The organized retail sector, which constitutes nearly 15% of the retail sector, incurred losses of about Rs 90,000 crore by May 2020 end
By Soumya Chatterjee
The COVID-19 pandemic coupled with the resulting national and state specifics lockdowns have severely impacted economic activities in the country. The retail industry, both organized and unorganized, lost Rs 15 lakh crore in first 100 days of the lockdown. The organized retail sector, which constitutes nearly 15% of the retail sector, incurred losses of about Rs 90,000 crore by May 2020 end.
In addition to the drastic fall in the disposable income of consumers, the retail industry is also grappling with curtailed days and timing of markets. Retailers are facing temporary store closures, furlough of store associates, shift in consumer behaviour and disrupted supply chains. According to a report, the retail sector is expected to take the biggest hit potentially leaving 11 million people jobless.
Challenges and strategies/solutions retailers should be ready with
It is a challenging time for everyone. In a mere few months, coronavirus has brought a whole new reality. Even after the crisis dies down, the businesses are likely to witness significant disruption in the upcoming nine to 12 months. Only the ones who are more resilient, adaptive, and agile will survive this phase.
Retailers are recognizing that the crisis will have a significant impact on their businesses, and they must revisit their business strategies to reassure customers, manage constraints and create contingency plans for disruption.
This has fast-paced the shift in mindsets of both retailers and customers – they are both realising the need to broaden the experience beyond purely the physical and the traditional. Retailers are actively seeking capabilities to leverage the phygital resources (technologies, new ways of working, business model etc.). Phygital allows retail companies to explore, innovate and create a new successful business model.
Embracing technology is the only way out for the survival of the retail industry
Brands are banking on cutting-edge innovations to perform crucial day-to-day operations and are fast tracking phygital to boost sales. Phygital shopping experiences provide shoppers all the convenience they seek while adhering to the new normal of COVID-19.
The successful co-existence of online and offline businesses will decide the survival of the retail industry, going forward. Agility to recognize the changing consumer preferences and adapting to meet the altered needs would help companies survive. Unquestionably, the retailers will need to prioritize safety and hygiene measures to reassure consumers of a safe shopping experience.
Thus, keeping all the market requirements and buyers’ sentiments in mind, the retail companies are expectedly making investments in implementing the necessary safeguards to bring back consumers in retail stores despite the grim six months with zero cash inflow.
Technologies offering a holistic phygital shopping experience
Imagine a shopping experience where you enter the store, pick what you want and simply step out without interacting with any other human being. Yes, this is the Phygital shopping experience one can expect today! Technology solutions like augmented reality (AR), virtual reality (VR), conversational commerce and robotics can help maintain a strong presence in today’s dynamic retail market.
Phygital shopping experience allows the speed and convenience of the digital world incorporated with the immersive-ness (the feel-factor) and interaction of the physical world.
The technology could be used to geo-target consumers and help retail companies curate very specific and relevant offers and rewards. With the help of AI and IoT, retail brands can track and monitor assets for efficiency, footfalls, information on shopping habits and patterns, customer feedback and more. The AI-powered analysis of consumer data will help brands improve their brand positioning, promotion, product, pricing, and shopping experience.
For consumers, technology will help them navigate through the stores using a store map. They can set shopping reminders, select, enquire, buy, and make payment for the product using their smartphone.
There are already multiple latest technologies that will be extremely beneficial with integrated leverage, like contactless payments, digital receipts and appointment scheduling for store visits.
Easy to implement, a retail company using plug-n-play retail toolkits would assist in driving offline sales through conversational commerce. WhatsApp and WebBot commerce allow the store staff to contact customers and assist them from product discovery to delivery. Customers could also schedule their store visits through appointments on WhatsApp and WebBot.
For a smooth check-in and check-out, an amalgamation of modern technologies like cameras, sensors, computer vision techniques and deep learning can be adopted along with automating operations like purchase, check-out and payment.
The inevitable rise of Conversational Commerce
Buyer behaviour has changed drastically. They are expected to do less shopping trips, spend cautiously, and prefer low exposure. Retailers need to restore consumer confidence and meet their preferences as buying patterns continue to evolve. Times like these require redefined strategies.
Up until a few months back, the adoption rate of conversational commerce at 10% was nascent in India. Indian internet users spend close to at least 1.2 hours a day on social media platforms like WhatsApp, Facebook and Instagram and others. WhatsApp alone has over 400 million active users. The platform is evolving from a peer to peer messaging platform to a more personalized space to conduct business.
Conversational commerce presents an entirely new way for brands to build relationships of value with consumers and vice-a-versa. According to a report, over 40% of Indian entities have either adopted or are in the process of adopting conversational platforms.
Future of phygital shopping experience in India
Over 5000 stores have been added to the fleet of leading online players during the lockdown period. Interestingly, the consumer base has also gained with senior citizens embracing the use of technology. Majority or essentially all the retail companies and stores are expected to offer phygital shopping experience in more than one way, over the next two to three years.
Today’s consumers seamlessly shift between physical and digital space. Over the course of time, online shopping has seen a remarkable growth but despite this, offline stores have always remained relevant in retail. Due to the crisis, we are standing at a time where the Phygital ecosystem is the need of the hour and will be instrumental in shaping the future of retail. Hence, the industry is focusing on new phygital technologies to redefine the dynamics of the retail world.
The author is CEO, Easyrewardz