The e-commerce space is expected to grow at 27 percent CAGR, while the brick and mortar or offline retail will grow at 16 percent between 2017-2021, according to the research report ‘Customer Experience (CX) – The Epicentre of Retailing’ by ANAROCK Property Consultants.
“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,” Anuj Puri, Chairman, ANAROCK Property Consultants says.
Brick-and-mortar or offline retailers that were earlier under threat from e-commerce are now looking forward to a more level playing field and tapping into the rapidly growing Indian consumer market with renewed confidence and business prospects.
The new e-commerce policy is expected to bring parity between the online and offline retailers and address the concern of data colonisation, as well.
According to Puri, 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.
Under the new e-commerce policy, online players are likely to lose their competitive advantages such as high discounts and sales of their own private labels with a competitive pricing strategy, the report stated.
The report takes into consideration the projected growth rates, value propositions, FDI restrictions and new policy framework that are expected to influence the customer buying pattern.
It also outlines that customer experience and built environment are completely metamorphosing the retail business in the country. These trends have already started influencing and impacting both the online and the offline retail segments.
Digital disruption has impacted the consumer buying process enabled by technology which has transformed the retail sector’s dynamics. It has shifted from merely satisfying the basic want of consumer to offering a superior customer experience.
JUMP IN MALL-SUPPLY
Mall development has evolved over time. India has luxury malls, book malls and gold souks. According to ANAROCK Property Consultants, India could witness a three-fold jump of mall supply this year – from 3.2 mn sq ft in 2018 to nearly 10 mn sq ft – following supply rollover from the previous year.
Responding to burgeoning consumerism in India, mall developers are rapidly infusing new retail developments across the top seven cities, with nearly 10 mn 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.
Design and built and environment of the retail spaces play a very important role in influencing the customer and their shopping behavior.
F&B and entertainment zones are catalyst driving the growth by attracting customers to the malls.
The report stated that style, variety and quality in a mall also enhance the loyalty of the customer
“Malls should add value proposition to the customers and services such as quality and diversity in products, entertainment and servicing. This will add to the Hedonic value of the mall and the mall will witness an increase in footfalls.”