The term ‘Incredible India’ seems appropriate when one considers the vast diversity of languages, cultures and ethnicities across the country. For the retail industry, which contributes about 10% to India’s Gross Domestic Product (GDP), the vast consumer market is both an opportunity and a challenge. The challenge is more pronounced in relatively untapped rural and semi-urban areas, which account for about 65% of the population.
Although the digital transformation of India’s retail industry was already underway in recent years, tailwinds associated with the pandemic have accelerated the acceptance of e-commerce among both sellers and consumers. As per estimates, unorganized retail accounts for 90% of the market in India. Of these, online buyers are said to number 70 million, of which only 10 million are classified as ‘digital natives’. Undoubtedly, in a country of over 1.3 billion people, tremendous scope exists to attract more online shoppers through personalized products and services, especially from regional India.
The availability of smartphones and 4G in Tier-3+ regions has opened up this huge market for e-commerce companies. Thanks to the absence of physical stores, online companies tend to offer higher cost-per-money prices due to their lower overheads. However, it should be emphasized that price conscious consumers also expect quality products.
But given the plethora of languages and customs, catering to the far flung people comes with unique complexities. In such scenarios, online entities can deploy digital technologies to provide their customers with a personalized experience, facilitate higher conversion rates and greater brand loyalty. What’s more, the beauty of online selling lies in the fact that e-commerce portals do not need to worry about storage space and its associated costs as the goods are shipped directly from the producers. For sellers, there is no worry about inventory clogging up in warehouses until the sale takes place.
While it all sounds special, it takes more time to convince and convert customers in tier-3 cities and beyond. Hence, online retailers are using regional language interface to provide better customer experience. Additionally, retailers are deploying big data to decode consumer behavior to provide bespoke offerings. In such situations, a thorough understanding of customer needs helps in increasing satisfaction and retention rates.
The use of AI algorithms and Big Data analytics also helps in analyzing consumer behavior through their purchase information such as product preferences, browsing history, etc. Predictive analytics is then leveraged to improve the customer experience by customizing marketing campaigns focused on their habits and needs. For example, data from a major value-based online retailer shows that customers searching the portal via regional languages spend an additional 20% of time on the platform, which includes higher viewership of product videos.
Accordingly, customer experiences can be personalized by analyzing their purchase history in order to pitch relevant deals and discounts. In addition, purchases from other consumers in the same demographic group can be used to sell related products.
In addition, retailers should provide a personalized omni-channel experience whereby customers can order products on the website/app and then collect from a brick-and-mortar outlet near them, if they so desire. Amidst all this, one must understand the importance of social media as a digital shop floor where sellers can connect directly with potential customers. Instagram and Facebook are prime examples here of earlier offering visual storefronts that helped drive customer traction.
However, keep in mind that marketers on social media must be digitally savvy and in tune with customer needs and expectations. Any mismatch in consumer expectations risks putting a bad experience in the public eye.
If big data and other technological tools are used judiciously to engage with consumers, they can act as a significant difference in providing a clear edge to e-commerce players in a highly chaotic and hyper-competitive retail market. can do. In this way, a sustainable relationship can be established with the consumers across India.
Thereafter, it is imperative to observe greater satisfaction and increased brand loyalty in non-metro areas, irrespective of the diversity of consumer choices. Undoubtedly, technology can present a winning proposition for customers, vendors, online platforms and other retail stakeholders.
Sanjeev Barnwal, Co-Founder and Chief Technology Officer of Meesho.
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