With the highest number of retail outlets in the world and modern retailers and e-commerce sites courting them aggressively, Indian shoppers have never been served better. Here’s an expert take on how we shop.
Indian retail is expected to be worth $1 trillion dollars by 2020. Over the last few years, e-tail has become the fastest-growing segment, increasing its share from 10% in 2009 to an estimated 18% in 2013. E-tailers are betting on more Indians switching to shopping online, with a projection of 200 million new consumers by 2017.
Even as the shopping experience in India is becoming more universal, the unique behavior of Indian shoppers has compelled all retail formats to adapt. Indian e-commerce websites, which were largely modelled like their global counterparts, had to introduce a feature called Cash-on-Delivery (COD) to cater to Indian mindsets.
Damodar Mall, the CEO of Reliance Retail Limited, has spent over 15 years decoding consumer behavior. From setting up the supermarket chain D-Mart with R. K. Damani, to working as the director of Food Startegy with the Future Group (Big Bazaar) and now heading the Value Format at Reliance Retail, Mall has keenly tracked the growth of modern retail and consumerism in India.
He has put all the lessons learnt in a book titled “Supermarketwala: Secrets To Winning Consumer India.” He refers to the supermarket as a “theatre of self-service”, where consumers can assert their choices as brands flirt and try to woo them. “Earlier on, in the kirana platform, you only got to know the list of what she was buying. In a self-service format, you almost hear what's going on in her mind as she faces the choices self service or supermarkets celebrate. My way of staying ahead of the customers is actually being behind her and observing the behavior,” he says.
The next modernisation of retail wave will be of the neighbourhood entrepreneur stores which we call kiranas. Large kiranas are in any case are moving towards the self-service format.
When quizzed as to why he always refers to the consumer as a female, he says, “If you observe the men who are shopping in a supermarket, about 70% of them will be on their phones. This is because mostly they are following instructions about what to shop from their wives or mothers. The ultimate consumer is a woman. So when I am trying to dissect consumer behaviour, I need to factor this in.”
He believes that the future of retail in India will drastically change in the next 5 years. He predicts that the divide between retail and e-tail will fade away and supermarkets will have their own websites and apps to cater to all needs. “The consumer does not differentiate between these different platforms. She seamlessly switches between the two. We will need to be on our toes and cannot take the customer for granted,” he adds.
Commentating on the future of the kiranawala, he says, “The next modernisation of retail wave will be of the neighbourhood entrepreneur stores which we call kiranas. Large kiranas are in any case are moving towards the self-service format. I would predict that the kiranas would become part of the links of the e-commerce wave today.”
“In urban India, the average income of every household will double in 5-6 years. In that case, I am dealing with different customers every 5-6 years. So we have to keep re-imagining formats. But, there will be no net losers in the Indian market,” he concludes.
With both incomes and aspirations rising, all retailers who can best understand the consumer, will find place to flourish.