The trends that we saw in 2014 and 2015 will continue through 2016. While we still wait to see what unfolds on the FDI in retail front, eCommerce is expected to continue its growth trajectory. While not many new regional shopping centers are expected to open in 2016, the existing organised players will continue to mark the market trends.
Brands Maximising Customer Engagement
Today, having an optimised, cross-channel mobile strategy is critical for companies looking to win new customers and increase more interface.. Accessible anytime, anywhere, today’s mobile-centric consumers are constantly connected. From SMS, to e-mail and push notifications, WhatsApp, retailers and consumers have numerous options for sending and receiving messages. Retailers that leverage multiple mobile marketing tactics, based on mobile user preferences and needs, see the most return. With mobile as the critical channel for the instant customer engagement needed for companies to stay ahead of the competition, companies can tailor their mobile marketing by using different mobile friendly ways to offer messaging that drives customer behaviour.
Today, mobile strategies for retailers are essential. These can be powerful buying influencers and can even serve to push customers towards stores. Mobile marketing to your customers via push notifications when they are near your shop or when they enter it – otherwise known as “geo-fencing” is a great way to kick-off in-store engagement. In store, your posters and other forms of advertising should all support your mobile campaign. NFC (Near Field Communication) Devices can also be attached to your posters to enable customer interaction.
Indian Consumer Market Different from Asian Markets
India is growing at an average annual rate of 7.6 per cent for the past five years and it is expected to continue growing at an equal if not faster rate. The rapid economic growth is increasing and enhancing employment and business opportunities and in turn increasing disposable incomes in India as compared to any other Asian markets. The Indian consumer market with 1.2 billion people, a huge middle class and the 3rd favourite destination for investments is one of the largest consumer markets globally. Increasing urbanisation, increasing incomes and rising aspiration for a better life, especially, among the lower economic strata are some of the factors reshaping the Indian consumer market.
The result of this flux is a new Indian consumer who is more discerning than ever, ready to place his money on brand, quality and convenience and eager to explore the organised retail market. Increasing penetration of media and infrastructure facilities will expose the rural India to urbanised lifestyle and fuel the latent desire for improved living standards. For instance, international fast food chains have had to Indianise their pizzas and burgers to attract consumers here.
The Indian consumer market, which is primarily dominated by the younger generation, is becoming increasingly sophisticated and brand conscious. This modern consumer wants his purchases to reflect his lifestyle or at least the one he aspires for. As a result of this brand consciousness, the food and beverage segment of the FMCG sector is already witnessing a significant shift in demand from loose to branded products in India.
Learnings Retailers take from e-retailers in Terms of running their Businesses
The digitally enabled store: Retailers now have to create digital shopping ‘experiences’ which bring digital technology into stores. This may include iPads by the dozen, lots of video screens, including full-length screens which convert into mirrors, as well as clothing which have been chipped to trigger catwalk videos when near a mirror. Some of the gadgetry may be beyond the budgets of many offline retailers, but tactics like adding Wi-Fi and using prompts for mobile users don’t have to cost a fortune.
Offer unique products: This obviously isn’t possible for every store, but if retailers’ products cannot be price-compared, then showrooming is less of a challenge. Indeed, Retailers are asking suppliers to create product lines that can only be sold in stores, thus reducing the impact of showrooming.
Launch an app or mobile site: The threat posed by comparison apps and sites, and those offered by e-retailers like Amazon, Flipkart, shouldn’t be underestimated. Chances are, if you have a product that Flipkart, Amazon etc. also stocks, it will probably be cheaper there. Add to that the flexible delivery and free shipping options and it’s easy to see why it’s a threat. However, if you can point customers at your own mobile sites and apps for product research, then this e-retailers effect can be reduced. If they can see product details, reviews etc. then they may not feel the need to head elsewhere. Prompt people to download it in stores, add prompts to product displays, even incentivise people to download and use apps and sites with discounts and other offers.
Use reviews in store: Consumer reviews are powerful, and if they work online, why not use them offline? Of course, retailers should prompt customers to check out the reviews on their own sites while at the store.
Offer excellent customer service: As the online channel matures, and growth slows, customer service (and customer experience) will be the key differentiator. It can also trump price in some circumstances. For some purchases, price online will be the deciding factor once the customers decide to buy a certain product, but they will also appreciate great service and the personal touch.
Make sure staffs have the knowledge: One of the reasons in-store shoppers turn to their mobiles is to find information, so why not make sure they can find out more in-store? If staffs are knowledgeable enough to answer customers’ product queries effectively, then they may not need to head online.
Use social media: If people are in your stores using their phones, why not find a way of turning this to your advantage, and getting these 'showroomers' to promote your store? One example of this comes from today’s brands are persuading customers/bloggers to promote at the shop. After receiving free style and make-up sessions, shoppers/bloggers are being invited to create a digital postcard using the photo-sharing app, Instagram/Facebook with hash tags.
Challenges Faced by a Retailer in the Wake of Rising eRetail Popularity
Emergence of Internet retailing (e-tailing) and eCommerce as a completely new space is driving the growth of number of online shoppers. As a result, the Internet retailing companies are getting attracted towards Indian markets which are poised to grow leaps-and-bounds in the years to come. There are about 17 million online shoppers in India and the number is projected to grow over three times in the years to come. The challenges retailers are facing due to online retailers are not the ones which cannot be worked upon, retailers, exceedingly and increasingly, will have to channelise their strategies.
Challenge One: Multi-channel brand management
As consumers continue to shop beyond the traditional eCommerce site, online retailers are faced with the challenge of providing a seamless brand and customer experience across channels, including mobile, shopping engines, marketplaces, and of course, their bread-and-butter-eCommerce site. From managing inventory to ensuring integrated branding and even keeping track of customers’ purchasing paths, bridging the gaps between these various outlets is of importance for retailers’ short- and long-term operations and business viability.
Challenge Two: Battling the Giante-retailers
With market share continuing to move to mega-e-retailers like Flipkart and Amazon, the smaller players will have to find new and innovative ways to keep up. Branding and customer service is a key component to differentiate themselves from larger, low-cost retailers, as is an increased push toward savvy marketing and gaining avid customer loyalty.
Challenge Three: Managing data
Retailers have overflowing and massive data, such as web analytics, e-mail metrics, sales patterns, customer segmentation and more. This means that a balance needs to be struck. . .not only do retailers need to wade through all the data, they need to decide which metrics are of the highest importance and not be distracted by outlier data that can take their strategy off the course.
Is e-shopping changing the way people shop?
In India, youth are technology advanced, and they are the ones who are primarily shopping online. Traditional people still want to come out with their families to the malls. They want to spend their day, eat, shop and have fun. Indian shoppers are a mixed combination of people who want to touch and feel the product before buying, whereas there is also the cross-section of shoppers who prefer the armchair approach. But there is yet another section that does not trust online retailers because of some bad experience of the past. India as a market will never go shopping online completely. There will always be a balance.
Yes, to some extent e-shopping has changed the way people shop, and that is a good thing. When marketplaces get more competitive, organised retailers get in better shape, and improve on shopping experience parameters – customer service, loyalty, pricing, in-store experience, etc. In the end, it is the customer that benefits.
Authored by: Aditya Sikri, CEO, Retail and Commercial, Mantri Developers Pvt.Ltd.