significant benefits. Digital and m-commerce: Post demonetization, consumers have adapted to digital payment in a big way and are using digital channels for various transctions. The transition from traditional commerce to e-commerce and now m-commerce is being driven by retail segments. Mobile today is more than just a calling device as the internetenabled smartphone is becoming a point of commerce for retail outlets and customers. We see consumers now shopping across websites, apps and in-store as per their convenience. The growth is fuelled by the availability of affordable smartphones and mobile data plans backed by an improving telecom infrastructure.
Today, consumers are split into two categories – those who shop online and those who don’t as they prefer to experience the look and feel of a product. The second type of consumer opts for cash transactions, being new to the concept of using technology as an enabler for financial transactions. Demonetization has thus formalized the process of going digital for financial transactions where concepts such as UPI (unified payments interface) have become easily available to consumers with the regulatory and policy push accelerating the process.
Looking ahead, the retail sector is poised for substantial growth and organized retailing will grow at a rate of more than 18-20% CAGR. E-tailing will form a significant part of the revenue for various retailers. Apart from cashless transactions, changes in the regulatory environment with FDI, GST, and various initiatives to improve the ease of doing business augur well for the future of retail industry.
The author has over 30 years of learnings and winning experience with Food Retail, New concept/ brands, FMCG and Organised Retail. Currently he heads Dubai Overseas Trade office in India and is on the Board of Skill Development – SME for Retail – besides also advising on international food retailing in India. He is reachable at firstname.lastname@example.org