New mantra for re­tail – so­cial me­dia, per­son­al­iza­tion...

Progressive Grocer (India) - - Contents -

The suc­cess of mod­ern re­tail across the coun­try is an es­tab­lished fact now. Mod­ern or or­ga­nized re­tail, which com­prised just seven per cent of the over­all re­tail mar­ket in 2011-12, is grow­ing at a CAGR of over 20 per cent and has now at­tained a 10 per cent share of the to­tal re­tail sec­tor. It is ex­pected to dou­ble in size in the next three years to Rs. 1,71,800 crore from the cur­rent Rs. 87,100 crore. With the New Year around the cor­ner, many mod­ern re­tail play­ers are look­ing to turn over a new leaf and fi­nally break into prof­itable ter­ri­tory.

The past few years have been chal­leng­ing, even for those who chose to tread the wa­ters care­fully. But the tide could turn now and re­turns on in­vest­ment, which un­til re­cently were like the prover­bial willo’-wisp, might well start show­ing up. Su­per­mar­ket chain D-mart, with its spec­tac­u­lar IPO list­ing and sub­se­quent jaw-dropping val­u­a­tion, has shone the light to prof­itabil­ity that other F&G re­tail­ers can well em­u­late.

It is ex­pected that the next few months will see the re­tail sec­tor close in on pos­i­tive re­turns. Play­ers like Spencer’s have ex­pressed con­fi­dence about be­ing closer to prof­itabil­ity than ever be­fore and those sen­ti­ments are be­ing shared by sev­eral other play­ers as well. Many of them are rolling up their sleeves to get into ex­pan­sion mode and ex­pand fur­ther in mas­sive ways to cater to the de­mands of the fast evolv­ing con­sumers.

But though the fu­ture looks promis­ing, it will not pay to act com­pla­cent. For one, suc­cess can never be taken for granted. The mar­ket sce­nario is chang­ing fast and new-age con­sumers are shift­ing their pri­or­i­ties in un­pre­dictable ways. More and more con­sumers are mak­ing their buy­ing de­ci­sions by weigh­ing in on fac­tors like con­ve­nience of shop­ping, speed of de­liv­ery and, of course, the cost of pur­chase as well.

Talk­ing of the shifts in the mar­ket and con­sumer be­hav­ior, it is per­ti­nent to point out that the changes we see in the in­dus­try to­day had its ge­n­e­sis years ago. But it is only now that we are feel­ing the re­ver­ber­a­tions of the tran­si­tion. The neigh­bor­hood shops that ex­isted un­til a few years ago have grad­u­ally meta­mor­phosed into small su­per value stores of to­day. This change has been felt promi­nently in the met­ros as well as in other smaller cities and towns (tier II and tier III cities).

How­ever, due to the rapid pro­gres­sion and ex­plo­sion of tech­nol­ogy, the changes in the in­dus­try are now hap­pen­ing at light­ning speed and their im­pact is be­ing felt al­most im­me­di­ately. Af­ter all, we are liv­ing in an age of in­no­va­tions and dis­rup­tions and sat­is­fy­ing the re­quire­ments of mod­ern day con­sumers re­quires keep­ing the ear and eyes close to the pulse of con­sumers. Go­ing ahead, we will wit­ness sev­eral new changes that will fur­ther dis­rupt and trans­form the re­tail sec­tor in In­dia.

Al­ready, it seems that the re­tail mar­ket in In­dia is chang­ing even faster than the peo­ple are able to un­der­stand it. Re­tail­ers need to be well on top of the changes and new trends dis­rupt­ing the in­dus­try. Only then, they would be in a po­si­tion to make in­tel­li­gent and in­formed pre­dic­tions and craft strate­gies based on the new trends with the po­ten­tial to shake up the mar­ket. To keep them­selves abreast of the new un­fore­seen changes, they should make the nec­es­sary course cor­rec­tion and ad­just­ments by mod­i­fy­ing their busi­ness strate­gies and in­tro­duc­ing new for­mats. That will give them a fair chance of cash­ing in on the new trends and capturing a good share of the chang­ing mar­ket­place. There is no other op­tion but for the re­tailer to change be­cause the con­sumer is chang­ing too, as well as the over­all re­tail en­vi­ron­ment.

In my view, re­tail­ers are well aware of the chal­lenges fac­ing them and are equip­ping them­selves to come out on top. They know that the sec­tor has the po­ten­tial and ca­pac­ity to grow for many years to come and so they are trim­ming their sails to suit the new winds blow­ing through the in­dus­try. The growth in the years ahead will be fu­eled by the new gen­er­a­tions, their ris­ing earn­ing ca­pac­i­ties and their as­pi­ra­tions to spend and en­joy life in­stead of fo­cus­ing on sav­ings for to­mor­row. These con­sumers have the con­fi­dence in their own fu­ture, in the op­por­tu­ni­ties avail­able in the coun­try and in their earn­ing ca­pa­bil­i­ties. They will not be de­terred from spend­ing freely and fear­lessly but they will also con­tinue mak­ing bold new de­mands of our re­tail eco-sys­tem. Re­tail­ers, in trend with this new sen­si­bil­ity, will live to grow, mul­ti­ply, and thrive.

The au­thor, Rakesh Gamb­hir, has over 30 years of ex­pe­ri­ence in 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 rakeshgamb­hir@im­ages­

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