Indian retail industry has more than 15 million retailers, both small and big, traditional and modern trade. Retail employs 45-50 million Indians directly of which modern trade employs more than 6 million Indians equaling to almost 12 per cent of the total retail contributes to approx. 40 per cent of India’s consumption and 10 percent to India’s GDP.
Retail technology investments will continue to reflect digital transformation efforts, as retailers reserve capital for technology investments by reducing spending on store openings and remodels. The ability to adapt responsively to product, workforce, partner, and operations needs will separate the winners and losers during the COVID-19 crisis. Some of the technology areas that will be in high demand are:
- Commerce and self-serve technologies
- Distributed order management and fulfillment
- AI-enabled personalized marketing and content management
- Supply chain collaboration and automation
- Cloud-based hiring and workforce enablement
- Network infrastructure, edge, and IoT for stores
- Contactless payments
Consumer Behaviour Change:
According to the experts, there is a shift in consumer behavior form offline shopping to online as people who were previously averse to online buying are now being compelled to explore online due to the restrictions in force. Organizations should closely follow consumer patterns and have an adaptive business model to stay relevant.
Another shift in buying behavior, especially for millennials is that they may choose to purchase only what they really require and hence buy less than would earlier.
While big-ticket purchases will be most likely get pushed to another 3 quarters, there may be an increase in small-ticket spending like eating our buying apparel for feel-good post lockdown. This will be more like symbolic buying.
Mitigating the Impact of Coronavirus: What should Retailers consider?
- Review your exposures
- Assess your supply chain and identify backup suppliers
- Review your policy for coverage
- Test your Business Continuity Management plans
- Communication and engagement with employees
- India has released 1 per cent of GDP. Following the example of other countries is important, which means releasing 3-4 per cent GDP, Which will help recover within 6-9 months. Stimulus from the government can be a big push
- Government should focus on giving more money in the hands of the consumer, which will automatically come back in the system as consumer spends increases
- During the webinar, experts also recommended number of measures which will help retail business to remain functional. Government will have to take a backseat on fiscal prudence & take bold steps to ensure that this sector as well as the economy, in general, is afloat.
- Recovery will be dependent on the Government’s support to the sector. It may take a minimum of 3 quarters to stabilize. In the absence of major support, as many as 20-25 per cent of retailers may be out of business or will need dire financial infusion to stay afloat.
Retailers are uniquely exposed
The Retail sector has considerable exposure to the potential impacts of the virus. From dependencies on Chinese manufacturing, networks, and in the case of many retailers – a reliance on a large workforce and a direct interface with customers. These factors expose the sector to a unique set of circumstances.
The source of the outbreak, China, and the other significantly affected East Asian countries, have two distinct role relating to the impacts felt by the retail sector. Firstly, lower labour costs, a different regulatory environment, low taxes and duties, and competitive currency practices create conditions
where manufacturing is prolific and agile, and where production accounts for a significant proportion of the local economy.