Technology has gained centre stage as a solution to bridge the gap between rural and urban areas and bring people together. The Digital India programme, which, was started with an aim to ‘transform India into a digitally empowered society and knowledge economy’ further gave impetus to the digital transformation of various sectors.
Moreover, increasing internet consumption has catalyzed the consumer to be more connected with shopping, devices, payments, e-medicines, etc. This has contributed to the increased use of digital technologies to create game-changing business innovations that disrupt existing industries or create whole new ones.
Perhaps no other industry is as impacted by evolving customer demands as retail. Today’s customers want quick, easy, and 24/7 shopping experiences. The global retail industry has also undergone many transformations, most of which have been facilitated by technology. This has allowed brands to deliver a better consumer experience and even anticipate and customize trends well in advance.
Digital Transformation Trends in Retail
Over the past couple of years, a lot of advancements have helped retailers streamline their operations and work more effectively. Retailers now get credit easily and do not need to overstuff their stocks like how they had to earlier. There are B2B buy and sell platforms for retailers that enable them to buy/sell from multiple sources across India rather than just from local wholesalers or distributors.E-commerce is another game-changer as retailers now have access to a wide network of buyers and can sell online easily. Many established brands, distributors, and retailers are now going online and becoming digital.
This has affected the offline Indian retailers' business, for instance, in 2019 the sales of offline Indian retailers from electronics, FMCG, gift items, and mobile phones, was considerably down by 40 percent from 2018, according to Dkoding. On the contrary, e-commerce saw a 33 percent rise in sales in the Diwali 2019 festive season. As unbelievable discounts from e-commerce are taking the major share of customers, 70% of offline retail investment on inventory for the festive season turned into a dead investment. Further, the pandemic has resulted in the exponential growth of e-commerce, especially the mobile phone industry has shown uptick sales as the demand for handsets and tablets increased due to online classes.
This has led to many mobile phone retailers demanding no web-only versions or exclusive models for e-commerce operations as it is hitting their businesses badly. There was a time when an average mobile retailer would sell 30-40 phones in a day and now that has come down to less than 7-8.
The B2B Segment
The big, but unglamorous B2B market of India has caught the eyes of many in the last few years. There have been many entrants in the market lately with huge venture capital that aims to simplify trading in India. According to an April 2016 report by the Confederation of Indian Industry and Deloitte, the global B2B industry will grow to $700 billion by 2020. The B2B Aggregation model is rapidly rising and the Indian retailers and distributors are extremely used to it now. Wholesalers now need less time to manage their stock of products and retailers now have more opportunities for the trade than before.
Some of the major drivers propelling B2B industry growth in India are the development of AI and ML algorithms to identify buyer behavior, increased usage of mobile platforms which are providing app-based solutions for customers’ problems, and lastly, social media marketing which is driving user traffic across different market segments.
Digital Commerce 360 highlighted the top reasons B2B companies sell online - 72% of them do so to increase sales, 56% to sell directly to consumers, and 44% to sell directly to dealers, retailers, wholesalers, and distributors.
But the question is, will they stay lucrative in the future as well?
What Digital Transformation do Indian Retailers Really Need?
India retailers do not need a dependency on an e-commerce platform for their business, rather they need empowerment. They need a balance between the traditional way of doing business and the digital business. If their business is running smoothly without any need of going digital, they should have the liberty and space to conduct it that way. What they really need is problem-solving digital transformation:
- Digital payments have been a game-changer and there is a long way to go. This has solved many problems for Indian retailers and continues to do so as the adoption increases day by day.
- Most small retailers are still maintaining their business records traditionally - bahikhata or excel. They need a comprehensive solution that’s customized for Indian retailing- a 360 solution to manage stocks, logistics, accounting, and other operations of a retailer.
- Liquidation platforms are the need of the hour. Slow-moving stock is the biggest pain point in some sectors such as electronics, particularly mobile phones and there is no organized channel for liquidating such stocks.
Summing It All Up
The technological evolution of digital wallets, e-commerce, IoT, mobility, cloud computing, and the emergence of social media in the past few years has completely changed the way retail business is being conducted. As retailers go digital, the future will be even more interesting and full of innovations.