PremiumNew Delhi: Indian shoppers, as well as consumer goods companies, are taking the multi-channel approach after the pandemic changed customer habits causing a shift in the offerings by retailers, said consulting firm Deloitte India in a report released on Monday.
“The future of the retail sector will be defined by a multi-channel approach where online and offline channels will not only compete, but also support each other. The way forward for retail will be a blend of brick-and-mortar stores with online selling platforms, with both likely to continue to grow in markets like India. Brands and retailers are recognising the transition and their strategies are being re-oriented to reflect this change," the report --ReWriting the Rules of New Retail-- said.
The pandemic has brought about permanent shifts in consumer behaviour. Although once the lockdowns were lifted, shoppers returned to stores, yet they are far more demanding when it comes to accessing products of their choice. This means they are willing to shift to different platforms and shop across channels.
As a result, retailers, especially offline, have had to adapt to the ‘new normal’, developing alternate ways to engage with and reach their end customers, building new business models—including direct-to-consumer reach, enhancing their online presence quickly while still preserving their offline stores and footprint, it added.
Consumers increasingly expect to be able to shop for any item, when and how they want it, in real-time, it added. This has far-reading ramifications for brands.
"This instant shopping across multiple channels is being addressed by retailers not only in stores but also upstream throughout the supply chain, which is undergoing massive omnichannel transformation as well," Deloitte said in its report.
Retailers can take this as an opportunity to re-engineer their store layouts where shoppers can opt for pick-ups and convenient returns, it added.
India’s retail sector is pegged at $883 billion, having grown three-fold in the past decade. Currently, it employs 8% of the total workforce at 35 million; by 2030, it is expected to create 25 million new jobs.
Deloitte said key trends that will drive the consumer products and retail industry over the next few years include premiumization of products, consolidation of platforms, emergence of hyper-focused niche brands, consumer shift to smaller and localized store formats, exit of weaker players, emergence of direct to consumer and alternative business models as well as consumer pivot towards convenience and sustainability.
E-commerce became the preferred channel of purchase during the pandemic as consumers refrained from stepping out and wanted contactless delivery. Rajat Wahi, Partner, Deloitte India, said that while in the past it was expected that e-commerce could corner only 5% to 6% share of overall retail trade, the number could be as high as 15% by 2025. Wahi said it could play out differently for different categories with apparel, electronics, accessories and books having higher salience online; online grocery will still take time to scale up, he said
Meanwhile, companies are also keeping an eye on newer, emerging models of shopping, such as social commerce. Companies, said the report, are increasingly using this platform to sell goods to save on capital expenditure and operational costs, while reaching a broad audience across the country.
Wahi pointed to further consolidation in the retail and consumer sector wherein large companies will continue investing in smaller niche players that offer differentiated products and are organically digital.
