Amazon, Myntra, Flipkart, online shopping, E-retail.
You must be well accustomed to these words by now. Not a day passes by without hearing these buzzwords at least once in a day.
Online retail stores have completely revolutionized the entire retail and trade scenario, expanding a brand’s geographical reach and opening up a whole new world of customers.
But one question that pops up in our mind regularly alike is whether eCommerce will take over physical retail entirely.
Well, there is no definite answer to this.
However, to give you a better perspective, here is our take on the retail offline & online industry.
What is the current scenario of the retail industry?
The online e-commerce sector is growing fast & wide.
By 2019, the sector is said to have touched a whopping $1500 billion worldwide!
Now, the factors leading to this phenomenal growth are four-sided.
- The physical store, through payment gateways and digital catalogs, is moving online.
- Social media plays a very big role. With diverse platforms, you can now use text, visuals, audio, and just great pictures to promote your products.
- The age group of 18-24 years prefers to shop more online compared to their older counterparts. This can possibly be attributed to this being the first generation that grew up alongside the internet.
- The rise of smartphones & the use of apps improve access to online stores and can even build brand loyalty. This is one reason so many online stores ask consumers to install their apps.
However, despite such an impressive growth in the online sector, about 36% of all shoppers mostly prefer to buy from a physical store. Like designer items or jewelry, they are high-value items where people like to go offline.
What are some of the advantages of offline retailing?
- One of the greatest advantages of offline shopping is the trust issue. You can actually see, feel & test the product before buying.
- Establishing a brand exclusively online can be daunting, considering the largest gateway for discovering these products is Google.
- Moreover, people may prefer to shop in groups and the option to do so is effectively non-existent in online stores.
How the two sectors are blending?
At present many marketing experts are trying to go omnichannel retail.
What is omnichannel you may ask?
Well, it is sort of a hybrid between both online and offline retail where they function as one single entity.
According to an AT Kearney report, a stunning 95% of sales are achieved by brands that have an offline presence.
There are a few other things brands can look into to make this hybrid retail experience seamless.
One is to keep the brand identity intact. This way consumers won’t get confused between the two.
Second, offering in-store pick-ups for online sales and letting customers experience a product in-store before buying online are some ways to integrate both. This way you are providing the best of both worlds.
Going with future predictions, according to analysts omnichannel is going to be the future.
How will the purchasing algorithm of customers affect retail in the future?
The future of retail will probably be dominated by AI-based virtual assistants and purchasing algorithms, which will help to make our life easier and deliver the most convenient of the possible convenience.
So effective algorithms that can take control of categories for the consumers, by providing them time and cost-efficient undifferentiated solutions, will be a major hit for consumers.
This will be a challenge for multi-brand retailers. The promotional activities will be focused on algorithms. Brands will have to work to make them relevant to ensure that either the algorithm won’t trade them down, or the consumers will care enough about the brand to keep it in their own selection.
What does it mean for offline retail businesses?
Well, popular predictions say that a large section of the consumers will move online completely, but statistics show a different scenario.
Some products like mobile phones, computers, and electronics are expected to move online with a 9% increase in online purchases.
Also, sports equipment and clothing are predicted to increasingly be purchased online with a 6% increase and a large 11% rise within Generation Z.
On the other hand, segments like groceries, foods, fresh vegetables are expected to have a decline of 12% to 9%.
Moreover, gardening products, shoes, alcohol, hygiene products are expected to shift towards offline retailing.
What position does India hold currently in the retail market?
Well, the good news is that India is achieving some splendid job in the retail development index.
In Retail Development Index 2017, India was ranked the first in the Indian retail industry as the world’s fifth-largest global destination leaving the Chinese market behind.
According to reports, it accounts for over 10% of the country’s Gross Domestic Product (GDP) and around 8 % of the employment.
Recently, Rajesh Jain, MD & CEO at Lacoste India (Sports And Leisure Apparel Ltd.) mentioned that the Government of India’s various initiatives to enhance the retail industry in India is seen as a positive step forward.
According to reports, India’s retail market is said to be the world’s third-largest consumer economy reaching US$ 400 billion in consumption by 2025.
Do you want to open a solid retail market online? Contact us at Skyram Technologies & let us guide you through your business goals.
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