Data mining and analytics will play such a vital role that many of the retailers may end up becoming concierges
We are a nation of shopkeepers. Eight million-plus retailers with 33 million Indians directly serving the nation of 1.25 billion people through their shops is an industry by itself. However, we cannot ignore the rapid change in the mindset and the lifestyle of young Indians. Mobiles and internet connectivity have not only changed the way Indians think but also the way they shop. Packaging is becoming more important than the content, brands are becoming more prominent than the product, and one is willing to pay a premium for experience. This trend is leading to a big change in the retail organisation of tomorrow. We need people who understand design sense, ethnography, technology and relation-ship building to create a collaborative organisation.
We will see new organisations emerging that will cater to children. Tomorrow’s children will behave like today’s adults; therefore, a new breed of retailers will cater to young adults who will shop on their own and pay on their own, although through their parents’ mobile wallet. Goods and services including QSRs will emerge, catering to the 8-13 year-olds. On the other hand the 50+ will behave like young adults, being fitter, with more money in their wallets and less responsibility. They will surf on the net but will shop on the ground, as they will have more social needs. They may almost ask for a shopping center in a park.
The next five years are going to be the best years in the history of retail as all opportunities will open up for Indian retailers. We will see small retailers becoming franchisees of brands and services. We will see them becoming the last mile connect for online players. They will shift categories unlike their forefathers who stuck to being a grocer or a garment retailer. With the younger generation entering the fray, we will see retail shops not only getting modernised but also equipping themselves with technology to improve current sales and become omni-channel.
We will see large format department stores going upscale, and large format brand stores either carving a niche or catering to the mass value segment. Malls will become niche and will segment themselves accordingly.
Consumers will get goods and services at unbelievable prices with competition intensifying both within categories as well as with online players. Price will become the key factor to start a relation-ship; however, experiences will be the way to build and retain these relationships. Multiplexes, entertainment centers and food specialty restaurants may
We will see many Indian concepts originating, perhaps to do with organic food, ethnic clothing, yoga, ayurvedic spas etc. Many of these concepts will emerge from the brick and mortar store but will eventually serve the non-catchment customer by going online. Therefore retail, although physical, will still go boundary-less.
Data mining and analytics will play such a vital role that many of the retailers may end up becoming concierges, ensur-ing that they serve a certain number of customers with everything they want at a fee and thereby building relationships.
All of the above will also bring in many disruptions. Players who are not willing to change will die. Players who can capitalise on their real estate, energise their second-generation family members, embrace new technologies and deliver great experiences to various customer segments will be the winners of tomorrow.
By BS Nagesh
The author is founder, TRRAIN (Trust for Retailers and Retail Associates of India)