Retailers need business strategy for digital age: PwC-India Retail Forum
Retailers need business strategy for digital age: PwC-India Retail Forum
Mumbai, 15 September 2015: Retailers today need a business strategy for the digital age and an enhanced business model to drive rapid growth in the future. This means relooking at everything - the role of the store, place of service, consumer connect, management of risk and role of employees. They will also need to develop new thinking around technology, processes, skills for people, and a new organisational design.
Retailers will be required to build a “true” omnichannel operation that allows customers to interface through any channel of their preference on a 24/7 basis, anywhere at any time. Meeting the omni-channel consumer’s increasing expectations for convenience, speed and quality will force many retailers to revamp and shakeup their obsolete value chains designed for the single-channel world. The surge in demand from regions beyond metros has led to omni channel emerging as a viable strategy for many and could eventually lead to the development of new highstreets in tier II and III cities.
However, certain things about great retail execution will never change: brand, product, price, and delivery continue to be as important now as they have ever been.
These observations are part of the PwC – India Retail Forum report titled Are you profitability ready – Perspectives on the Indian retail industry launched today.
Speaking about this, Anurag Mathur, Retail and Consumer leader, PwC India said, “In the face of increasing competition, sustained cost pressures and the constantly evolving customer, the need to create differentiation has never been as important. Ability to be present at “point of discussion” and a differentiated Omni-channel presence to drive higher revenues has emerged as the key factor, even as customer loyalty in Indian retail continues to be a myth.”
Amitabh Taneja, Chief Convenor, India Retail Forum, said, “The retail industry in India is at the brink of evolution. Consumption trends are continuously changing the way retailers are strategising. Innovations have become the order of the day. The industry the world over is evolving fast and differentiation is what it will take for winning in this age.”
The report highlighted that challenges retailers have been historically dealing with, in order to manage costs related to expenses and revenues, have become increasingly complicated. Thus, the survey has identified six pillars of profitable growth in the retail industry.
- Constantly strive to understand your consumers: Consumers vary by region, state, city and street. It is critical to understand local market dynamics and ensure that product assortments at the store level or on your e-commerce portal can meet these needs. Creating localised products will help drive purchases and sales.
- Define your value proposition and ensure that it stays relevant: Develop a consumer centric value proposition, harness the collective intelligence of your consumers and build a proposition that is relevant and valuable to the customer.
- Make it seamless, efficient and profitable across your channels and your supply chain; couple this with SPEED as today is “too late”: Retailers need to create new ways of retailing that merge the experience of shopping on-line and in-store so that each touchpoint is consistent, cumulative, and compelling. In a wireless world, retailers need to find ways to use digital connectivity as the bridge between the online and offline parts of their business.
- Drive decisions through continuous analytics: Retailers need to get as good at this as the “local grocers” are, and start using its vast volumes of consumer data as a source of competitive advantage. In a large and diverse country like India, retailers are bombarded with tons of data that they can be used to their advantage.
- Accelerate focused and smart investments in new technology but make it work hard for you: The retail sector has to realise that there is no longer any alternative to accelerating their investment in digital technology. Indian retailers will have to find and train people who can use these new age technologies and apply it to specific problems and challenges of the retail environment.
- Protect your customer, image and brand in the digital world– prepare for risk and hold yourself to standards higher than those demanded currently: The digital world represents a whole new set of risks across various dimensions – from people, to processes to public perception. With your customer, image and brand at stake, it is therefore not just about the safety of your own systems; it’s about those systems might be used (or rather misused).
Notes to the Editor:
Survey Methodology:
PwC’s Global Retail and Consumer practice, in conjunction with the International Survey Unit (ISU), administered a global survey to understand and compare consumer shopping behaviours and the use of different retail channels across 19 territories–Australia, Belgium, Brazil, Canada, Chile, China/Hong Kong, Denmark, France, Germany, India, Italy, Japan, the Middle East, Russia, South Africa, Switzerland, Turkey, the UK and the US.
A team of subject matter specialists representing each participating territory developed the survey based on last year’s survey. The final survey for 2014 includes updated questions and answer options in addition to new questions on payment methods. Where possible and appropriate, last year’s questions have been retained in order to conduct year-on-year comparisons. Research Now, an external provider, carried out the survey in August and September 2014, resulting in 1,000+ completed responses in every territory.
Nineteen thousand and sixty-eight online interviews were conducted across 19 territories during August/September 2014.
The demographic profile of the respondents was defined by the age, gender, employment status and region. In India alone, the geographical spread covered 32 states with the household income ranging from Rs 20,000 to over Rs 5 lakhs per annum.
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