How Technology Can Help Traditional Retail
The Indian retail sector, that contributes 22% of total GDP, is very dynamic and has been evolving regularly, wherein different brands have been adapting and using technology to cater better to varied and changing consumer preferences. Rapidly growing population, convenience, increase in personal disposable income coupled with fast paced urbanization, high demand and easy access to credit cards and personal loans, have been the main drivers of retail growth.
Earlier, the presence of brick-and-mortar retail signified a physical store where customers could browse through the displayed products and initiate purchases in person. During these times, a sales personnel from each company or a distributor would visit the Kirana store in person to take the stock updates before an order was placed. Accordingly the distributors would send the stock to retailers, which was indeed time consuming and a tedious process. This would eventually lead to business loss due to time lag and would affect the retailer, distributor and the main company, especially in Tier two and Tier three cities.
Keeping the two main customer objectives in mind, best price offered with no compromise on quality and timely delivery, the retail sector today is hugely diversified, with seamless service at several touch points. However, as consumers get more tech-savvy with rapidly evolving consumer interfaces, the in-store traffic has been on a decline.
Traditional retail outlets have taken a backseat since online shopping has increased vehemently due to attractive websites, timely delivery and convenience of shopping on user-friendly interface, multiple online options for the same product, easy and secure online payment methods. Round the year discount coupons, referral and reward points, 30-days return guarantee have been instrumental in achieving success for the ecommerce sector. Hence, traditional retailers have spent a larger part of the last decade in reacting to and coping up with dynamism in this industry. Rapidly changing landscape and to combat the increasing competition, traditional retailers have been motivated to provide varied benefits of technology in-store. The constant fear of remaining technologically viable in today’s competitive world, has instigated the retailers to innovate constantly and implement cutting-edge technologies to fulfil today’s customers’ need, so that they do not lose track of them. Hence, traditional retail majors like Godrej, Big Bazaar, Reliance Digital, Vishal Mega Mart, Spencer, Aditya Birla Group etc. have been revamping the entire retail ecosystem, known as ‘Experiential Retail’ with technological innovations like smart displays, smart shelves, in- store services, supply chain optimization, home delivery and brand optimization options, wallets, social networking, point-of-sale data, logistics automation etc. Research indicates that retailers benefit by offering a seamless experience across mobile, desktop and in-store, which enables a consumer to spend an average of 13% more in store, if he has browsed through the retailer’s website. Therefore, there has been a digital transformation to attract store footfall and increase basket sizes.
Technological wave in the Retail Landscape:
Digital technology has enabled traditional retailers to transform shopping into an enjoyable and comprehensive experience while offering more value added services like discount coupons, display merchandise and run their own loyalty programs. Different brands in the digital space have been helping them micromanage their business in clusters, which would improve supply chain efficiencies by inculcating the following:
IoT (Internet of Things)
IoT has been instrumental in providing opportunities like customer experience, supply chain and new channel-revenue streams for in-store retail formats to enable streamlining the information flow and real-time decisions. IoT’s application is witnessed from the lighting system in the store, to being an information provider to the customers in real time, the PoS (Point of Sales) system, to the electric switches and even garbage disposal units. Automation of inventory management, credit management and other in store operations have become cheaper.
SMAC (Social, Mobile, Analytics & Cloud)
SMAC’s contribution to reshape a brand value is driving business innovation. Advancing technologies have been enabling traditional retailers to change brick and mortar store operations, give them greater flexibility, efficiency and attract consumers in the door.
Big Data & Display Technology
Retailers have been finding innovative ways to gather insights about their customer’s behaviour and pricing decisions from the ever-increasing amount of structured and unstructured information. Data and analytics have been useful in keeping a track of the untapped potential in social media, customer feedback comments, video footage, recorded telephone conversations and locational GPS data.
Digital signage attracts shopper attention and enhances their experience as it gives information of in-store promos and in turn an impulsive purchase.
Presence of Omni-channel Retail
Every traditional retail experience works to deliver personalized experience catering to consumer tastes, via digital medium to improvise on their experience of shopping and thereby nurture the relationship between retailers, brands and customers.
Consumers are empowered with information to access product details and compare them by enabling more shopping options. More opportunities are created for the retailers spanning from potential extension of sales, while increasing brand awareness and loyalty. Brands rendering cohesive, personalized experiences will be analysed which could lead to a brand switch, driven by real time shopper analysis.
Technology has been pertinent to create transparent communication mechanism, thereby changing the dynamics of traditional retail. Companies are embracing the technological wave to streamline the secondary and tertiary sales. The market has been flooded with innovative technologies to enable a smooth supply channel.
Launch of advanced retail applications has been instrumental in connecting the retailer, distributor and the company digitally, wherein the retailers can punch in their order requirement to their distributors online. The online application enables faster turn-around-time and efficiency as chances of an in-person visit is eliminated, thereby saving a lot of man hours for orders and delivery. Probability of stock outs can be drastically reduced while the focus on rural areas has become easier to maintain.
Use of retail applications by retailers has inculcated transparency in the supply chain process, whereby the distributors can keep a count of the actual stock available with each retailer, while the retailers could see their order status and plan their needs in advance. Digital payment channels are very convenient and keep a track of the changing dynamics in real time. These smart retail applications are bound to create a ripple of wave in the traditional retail business, in today’s era of digitalization.
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