COVID-19 can be a springboard for India’s Modern Retail Sector
India’s modern trade retail brands have had a good run.
Despite being dwarfed in size by general trade, the sector has experienced steady growth over the last decade, sustained by strong economic and social factors. Rising incomes, favourable demographics, and growing urbanization – combined with high levels of foreign investment – created a sense of certainty about the future. Long-term growth felt assured.
The events of this year, however, have challenged these assumptions and are raising fundamental questions about the future of modern trade retail in the country. To date, the sector has been able to rely on latent demand, which led to an attitude of, “If we build it, they will come.” COVID-19 and the resultant financial uncertainty has shut down demand. From being in a situation where providing access to brands in well-kept modern stores was enough, retailers are now in a situation where there aren’t enough customers to go around.
Yes, retailers will become more adept at protecting customers through new safety protocols. But as the fear of COVID-19 and concerns about financial security are now hardwired in to the consumer conscience, the repercussions are likely to be here for the long term.
Brands can’t afford to wait this out.
Some steps are being taken
With necessity being the mother of invention, it’s interesting to see how certain brands are innovating. For some, COVID-19 has acted as a catalyst for positive change, prompting brands to make innovative leaps.
Given customer reticence to venturing out, Domino’s Pizza has going mobile. Food trucks are working with housing societies, announcing their visit ahead of time to allow residents to order pizza right outside their home. This is a perfect response to the “new normal,” and also one that has longevity, as customers actively seek out brands that make it easy for them to buy.
Another smart move sees IKEA developing click-and-collect services, meaning that customers can order and pay online, and pick up sanitized products from store carparks at pre-agreed times. Like Domino’s, this initiative serves as a response to current needs, but also provides a new and valuable way for customers to engage with the brand. It creates an impact in the short term, but also opens up more channels for longer term benefit.
While Domino’s and IKEA have identified key touchpoints that put them in winning positions with the customer, some brands need to look beyond single touchpoints and reconsider their overall brand experience.
An opportunity to boldly reconsider the fundamentals
The first step in the process is doubling down on a universal consumer truth: “The more your retail experience matches my need, the easier it is for me to say yes to you.”
This means that in order begin to thrive again (or in cases, merely survive), retailers need to re-examine their purpose and rethink how they operate.
Here’s an example of this type of re-examination, using bold thinking to take a retail brand in new directions.
John Lewis, one of the UK’s most respected retailers (and famous for its employee-owned business structure) is considering turning recently closed stores into new, mixed-use affordable housing. Other potential initiatives tap into the brand’s commitment to social good and reflect growing consumer trends. Interest in the shared economy has led them to consider renting products rather than only selling them.
Create a stronger commitment to consumer “experience”
As the John Lewis example shows, moving forward, the consumer needs to be placed front and centre. In these times, taking decisions that benefit consumers will ultimately benefit you.
While retail brands can’t predict the post pandemic future, they can connect with people, their lives, and how life is changing. In doing so, brands can influence and design their own futures by offering powerful retail experiences that allow customers to see brands differently. This, in turn, creates tangible differentiation versus the competition, giving people compelling reasons to visit a certain brand.
At FITCH, we achieve this through what we call “Experience Themes.” Using BrandZ™ data, we’ve taken “experience” (something considered by many to be vague and intangible) and have codified it for brands – empowering them to take control back into their own hands.
Establishing the right themes, and blending them with a brand’s positioning, creates a unique experience signature – enabling retailers to effectively express themselves across all touchpoints, whether they be physical, human, or digital.
While COVID-19 provides Indian retail with its biggest challenge, the chaos presents opportunity – a chance to move from a purely transactional exchange to something more sophisticated: an empathetic customer relationship.
So create stores where people want to be, enable customers to easily engage with your brand, and help them to achieve their needs.
In these times of uncertainty, real and personal connections make all the difference.
Originally written for and published by The BrandZ Top Most Valuable 75 India Brands Report 2020, which can be found here.