“Retail” has been touted as the hype word for the past decade, but what’s at the core of retail often goes unnoticed. So, what does the future of retail look like? Let’s find out.
How did it all start?
Unlike wholesaling, where businesses or institutional customers make purchases, sales of goods and services are made directly to the individual customer in retail. So, retailers buy goods in bulk quantities from mass manufacturers- either directly or via wholesalers- and re-sell the same in limited, smaller amounts to a horde of consumers for profit. In layman’s terms, retailers are the nexus between the producers and the consumers.
The retail market in India happens to be one of the pillars of its economy, accounting for nearly 10% of its GDP. Estimated at roughly 600 billion USD, the Indian retail sector is one of the top 5 retail markets globally, purely judged on economic value.
In 2003, India’s retail industry primarily involved owner-manned small shops, which shifted at the turn of the decade, with 2010 witnessing larger convenience stores and supermarkets forming about 4% of the industry, albeit only in urban areas.
To understand the significance of this evolution and what it suggests for the future of retail in India, we must consider the various stages of development. The study of history always gives us a sneak peek into the future- the same rings true for the retail industry.
Stages of Retail Evolution
In 2003, the state of retail in India with self-serving physical stores where customers picked up and went through a product before purchasing it is the best way to define retail 1.0. Here the physical stores are but the sole medium of business. So, if you chose to stay back at home, your chances of sating your needs were slim.
This stage of evolution brought about every departmental or convenience store that you see around you, be it hypermarkets or supermarkets. Commonly residing near major towns, these stores were meant to cater to an expansive consumer base looking for a more exhaustive collection. At the root of these setups were large organizations.
This is where we usher technology in, with the e-commerce (electronic commerce) boom and global-scale sales. If you missed out on a lot by staying at home back in 2003, now is the time for the market caters to you.
As we enter the future of retail, technological advancements are increasing at an exponential rate! Now, you no longer need to venture out in search of goods.
What was previously a limited, albeit revolutionary, scope of e-commerce, is now elevated to m-commerce (mobile commerce) and social media. With Multi-channeled and Omni-channeled stores, retail markets streamline their income through store, online, and mobile.
This is essentially the future of the retail market. With physical stores harboring self-checkout processes fast-tracked by AI and robots, this stage sates the consumer’s need to venture out while still polishing up the process of goods selection and crowd-management.
What is the Future of Retail Business in India?
Kalyan Krishnamurthy, Group CEO of Flipkart, has this to say about India’s changing retail market dynamics:
“India’s consumption economy will be the third-largest by 2030, and we are looking at a scale of $5 trillion. This consumption growth will not be restricted to certain segments, and the middle-income group will lead 75 percent of this.”
By 2024, the e-commerce section of India’s retail market is touted to increase by 84% and touch a whopping 11 billion USD. Mobile shopping will drive this revenue, which will grow no less than 21% annually over the coming three years.
However, the most interesting aspect of the future of retail is the facility to click and collect products. Save your shopping list and have it delivered to the counter. India’s retail future holds the same number of store visits but with lesser crowds.
The future of retail in India is Omnichannel Assistance. It will offer an offline experience while letting you benefit from online portals. You will be able to buy online and ship from the store, reserve online and pick up from the store, and get unlimited digital aisle access to stores and fit catalogs.
A B2C online retail company under Alibaba (China) spearheaded the futuristic trend of ‘smart mirrors.’ Here physical trial rooms are transformed into virtual ones using Artificial Intelligence (AI), Virtual Reality (VR), and gesture recognition. This eliminates the tedious and time-consuming waiting indefinitely to try on one dress in trial rooms.
Try on your favorite clothes in the virtual trial room and scan a QR code to purchase them on the spot! It does not end here: with these ‘smart mirroring’ options, you can share your look on social media to ask for your friends’ opinions and get automated suggestions as per your body shape and posture.
How can Technology advance the Retail Market?
The future of retail in India, much like anywhere else, involves increased use of top-shelf technology that helps streamline the consumer experience. Amazon already has a head start with the launch of its chain of convenience stores called ‘Amazon Go.’
Through feedback from sensors and cameras integrated with Deep Learning and Computer Vision, Amazon automates the process while also gathering ample data points for other intelligent solutions. The cameras installed in the Amazon Go stores capture both what consumers are picking and the products they are rejecting on second thought. This offers scope for better conversions through machine learning algorithms.
Robots will soon be programmed to recognize a consumer, greet them, converse with them using speech recognition software or close-ended touch screen options, make product recommendations based on the conversations, and offer guidance around appropriate aisles. Pictures of the customers can also be captured, and the purchase information can be stored to provide loyalty rewards or similar targeted promotional offers on their next visit.
The future of India’s retail market is primarily banking on the O2O (Online to Offline) model, which helps leverage mobile technology in driving offline sales and creating new business opportunities. The west has already started the practice of placing a food order on your mobile and having it ready when you arrive to pick it up, and India is catching up soon!
Wrapping Up: The Future of Retail Business
The only way forward for the future of the retail sector in India is to successfully integrate their online and offline businesses through AI, Machine Learning, the Internet of Things (IoT), and Robotics. The result will be utopian- superior customer service, hassle-free and safe shopping experience, and comparatively better inventories and logistics management. So to put it simply, data analytics and technology are the only potential future for retail businesses in India.
So, what do you think the future holds for retail business in India? Share your opinions in the comments.
And if you are a brand that wants to expand its retail presence, contact us or mail us at firstname.lastname@example.org, and we will be more than happy to assist you.