By digitising core business, retail companies could see a 15-20 per cent increase in revenues, according to a report.
“Do not treat digital as an ‘add-on’. It should be central to the CEO’s agenda,” the joint report on ‘Decoding digital opportunity in Retail’ by Retailers Association of India and Boston Consulting Group said.
Digitising the business can help retailers with early trend detection, real-time feedback, customer-centric buying, optimised merchandising and end-to-end supply chain management, among other things, the report noted.
Besides, it also pointed out that retailers can get a 3-5 per cent margin uplift if they shift to higher margin categories based on data-driven insights.
In order to compete in the current scenario, the report said that retailers have to compete with marketplaces, yet collaborate in order to market and sell private brands.
“Retailers have to collaborate with marketplaces to sell private brands, leveraging the reach of these marketplaces.
For this, retailers need to make smart operating choices and deepen engagement with marketplaces,” the report noted.
At the same time, while setting up their own online store, retailers have to provide a significantly superior value proposition than e-retailers to help consumers make a more informed buying decision, it said.
For this, it suggests digital engagement with the consumer through targeted, or personalised content to drive sales, besides enhancing the convenience and creating brand resonance.
In the last three years alone, digital buying has increased from 3 per cent in 2013, to 23 per cent in 2016.
The overall digital influence on consumers has increased from 9 per cent to 30 per cent during the same period.
The report notes that convenience has overtaken discounts as a key driver for buying online.
From 40 per cent in 2014, the report notes that more than 55 per cent purchase online due to convenience.