Tech­nol­ogy: Chang­ing the Fu­ture of In­dian Re­tail

Go­ing for­ward, tech­nol­ogy like ‘AI’ will be fur­ther used to get an in­te­grated view of con­sumer be­hav­iour. Pref­er­ences ob­tained from store and non-store-based sales and mar­ket­ing chan­nels will al­low re­tail­ers to of­fer per­son­alised and con­sis­tent ex­pe­ri­ence

Images Retail - - TECH RESEARCH - – By Ina Dawer, Re­search Man­ager at Euromon­i­tor In­ter­na­tional

Tech­nol­ogy has al­ways played a ma­jor role, cre­at­ing a mas­sive im­pact in re­viv­ing the re­tail in­dus­try, bring­ing it renown and re­pute. It is as­sist­ing re­tail­ers to be­come highly-equipped and ad­vanced in the way they en­hance the ex­pe­ri­ence for con­sumers.

The In­dus­try Growth

As per Euromon­i­tor In­ter­na­tional’s re­cent re­tail­ing re­search, the mar­ket size of Mod­ern Gro­cery Re­tail­ers in re­tail value sales at cur­rent prices (in­clud­ing in­fla­tion) was ₹603 Bil­lion in 2017. Mod­ern Gro­cery Re­tail­ers grew at 13.2 per­cent in 201617. The cat­e­gory is fore­cast to grow by CAGR 9.2 per­cent through 2017-22.

The search for a one-stop shop­ping destination keeps mak­ing con­sumers shift from tra­di­tional to mod­ern re­tail­ing stores. Mod­ern re­tail stores at­tract foot­falls in their phys­i­cal store in Tier I and Tier II equally, al­beit for dif­fer­ent rea­sons. As­pi­ra­tional Tier II con­sumers look at mod­ern re­tail­ers as places to ex­pe­ri­ence the new age re­tail. Equally Tier II & III cities have lu­cra­tive ge­ogra­phies for ex­pan­sion of mod­ern re­tail.

Re­tail­ers are tap­ping on to this new mar­ket of as­pi­ra­tional con­sumers in­creas­ingly. The lack of pres­ence of most of the in­ter­na­tional and a ma­jor por­tion of na­tional brands in these ar­eas, have led con­sumers to re­sort to on­line chan­nels in Tier II cities.

Role of Tech­nol­ogy

Tech­nol­ogy – or rather con­nec­tiv­ity – has cre­ated op­por­tu­ni­ties for un­or­gan­ised re­tail­ing by giv­ing them ac­cess to huge pop­u­la­tion, with­out the need of hav­ing a phys­i­cal store. Their prod­ucts now com­pete with brands and have made the com­pe­ti­tion in­tense espe­cially within cat­e­gories where con­sumers are not brand loyal or are price sen­si­tive. This is keep­ing re­tail­ers on their toes and in­creas­ing the need for man­u­fac­tur­ers to dif­fer­en­ti­ate their prod­ucts and for re­tail­ers to en­rich the shop­ping ex­pe­ri­ence and make it seam­less.

The big­gest change is the use of Ar­ti­fi­cial In­tel­li­gence (AI) to an­a­lyse con­sumer be­hav­iour and pref­er­ence at each stage of the shop­per’s jour­ney, for tar­geted mar­ket­ing and of­fer­ing price dis­counts. AI is be­ing used more promi­nently by e-com­merce web­sites or dig­i­tal mar­keters. Go­ing for­ward, it will fur­ther be used to get an in­te­grated view of con­sumer be­hav­iour. Pref­er­ences ob­tained from store and non-store-based sales and mar­ket­ing chan­nels will al­low re­tail­ers to of­fer per­son­alised ex­pe­ri­ences.

The use of tech­nol­ogy has be­come very in­tu­itive as far as shop­ping through mod­ern re­tail is con­cerned. Con­sumers search for prod­ucts, com­pare prices on e-com­merce web­site and buy on­line or off­line de­pend­ing on their con­ve­nience and need. Even for check­outs, con­sumers pay through e-wal­lets mak­ing check­outs quicker.

Im­pact

Within mod­ern re­tail stores, tech­nol­ogy is be­ing used to en­hance the in-store ex­pe­ri­ence, in­crease the con­ve­nience in brows­ing and se­lect­ing prod­ucts and for faster check­outs. Store based re­tail is evolv­ing and in store en­gage­ment is very crit­i­cal. Newer tech­nol­ogy that al­lows con­sumers to browse mul­ti­ple prod­ucts in a short pe­riod also adds to the con­ve­nience.

For ex­am­ple, Van Heusen’s vir­tual mir­ror en­gages the con­sumers and also cut out the trial time. Hyper­city’s self­check­out store in Hy­der­abad, al­lows con­sumer to avoid the billing queues.

Chal­lenges

Re­tail­ers be­sides de­vel­op­ing their Om­nichan­nel strate­gies are now in­te­grat­ing tech­nol­ogy through each node of their sup­ply chain. For in­stance, Len­skart uses LOCUS tech­nol­ogy fo­cused on find­ing the best route to de­liver. Re­tail­ers have been fo­cus­ing on prox­im­ity mar­ket­ing, us­ing tech­nol­ogy to en­hance in store ex­pe­ri­ence. All of these are likely to en­hance con­sumers’ ex­pe­ri­ences even­tu­ally in­creas­ing con­sumer de­light. The only chal­lenge is that each in­di­vid­ual re­tailer is in­te­grat­ing tech­nol­ogy in only cer­tain nodes of their value chain while tech­nol­ogy is al­ready in­te­grated through­out con­sumers’ path to pur­chase and this is likely to cre­ate a gap. Re­tail­ers need to look at the shop­per’s jour­ney from the eyes of con­sumers. This is the only way to pro­vide per­son­alised, con­sis­tent and seam­less shop­ping ex­pe­ri­ences and for re­tail­ers to be­come fu­ture ready.

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