Responding to burgeoning consumerism in India, mall developers are rapidly infusing new retail developments across the top 7 cities, with nearly 10 million sq. ft. new mall supply in 2019. Factoring in the rollover of some supply from 2018, there will be a three-fold jump in 2019 against the preceding year.
These and other critical insights are outlined in the research report ‘Customer Experience (CX): The Epicentre of Retailing’ by ANAROCK Property Consultants.
Customer experience and built environment are completely metamorphosing the retail business in the country, finds the report. These trends have already started influencing and impacting both the online and the offline retail segments.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “With the new e-commerce policy in effect from early this month, online retail giants are re-aligning their business strategies and focussing to expand their offline presence. Brick-and-mortar (offline) retailers who were earlier under threat from e-commerce can now look forward to a more level playing field and tap into the rapidly growing Indian consumer market with renewed confidence and business prospects. The new e-commerce policy will bring parity between the online and offline retailers and address the concern of data colonization, as well. Even as online players may lose many of their competitive advantages – such as high price discounts on their private labels – brick-and-mortar stores will focus on offering superior customer experience to enhance customer loyalty.”
“The new e-commerce policy will cause online retail entities to invest seriously in offline stores,” says Puri. “They will consider tie-ups with offline retailers or buy stakes in them. However, as competition stiffens, customer experience will be the key differentiator to the success and sustenance of any new retail venture.”
Kumar Rajagopalan, CEO – Retailers Association of India (RAI) says, “A combination of essential and value-added services, along with sound marketing strategy, is now the key to customer attraction and therefore successful mall performance. F&B and entertainment are critical ingredients for attracting footfalls into retail developments. Simultaneously, style, variety, and overall quality of malls also play crucial roles in ensuring customer satisfaction.”
Historically dominated by unorganized mom-and-pop stores, the Indian retail sector’s dynamics are rapidly changing post liberalization and subsequent e-commerce boom across the country. The rise in internet subscribers and active social media users, changing lifestyles and increasing disposable incomes have transformed the rural and urban consumer bases alike. This dynamic resulted in the increasing prominence of e-commerce across the country, leading to India’s emergence as a key global retail market.
Nearly US$1.42 billion FDI has already been infused in the Indian markets between April 2000 to June 2018 – and global investments into Indian retail are all set to increase further, states the report. The Indian retail sector is expected to reach US$ 1,750 bn by 2026 due to changing demographics and increasing consumer expenditure, which is expected to rise to US$ 3,600 billion by 2020.
Omnichannel to become a catalyst for future-ready retail in India.
Tough the new e-commerce policy may bring in level playing field between online giants and brick-and-mortar stores, there may be an impact on foreign investments, logistics and warehousing development as well as new job creation. A reduction in foreign investments and profit cut for global marketplaces will hurt the Indian economy to some extent.
Strong customer experience and high functionality of malls will reduce churn, increase footfalls and overall customer satisfaction.