The year 2017 has been one of the most defining years for the retail sector in many ways. It was the year where companies managed to emerge out of demonetisation, with different degrees of success, and then from the implementation of goods and services tax.
Consumers have well managed to balance the growth of e-commerce and brick and mortar retail. The government also played its part in implementing GST as planned and then demonstrating some flexibility rates and easing various rules.
The Indian retail industry is one of the most dynamic and fastest growing industries with an impressive employment potential. A number of international brands are entering the retail sector accounting for over 10 per cent of India’s gross domestic product. The concept of shopping in our country has dramatically transformed over years in terms of consumers’ preferences and attitude.
Modern retailing is penetrating the retail market in the form of multi-storied shopping malls, large shopping centres, and supermarkets and hypermarkets offering shopping, dining, and amusement, under the same roof. In many ways, a new base has been set for this year and beyond.
Here are the top five trends that will make a strong impact on the Indian retail industry:
Online retail market poised to boom: The data gathered from a survey conducted by market research firm RNCOS reveals that owing to the rapid expansion of e-commerce, the Indian online retail market is expected to grow more than four-fold to reach $14.5 billion by next year.
According to the survey, this growth is mainly driven by the need for shopping ease, growing number of smartphone users, higher mobility, and time-saving factor.
Artificial intelligence and machine learning to enhance customer experience: These revolutionary technologies will dominate the retail supply chain in 2018. Since the tech-savvy millennial consumer demands speed and a culture of retail convenience, retail stakeholders will increasingly invest in intelligent tools to provide omni-channel service to their customers such as click-and-collect delivery service or same-day shipping and delivery. Conversational artificial intelligence platforms will be significantly utilised for setting new standards of business intelligence and advanced analytics.
Inventory optimisation: In order to meet growing consumer expectation, delivery management will be important for retailers who will take more deliberate and meticulous actions pertaining to delivery management. Retailers will embrace technology to lessen excessive inventory through artificial intelligence planning and precision inventory planning.
Hyper-personalisation for boosting sales: In order to survive, personalisation will be the top most priority of the marketing strategy of Indian retailers. To enhance the shopping experience for consumers, the best-performing Indian retailers will leverage hyper-personalisation models based on behavioural data, brands preference, demographic preference and pin codes of consumers.
Chatbots to make consumer experience interesting: Chatbots were at a nascent stage until now, but in 2018 they will be increasingly utilised by Indian retailers for interacting with customers via messaging apps. Brands which utilise chatbots will tap customers easily by initiating conversations with the customers, guiding them through the products or services, providing recommendations and updates, and processing orders.
Nevertheless, there are certain impediments that may obstruct the growth of Indian retail sector. For example, slow Internet connections in rural India and apprehensions about the security of online transactions. Regardless of these hurdles, the future of the retail sector in India seems to be exciting as both organised and unorganised retail businesses along with the government are working collectively to revolutionise the retail industry while keeping the interests of the customers in mind.
All things considered, it seems reasonable to assume that an exciting year lies ahead for this sector with global retail giants entering the market, ground-breaking technologies revolutionising customers’ journey by enhancing retail operations, and favourable government policies.
The writer is executive director, Pacific India Group.