Future of retail in the age of E-commercialization
The India Retail Industry accounts for over 10% of the country’s GDP and contributes to around 8% of the employment. This space is undergoing transformations due to scores of e-commerce firms gaining huge popularity. In such a scenario, it is the brick and mortar companies that are gradually feeling the heat waves of the rising competition level in the Indian market. The truth is, the future of Indian retail holds value both in offline and online retail, especially in impulse categories like fashion jewellery and accessories.
Over the last decade, the Indian retail industry has grown phenomenally with a remarkable shift towards organized retailing formats. It is gradually shifting towards a modern concept of retailing which is a seamless blend of online and offline formats. This concept is called ‘Omni-Channel’ retailing which focuses on employing all kinds of shopping channels like internet, brick and mortar, television, direct mail, radio among many others. Merging the two formats of online and offline retailing is to blend technology with smart merchandising and imbibe community building, customer engagement and targetted marketing in their operations. For instance, to tackle the queue problem at its stores, customers have the option of shopping online and opting for home delivery or store pick up at WalMart. Customer friendly tactics such as this have helped WalMart to be counted among the top five online retailers in the US with estimated revenues of USD 10 billion in 2013 from the online segment alone.
It is predicted that the Indian retail market will grow by 7% over the next 10 years, eventually becoming a whopping US$ 850 billion industry by 2020. Coming specifically to traditional retail, a growth of 5% is expected in the same and is estimated to reach a size of US$ 650 billion (76%). Organized retail is likely to develop by 25% and reach a size of US$ 200 billion by 2020. Since the last five years, online and retail, both direct and through marketplaces has had a roller-coaster ride in metamorphosing itself from being at a nascent level to becoming the most promising sector in India.
For the future growth of the industry, retailers are also set to embrace targetted marketing to augment their operations and keep themselves on par with global standards. Targetted marketing aims to make the promotions, pricing and distribution of the products and services easier and more cost effective. It envelopes all the aspects of marketing and involves breaking a market into segments and paying more attention to the ones that are of paramount importance for the company. For instance, firms can create e-mail campaigns and send to a specific set of customers depending on who the company wants to target. In order to know their target audience, companies can use various nifty tools like social media. These have helped marketers and SMEs track the target audience in real time through the fan pages of other companies. Besides this, they also provide an in-depth graphical data about every person who is connected with the page. Targetted marketing is the mantra for finding the target audience that will help the retail sector survive cut throat competition. Innovative thinking and technology aided growth strategies are what will separate the lions from the lambs when it comes to this ever-evolving industry.
The writer is Mr Ashish Pal Sood, Founder, Youshine