As we had traditionally known, retail has undergone severe disruption in the past decade, thanks to the advent and immediate popularity of e-retail, digital payments, and door-step delivery. The COVID pandemic has further accelerated digital adoption across retail channels, including physical brick and mortar stores offering online order placements and aspiring to create an omnichannel presence among a host of other digitized services.
The Indian retail market consists of the unorganized sector, including conventional family-run neighborhood shops, and organized retail, such as brick-and-mortar large retailers and online shopping sites, is the third-largest in Asia and fourth-largest in the world. The sector is expected to cross US$1.75 trillion (approximately INR 126 lakh crore) by 2026. The grocery sector accounts for half of India’s retail consumption, and kirana stores—conventional mom-and-pop stores, account for about 90% of the grocery retail market.
The fast-paced growth is set to be driven by several factors, as pointed out by Zinnov’s Digital Engineering in Retail study report. As per the study, India is fast becoming a retail test-bed, thanks to a large base of existing e-Commerce users (110 Mn), the presence of retail Global Centres Of Excellence (GCoEs) (25+), a large number of start-ups focusing on retail tech (465+), and also significant digital talent (1/8th of the world’s digital talent is expected to be based in India by 2030) While no-contact deliveries and cashless payments are two of the most popular and widely used tech tools by offline retail, currently, there is a vast range of tech-enabled tools that leverage AI, ML and other features, to make conventional retail safe and smart for the modern consumer. The Indian organized and unorganized retailers across grocery, furniture, and apparel, witnessed an increase in multi-channel shopping as lockdown prompted consumers to turn to non-eCommerce platforms like WhatsApp ordering to takeaways and curbside pickups. Below are some other digital adoptions that can help Indian conventional retail to accelerate growth and thrive include:
Digital payments and POS technology
While cashless payments and digital wallets powered by Adhaar and UPI have been around for a while, there has been a remarkable adoption by smaller unorganized retailers who are now moving away from a cash or card payment to other modes of digital transactions. Apart from the payment digitization both at the store and in COD, retailers can also adopt SaaS solutions that can allow them to integrate POS and e-commerce or other omnichannel sales platforms to optimize consumer engagement and boost sales. Effective synchronization can allow retailers to conduct both online and offline transactions, keep track of inventory, and run promotions across all offline and online platforms.
While offline and online seem to be the only two known platforms that most retailers can think of, several tech innovations have been introduced to help retailers build strong visibility and a digital connection with their consumers. Digital 3D sampling, virtual fitting rooms, AI-enabled solutions for helping senior citizens and vulnerable consumers with assisted shopping, and chatbots are only some of the varied channels now available, making a difference to retail outlets. From fashion and groceries to stationaries and electronic and white goods, omnichannel retail is changing the shopping experience for new-age consumers
Data-driven consumer engagement
Data analytics and AI and ML-based tools can help retailers build a strong consumer portfolio with precious insights into purchase patterns. From average times a person shops to the regular items bought, personal choices and insights into newer product or campaign launches can go a long way in effectively running discount offers, promotional sales and even introducing specialized inventory. Apart from consumer behavior insights, data analytics can also help run targeted consumer communication, which can boost effective engagement and build loyalty.
Self-service or staff-free shopping
Physical stores without staff or cashiers monitored and supervised only through advanced tech enables infrastructure may sound like an ambitious futuristic idea but is actually the most relevant and feasible one today when social distancing norms are imperative to make physical shopping safe. Apart from contactless payment and smart tech solutions like virtual fitting rooms etc., self-service stores with no cashier, no staff are becoming increasingly appealing. Leveraging RFID tags for inventory, computer vision systems, machine learning, IoT devices, and facial recognition, retailers can now employ a smarter and faster zero contact shopping experience. For example, the Amazon Go Grocery model that is recently being used in the USA leverages computer vision, sensor fusion, IoT, and deep learning to track what consumers place into their cart. When the customer leaves the store, the store automatically charges the credit/ debit card that the customer has on file.
Even as most businesses come to terms with the second lockdown and stricter norms for business operations, tech-enabled disruption will pave the way for a more integrated, sustainable, and smarter shopping experience that helps create value for both small and large businesses as well as consumers.
Author: Mahesh Alayil