The Corona pandemic had varying impact on various sectors of the economy worldwide in the past two years. However, there were sectors that were able to leverage the pandemic and flourished while, there are sectors which are still trying to recover from the pandemic slump.
The retail sector was among those sectors which was on the pandemic slump side of the spectrum as it made sellers close their stores, because of depressed demand and localized restrictions. The sector was also the victim of operations and supply chain snarls.
The Retailers Association of India (RAI) says that even as the sector recovers, the India consumption story continues to remain strong despite unprecedented challenges and is poised for significant growth.
As per RAI report this year, it is expected that by 2030 there would be a 40 per cent increase in annual household income, reflecting the propensity of consumers to spend. It also said that it is expected that 80 per cent households would have access to the internet by 2026.
The attitude to spend as reflected in RBI’s Consumer Confidence Index is at the highest level since the pandemic. Overall, the retail market has recovered to exceed pre-covid levels.
The report says that online channels are now contributing a larger share of revenue across segments.
The sector is dynamic due to changing demographics, human aspirations and behaviours, brands and product, global connectivity, etc.
Here’s what shaped the retail sector in 2022:
Brand Websites establish loyalty among digital shoppers
According to Unicommerce and Wazir Advisors Report 2022, as consumers continue to shop online, brands across all segments are focusing on increased online visibility and direct sales. The increase in technology investments appears to be paying off, as evidenced by the 80.4 per cent year-on-year (YoY) growth on brand websites, while dropship volume on marketplaces increased by 59.6 per cent during the same period.
Beauty and personal care products continue to grow rapidly across brand websites and marketplaces. Brand websites drive strong growth in the Health & Pharmaceuticals (84.8 per cent) and Fashion (89.5 per cent) segments.
Customers prefer marketplaces for the footwear segment because they provide more shopping options.
However, marketplaces have yet to make significant inroads into the eyewear space, which explains the rapid growth rate.
As per BCG and RAI Retail Report 2022, a seamless shopping experience integrates customer data to personalise consumer interactions and provide a continuous, connected journey as shoppers transition from one device to another, and from online to offline and back again, so that consumers do not perceive boundaries between online and offline channels.
Consumers are increasingly expecting to be able to do anything, at any time, from anywhere. Sellers are now providing consumers with an unlimited experience, such as the ability to buy anything while commuting via shoppable apps/websites, the product can be delivered anywhere, including the home or car, and delivery is no longer limited to days; retailers are now offering one-hour delivery, subscriptions, and so on.
Emerging Revenue Models
Experimenting with new revenue models Innovative methods for selling products on social platforms was seen in the year gone by.
a. Using pre-recorded / live streamed videos to drive customer purchase journeys: Creating interest through short videos, using live video to share product details, and answering customer questions in real time are all ways to generate interest.
b. Influencer Led: An influencer may demonstrate certain product hacks, explain its pros and cons, and so on.
c. Reseller-led marketplaces use resellers to sell a curated set of products in their circle; consumers rely on the reseller’s recommendations for product quality and pricing.
Rise Of Mega Ecosystems
Unlike social media filters, consumers are becoming more authentic with their desires. In recent years, we’ve seen people accept other people and themselves for who they are. Retailers are now developing platforms and ecosystems to meet all of their customers’ needs. Alliances expand and scale retail capabilities while reducing competition.
Personalisation At The Core
From discovery to fulfilment, customers want unique and tailored offerings. With social media and the internet in their hands, consumers want to give and receive personalised gifts. As a result, more sellers are now providing this experience to customers.
Retailers have faced numerous challenges in the past, but this has not stopped them from reinventing themselves in response to constantly changing social trends and consumer needs. They demonstrated that if they want to get out of the ‘well,’ they will undoubtedly find a bucket to climb up