Retail Trends in India by 2020


Different estimates put Indian retail market size between USD 600 -800 Billion and it is projected to grow more than USD 1200 Billion in next three years. There are many things like investment in technology pertaining to this sector, warehousing, tax simplification, 4G mobile network, consumer awareness and confidence, growth in consumption at bottom of the pyramid and increase in education level boosting the retail sector in India. Year 2018 has been very important for Indian retail sector. Walt-Mart gave humongous valuation to homegrown unicorn FlipKart, Amazon bought more. and made strategic investment in Big Bazar, not only that, if Industry rumors are to be believed, it is in talk with Spencers for buyout. Kedaara Investment and Partners Capital acquired Vishal Megamart from TPG, Alibaba showed confidence in BigBasket and Softbank sided with Grofers with big money.

Retailers seems to be convinced that there is nothing called online of offline retail anymore, ultimate battle is for share or control over consumer’s expenditure. Consumers are out there with their money and if you don’t reach out to them, someone else will. Time is over for supplier or retailer driven market; now customers are spoiled with choices. All of it will make big changes in Indian retail sector very soon. I am seeing following trends in coming two years:

1)Bots will replace humans in the job of Category Management: Category Management and persons manning it are backbone of the retail business. They own the business; rest plays the supporting role. But modern organized retail in India has come a long way from 2005-06, supposedly when it made a big entry in the country. After that it has seen many ups and down, but one thing it has ensured is humongous amount of unstructured and ever flowing data of human buying pattern. Now with lots of hard work, research and investment going into retail analytics, a powerful bot probably might have started replacing Category Managers in one corner of offices of Wal-Mart (Read FlipKart), Amazon in Bangalore or Reliance Retail, Big Bazar in Mumbai.

2)Supply Chain will gain more prominence: Role of supply chain in brick and mortar retail was limited to getting the product either from warehouse or wholesale market or distributor’s point to retail point and taking back. In the changed scenario, where estimated e-commerce retail sales in India in 2018 as per India Brand Equity Foundation is $ 32.8 Billion led by FlipKart and Amazon, role of supply chain personnel is rapidly changing and it is doing the multiple role of salesman, delivery boy, pick up boy and cashier. According to Indian Brand Equity Foundation, Indian e-commerce market size is slated to grow to USD 200 Billion by 2026. With manifold increase in delivery points, delivery timings and load, work of supply chain will be more demanding, challenging and prominent and it can’t be automated in chaotic country like India.

3)Hyper local will be new frontier: Though Grofers had to pull out of it, but there is no other option available to retailers other going hyper local. So far, items which had margins to afford the supply chain cost are getting sold more through online retail, but the next frontier to win for e-commerce players are grocery retail, which is of low to very low return. It will be very difficult for retailers to work in inventory led model in grocery retail and expand to Tier-II and III cities. Armed with incentives for service providers and consumers both like what taxi aggregators like Uber and Ola or restaurant aggregators like Zomato and Swiggy, retailers will have to fight for customer attention and retention.

4)Massive Investment in technological Infrastructure: To cater the huge and well spread market and humongous amount of bills, technological infrastructure will be key of survival, which will require massive investment in technology build up, many more server farms across country huge demand of electricity. Without this arsenal, everything will fail miserably.

5)Private Label will uproot Brand’s hegemony in retail shelf: Big brands monopolized the consumer market. They actually forced the retailers to behave they wanted them to behave. But things are already changing and will change a big time in coming couple of years. Online and Offline retail are now run behemoths like Wal-Mart, Amazon, Reliance, Big Bazar and Alibaba, who have deep pockets to create the block or blocks of loyal customers and use it to fight the might of big FMCG companies. Success story of hitherto unknown mobile brands like Redmi, Realme, One Plus etc. using online retail platforms FlipKart and Amazon in Indian market, which has the negative impression about Chinese products, shows that Indian customers prefer feature, quality and value at an affordable price than the big brands. In fact, everyone working in retail field would be witnessing this pattern in different categories.

6)Getting into consumer’s pocket will become more important than getting the business model right: Shopping isn’t offline, online modern organized retail, pop-n-mom store, network marketing etc. anymore. Nothing is working in isolation and nor it will work in future. In fact, none of it worked ever in isolation in the past as well. Though each one of it might have created value for the founders, but none of it guaranteed long-term profitable venture. Each of the business models, alongside the in-model competition is vying for the same consumer expenditure. For example, a customer who has planned to buy a TV can buy it from various brands available in many retail outlets of her city or the online marketplace like FlipKart, Amazon or the company’s online portal; she is deluged with the choice. Now for everyone, money coming out from the customer’s pocket is very crucial to survive and grow. That’s why we are seeing acquisitions of brick and mortar retail companies by online retailers and vice-a-versa.

7)Small Players will have to fight for their survival: Battle ground is already drawn and warriors have taken their side. Individuals with limited capacity will have to take side in the battle, otherwise they will be crushed, because money riding with big players is too huge to be ignored.

Please leave your valuable opinion in the comment section. You can also reach me at mukul.bhartiya@reviewboard.in.

Leave your comment
 
Tag
CULTURE (5) GENERAL  (11) CODING (2) DESIGN  (2) WEATHER (1) JOBS  (16) HEALTH  (5) Marketing (18) Branding (17) Marketing & Branding (18) Sales (23) Salesman (18) Salesperson (18) Sales Management (20) Polity (7) Policy (8) Idea (27) Product (11) Services (13) Product & Services (15) Advertising (8) Communication (15) Marketing Communication (13) Marcom (10) 360 Degree Branding (9) Education (4) Elementary Education (2) Entrepreneur (12) Social Entrepreneur (8) Social Media (9) Inbound Marketing (10) Inbound Sales (8) Online Marketing (9) Agriculture (8) Agriulture Marketing (7) Agriculture Input (4) Food (8) Human Resource (3) HR (4) Personnel Management (3) Resume (2) Resume Writing (2) Investment (7) Finance (6) Financial Market (6) Investment Strategy (7) Money (5) Training (1) Training & Development (2) Learning & Development (2) Retail (5) Private Label (1) Employment (11) Unemployment (9) India (7) Economy (9) Strategy (17) Growth Strategy (13) Consultancy (4) Personal Branding (8) Personal Brand (8) Customer Engagement (8) Customer Acquisition (7) Customer Delight (5) Banking (5) Slowdown (8) Crisis (10) Financial Sector (4) Economy (6) Economics (11) Political Economics (8) Budget (3) Union Budget (3) Behavior (10) Psychology (11) Human Behavior (11) Behavioral Science (11) COVID19 (6) Pandemic (5) Book (6) Books (6) Book Review (6) Neuroscience (7) Neuro Consumer Science (7) Artificial Intelligence (1) AI (1) Retail Analytics (3) Consumer Buying Behavior (4) Consumer Behavior (3) woman (1) female (1) shopper (1) Tanishq Jewelley (1) Jewellery (1) Technology (1) Data Breach (1) Tech Companies (1) 
Archive