Retailers need to find new business models and performance matrices different from GMV (Gross Merchandise Volume) and scale. The ever-changing customer expectations and reducing differentiation in terms of products and range would require retailers to compete on customer service, which is beyond just-on-time delivery.
About 75 percent of Indian youth (16 to 21 years old) spend more than Rs. 6,000 on cosmetics, apparels, and mobiles. They are interested in quality and experience at an affordable price with minimum hassle. Retailers would have to find new avenues to meet the expanding and changing demands of these consumers.
Fewer large retail houses and skewed consumer base trends push towards polarization of the industry, creating two types of retail formats. One acts as ‘one stop shop for all’, where consumers can get everything under one roof like Big Bazaar and Amazon. Another format is specialized service providers concentrating on focused offerings.
Growing purchasing power, increasing digitalized consumers and polarization of the industry requires a paradigm change in the way Indian retail marketplace functions. Delivering the best product on-time is a necessity but is not sufficient to gain consumer satisfaction. Online and large format price stores are just a dispenser system where consumers can pick and move. It’s fast and convenient but not enough to reach the consumers’ love bracket.
The concept of maximizing the basket size and value has changed with new formats. Price discounts, reduced or no shipping cost, low or no switching cost make it highly price competitive. Consumers have access to a range of products through various platforms, which heightens consumers’ expectations from retailers.
Consumers look for not just shopping but a personalized shopping experience. For retailers to reach these consumers, they need a focused and customized strategy. Digitalization through internet and technology can be used as an aid to the specialization.
This story is from the May 2019 edition of Progressive Grocer.
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This story is from the May 2019 edition of Progressive Grocer.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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