Deepak Bansal, Director, Cantabil Retail India writes for BW Retail World as he delves into the allure of physical retail stores and the resurgence of brick-and-mortar retail
As the world continues to embrace digital transformation, a surprising resurgence is taking place in the retail sector. While ecommerce has undeniably reshaped how consumers shop, the allure of physical stores is proving to be timeless. The tactile, sensory experiences offered by brick-and-mortar stores provide an irreplaceable value that online platforms can’t fully replicate. In India, this renaissance of traditional retail is not just a trend but a strategic pivot that is redefining the entire retail landscape.
India’s digital payment infrastructure and widespread internet access initially fuelled a surge in ecommerce, but brick-and-mortar retail is now experiencing a robust resurgence. Direct-to-consumer brands are establishing physical stores, retail leasing is at an all-time high and the growth of online users has decelerated. Retailers are expanding their physical presence to enrich the shopping experience, as consumers now desire more than mere transactions, they seek an enjoyable and engaging overall experience. In today’s rapidly evolving retail landscape, retailers who adeptly navigate this new environment are not only positioned for growth but also for fostering enduring customer loyalty in the digital age. This shift underscores the vital role of traditional retail in India’s dynamic retail ecosystem.
The physical retail market is robust, with nearly 41 million square feet of retail developments set to become operational between 2024 and 2028 across India’s top seven cities, according to a recent JLL study. Delhi-NCR will have the majority share, followed by Chennai, Bengaluru and Hyderabad. Even brands that started online are embracing the omnichannel route by opening retail stores. Retailers across various categories are not only opening new stores but also expanding existing ones to meet the growing demand for a better physical retail experience and to capitalise on the organised retail market.
According to Deloitte Report, the organised brick-and-mortar retail sector, dominated by malls and shopping centres, is set to outpace the overall retail market’s growth from 2022 to 2028, with a projected 17 per cent Compound Annual Growth Rate (CAGR). According to a Deloitte India and Shopping Centre Association of India (SCAI) report, several factors, including rising disposable incomes, increasing urbanisation and growing consumer demand for convenience and experience, are driving this growth. As a result, the market share of organised brick-and-mortar retail in India is likely to increase.
Let’s delve into the reasons behind this resurgence, examining the key factors driving the success of brick-and-mortar retailers.
The retail sector is fast-paced and ever-changing, primarily influenced by consumer preferences and technological advancements. As consumer tastes and preferences evolve, retailers must swiftly adapt to meet these changes. Technological innovations in ecommerce, mobile shopping, payment methods and data analytics are revolutionising retail operations, necessitating continuous updates to remain competitive and relevant.
Physical stores remain highly relevant, significantly impacting the retail sector and shaping how retailers strategise in an increasingly digital world. Despite the growth of ecommerce, brick-and-mortar stores offer unique advantages that are hard to replicate online. They provide customers the opportunity to see, touch and try products before purchasing, especially important for apparel, electronics and home goods. Physical stores also offer the benefit of immediate gratification, allowing customers to take home their purchases right away, which online shopping can’t match. Additionally, in-store staff can provide personalised assistance and recommendations, enhancing customer satisfaction and fostering stronger customer loyalty through personal interactions.
While digitalisation is pivotal, the essence of Indian retail lies in its diversity and local flavour. Retailers are increasingly focusing on hyperlocal strategies, tailoring their offerings to regional preferences and cultural nuances. This localisation not only strengthens community ties but also fosters sustainable growth by aligning with the socio-economic dynamics of diverse Indian markets. Brick-and-mortar retailers are increasingly adopting an omnichannel approach, seamlessly integrating their online and offline sales channels. This strategy enables customers to research products online and make purchases in-store, or vice versa, offering the convenience and flexibility that modern shoppers desire.
Moreover, advancements in in-store technology, such as augmented reality (AR), virtual reality (VR) and interactive displays, are revolutionising the shopping experience by providing immersive and engaging environments that appeal to tech-savvy consumers. AR allows customers to visualise products in their own space through their smartphones or in-store devices, enhancing the decision-making process for items like furniture and home decor. VR offers virtual tours and experiences, enabling shoppers to explore products and store layouts in a fully immersive digital environment. Interactive displays, including touchscreens and smart mirrors, provide personalised product information, recommendations and virtual try-ons, making the shopping experience more interactive and enjoyable. These technologies not only draw in customers with a penchant for innovation but also enhance overall customer satisfaction by offering a seamless blend of physical and digital shopping.
Thus, the revival of traditional retail in India relies on a strategic combination of innovation, customer-centricity and adaptability to evolving consumer preferences. This dynamic approach effectively merges the advantages of both physical and digital retail worlds.
