The retail industry is in the midst of one of the major technological changes in the last century. Digital and mobile technologies have proliferated the market and customers have adopted these technologies and that has made a revolution in the way customers shop.
Many retailers blended their online and in-store verticals providing the customers with a cohesive shopping journey. Let us look at the following two cases
- A consumer goes online looking for a refrigerator. He is invariably influenced by the tonnes of user reviews online. While making a price comparison online, he discovers that a local organised retail store near his home has a great discount for the model he has chosen to buy. He completes the purchase by physically visiting the store. This is a classic example of how organised retailers have used their online muscle power to serve customers and boost their sales volumes.
- Another user buys an Apple IPhone online and when he opens the delivered box, he finds a defect in the phone. He immediately walks to a nearby Apple store and gets a replacement for the phone.
Let us look how the Retail industry fared in 2015.
Looking back at 2015
1. The steady growth of online sales
2015 was a year where both online and brick & mortar retail went hand in hand. The customers have got a grip of using these two mediums with ease. The year 2015 saw a growth in the online sales by 20 to 30%. Traditional Brick and Mortal retailers have ventured into the online space and have started to provide an Omni channel experience to their customers.
2. The researching customer
Customers are becoming more educated. In 2015 more research was done by customers before a purchase decision. 82% of smartphone users consult their phone while in a store.
The number of researching customers have steadily increased.
3. Brand name matters
For highly prized products, unless and until they belong to top brands, customers visit the store physically to have a feel of the product before making a purchase.
The above trends in IT retail in 2015 shows that 2015 has not been much different from the previous year. However things will change drastically in 2016. Technology will drive sales in 2016. Falling costs, widespread availability and adoption of devices, a working infrastructure and internet of things will accelerate the integration of technology. This will drive more change in the way consumers shop in 2016 than it has in the last decade.
Predictions for 2016
- Traditional players will focus on online sales
Retailers who are on brick and Mortar will start their investments online. Reliance India retailers ventured into the online space in 2015. They have a high chance of investing heavily to boost their online sales.
- Customer Experience (CX) will be the focus
The world is talking about CX. Retailers who are already online will invest more in providing superlative customer experience. Retailers will focus on fast loading websites, user friendly site, stronger content, online reputation management and much more.
- Innovations will be on the rise
Online retail will see lot of innovations in 2016. For example, clothing retailers would invest in virtual trial rooms which will give the online customer an idea of how a particular clothing will fit them. Persona based innovative marketing will become a common phenomenon
- Investment on traditional retail stores will come down
The spend on brick and mortar retail stores will slowly come down because the investments in brick and mortar is comparatively higher compared to online retail, whereas the overall sales are more or less the same in both.
- Acquisitions will make headlines
Multiple acquisitions of retailers will make headlines in 2016. The larger retailers will acquire smaller retailers. The vice versa is also a possibility if the smaller retailer is cash rich.
- South Asian market will be a force to reckon with
Online Retail is slowly taking its dominance in the South Asian Market. India will be a major player in the south Asian market. 30 to 40 % of the global online sales will be contributed by India and South Asian countries.
- Phanikishore Burre,
Associate Vice President – Head of Retail Technology Solutions