The Boston Consulting Group (BCG) with the Retailers Association Of India published a report back in 2016 stating that the Indian retail sector is projected to double from USD $600 billion to USD $1 trillion, by 2020. Despite the steady rise of e-commerce, the offline retail industry constituting the big players/chains to the small brick and mortar stores have held their own & exhibiting a strong growth and an even better projected growth rate of 10% putting India ahead of China by 2025.
Statements say that the online retail stores have the future in their bag are not accurate, but the fact is that they pose great competition. Trends indicate that e-commerce market in India is expected to grow to USD $70 billion dollars in the next 5 years; and there are a few things that they are better equipped to do. Functioning in the virtual world, online stores have a click of a button access to customer behaviour and buying patterns. With the right analytical tools and integration systems that advances in technology, big data, and small data present, empowers them the means needed to meet customer expectation and improve conversions by leaps and bounds.
While online stores have the benefit of convenience, variety, and price, the one thing that still holds them back is that they cannot deliver the same all encompassing feeling of satisfaction that comes from the ‘touch and feel’ that an offline retail store can.
Building Customer Experiences
A SEAMLESS EXPERIENCE. The only expectation that customers have from the retail industry today.
Customers are plugged into the digital world 24*7. They demand to have access to information as and when they need. It is a world of instant gratification that we live in. It is essential that the retail industry is just as plugged into the digital world today, especially offline retail stores if they hope to compete with online retail world. It is an absolute must that their marketing strategies are mapped keeping in mind their digital presence. But simply being present in virtual space will not cut it anymore. It is just as necessary for offline retail stores to leverage their day to day interactions and the technology that is available today to enable business intelligence that can drive better understanding of demand, pricing and visual merchandising.
Big data in itself is not driver. Big data when sliced and spliced right will be help you build accurate understanding of the contextual experience that your customers expect. It helps you to understand who they are and what they aspire for, which is the key to unlocking their expectations. For example, the telecom industry is driving big analytics to understand customer consumption patterns to push heavy data content and phase out free or unlimited data plans. The retail industry in today’s world needs to apply the same intelligence to gather customer interactions and buying pattern across the virtual and real world to build more seamless experiences.
The offline retail stores need to enhance customer engagement using these patterns to deliver better experiences in store. Buying patterns and the customer's lifecycle indicate what they want but the crux of the experience still depends on the emotions that are created and catered at the store itself. That is where sales conversions happen driving up revenues and enhance the loyalty in customers that reduces the cost of acquisition over a period of time. But there is so much more a retail store can do with big data as long as the focus is not just on the product and also the lifestyle the customer wants to project by owning a certain set of products. Help them build the the lifestyle they want and you can be sure of a greatly improved CLTV. CLTV is not a concept that is reserved for the ecommerce industry alone. CLTV plays an important role in the offline retailing where the CAPX is higher.
The foundation - In store design
The metrics of measurement when it comes to calculating ROI and sales conversions are numerous in the retail industry as it is with any other industry. But every metric boils down to how many items the customer has bought and how many times do they come back to buy. And the root to these metrics lie in visual merchandising or in store design to put it simply.
While big data will help you make decisions on what products to display and what are the customers preferences when it comes it’s pricing, visual merchandising will help you create the environment that entices the emotional connection that your customers build with the brand enhancing sales conversions. Something as simple as lighting impacts the sales conversion largely. The right balance will ensure that the products are displayed at their best. For example, neon lights are rarely used in stores for they quite literally present the product in bad light. The colours for the fixtures and even the walls used in store are not only a result of branding guidelines but also a need. Some colours attract attention, while others ensure that once you are in the store you have the sense of calm needed to spend time. After all the more time one spends in a store, higher the chances of an increase in the units of goods they buy. While we humans are visual creatures, visual merchandising works it magic best when it can engages all 5 senses. The most impact is felt with a layout that allows the customers to touch and feel as many products as possible on display.
The right layout with the right equipment forms the very basis of ensuring visual merchandising is working in your favour. Considering that customers also expect every experience to be tailored ensuring that your equipment has the functionality that enables adjustments to it and therefore the layout of your store is critical. But it does not end there. The influence of the right equipment is also felt in the impression that it makes in a customer's subconscious. Every individual is by far the most attracted to what is just a little bit more than he can get at that very moment. Having the right equipment can ensure that you can make the most of this human tendency. Make a wise choice; spend a little more on well made and tested products with brands like Instor. The ROI will speak for itself.
Lay the foundation right and keep forging ahead. The need of the hour for any offline retail store today is pay attention to the experience they deliver. While as SMB you may not be ready to integrate advanced technology because cost and feasibility is a real constraint, you cannot afford to not have the foundation in place.
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The article has been penned down by Mr. Gautam Das, Vice-President (Sales & Marketing), Instor by Kider India Pvt. Ltd