June 6, 2019
As per the latest updates from the Indian Brand Equity Foundation (IBEF), India is the fifth largest global destination in the retail sector. India’s retail market size is expected to reach around US$ 1.1 trillion by 2020. The rise in the income of the burgeoning middle class and changing lifestyle are reasons behind the transformation in retail, especially the Kirana segment.
With an increase in investments and internet penetration, India is poised to become the world’s fastest-growing retail destination. Here are the top three changes that will help transform the Indian retail industry:
1. Bringing Traditional Retail Online – O2O
As per Deloitte India and Retail Association, the e-commerce market in India will be US$ 84 Billion by 2021. The consumers’ preference for purchasing online is increasing. Off-Line Grocery Retail market leader, Kirana King is bridging the gap between the traditional Kirana shops and evolving consumer needs.
Kirana King is helping them upgrading their traditional Kirana shops to modern organized Kirana stores. This is a tectonic shift, as traditional retailers are now working along with the online facilitation. In addition to this, click and collect is also giving the customers better shopping experience and saving time.
2. Artificial Intelligence Will Transform the Customer Experience (CX)
AI is another technology that is changing the retail landscape for good. It is improving consumers’ online experiences and on the other front helping, businesses understand customer behaviour on the shop floor. AI helps in bringing to the fore truly immersive shopping experiences for the consumer thereby improving the store level GMV’s.
3. Internet of Things (IoT) Will Impact Retail Industry
Gartner Inc. forecasts that connected devices will reach 50 billion by 2020. It will cover every machine right from PCs, smartphones, tablets, air cooler, and washing machines, etc. The three key areas where IOT will affect the retail industry are:
4. Supply Chain Management (SCM)
Robots are already in use to improve the supply chain of retailing. Smart supply chain systems, using IoT can help to replenish low stocks on an auto-pilot. Intelligent inventory with RFID sensor technologies will automate the entire system. This will improve the overall SCM performance.
5. Consumer Engagement
Special customized software that uses the data across the physical, digital and social channels will help with personalized offers to the customers. Smart vending machines are soon going to be common in retail outlets.
6. Predictive Maintenance
Introduction of IoT will give alert to the companies about the health of the retail store level devices. Acting fast on them will not only help in arresting leakages and shrinkages but also save extra expenses. This will ensure the self-healing mechanism in place of failure. As the famous English cliché goes – “A stitch in time saves the nine”.
The Indian Retail Sector has witnessed a huge transformation over the last decade. Penetration of the internet and permeation of seamless technology has changed consumer buying behaviour. Nowadays consumers see and research online and buy offline and the vice-versa. This, in turn, is transforming how retail is catering to them. In a projection made by Indian Brand Equity Foundation (IBEF), by 2021, traditional retail is still going to have the largest share with 75% of the market size. Organized retail is going to have 18% and e-commerce retail will have 7% of the total retail market. The rate of technology adoption will shape up the retail industry. Along with this, the government regulations and policies are going to play a major role in shaping up the future of the Indian retail transformation.