Born in a first-generation business family of modest means, Akash always dreamt of doing something big and had the zeal to strive hard towards realising his dreams. Drawing from his personal experiences, he entered the entrepreneurial universe solo and set out with dedication to establish and build a business from scratch, seeking to make his own mark. Presently, Akash is overseeing his own group of four companies and managing business operations in the Retail Trade, Finance Services & Insurance sectors.
Even before 2020, the retail landscape had been moving slowly but surely towards digital. But a black swan event – the COVID-19 pandemic – has completely transformed the scenario. As a result, the transition towards digital that would have taken a few years has happened within weeks.
One of the biggest triggers for an accelerated shift towards digital, nationally and internationally, has been due to the series of regional and national lockdowns. As malls and markets wore a deserted look overnight, both customers and retailers responded to the changed circumstances by using digital means to either buy or sell their products, respectively.
Omni-channel Approach
During the past few months, even those retailers who were digital sceptics have come to realise the importance of deploying an omni-channel approach. While virtual sales were pushed vigorously in the lockdown period, as the restrictions were eased, retailers have been gradually opening their brick-and-mortar outlets too.
As far as customers are concerned, they have realised the benefits of digital shopping. Safety and convenience are two of the biggest benefits since buyers can shop without running the risk of contracting the coronavirus. Online shopping offers many deals and discounts that may or may not be available at physical stores.
Sales of home appliances such as dishwashers, washing machines, microwaves and vacuum cleaners, among others, are enjoying somewhat greater demand from people as they are reluctant to depend solely on house help, as they did before the pandemic.
Another interesting insight in recent months has been that while physical stores have been witnessing lower footfalls, the rate of conversion is almost 90% in many cases compared to 20–40% previously. Besides, to reduce the number of store visits, consumers are buying items in bulk and bringing home larger value packs.
In the pre-pandemic period, while almost 95% of retail sales comprised offline channels, this trend has changed. During the lockdown phase, as per RAI (Retailers Association of India), there has been a 60–80% impact on offline retailers in high-street stores and malls. Simultaneously, online stores and e-commerce platforms have seen sales soar. Surprisingly, demand has even been emerging from tier 2 and tier 3 regions, which have been opting for online shopping during the post-lockdown phase. With 2020 in its concluding weeks, retailers are eager to know what the trends and outlook for 2021 hold for the industry. To begin with, one thing is amply clear – the shift towards digital is here to stay. Consequently, in the year ahead, an omni-channel approach will bring better dividends for retailers.
The Upcoming Reality
Some market analysts believe 2021 may be the year of augmented reality (AR) and virtual reality (VR). As in sectors such as realty, AR has much to offer the retail industry too since it can provide customers with a more immersive experience. For instance, customers can be given a 360-degree view of specific products. Through AR, it is possible to look at a garment (say, a t-shirt or trouser) in different colour options and select what seems most suitable.
Earlier, AR offerings were used by larger players due to the higher price tag. But as economies of scale have come into play, AR is more affordable. Similarly, retailers are using hyperlocal delivery models, chatbots and other means of conversational artificial intelligence (AI) in driving the omni-channel approach in acquiring and retaining customers.
In many cases, this has meant reconfiguring distribution models and signing new partnerships for sales and distribution of products, taking into account changing consumer behaviours and patterns. Another trend is the rise in the sales of face masks, home sanitation and immunity-boosting products as the people are more conscious of personal health and hygiene. Also, work-from-home items and accessories are much in demand, as the WFH regimen continues for many people. As
things stand, this is likely to continue for some more time. Furthermore, the emphasis remains on value-for-money products as discretionary spends continue being put on hold.
Customers apart, even retailers are emphasising the use of face masks, hand sanitizers and thermal temperature screening before allowing people entry into their premises. These practices are likely to continue well into 2021 and remain in force until a vaccine is in place or the threat of the coronavirus abates. Yet, more needs to be done to make shoppers, employees and vendors feel safe in physical premises. In-store technologies such as barcode scanning via mobile devices, contactless methods of e-payment, providing bills and receipts through WhatsApp as well as online feedback systems need to be deployed and institutionalised.
Beauty, apparels, consumer durables, gadgets and home furnishings can all gain from using AR and VR in selling their products more effectively. Since physical in-store launches of products may no longer be safe, brands may take recourse to virtual product launches. Digital tools and AI could also be used for streamlining and managing inventories as well as providing doorstep delivery options.
Meanwhile, one hastens to add that the transition towards digital does not mean physical retailers will soon be walking into the sunset. Rather, as omni-channel gains prominence in 2021, both physical and online retailers will join hands in ensuring shoppers a more enjoyable shopping experience.