The retail landscape has constantly evolved over the past century. For example, in the US, mom-and-pop shops gave way to departmental stores that offered curated products and experiences to consumers under one roof. This was followed by the advent of big-box retailers such as Walmart, driven by value and convenience in the 60s. The advent of ecommerce however has been a disruptive event, challenging the basic nature of interaction with consumers. The current wave of disruption has been termed the “retail apocalypse”.
In contrast to its global counterparts though, the physical retail landscape in India isn’t under such a threat. Ecommerce contributes only approximately 5 percent of the overall retail market share in comparison to nearly 12 percent coming from online retail in the US. Even with the Covid-19 pandemic disproportionately boosting ecommerce growth, we believe the future of retail most likely won’t be binary. Brick-and-mortar retail is here to stay; however, the business model must adapt. We believe that retailers need to fundamentally rethink their overall value proposition to the consumer.
Successful strategies must be built upon the simple principle of ‘consumer focus’ to ensure relevance and create a sustainable advantage. Retailers must embark upon the following five key strategic imperatives:
c. Retailers need to move beyond the transactional nature of standalone loyalty programs and to drive long-term brand loyalty and offer unified experiences to customers through omnichannel loyalty programs
Within digital environments, retailers will employ virtual reality (VR) to provide engaging experiences to the consumer and attempt to bridge the gap with regards to sensory experiences at brick-and-mortar stores. At the other end, brick-and-mortar retailers will invest in augmenting their in-store experiences by deploying Augmented Reality (AR) technology on their product shelves aimed at hyper-personalised interactions with consumers.
In the post-pandemic world, consistent disruption will be the new normal in retail and organisations that can respond with agility to adapt will survive in the long turn by creating a sustainable competitive advantage for themselves. Retailers have a mammoth task at hand and hence, embedding the above imperatives as core strategies will be the key to survival and become the leaders in the future of retail.
Siddharth Jain, Partner; Karan Dhall, Principal and Siddharth Mukund, Manager at Kearney
The thoughts and opinions shared here are of the author.
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