2018 will be a game-changing year for India’s traditional retailers – Trends that are set to redefine the retail ecosystem in 2018
2017 has been an eventful year for the retail industry, there has been a spurt in automation and digitisation to improve service, retain customer and enhance overall shopping experience. In 2018, this development will only amplify as kirana stores adopt technology to automate their operations and drive customer engagement to keep up with modern trade, discount stores and e-commerce. Listing down some of the key changes we foresee will revolutionise this industry in 2018:
• Digital transformation will drive shopper experience and store management: New age retailers are adopting digital solutions to uplift store image and keep up with modern trade and e-commerce. Increasing penetration of smartphones, impetus on digital India drive, GST and demonetization have paved the way for digital transformation for India’s most unorganized (kirana) sector. Retailers who are usually apprehensive about adopting newer technology are instead making a smooth transition towards android or windows cloud-connected POS solutions to automate their everyday operations. Customers are spoiled for discounts, itemized bills and offer by large format retailers; now they enjoy similar benefits at their stores.
Cloud-connected business platforms in Kiranas will automate in-store management, data on customer buying pattern will be eventually used to enrich the customer experience, and sales data analysis will help make meaningful business decisions, overall improving productivity and profits. 2018 would see a surge in end-to-end affordable digital solutions gaining popularity in the kirana space, helping them transform to a virtual supermarket.
• IoT-enabled supply chains will pave way for building stakeholder relationships: Reports suggest that the number of connected devices are expected to rise to 20.4 billion by 2020. There is a surge of improved and less expensive technology especially connected devices in the market which would change the dynamics of customers purchase behaviour and engagement with brands and retailers. Retail space will adopt technology that automates supply chain management, devices that auto-detect low inventory and send pop-ups to place order with distributors who are connected with retailers on cloud platforms. With limited human intervention and reducing logistical challenges, retailer will see improved efficiency, probability and more accuracy in the manner they conduct everyday business operations.
• Artificial Intelligence will lead the way in customer service and marketing: A research by Gartner stated that in the coming years, about 89% of the businesses will compete mostly on customer experience. The trend stands particularly true for the retail sector, where loyalty to a brand/product/store is a core concern. Today more and more companies are investing in research, big –data analysis and AI technologies to draw customer insights and personalise their marketing strategies. Most of the customer facing platforms like Facebook and website have incorporated Chabot to improve CRM thereby reducing human intervention, improving efficiency and customer experience. The impetus on real time data and advertising, personal and contextual communication will drive transition to AI devices and see a huge shift in marketing strategies and budgets in 2018. In these circumstances, Kiranas in India would have to adopt technology to transform their stores to virtual supermarket, use analytics for everyday business operations and contextual marketing to drive consumer engagement. Indian retail industry is ripe for disruption with increasing number of cloud connected POS solutions in the market to transform kirana stores, 2018 would see increased competition and a changed face of India’s most unorganised retail.
• Data and analytics will conduct customer engagement at the point of sale: Data would empower Indian kiranas to be the cornerstone of the retail eco-system especially as they drive 90% of the FMCG business in India. Brands can leverage data from these stores to re-align their marketing focus to kiranas which has so far been a dark space. There has been some traction in this space in 2017 with emergence of smart POS machines designed for Kiranas in India, however, 2018 would see heightened development in this space.
• The focus will be on establishing an emotional connect with consumers to build loyalty and trust: If India’s traditional kirana store succeed all this while, it is due to the emotional and personal connect that it offers to the customers. They garner high loyalty with an emotional rapport that has successfully been able to compete with their modern-day competitors. Going forward, the balance between the emotional quotient and the business will become simplified through data to help Indian retailers stay profitable through their technology revolution. While digital solutions enhance the core strength of the retailers, the deciding factor will lie in finding the balance between automation and customer connect in 2018.