How Technology in Retail will Help Unleash its True Potential
Future success of brands will depend majorly on brands'/retailers' ability to engage with their respective customers
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The retail sector faced various challenges in 2017, including transformations at the government policy level, technology wise and also in terms of working capital for sustainability. Success in 2018 and onwards, will depend majorly on brands'/retailers' ability to engage with their respective customers
The Indian retail industry, which accounts for over 14 per cent of the country's GDP and around 8 per cent of the employment, has seen many opportunities in 2017, especially with the entry of various brands and new players.
A tremendous increase in brands, stock keeping units (SKUs) and transactions in the last decade has increased the opportunities and also, thrown challenges in terms of space required, working capital availability, trackability regarding customers, transactions and taxations. The recent transformation of change in taxation has created a short-term uncertainty.
Customer retention and acquisition, beyond the regular and walk-in customers, continues to be another big challenge along with increasing cost of manpower and limited availability of retail assistants. The need and demand has moved from unskilled labour model to semi skilled and skilled labours.
Most importantly, lack of use of technology has led to humongous amount of unproductively in retail, also leading to increase in leakages, ending up with shrunken profits.
We need to focus on solutions, anticipating the upcoming trends and how the industry should be riding the newer waves.
Trends in 2018 and Onwards:
Technology is Giving an Opportunity to Engage with Customers Directly
Technology is growing at a faster pace than what was imagined earlier. The brands and retailers who are able to engage with their customers and stake holders will be successful. Both Online marketing and offline marketing are growing faster. Measuring the RoI is possible only if the engagement is percolating to end consumers.
Omni Channel Continues to Grow
The growth in retail is clearly visible in both offline and online. One can't afford to ignore one and focus only on the other. Most brands including that of FMCG should be able to serve their customers on both channels. Beyond this, they should be able to know the consumers, their needs and grievances, irrespective of the channel that they have chosen to shop with.
Creating an Engaging Experience is Critical
Engaging customer experience and brand engagement is crucial. Customer engagement is going to be the next biggest challenge. Especially when the market is highly scattered and many transactions are happening at the multi-brand outlets, brands and retailers should be able to know the technology and avenues that could help them to identify their consumers/customers.
Personalization is the Key to Brand and Retail Success
The importance of personalisation in retail, cannot be assumed, to be a need only in online stores. Personalisation is about knowing a customer well and able to predict their needs and expectations to provide the engaging experience. Personalisation should be extended to offline retailing too. While online transactions are increasing, it is also true that large portion of the retail still happens via offline. Even online-only stores are opening up more offline stores. Knowing the customer at the point of sale is imminent to create an exciting experience.
Consumers are more social and their opinions are highly influenced by social friends. Brands should be capable of being connected on social platforms, share their products and should make it possible to rope in consumers to buy then and there. The experience is further improved by delivering as quick as possible by connecting all offline stores that sell those products. A brand/retailer is now capable of making these outlets virtually a mini warehouse. Thus, being able to deliver from the nearest store, instantly, will delight the consumers.
Small to be Successful in India and Small is Back Globally
India is dominated by small format stores. Many of them, initially, were worried about getting wiped out due to many reasons including the threats from online and large format stores.
But the trend throughout the world is proving the reality that small format are back and will showcase success. Even large formats are opening small formats along sides, to be in the competition.
Convenience, smaller quantities and repeat buying habits along with the awareness of fresh and new models are increasingly becoming the reasons for smaller format trends coming back.
Success in 2018 and onwards, will depend majorly on brands'/retailers' ability to engage with their respective customers. The right-thinking brands and retailers will focus and put efforts on creating a future by adopting technology that helps in integrating in-stores, mobile-stores, cloud, analytics and social media in a unified technology to boost customer engagement.