Indian retail industry is one of the fastest-growing retail industries in the world and is the fifth largest preferred retail destination, globally. India has witnessed a drastic shopping revolution in terms of format and the buying behavior of consumers. With the advent of Internet/digitization, the increased purchasing power of consumers, urbanization and rapidly changing lifestyles have led to the accelerated growth of the Indian retail sector.
As per Kearney Research, India’s retail industry is projected to grow at a pace of 9% from 2019-2030, from US$ 779 billion in 2019 to US$ 1,407 billion by 2026 and more than US$ 1.8 trillion by 2030. It accounts for over 10% of the country’s Gross Domestic Product (GDP), and around 8% of the employment.
Some of the factors encouraging this growth are:
Technology is fueling the next stage of growth in retail, with digital being the medium of this progression.
Recently, the retail industry has faced a major shift to “go digital”, brought on by the rapidly changing preferences of consumers and influenced by unending choices, real-time comparisons with competing products, and the ease of use of omnichannel platforms.
The COVID-19 pandemic brought the digital revolution of many companies to the fore. With curtailed physical movement and the closure of supermarkets and retail stores to avoid the risk of community transmission, the pandemic has emerged as a “black swan” moment for Kirana stores. Reports show that a staggering 1 million Kirana stores across the country have gone online in the last few months. The usage of digital payments has also spiked, with 75% of Indian consumers using digital payments currently – the highest number in the world.
With the growing need for home deliveries and cashless payments, retail giants like Reliance have recognized the Kirana store as the new local touchpoint. According to a report by daily Mint, Reliance-backed Jiomart may be embedded into WhatsApp this year to allow consumers to order on the popular messaging app itself. This move will allow 400 million WhatsApp users in India to order goods within the app.
The pandemic has also catalyzed the expanding outreach of e-commerce companies to smaller cities & towns. Phygital retail – a smart blend of e-commerce and the unique aspects of in-store shopping – is an emerging approach geared towards delivering an unparalleled shopping experience and surpassing the expectations of digitally-savvy consumers.
As India recovers from the pandemic, phygital retail is likely to dominate the industry. Combining the physical and virtual world, phygital carries with it the promise of a unified and personalized user experience. Digital signage is a powerful lever of the phygital strategy and a critical component that supports retail digitization.
At the same time, technologies such as virtual reality (VR), augmented reality (AR) and artificial intelligence (AI) will also be capitalized on to help retailers offer an immersive brand experience.
VR and digital signage could work together to create immersive and powerful experiences for consumers. For instance, retail stores could provide virtual fitting rooms and “try before you buy” experiences.
Ralph Lauren installed virtual mirrors in its in-store fitting rooms. Cameras inside the mirrors use RFID technology to detect which items a shopper has brought into the fitting room. The technology combines this with product data—like available sizes, and alternative colors, and offers product recommendations.
Ralph Lauren reported that its virtual mirrors have an engagement rate of 90%. Data from the virtual fitting rooms can be leveraged to tweak its retail strategy.
Digital wayfinding and informative retail digital signage enhance the overall shopping experience by helping consumers to navigate easily around large stores and locate their item of choice.
AI chatbots that elevate customer service and assist shoppers with product recommendations are gaining traction with many global brands. For instance, Tommy Hilfiger and Burberry have chatbots in their stores to assist customers to navigate through their collections. 80% of brands worldwide are already using or going to use AI chatbots soon. Retailers are also using AI and machine learning for generating customer-centric targeted content to upsell/cross-sell their products.
Cosmetics retailer Sephora is one brand that makes a prime example of using the power of data analytics augmented reality (AR) and AI to become a digital trailblazer. The Sephora app incorporates some of the latest AI tools and models to offer a virtual lipstick assistant with rewards and promotions for customers. Besides allowing users to experiment with the latest makeup trends, the interactive tools also enable users to show their designs to the world using instant social sharing buttons.
Self-checkout kiosks and touchless payments are becoming the “new normal” to decrease the perceived waiting times and make the shopping experience swift and seamless.
Decathlon, one of the largest sport-goods retailers, has introduced self-checkout technology in its new Noida store. The brand aims to provide a safe and seamless shopping experience.
Today’s consumers expect more personalized and customized experiences which are curated by brands and tailored to delight them at every touchpoint. Resultantly, brands need to develop strategies aimed at not only customer acquisition but also long-term retention.
Retail digital signage can be used to deliver a personalized shopping experience based on personas by tracking shopper data and adjusting marketing messages and in-store screen content in real-time, ensuring information and promotions resonate with current customers. Interactive displays and touch screens take the shopping experience up a notch by allowing shoppers to develop their own experiences by selecting their preferred content.
Additionally, retail digital signage featuring vivid imagery and stunning displays can be deployed to attract attention and increase footfall. Use digital signs to announce sales and special offers, launch and promote products, and make announcements about special events. Popular apparel retail brands that have deployed retail digital signage include Gap and Levis.
The retail industry in India is in the belief of a paradigm shift, transforming from disorganized to organized. Retailers in India are currently expecting a rise in revenge shopping across various segments and anticipating a V-shape recovery in 2022. Retailers are stepping up their game and jumping on the digital transformation bandwagon, to capture heightened consumer demand and forward their business.