Rapid evolution of technology in retail has led to a major revamp in the sector globally as well as in India. Companies, especially modern retailers, are increasingly leveraging advance data analytics, social media analytics, and other cognitive technologies such as machine learning, chat-bots, etc. to gain insights into shopper behaviour, augmenting the traditional research methods to understand the shopper journey and their ‘triggers’ to purchase.
These insights are subsequently fed into retailers’ business strategies to offer bespoke solutions based on consumers’ specific desires, creating more and more ‘individualised’ promotional/marketing campaigns, with the end goal being to target the segment of “one”. This has become one of the key strategic differentiator to edge out competition in a highly competitive retail market.
Consumer brands across industry segments such as food and beverage, apparel and footwear, fast moving consumer goods and consumer packaged goods, skin and personal care, etc. are increasingly focussing on differentiating from the competition by offering more than just the product. The quality of the shopping experience has once again put the focus on the consumer. Retailers, both offline and online, are now providing customised solutions to the consumers. A few major examples include:
· Personalised advertising and marketing campaigns run by consumer goods and packaged goods players
· Special ‘wow’ experiences in-store to attract and retain consumers by lifestyle and other retailers
· Made-to-order products in personal care or luxury segment where consumers choose the ingredients/contents and witness the product being designed for them
· Custom loyalty programmes by modern retailers providing “personalised” benefits to consumers basis their shopping patterns
· Exclusive customised product and service offerings for premium and high-spending consumers in e-commerce.
Enhancing consumer experience via technology
Technology has been the front-runner in driving consumer engagement and experience in retail. Apart from understanding consumers’ behavioural insights through advanced data analytics, emerging technologies such as Internet of Things (IoT), Augmented Reality (AR) and Virtual Reality (VR), Artificial Intelligence (AI), bots and drones, beacons, cloud-platforms, etc. are enhancing consumers’ engagement more than ever.
AR/VR based experiences
While online retail, especially for lifestyle and beauty enhancing products, has already embraced the concept of AR, physical retail stores are also following suit by piloting AR/ VR-based virtual trials at their stores in India. For example, consider the extent to which convenience has been redefined for consumers at AR-based apparel stores. Consumers just have to walk-in the store, choose their preferred attires from a wide range of product assortments available through a virtual inventory, enter the trial room and try all the outfits via a virtual mirror without actually having to perform all these tasks.
The combination of technologies at these modern apparel stores facilitate a seamless experience for the consumer, which is more engaging and convenient, while providing more options. The buying experience is engaging and unique in value for the consumers, thus encouraging repeat visits as well as word of mouth advertising. Stores or e-commerce platforms try to ensure that the consumers’ queries and concerns are adequately addressed, and they are appropriately guided so as to facilitate and enhance their overall shopping experience.
Stores are trialling AR to showcase the entire range of products ‘virtually’, allowing shoppers/consumers to browse the catalogue and make selections, thereby reducing the physical space required by stores. In many cases, the ‘virtual’ catalogue is connected to social media platforms, allowing consumers to get real time feedback from other consumers who have bought/used the products, see the advertisements promoting the products, and also check for their favourite celebrities who may have used the products, further enabling them to make the choice.
Mobile wallets disrupting the payment eco-system
Another major technological advancement playing a significant role in reshaping shopping experience at multiple levels is the advent of mobile-wallets, or m-wallets. The extensive adoption of smartphones and rising Internet penetration levels in India coupled with the government’s regulations and policies are positively swaying the evolution of m-wallets. These wallets are playing a pivotal role in facilitating payments, especially in the retail industry, driven by convenience and acceptability.
The advantages of using m-wallets are multi-faceted, as they provide consumers with an alternate payment method to transact and enable payment to small merchants, who are reluctant to accept payment through non-cash instruments for low-ticket transactions. At the same time, digital transactions result in traceability and lead to better record-keeping, which helps in enhancement of overall accuracy of financial estimations and taxation. While traditionally, m-wallets started with services such as recharge, bill payments, and money transfer, these are now increasingly being used for shopping purposes, including travel and entertainment reservations, taxi services, food orders, tolls, etc. M-wallet providers are entering this space and driving the change in retail payment eco-system. Mobile payments have witnessed noteworthy increase in terms of volume transactions in the last one year, reaching 3 billion transactions in FY’18.
Looking forward
While today India lags many developing countries and developed countries in terms of technology adoption in retail, increasing penetration of organised retail and investments by many multi-national and national retailers are expected to modernise the Indian retail sector. In addition, the government’s regulations and policies are expected to expedite the digital and technological advancements and adoption in India. As a result, Indian retail (both offline and online) presents significant growth opportunities for adoption of technologies in the sector, and is expected to outpace the growth witnessed in other developing and developed markets.
( Views expressed are personal. )
The author is partner, Deloitte India. He has over 20 years of experience in various senior management positions, and has worked extensively in the areas of agriculture, retail, and consumer goods.
