Emerging from the Covid-19 pandemic, our collective response and adaptations to this unprecedented global disruption have undoubtedly imparted valuable wisdom. Nevertheless, new challenges persist on the horizon, such as the Russia-Ukraine conflict, geopolitical instability, and an economic slowdown.
Naturally, these hurdles have wielded a profound influence on consumer behaviour, effectively reshaping the retail landscape in India and ushering in significant transformations within the e-commerce industry. However, what sets the present scenario apart is the industry’s adeptness in assimilating the lessons of the past three years, harnessing technological advancements, and eagerly anticipating further changes that will prove advantageous to both retailers and consumers alike.
As we forge ahead, it is crucial to recognize that several enduring trends will continue to shape the future of retail in our country. In my firm conviction, I present to you five prominent retail trends that will demand close attention in the coming days…
E-commerce will continue to reign supreme
The aftermath of the COVID-19 pandemic witnessed an unparalleled surge in the popularity of the e-commerce platform. With lockdowns and restrictions confining physical shopping, consumers swiftly pivoted towards online channels to fulfill their purchasing needs.
While traditional brick-and-mortar stores are gradually making a resurgence, the demand for online shopping continues to soar, establishing e-commerce as the dominant channel for retail transactions. This significant shift in consumer behaviour has presented businesses with newfound prospects to venture into the digital marketplace and engage with a wider customer base.
According to reports, the e-commerce sector in India is poised for remarkable growth in the forthcoming years. A recent survey, titled ‘The State of Cross-Border Trade,’ conducted by Shiprocket X, a prominent cross-border shipping product, revealed compelling insights. Currently ranked 9th in global cross-border growth, India’s e-commerce industry is projected to surpass the United States by 2034, becoming the second-largest in the world on a global scale.
Embracing omnichannel shopping
Omnichannel shopping has emerged as a prevailing standard in the retail industry, accentuated by two major trends in recent times: selling on Instagram and the advent of mobile stores online. This evolving landscape has intensified consumer interest due to its experiential nature and emphasis on personalisation.
Consumers now prefer to conduct thorough product research online before finalising their purchases, whether it be in-store or vice versa. Retailers are swiftly acknowledging the importance of offering integrated online and offline experiences to effectively meet the evolving demands of their customers.
This entails creating distinctive and immersive shopping journeys that seamlessly integrate the digital and physical realms. By doing so, retailers can engage with customers in more profound ways, elevating the overall brand experience.
AI & chatbots for seamless experience
As retailers strive to deliver a seamless omnichannel experience, the utilisation of artificial intelligence (AI) is poised to soar in the current year. Given its vast range of applications, the integration of AI technologies is regarded as a catalyst for progress within the retail industry.
According to Global Market Insights, the retail market size of AI, which amounted to USD 6 billion in 2022, is projected to exhibit a 30 per cent compound annual growth rate (CAGR) from 2023 to 2032.3 One notable impact of an AI-driven retail industry is the pivotal role played by chatbots,4 which have emerged as vital tools for efficient customer service.
These AI-powered conversational assistants significantly contribute to addressing customer queries and enhancing their shopping experience across multiple touchpoints. With the continuous expansion of online shopping and e-commerce, retailers are increasingly embracing chatbots to cater to the needs of their digitally savvy consumers. This not only streamlines the process of providing information to customers but also saves time and aids in post-sales activities.
Adoption of sustainable & recyclable packaging
In order to provide customers with an exceptional shopping experience, retailers cannot afford to overlook the global call for sustainability. Today’s well-informed and environmentally-conscious consumers place significant importance on sustainable and recyclable packaging and the impact of this shift is evident in the increasing adoption of sustainable packaging by businesses as well.
According to a recent marketing report, the sustainable packaging industry in India alone is projected to grow at a compound annual growth rate (CAGR) of 7.24 per cent between 2023 and 2028, showcasing the significance and potential of this trend.
Retailers are embracing this shift and recognising the crucial role of sustainable packaging options in meeting the expectations of their environmentally-conscious customers. By adopting sustainable packaging practices, businesses not only cater to their customers’ preferences but also contribute to creating a more environmentally friendly future for all of us.
Optimising retail media networks
The post-pandemic era is set to witness significant shifts in media consumption habits, placing a greater emphasis on digital media and online platforms. News and digital content will be particularly favoured, as consumers over-index their consumption in these areas. The surge in digital activity can be attributed to a substantial number of consumers transitioning to e-commerce for their shopping needs, including online grocery shopping.
As consumer behaviour becomes increasingly digital, it is imperative for retailers and businesses to adapt their media strategies to effectively reach and engage their target audience. This entails optimizing all retail digital networks, such as physical stores, websites, in-store displays, mobile applications, and streaming services.
Notably, the streaming TV space is expected to experience significant revenue growth in the new normal, as the retail industry harnesses its potential to a greater extent in the days ahead.
As you can see that while the shoppers’ journey significantly influences the above trends in 2023, it is undeniable that these strategic developments will also serve as catalysts for a prosperous future in the dynamically evolving retail industry.
Author:
Vineeth Viswambharan, Associate Vice President, Marketing & Sales, Adani Wilmar Limited.
