The Indian retail scene is set to change forever. While the COVID-19 pandemic may have caused severe disruption across the globe over the past few months, it has offered valuable insights as to how the retail sector is set to evolve in the days ahead.
Prior to the pandemic, 86% of surveyed millennial shoppers and 56% of Gen X shoppers have already indicated that they have shopped in a store and left without a purchase only to end up buying the item online, according to Zebra’s 2020 APAC Shopper Study.
E-Commerce gaining momentum
A report by Bain and Co. further pointed out that India’s e-commerce market is set to clock $100-120 billion in gross merchandise value (GMV) and have a total of 300-350 million shoppers by 2025. But before we jump to the conclusion that this must spell the end for physical retail stores, the same Bain and Co. report also highlighted that India’s e-commerce segment today only accounts for 3.4% of the overall retail market with 100-110 million users and an online GMV of around USD$30 billion.1
E-commerce has not made physical stores obsolete, contrary to what headlines would suggest, and e-commerce retailers, including digitally native stores, are often sending their customers into brick-and-mortar locations for “buy online, pick up in-store” (BOPIS) transactions and online returns.
Retail remains critical
Retailers have not been forced to abandon the operating principles that have sustained storefronts for many decades either. The convenience of online shopping has simply compelled retailers to set and strive for new customer experience, operating and inventory efficiency standards to appease 21st-century shoppers who expect instant gratification, whether in the form of information, products, or services.
So, it is not all doom and gloom for physical store retailers just yet, if they can implement the right technology to modernize their stores and supply chains. However, it can be difficult to determine which technologies truly give retailers the ability to sense what is happening in their operations or in the market and analyze the reasons.
Need to invest in intelligent technologies
Without the right technologies in place, it is nearly impossible to know how to “act” in real-time to resolve issues that could negatively impact a shopper’s in-store experience, such as a misplaced item that could look like it is out of stock, or to take advantage of an opportunity to increase basket size.
Some brands may just want to know if the investments they are making in new mobile computers at the point of sale and workflow software in stockrooms are enough to gain the intelligence they need to better serve customers. They may also require insight into the need to integrate additional layers of “intelligent” technologies, such as an Internet of Things (IoT) platform or a prescriptive analytics solution, to make those devices, and the workers using them, as smart as they need to be in today’s retail environment.
And just how much could an intelligent automation solution improve the in-store experience for shoppers? Could a robot-like device roaming the aisles checking inventory levels and planogram compliance really prevent out-of-stock scenarios, and therefore shopper walkouts?
These are the questions that will be answered soon as the results of these pilot programs start to roll in. However, there are other factors that retailers should consider while engaging in their own pilot programs to pair the right solutions with their individual needs. These factors, along with variances in infrastructure and labor assets, all influence modernization strategies and technology outcomes.
Retailers must move from “systems of record” to “systems of reality” if they want to sustain the success of their physical stores in a digitally empowered economy. Only those with a certain level of operational intelligence and agile execution can adapt to changing market dynamics in real-time and meet customer expectations every time they walk in the store.