Retail 2.0: Focus on data, tech, innovation, to take on e-commerce giants

The current decade could be marked by significant shifts in Indian retail as new competitors, forces, and challenges emerge within the sector. While the sector faced significant disruptions from the emergence of well-funded Indian and foreign e-commerce players in the last ten years, neighbourhood stores continued to be relevant, providing convenience, proximity, and monthly credit to consumers.

The current decade, however, will see boundaries increasingly blurring, said experts and retailers at the ongoing Retail Leadership Summit in Mumbai, with the entry of new players and existing companies looking for ways to stay ahead of the game.

“Social commerce, for instance,” says Abhik Singhi, managing director and senior partner, Boston Consulting Group, “is one such new competitor that could emerge in retail in the coming years.” “There could be cross-industry play, where companies could enter retail through extended offerings and business models,” he adds.

For retail firms, therefore, the strategy would be to leverage data, technology and innovation. As Anand Ramanathan, partner, Deloitte, says: “Retailers function in a dynamic environment where changes are happening all the time. By deploying asset-light digital technologies including artificial intelligence (AI) and machine learning (ML), retailers can improve average bill value, assortment planning and brand experience to accelerate sales at their outlets.”

As retailers continue to face margin pressures, thanks to higher competition, and greater people, real estate and allied costs, the thrust will be on leaner supply-chain models, faster rollout to market and synchronised planning and demand fulfilment, say experts.

For instance, the Kishore Biyani-led Future Group is putting in place a “phygital” model of retail that entails online-offline partnerships in categories such as apparels, food and fast moving consumer goods. In segments such as home furnishings, on the other hand, the emphasis for the group is mainly on an online-only model to reduce offline retail and carriage costs.  

Some quick-service restaurant (QSR) chains such as McDonald’s and Pizza Hut, meanwhile, are already digitising their store fronts and rolling out next-gen outlets that require lower number of store assistants on the shop floor. Some QSRs are already experimenting with robots, chatbots and interactive vending machines within their outlets to serve customers faster and better.

Experts say that as consumers demand more convenience, personalisation and a better shopping experience at outlets, retailers will be forced to adopt new models of retailing that are seamless, both online and offline. 

For instance, retailers within lifestyle, fashion, grocery and entertainment segments are tying up with handset and television makers to be bundled with their software offerings. 

Some big-box retailers such as Reliance, for instance, are partnering with neighbourhood stores as they onboard small retailers on to their “new commerce platform”.

Singhi says the decade of the 20s will see more alliances and shared ecosystems emerge than ever before as organised players increasingly involve unorganised players in their business. At the same time, many retailers will keep a hawk’s-eye on operations, and balance the need for addressing regional consumer requirements with localised products within their assortment.


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