The Indian retail industry is one of the most dynamic and fast paced industries to have come up in recent years.
According to a report by the Boston Consulting Group and Retailers Association of India titled Retail 2020: Retrospect, Reinvent, Rewrite, India’s retail market is expected to double to $1 trillion by 2020 from $600 billion in 2015, driven by income growth, urbanization and attitudinal shifts.
Although, the Indian retail industry is predominantly unorganized, healthy economic growth, changing demographic profile, increasing disposable incomes, changing consumer tastes and preferences are some of the key factors that have contributed to the growth of organized retail. Today, organized retail in India has huge potential because of the vast market and the growing consciousness of the consumer about product quality and services. But this growth is highly dependent on the ability of retailers in the organized sector to reinvent and stay abreast of the changing times and technological innovations.
Digital is playing a major role in shaping the way consumers buy. There are currently 35 million people buying online and this number will increase to 100 million in the next two years. The e-commerce boom has been a major disruptor in the Indian retail space. The main reasons for its success have been competitive pricing and convenience for consumers. Consumers are buying everything online; even big-ticket items such as houses, cars and two wheelers. Despite its success though, it only constitutes 8-10 percent of the total retail market. However, greater acceptance of technology among consumers is paving the way for more web-based shopping experiences in physical stores. As a result, brick and mortar stores are adapting to new technological trends to stay abreast.
Here are some of the retail technology trends that show promise in the Indian retail industry:
- Omnichannel retailing – According to a PwC report “Building retail businesses for tomorrow today”, in the upcoming years, India’s retail industry will go the omnichannel way of shopping. The report says that digital transformation has become a means to overcome infrastructural difficulties and has led to a proliferation of multiple channels leading to retailers moving on to a consumer centric operating model which is anticipatory and responsive to changing consumer behavior.
- In-store analytics – By using indoor positioning technology such as beacons and Wi-Fi, brick and mortar stores can leverage the advantage of their physical presence to study consumer behavior patterns, travel paths, heat maps, dwell time etc., and use this to enhance the store layout and in turn, provide better in-store experience.
- Indoor positioning technology – Using indoor location data, retailers can target customers better with promotional offers and advertisements, while also improving their in-store experience with provision of features such as smart product search, smart shopping lists, and indoor maps to aid quick shopping, all on their handheld devices.
- Evolution of experience stores – These are basically physical showrooms for e-commerce websites, where customers can see the products first hand, and gather information about them, but not buy them. Orders can then be placed with the store or online, and the products can then be shipped to the required location. This allows customers to enjoy the convenience of e-commerce while experiencing the benefits of shopping in a physical store. This trend has come to be known as ‘Reverse Showrooming’ or ‘Webrooming’.
- Personalization – According to an Accenture Interactive study, “56 percent of consumers are more likely to shop at a retailer, in-store or online, that recognizes them by name.” But personalization doesn’t end there. Online engagement with consumers can be used to collect data about transaction histories, preferences and behavior of individual consumers which could then be harnessed to give value added services and personalized recommendations to them. In a survey conducted by PwC in 2015, 55 percent of the respondents indicated that among in-store technologies, real time personalized offers would make their shopping experience better.
- Retailtainment – As the name suggests, ‘retailtainment’ is a fusion of retail and entertainment. In order to stand out, retailers can start offering fun and unique experiences in-store by incorporating some lifestyle elements such as boutique coffee shops or virtual reality. These unique experiences will give an incentive to customers to travel to the physical store.
- Mobile Wallets – In 2016, demonetization of two key Indian currencies paved the way for the growth of mobile payment apps such as Paytm and Freecharge. In- app and digital payment options will continue to grow popular and customers may soon start replacing physical wallets with mobile phones.