Is retail in for a revolution in 2019? Going by the current dynamics and the ever changing market conditions, it most certainly is. Where consumer is always going to remain the king, it is equally important to recognize and respect the space of retailers and their need to make money. Focus on consumers coupled with keeping a hawkeye on profits is what is going to revolutionize retail in 2019.
No matter how much we talk about the growing Indian middle class and consumerism, the fact is that there is far too much competition in the retail space. And this competition is not between offline and online retail, but it is competition between brands irrespective of the space they operate in. Where online retail has increased consumerism, it has also led to many entrepreneurs entering the space and making their brands available through both the offline and online channel. To add to this are Stay at Home Moms (SAHM) who are turning into home-based entrepreneurs and using the social media route to aggressively sell their wares – ranging from apparel to household products. They retail through WhatsApp, Facebook and Instagram.
With so many channels of sale, the big question is: What should retailers do to remain afloat in 2019?
2019 is going to be a year that would decide on the survival of the fittest. And a few rules to be followed include having a strong and healthy internal system of operation in place. Salesh Grover, Business Head – OSL Luxury Collections Pvt. Ltd. (Corneliani) says, “In 2019, the face of the market is quickly unfolding, and retailers must adapt to new shifts in demographics, attitudes and consumer tastes and preferences. The market will be defined by emerging technologies that remodel the way consumers interact with their favourite brands, a shift in preferences and the mushrooming of new battle lines for e-commerce.”
Vijay Mansukhani, Managing Director, Mirc Electronics Limited strongly feels that trying to sell only based on prices will not work due to immense competition on online platforms and that proper product mix at the shop floor will draw customers towards the store.
Within the online space, besides having an exclusive brand e-commerce portal, according to Vikas Pacheriwal, Co-Founder, Raisin, it is imperative that brands also have their presence on top trending e-commerce portals. “Online shopping has exploded in the past 5 years and being present on top e-commerce websites is essential for a retail brand’s awareness, increased sales, and market positioning,” he explains.
Another piece of relevant advice from him is that tastes of customers change rapidly and it is important for a retail brand to stay updated on trends to remain relevant, maintain customer loyalty and become a brand everyone wants to own.
Money Matters
With banks and investors being cautious before lending money, it is upon the retailers to ensure that profits levels are maintained, and costs are curtailed. Marketing ideas that cost a bomb need to be scanned thoroughly before implementation. Similarly, team expansion needs to be done keeping the ROI in mind. Mindless expansion with a foresight of profits is a strict no for now!
Grover shares, “Retail is an industry under pressure. Many retailers find themselves in an uncomfortable position as margins are squeezed between weakening demand and rising costs. Retailers are shifting from a store-based past to a digital future.”
Dhiraj Agarwal, Chief Executive Officer & Co-Founder – Campus Sutra minces no words when he talks about the need to follow a clear-cut route to profitability. “There is a lot of blood on the street – especially in offline retail. A focus on profitability rather than sacrificing profitability for growth, is what is needed,” he says. He also strongly finds the need to offer ‘value’ to customers. Citing an example, he shares, “Value retailers like Reliance Trends etc., are doing better than high value brands. Customers are open to buying as long as there is value.”
Offline-Online Complement Each Other
A strong amalgamation of offline and online retail to extend a seamless shopping experience needs to be on the list of priorities for all the retailers. Grover explains that with the retail industry undergoing a significant transformation over the past decade and going by the way it is still evolving, customers do not just buy your product or service, but they experience it. He shares, “Online and offline experience should communicate that cohesively.”
Agarwal shares his views saying, “Omnichannel is the way to go. The most successful brands are those that are delivering a frictionless experience leveraging both offline and online.”
Grover stresses on the importance of having a strong social media presence and rightly so since the power of social media can be accentuated by a lot many examples. For e.g. users tweeting about their experiences with brands can either break or make a company’s image.
He further elaborates on this saying, “Social media is integral to the customer experience. One should focus on building an online community. Good customer experience is the key to success in this era. A retail brand may have a flashy app and many lucrative offers, but if it fails on offering a good customer experience then customer retention is impossible. Besides this, a strong analysis and a platform to check which merchandise is working and which isn’t is also essential.”
Technology Adaption a Necessity, Not a Choice
Technology and its influence on retail has drawn quite a lot of attention and this subject needs no elaboration. What though needs to be stated is that brands that do not adapt to technological evolution are sure to face stiff competition from those who do. Not only for inventory management and logistics, technology has made inroads to drive in consumers, retain employees, boost expansion etc.
Grover shares: “From discovery to delivery, retail brands are automating the customer journey. The technological marketplace is evolving at such a pace it can be hard to keep up with the newfound innovations now available to the retail industry.”
Innovate, Innovate, Innovate
Offers and discounts lure but they cannot retain a customer. With so much happening around them, a customer is spoilt for choice and she needs to be excited enough to consider shopping at a particular brand store. This calls for innovation. Innovation in store design, innovation in payment methods, innovation in the way she is welcomed to the store etc.
Grover says, “To remain relevant, brick-and-mortar stores need to create inventive ways to entertain and provide pleasing environment for customers, else they can kiss customer retention goodbye. Personalization also impacts how a consumer views and perceives a brand. An increasing number of consumers are seeking a retail experience that has been tailored to suit their own personal shopping preferences.”
On some innovations that offline retailers can rely on, Mansukhani says, “Specialised and trained in-shop demonstrators with tablets can help give a rich consumer experience of the product on the shop floor. Immaculate display of the products will go a long way in attracting the customers and help build conversion at the shop floor. Key differentiated features like IOT enabled devices and smart products where the customer can touch and feel the products will draw customers to the shop floors too.”
Coping with Challenges
Besides real estate cost and manpower attrition, there are a host of key challenges that would affect the retail industry in 2019. The key would be the elections and policies that would be framed / revised post the new government is formed. Agarwal elaborates stating: “Elections and likely changes in GST – this move can be positive or negative and we will have to wait and see. Besides another important challenge that seems cropping up is that of weather unpredictability. Winter is becoming unpredictable in terms of timing and intensity. Extreme weather conditions are playing havoc and seasons are becoming unpredictable. Winter sets in much earlier in some parts and this requires more of a buffer while planning a collection for a season.”
Pacheriwal sees offering affordable clothing important keeping in mind the rapid change in trends which compels people with a need to be able to buy new styles at a price they can easily spare.
Twist in the Tale
The offline-online tables have turned. The phase of offline players having to have a strong online presence has moved to now having online players eyeing for brick and mortar presence. As Manukhani rightly points out, “Online centric brands will be forced to be omnipresent.” Besides, he adds that within the offline space, automated check in and check outs is an unexplored market where retailers can focus on.
To conclude, the most prominent retail game changers for 2019 according to Mansukhani would be:
– Easy availability of finance schemes like cashbacks, EMIs
– Loyalty programmes
– Same day delivery of products to the customer’s doorstep
– Delivering same customer experience on all mediums of trade including online and offline because every touch-point matters.
