Retailers must tap new pockets of opportunity

Contrasting trends of commoditization and premiumisation: Driven by the growth of “from home” entrepreneurs, who have quit their jobs to launch new brands, can leverage social media to reach their customers directly. In addition, most retailers have launched their own private labels, and both these trends are “commodifying” established categories. On the other end, we are witnessing the rise of “premiumization” across categories and the launch of hyper-focused “niche” brands, as consumers move towards trusted brands and brands that offer benefits such as health, wellness, anxiety, etc. are willing to pay more for Relief and natural.

Digital success will become elusive and it will be more difficult to stand out: with the increasing use of “influencers” and digital celebrities, more spending on digital media to reach buyers and consumers, retailers to attract buyers to digital Will spend more on media and drive footfall/clicks for your store and categories within the store. Furthermore, with digital intervention becoming non-linear with the buyer journey becoming non-linear, the five “Ws” (who, what, when, where and why) and “how” of each category will have to be re-learned for each category to be successful.

Small, Closer and Convenience, the New Battleground: As cities and shopping centers close because of COVID, shoppers prefer to shop closer to homes or at home, and we’ve explored neighborhood grocery, convenience stores and high streets versus malls. saw the revival. Due to factors such as convenience, proximity, open air, ease of access, quick turnaround and trust. Apart from this, grocery also ensured app-enabled home delivery. Even now, shoppers continue to avoid crowded areas for fear of contamination, which encourages neighborhood shops.

New models affecting traditional retail development: with changes to mobile commerce, the rise of “social” commerce and direct-to-consumer models, growth of the second hand market or re-commerce, development of subscription models (community buying), The rise of consumption at home, the rise in cooking versus eating out, vertical commerce, etc., is moving buyers and consumers away from traditional retail channels including online platforms, and the trends for retailers to adopt and incorporate these categories. need to be aware of. Model in your businesses to stay connected with shoppers.

Health and Sustainability New Baseline: Sustainability-focused marketing, the rise of “healthy” consumers and the rise of healthy “fast-casuals”, increased transparency, “fresh” and food safety, key such as increased demand for environmentally safe products Trends, and community engagement, are shaping shopper behavior, especially for Millennials and Gen Z. This can affect retailers and shoppers of the brand.

Fragmentation and consolidation: As small and local retailers in the non-essential categories struggle to survive and face persistent restrictions, the potential for large retailers to grow through acquisitions is becoming even bigger. This would further consolidate power in fewer large retailers, and shift the balance of power. It will also bring in-depth analytics, customer focus and digitization to the Indian retail sector.

Additionally, some other differentiators that retailers may need to pay attention to are:

• Emphasize CX (customer experience): rethink their in-store and online CX and engagement strategies, and see how they can leverage technology to enable better engagement with shoppers so they are better served Can you

• Effective use of social commerce: Social media is evolving from the use of effective marketing campaigns to be used to sell products, and retailers use it to reduce operating costs while reaching a wider audience across the country. can take advantage.

• Optimizing the retail supply chain: Build real-time visibility of product availability to customers through item-level tagging, analytics-enabled demand planning and forecasting.

Consumer preferences have also changed drastically over the past year and many of these are likely to remain, including their desire for flexibility, convenience and “instant gratification”. The focus should be on adopting practices to help businesses thrive in the new normal of sustainability. Change and identify new areas of opportunity to meet these changing consumer needs.

Rajat Wahi is a Partner at Deloitte Consulting.