The focus for all retailers has been to capture valuable consumer data across different channels so as to develop a 'single' view of their customers/consumers
By Rajat Wahi
Total retail sales in India are in the range of $850 to $900 billion, off which offline retail (General and Trade and Modern Trade) accounts for 95 to 96% – General/Traditional Trade accounts for between 80-83%, and Modern Trade at 12-15% today, with the balance being accounted for by ecommerce/online retail and a small portion by Direct Selling. All retail was impacted during the Covid lockdowns over the last 18 months, with various high streets, malls and neighbourhood stores being shut or having limited opening during various stages of lockdowns across cities. Ecommerce or online channels also suffered during the lockdowns, with only “essentials” being allowed for various periods (however essentials were defined), and with many cities and states restricting movement of deliveries during various periods. While online sales were the fastest to recover as restrictions were eased and many shoppers moved to buying online for all their essential and non-essential needs, offline has been slow to recover post the second wave.
Both channels have been looking at new ways to reach their shoppers, with offline experimenting with a lot of new models like Direct-to-consumer (D2C), Valet assisted shopping, Curb-side pick-up and drop and drive through pickups, home delivery from Malls, Community buying in apartment blocks, etc. For pure-play online players, the big focus has been on expanding their offline footprint to allow their consumers to “touch and feel” the products and to create a ‘physical’ connect with their shoppers.
Technology enabled digital transformation has been a key driver for all retailers, be it malls, offline retail brands or online players. The focus for all retailers has been to capture valuable consumer data across different channels so as to develop a “single” view of their customers/consumers. This enables them to engage with them through the entire shopper journey, from awareness and discovery to actual selection and purchase (and even post purchase). Most retailers have been capturing consumer data for years, but did little with this other than offering basic discounts and promotions. But I feel that it was the Covid disruption that really pushed them to mine this valuable data to understand the “what, when, where, why, who, and how” of their shoppers so as to engage and serve them better, offering personalized promotions and offers, tailored selection of products, curating products at their homes if they could not come to the stores, and even offering delivery at home. While the “single” view of the customer across channels is still a way away due to unavailability of data, silo working within businesses (separate ecomm and offline retail teams), channel partners not sharing the data, etc, there is a strong awareness amongst the retail analytics teams to strive for this “single view” of their shoppers.
Online search and sales trends have also helped offline retailers better understand where the demand for their products is coming from (cities, neighbourhoods, towns, villages, etc), where the potential/actual shoppers are based, how much they are willing to pay, how frequently they search and buy, what product adjacencies are in their bills, etc. This is allowing them to not only get into micro-segmentation of their shoppers, but also help locate their new outlets in the right locations, along with plan the right inventory, and the 4Ps of marketing (product, price, promotion and placement).
The front runners/early adopters of technology in retail had started a lot of work on their apps for their end consumers even pre Covid as a way to engaging more with them. This has really stood them in great stead as they have further leveraged the app to further connect with the shoppers during the lockdowns to enable shipments, ordering, promotions and marketing directly to them. This is being enabled these retailers to not only predict future orders, but also ensure that all communications are done directly with more and more shoppers to capture valuable data. It also means that their supply chain and demand forecasting needs to be very agile to meet the demand of the online consumers, irrespective of whether the order is fulfilled directly from the warehouse or through the nearest physical store.
The author is a partner at Deloitte India.