How the retail industry fared in 2018 and what in store for 2019?
firstname.lastname@example.org 2018-12-29 12:58:00
The overall retail market in India 2018 stood at Rs 43,251 billion and is forecast to grow by 6.4 per cent CAGR in 2018-2023, according to a report.
Retailing in India still predominantly takes place in physical stores and shopping behaviour between urban and rural consumers continues to be vastly different, says retailnews.asia in its latest report.
Smaller independents (both grocery retailers and non-grocery specialists) continued to dominate the landscape they faced growing competition from modern outlets opening in out-of-town shopping centres and malls capturing the Tier II & III markets.
This year, we witnessed modern retailers launch interesting payments schemes and effective pricing strategies to propel the sales. For example, leading retailer Future Group launched its payment wallet Future Pay which can be used in all its retail brand outlets. Retailers also capitalised on growing acceptance of modern retail by developing new marketing schemes and strategies to attract shoppers.
Additionally, multi-channel strategies remained key for retailers as they are developed online platforms that are also smartphone and tablet compatible to drive Internet sales.
Furthermore, retailers also increased their new private labels products. This is was done for certain grocery categories like: packaged foods, non-alcoholic drinks, beauty and personal care and home care products.
Finally, subscription-based retailing practices started to pick up in 2018. Although still relatively niche, and limited only to urban India, the subscription-based model for beauty and personal care and consumer health became quite popular in metropolitan cities.
What are the retail trends that are going to rule the roost in retail in 2019?
– Retailing will continue to offer potential for grocery retailers. Convenience stores and forecourt retailers are likely to continue to see healthy growth rates as their format can meet the demands arising from changing lifestyles by offering more convenient shopping solutions, both in terms of location, business hours and product range.
– Given the rising maturity of retailing in metros/urban areas, retailers have slowly started to focus on the semi-urban consumer base. This has resulted in the slow and steady urbanisation of shopping styles amongst semi-urban consumers.
– As the labour crunch and high rentals continue to affect the retail landscape in India, hypermarkets are looking to ramp up investment on self-service technology and automation to reduce costs and improve customer experience. Some hypermarkets chains have implemented self-service kiosks at checkout counters, generally with positive results because of reduced waiting times. Investments have also been made into automated ordering systems, which has helped brands reduce storage space at outlets, hence control rental costs. This can be expected to grow during 2019 as well.
– Furthermore supermarkets are likely to push the broadening of key product categories, such as organic fresh food, soft drinks and packaged food. They are also likely to further narrow the line between foodservice and grocery retailing, with the introduction and integration of new foodservice elements within their stores.
– Non-grocery retailing will likely be impacted by the growth of internet retailing at the expense of specific store-based retailers and other non-store channels. Consumers are expected to increasingly shop and research products online, with the popularity of smartphones making mobile-optimised sites and shopping apps crucial in attracting consumers. Moreover, social media will be used more often to alert consumers to attractive price promotions and build interest in new product launches. Also, omni-channel strategies will remain key for non-grocery retailers.
– Non-grocery retailers will increasingly integrate their online brand information with store inventory, as consumers expect to find the same products in both channels. Moreover, to minimise showrooming, players will also need compelling reasons for customers to buy their brands in store, whether in terms of product selection or price competitiveness.
– The entry of Amazon and Flipkart could stimulate a much-needed increase in the competition, which will bring both opportunities and threats for existing food and drinks retailers in India. Amazon with ‘Amazon Pantry’ and Flipkart with ‘Flipkart Supermart’ eventually launched its online grocery business in 2018. Millennials and affluent consumers were encouraged to change from shopping in physical stores to online in 2018 with convenience and heavy discounts on offer.
Also, with increasing investments from player such as Amazon who are expected to buy skate in Future Retail and PayTm who have partnered with BigBasket and Future Group to strengthen its online grocery business, the food and drinks internet retailing is expected to show tremendous growth in 2019.
- K RAMANATHAN email@example.com
- How the retail industry fared in 2018 and what in store for 2019? 2018-12-29 12:58:00
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