Consumer view of Digital Retail in India
My digital marketing professor once told us – If you want to see response of an idea, just ask a person around you. That would be the smallest possible set to base your observations on, but is somehow a good common average for a feedback. When I watch standup comics perform (another rising segment!), I actually believe this to be true, as they make jokes on common situations around, and everyone relates to it. Usually what we experience and observe is something the majority around us is experiencing as well.
So taking a bottom up approach, here is my consumer view of the evolving Indian Retail Landscape.
The Why - First the context
India is at the intersection of highest growth of – 1. Total personal disposable income and 2. Smartphone users. It is estimated by IBEF that there will be 829 million smartphone users in India by 2022. Do you know that this is twice the estimated population of the 3rd most populated country (read the US)
The What - What a consumer wants
It is to be spoilt, and where he/she is readily happy to open the wallet (umm.. the digital one if I may add)
• Convenience - If I get my keto wrap and calorie specified cold coffee, delivered at home, within 20 minutes of ordering, the consumer has been pampered (Thanks @Swiggy). Also if calculations about time v/s money are done right, then paying a little premium for the quick food delivery is something eventually luring us. No doubt @Zomato claims its revenue to grow 3X in FY19 at 206Mn USD
• Personalization - I have never owned a @NIKE pair but it still managed to reach me (and many other growing tribe of runners). It brings in one of the best personalized workout routine through the Nike run club app. That was how the brand struck it right over other local players, and even competing with the smart monitoring devices
• Discounts – Taking a stroll in a book shop, picking up one and just before the checkout counter checking it on @Amazon/@Flipkart and ordering on a discount – Yep, guilty of that. Thanks to the growing VC money flowing in, discounts turned out to be the norm. Businesses scaled while waiting for consumers to develop a habit. Apps have made their way into our smartphones through cashbacks while we have uninstalled quite a few, as the offers dried up as well. But the winner will be the one which stays on, as a balance between habits and relying on cashback reaches a level of maturity for an industry. Back to focusing on unit economics and commercial viability, which adds to the longevity of the company, thereby to the macro-economics of the country!
• Quality with affordability – Spotify, a late entrant in the music streaming industry in India, already claims over 2Mn users since Feb. With a right mix of hyper localization – content and cost, freemium package model, social media sharing, digital home compatibility, and its brand presence it has created exactly this.
The How (behind a future cash cow)
Starting with the most important – Technology (fueled by data). From hyper localization and personalization, augmented reality shopping, automated last mile delivery, checkouts and payment tech, smart dressing room and shopping carts, shelf monitoring, in-store analytics, and what not, it is everywhere. We are interacting more with technology than anything else. And so are the Brands!
Organizations are trying not to be left behind in the digitalization race. Remember the last time you visited a physical bank branch? The best mobile banking app is already taking in the most business, if they still exist in a far-fetched (yet) crypto future.
Open/Social Business – While marketplaces have connected the local community with a global audience, it’s an established and a continued story.
Completing the loop is another aspect of the 360 degrees connected world. @Xiaomi’s “Fan-based innovation” has positioned it as an internet platform provider and not just a leading smartphone maker. Crowdsourced development with fans pitching in for improvements and development, can be a good reason behind its 129% growth in a crowded market.
X-aaS, the subscription model – Flexibility and access over ownership can be the biggest ‘asset’ (ironically) for a huge consumer base like that of India. Entertainment, beauty and wellness, apparels (even socks @mojaclub!), storage, security, etc. are fast moving into a recurring revenue stream business and well received by consumers. What may start now as a small subscription to something as basic as monthly groceries may always have an added possibility to enhance the offering along with building a loyalty base.
It is this constant endeavor which makes interaction between consumers and brands frictionless, sustainable and transformational. A change, which will bring Nirvana to the fast growing lazy millennials.
My digital marketing professor once told us – If you want to see response of an idea, just ask a person around you. That would be the smallest possible set to base your observations on, but is somehow a good common average for a feedback. When I watch standup comics perform (another rising segment!), I actually believe this to be true, as they make jokes on common situations around, and everyone relates to it. Usually what we experience and observe is something the majority around us is experiencing as well.
So taking a bottom up approach, here is my consumer view of the evolving Indian Retail Landscape.
The Why - First the context
India is at the intersection of highest growth of – 1. Total personal disposable income and 2. Smartphone users. It is estimated by IBEF that there will be 829 million smartphone users in India by 2022. Do you know that this is twice the estimated population of the 3rd most populated country (read the US)
 |
| Total personal disposable income (https://tradingeconomics.com) |
The What - What a consumer wants
It is to be spoilt, and where he/she is readily happy to open the wallet (umm.. the digital one if I may add)
• Convenience - If I get my keto wrap and calorie specified cold coffee, delivered at home, within 20 minutes of ordering, the consumer has been pampered (Thanks @Swiggy). Also if calculations about time v/s money are done right, then paying a little premium for the quick food delivery is something eventually luring us. No doubt @Zomato claims its revenue to grow 3X in FY19 at 206Mn USD
• Personalization - I have never owned a @NIKE pair but it still managed to reach me (and many other growing tribe of runners). It brings in one of the best personalized workout routine through the Nike run club app. That was how the brand struck it right over other local players, and even competing with the smart monitoring devices
• Discounts – Taking a stroll in a book shop, picking up one and just before the checkout counter checking it on @Amazon/@Flipkart and ordering on a discount – Yep, guilty of that. Thanks to the growing VC money flowing in, discounts turned out to be the norm. Businesses scaled while waiting for consumers to develop a habit. Apps have made their way into our smartphones through cashbacks while we have uninstalled quite a few, as the offers dried up as well. But the winner will be the one which stays on, as a balance between habits and relying on cashback reaches a level of maturity for an industry. Back to focusing on unit economics and commercial viability, which adds to the longevity of the company, thereby to the macro-economics of the country!
• Quality with affordability – Spotify, a late entrant in the music streaming industry in India, already claims over 2Mn users since Feb. With a right mix of hyper localization – content and cost, freemium package model, social media sharing, digital home compatibility, and its brand presence it has created exactly this.
The How (behind a future cash cow)
Starting with the most important – Technology (fueled by data). From hyper localization and personalization, augmented reality shopping, automated last mile delivery, checkouts and payment tech, smart dressing room and shopping carts, shelf monitoring, in-store analytics, and what not, it is everywhere. We are interacting more with technology than anything else. And so are the Brands!
Organizations are trying not to be left behind in the digitalization race. Remember the last time you visited a physical bank branch? The best mobile banking app is already taking in the most business, if they still exist in a far-fetched (yet) crypto future.
Open/Social Business – While marketplaces have connected the local community with a global audience, it’s an established and a continued story.
Completing the loop is another aspect of the 360 degrees connected world. @Xiaomi’s “Fan-based innovation” has positioned it as an internet platform provider and not just a leading smartphone maker. Crowdsourced development with fans pitching in for improvements and development, can be a good reason behind its 129% growth in a crowded market.
X-aaS, the subscription model – Flexibility and access over ownership can be the biggest ‘asset’ (ironically) for a huge consumer base like that of India. Entertainment, beauty and wellness, apparels (even socks @mojaclub!), storage, security, etc. are fast moving into a recurring revenue stream business and well received by consumers. What may start now as a small subscription to something as basic as monthly groceries may always have an added possibility to enhance the offering along with building a loyalty base.
It is this constant endeavor which makes interaction between consumers and brands frictionless, sustainable and transformational. A change, which will bring Nirvana to the fast growing lazy millennials.
