Indian retail is making a recovery, and while fashion may still be among the slower segments, many new segments have emerged strongly to keep the momentum going. India’s top preforming mall – Select City, Saket in New Delhi, has registered over 25,000 visitors in a day post COVID-19, no doubt less than the usual 40,000 plus earlier, but definitely good numbers by any yardstick. One may ask whether the numbers are only about crowds because people have been caged in for over 3 months or is business actually happening. Arjun Sharma, Chairman, Select Group, shares that ticket sales and purchase values are actually much higher, meaning that people are using malls not only for an outing, but also to buy!
What has really helped retail bounce back so quickly is the habit of saving, which has supported families, despite pay cuts and layoffs. The real eye-opener has been the huge growth in online buying, especially in unconventional segments like food, electronics and cycles. It is obvious that the Indian consumer is now looking at online as an addition to stores for his shopping needs. Not surprisingly, Amazon has been among the biggest gainers with consumers from pan-India exploring the options. The online giant has seen a huge growth in new base of consumers in the last few months with about 65-70 per cent of consumers coming from smaller towns.
The surge in consumer interested is balanced by the huge surge in seller registration at Amazon by over 80 per cent since February, the last pre-COVID month. Manish Tiwary, VP, Amazon India, however, does not see a competition between the online and offline retail options. Instead, he feels that it means greater power to the customer shopping experience. “It is all about adding one more channel to serve your customers. End of the day, there will be customers for both channels. But there has definitely been a shift in the Indian consumer’s preference towards online channel,” says Manish.
No one can deny that the pandemic has resulted in some critical shifts that will have a long-term impact on retail, pushing it into what is now called phygital format. Factors like working from home, a greater focus on wellness and consciousness of social distancing are expected to continue for longer than what was initially anticipated and this will further bolster consumers’ propensity towards online shopping. Reacting to the growing preference to online shopping, Arjun emphatically states that nothing can replicate the shopping experience and authenticity of purchase that offline retail has to offer. With both formats doing well, there is unanimity in the belief that the future of retail lies on seamless integration of both online and offline channels.
While e-commerce is catching up momentum in India, it still is a very small part of the overall pie. Manish reasons, “I don’t understand the debate… online is still such a small segment and in a country like India with so many mom and pop establishments, online still has a long way to cover.”
A relatively newer but equally strong player in the retail space, Reliance Digital has experienced robust rebound since stores re-opened with over 100 per cent productivity almost immediately. “We thought of this as an initial rush for work from home and food requirements, but what we have seen from May till now is that we have been selling as much as 50-60 per cent above the last year’s numbers,” says Brian Bade, CEO, Reliance Digital. Brian shares that the company has also expected a shift from stores to online after it went omnichannel post the pandemic, but store sales continue to be strong.
In the online-offline debate, all experts agree that technology adoption plays a very critical role in the harmonious convergence of both formats. Earlier, technology was an enabler, but post the pandemic, it graduated to become a necessity for both retailers and consumers. “We started our technology journey about 5 years ago with core focus on people, software and hardware. When people were panic buying, it was technology that helped us cater to the demand seamlessly,” states Vidya Laxman, Director Technology, Tesco (Global). The success is obvious from the fact that Tesco’s online business grew from 9 to 16 per cent after the pandemic hit and the company leveraged heavily on technology. Significantly, 85.6 per cent of consumers moved to online for grocery needs in the UK during the pandemic, and even more significantly out of this, 47 per cent have confessed that they will continue buying grocery online even after the pandemic.
It is interesting to see that even in India, online formats are expanding their reach. Of late, malls or in-mall stores are being used as urban warehouses by the online players to ensure a faster delivery to the customer in a bid to leverage their existing network and reduce fulfilment cost. As per a recent report ‘Indian Retail – Certainty Despite Headwinds’ based on a study by Anarock & Retailers Association of India (RAI), this has led to over 25 per cent jump in billing by some brands across segments as omnichannel retail takes the centre stage.
There is no doubt that the time has come for the retail industry to converge and compliment channels, so as to seamlessly offer consumers a better experience and journey. The reality remains that as retail picks up pace, it will be different and more dynamic than the pre-pandemic era. It is also noteworthy that on the backdrop of increasing retail expenditure and more willingness to move out of the confines of home, fashion cannot remain out of the purview for long!
Also Read: Top Trends in ‘Retail’ by Apparel Resources