The Indian retail industry has been rapidly evolving, but the disruptions and pathbreaking changes can be seen dominating more so, especially over the last 5-6 years, thanks to modern technologies, the internet, and paradigm shift in consumer behaviour patterns. It was not long back when a physical store owner used to only consider the nearby retail stores as their competitors. Cut to 2022, even a small retail store owner is competing with not only the nearby small and mid-size retail stores but also the supermarkets, hypermarkets, local and global retail chains, and the invisible competitors – the online sellers or online retailers. Be it a small retail store owner or a giant retail chain, every retail player is now in search of the winning mantra that can help them to update, innovate and revamp their businesses and stay relevant in the era of modern retail.
Now, online shopping is directly impacting and competing with the mid and small retail owners in metro cities with the additional advantages of heavy discounts, product options, rapid deliveries, and single-touch order placements. The digital revolution, cheaper internet and smartphone costs, entry of new online shopping channels, and the pandemic have already fueled up online spending and purchasing in India, a study by Boston Consulting Group expects online shoppers to nearly triple over the next decade, and online retail spending to grow nearly sixfold to reach USD 300 Bn by 2030. But the half-truth to this story is that despite all the factors and disruptions, online retail still accounts for barely about 5-6 per cent of Indian retail.
At present, a nearly 900 billion Indian retail sector is still dominated by mom-and-pop stores. The story doesn’t end here, brick-and-mortar stores, are also expected to be continuing touching the rooftop for the next 3-4 years as a recent report ‘Real Estate Market Outlook 2022’ by one of the country’s leading real estate consulting firms shows that India could see a 25 per cent jump in new store openings in 2022. The robust presence and dominance of small- and mid-sized mom-and-pop retail outlets are the reason why leading retail chains and players such as Reliance Industries, D-mart, and Future Retail are all competing for offline customers, even online giant Amazon is aiming the local stores by helping them to turn into ‘Digital Dukaans’.
The trends, technology, and rapid disruptions have turned the Indian retail space into a highly contested market, and the answer to leading the retail sector lies in gauging and decoding the constantly evolving consumer behaviour patterns. Only ‘Pay and Purchase’ or ‘Buy and Sell’ is no longer the meaning of shopping for the young and affluent shoppers, now they look for an immersive and hyper-personalised shopping experience and wisely opt for the platforms – online shopping, physical store, or omni channel purchase, as per their convenience. A survey by the Retailers Association of India (RAI), further concretes the Omnichannel consumer behaviour pattern by showing that more than 80 percent of Indian consumers prefer both online and physical store purchases.
Online shopping has made the purchase process easy, yet in-store immersive physical store experience, product quality, fast availability, easy return, post-sell service and satisfaction are among the top factors, customers prefer physical store purchases despite having a one-touch online shopping option. The winning mantra is that the retailers are looking for the ‘Phygital’ – the right combination of physical and digital options to provide a complete buying experience.
Online shopping is now not just a place to purchase rather it’s an exploration platform that derives inspiration for the purchases whether the transactions get converted online or in the physical realm, while people first visit the physical stores to be assured about the high-value online purchases. In short, modern customers prefer the combination of Physical Stores and Digital Options or “Phygital Purchases”, where hyper-personalisation is paramount for them.
To provide a seamless buying experience, it is a must for the online players to provide a smooth payment experience, easy-to-return options, reduced delivery time, and authentic product delivery. While, the customers will be expecting an immersive and seamless in-store experience, large clean supermarkets, hyper-personalised product options, eye-catching displays, and easy-to-collect & check-out systems from the physical stores. In-store purchases or online shopping, retailers will have to learn, adapt, and provide the “Phygital Personalised Purchase Experience” for survival in the most fiercely contested modern retail market.
Views expressed above are the author’s own.
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