The year 2018 witnessed major developments across all industries and verticals, including some of the most crucial turn of events in the retail industry in India. The year was certainly not the same for all—whilethe world’s largest athletic-gear makerNike went on a consolidation spree in India to curtail losses, renownedbrands like Adidas and Reebok shifted towards athleisure upon gauging its potential in the Indian market. From major acquisitions such as that by Walmart of Flipkart, acquisition of Heritage Foods Pvt. Ltd., Lee Cooper and UK-based Laura Ashley by Future Retail to international furniture giant IKEA opening its first store in India at Hyderabad—the retail industry has seen it all in 2018. As we move towards 2019, here are some of the key developmentsthat have been predicted to reshape the retail industry:
The emergence of ‘phygital’ retail
While e-commerce gains traction, traditional brick-and-mortar stores remain just as significant. Both online and offline retail organizations have therefore sought to leverage opportunities through a convergence, christened ‘Phygital Retail’ or ‘Retail 3.0’. The USD 16 billion Walmart-Flipkart deal stands as a major example, with leading international retail corporation Walmart venturing into the Indian market by acquiring77% stake in the country’s top e-commerce player Flipkart. According to the CII-BCG Report titled “Retail transformation: Changing your performance trajectory”, the Indian retail sector is projected to be worth USD 1100-1200 billion by 2020, with e-commerce accounting for a share of USD 45-50 billion, and potentially higher. Supplemented by a phenomenal rise in the ownership and acceptance of digital devices, favourable demographics and changing behavioural patterns among consumers, the opportunities for retailers are ever-growing. In order to tap into the changing market dynamics, these phygital retailers will further expand their avenues toacquire new customers and to engage better with the existing ones.
Content-centric marketing approach
It has now become imperative for retail businesses to stay ahead of the curve by bringing forth an innovative and creative marketing approach with a personalized touch for a deeper connect with potential customers. According to a study by Marketing Insider Group, personally-relevant marketing content increased the purchase intent for 78% of the respondents, with 50% willing to even pay premium for a certain product or service that delivered such content. Therefore, every retailer will emphasize more on connecting with the end consumer through innovative personalized content in 2019.
Technological interventions driving consumer decision-making processes
It has been observed that technological interventions have increasingly been enabling consumers to make better-informed choices along with ensuring right segmentation and enhancing convenience. Disruptions like big data, AI and machine learning have helped personalize offerings through recommendation engines, product customization and precision marketing. Such targeted communications have been driving deeper customer engagement. Digital practices such as augmented reality and social shopping are further facilitating the building of customer trust. Several mature businesses and start-ups have already introduced the digital approach to connecting with consumers, right from the awareness stage uptill the stage of making the purchase-decision. Taking into consideration the robustly growing acceptance of digital disruptions in the country, this approach will increasingly become a vital practice for the retail industry players in 2019.
Augmented consumer buying experience
Both well-established brands as well as start-ups have been trying to enhance consumer experience offline as well as online. According to industry reports by Deloitte analysts, 71% of shoppers in India make use of digital modes before their purchase journey. Furthermore, around 70% of these shoppers prefer using digital devices over taking help from in-store sales associates for product information, pricing comparison, checking availability, and other such activities.Keeping this in mind, retailers in 2019 will focus on incorporating digital interventions to provide a seamless and customised buying experience for every customer.
The article has been penned down by Aditya Bafna, MD, Element Retail