We are all different and so are our buying behaviors. Some of us just want convenience while others are drawn by brand loyalty, price sensitivity and personalization. One factor that remains consistent across the globe is the shopping experience.
‘Unravelling the Indian consumer’ a report by Deloitte and the Retailers Association of India, states – ‘India is one of the fastest growing major economies globally. The Indian retail market is expected to grow from USD795 billion in 2017 to USD1.2 trillion by 2021.’ Further, with ever increasing internet penetration in the country and a boost in operations of international retailers, the share of the organized retail market is expected to increase from ~12 percent in 2017 to 22-25 percent by 2021. India has the world’s largest millennial population.
They constitute nearly 34 percent of the country’s total population falling in the age group of 18-35 years. Due to their hectic lifestyles, convenience shopping is an important consideration for millennials, hence the explosive growth in, and high tendency to shop online. Millennials place greater reliance on the ethos and the value system of the brand and prefer personalized product and service categories as they aim at differentiating themselves from the rest.
As such, we are seeing an increasing rise in multichannel retail. Consumer focused companies in India are aligning their business strategies, especially to cater to the demands of a young and technology driven population. Consumer experience is taking front seat and brands are seen to shift their stance from ‘bricks versus clicks’ to ‘bricks-and-clicks’.
The expectations from a modern retailer have changed completely – consumers no longer walk into stores just to buy products. They are looking forward to an enhanced shopping experience where they get immersed into a whole new dimension of interaction. They get introduced to new products and features, engage with technology and devices, experience delectable global cuisines, get absorbed into virtual entertainment, special events and product launches, etc. Retail is thus evolving into a new dimension of ‘retailtainment’, which is likely to dominate the consumer industry in the near future.
At the same time, and according to a recent global study conducted by Oracle NetSuite, Wakefield Research and The Retail Doctor. The global study of 1,200 consumers and 400 retail executives across the U.S., U.K. and Australia highlights the varying shopping expectations of different generations and the role of technology in personalizing retail.
The shopping experience continues to vary among different generations of consumers with younger generations preferring experiences that incorporate technology and seeking connections with brands on social media. On the other hand, an older generation of shoppers prefer a more traditional retail experience. Personalization is key for retailers who are seeking ways to balance consumer expectations.
Almost half of retailers have made no progress to tailor the in-store shopping experience, despite the fact that ‘digital natives’ (Gen Z and millennials) are preparing to do more shopping in-store. The expectation from consumers is clear and it’s up to retailers to offer engaging and custom experiences that will cater to shoppers across a diverse group of generations.
The in-store shopping experience remains an important part of the retail environment for all generations, but the progress retailers are making to improve the in-store experience is being viewed differently by different generations. “Digital natives”, Gen Z and millennials (43 percent) are most likely to do more in-store shopping.
Gen Z and millennials (57 percent) had the most positive view of the current retail environment feeling it was more inviting, followed by Gen X (40 percent). Baby boomers (27 percent) were more likely to find the current retail environment less inviting than consumers overall. Gen Z valued in-store interaction the least with 42 percent feeling more annoyed from increased interaction with retail associates.
While more than three quarters of retail executives (79 percent) believe having AI and VR in stores will increase sales, the study found that these technologies are not yet widely accepted by any generation. Overall, only 14 percent of consumers believe that emerging technologies like AI and VR will have a significant impact on their purchase decisions.
While almost all retail executives (98 percent) think that engaging customers on social media is important to building stronger relationships with them, the study found a big disconnect with consumers across all generations. Overall, only 12 percent of consumers think their engagement with brands on social media has a significant impact on the way they think or feel about a brand.
It is interesting to see that ‘digital natives’ in US, UK and Australia are more likely to increase their shopping in physical stores whereas Indian consumers are seeking the confluence of online and offline channels, where technology will facilitate the enhancement of consumers’ experience throughout the shopping journey.
We watch with interest as the Indian retail sector finds a way to successfully move their approach to ‘bricks and clicks’.