As one of the top five global retail destinations, India’s retail landscape is very vibrant. As entrepreneur Narendra Pasuparthy writes in Business World, India has the highest per capita brick-and-mortar store ratio. Seen in present context with pandemic and lockdowns across the globe, this indicates towards a shift in consumer preference towards online retail, and is an opportunity for omnichannel.
As per an IBEF study, online sales in India will grow at 10.7 per cent in the next four years from less than five per cent in 2019. Indeed, the pandemic was a catalyst, with online grocery sales alone recording 76 per cent growth compared to last year. This throws up huge opportunities to transform the landscape by leveraging technology.
Importance of brick and mortar stores
While online maybe an emerging opportunity, brick and mortar stores still hold a strong place he writes “As the world looks at Indian retail for inspiration and business opportunities, it is important that we play to our strengths – our good old physical store. Let us not make the myopic mistake of equating technology to ecommerce and online purchases alone.”
Hence, brick and mortar stores are irreplaceable. In fact, an IDC study highlights, customers who shop from multiple channels (store and ecommerce platforms) have a 30 per cent higher customer lifetime value as opposed to those who buy from a single channel. Hence, the importance of physical stores cannot wane.
“Therefore, it is crucial that we understand the need for multiple channels and the role each one plays in contributing to customer loyalty. As retailers, we need to understand the post-pandemic customers’ mindset – safety, convenience, cost-efficacy, and yet, an engaging experience that delivers more than just the product,” Pasuparthy writes.
He goes on to argue hyperlocal presence is important for “an impactful experience that aids overall growth and sales across channels”. The role of technology is important here to service customers across channels. “A well-integrated omnichannel system allows companies to be in sync with changing customer expectations so that they can meet them consistently,” he writes.
In the US for example as per McKinsey the Buy Online, Pick-up In-Store model grew almost 28 per cent in February 2020 compared to 18 per cent in 2019. With the pandemic and shifting customer behaviour there is a huge potential to deploy hyperlocal delivery and personalised experiences, powered by technology.
And as Canadian retail industry futurist Doug Stephens says, “Most convenience-based retailers will begin to use stores as media for customer acquisition and media platforms as stores for sales transaction”. Indeed, while businesses are shifting to digital channels brick-and-mortar stores will continue to remain vital to drive omni-channel business growth.