Good customer experience can drive retail in India

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Attractive glass buildings with posh interiors, huge discounts displayed right at the entrance, customer service executives holding loyalty card forms and seeking a few minutes from you. Do all these remind you of your experience each time you walk into a retail shop in your neighbourhood? Well, this is just anindication of an upcoming big boom in the organised retail sector in India.

According to industry estimates, the organised retail sector in India occupies around 4% of the $350-billion retail market, which is expected to hit the $635-billion mark in 2015. Large Indian corporate houses like the Tatas, the Birlas and Reliance have diversified into retail and are expanding in a big way to capture the market share. Even top global retailers like Metro, McDonald’s, Wal-Mart, Staples and GAP are not lagging in expansion and have entered or are entering India through cash and carry, franchise, licensing or single brand formats. An interesting observation is that even those few mom-n-pop stores are modernising the store layouts to buck the trend.

However, during expansion, retailers need to have a long-term view to address important business and techno- logy issues to enhance customer experience and improve the market share/profit.

Right formats for Indian market

In developed markets like the US, large formats such as hypermarkets and super centre stores work well. However, considering the Indian customer’s shopping patterns, small to medium store formats such as convenience stores and supermarkets would be able to drive customer traffic in the city centre and developed localities of Tier-I and Tier-II cities. While mid-segment and price-sensitive customers purchase their grocery on daily or weekly basis, upscale customers do it monthly. So, they look for such formats in their neighborhood within one or two kilometres.

In specialty segments like electronics, home furnishing and merchandising space, large store format would be successful. Here, the customer shopping style would be different wherein he enjoys his weekend shopping and also looks for more varieties.

Enhancing customer experience

To attract customers, retailers have been focussing on promotion schemes, loyalty programmes and few in-store strategies. However, they need to focus on enhancing customer experience in areas of points of sale (POS), customer complaints, parking spaces and the like.

a) Adequate parking space