The Store will fight back

Chitra Narayanan | Updated on March 10, 2018 Published on December 31, 2015


Even as e-commerce goes great guns in 2016, brick-and-mortar stores will find innovative ways to deal with the disruption

In the next few days, Freecharge, the digital wallet acquired by Snapdeal, will debut a new way of paying at Shoppers’ Stop, says its COO Govind Rajan. Consumers can use the mobile wallet to pay their bill at a physical Shoppers Stop stores.

India’s largest mobile wallet company Paytm too has been testing models to make its e-wallet usable offline. As has MobiKwik. The models differ – some do it through integration with point of sale devices, others through proprietary software.

This could be disruptive for retail as unlike credit cards consumers do not pay commission so it may be cheaper, faster and smoother to transact. “It could also help offline merchants market to the consumer better,” says Rajan. Year 2016 may well be the year of the mobile wallet which is expanding its reach fast and changing the way people spend.

So far it has been driving e-commerce’s growth but as it crosses the border and enters physical stores, expect it to become part of offline retailers’ armoury too soon.

All the trends forecast a rosy 2016 for India’s e-commerce market that will expand its consumer base fuelled by rapid increase in the number of internet users, most of them accessing the Net through mobile. From $3.5 billion in 2014, India’s e-commerce market is estimated to catapult to over $100 billion by 2020, according to a Boston Consulting Group retail report ‘ Retrospect, Reinvent and Rewrite’.

Overall, Indian retail is projected to double to $1 trillion by 2020 from $600 billion in 2015, forecasts BCG. Very soon e-commerce and offline retail will be at par with each other in India.

However, the store is by no means dying. Instead, it is fighting back. Formats may change as modern retail will grow at twice the pace of traditional retail on the back of innovations and omnichannel strategy adoption. The arrival of shopping butlers in the form of concierge services will level the playing field for physical stores. Here is what experts forecast we will see in 2016


Thanks to big data and predictive analytics culled from loyalty cards, mobile wallets and technology such as beacons, more and more stores will strive for customer-centric personalisation. Data derived from multiple sources will give clues about customer preferences. The trick for retailers will be to shift from a transaction mindset to a delight mindset. The question is how many can do it?

Bricks and clicks

More stores will take to omnichannel retailing to drive online customers to physical retail outlets, and give them incentives to spend more. Future Group is investing crores to give customers one-point access across physical and online channels. Delivering a seamless experience will help offline retailers grow their business faster. Omnichannel adoption is going to peak in 2016.

Rewards and promotions

Old-style loyalty programmes may not appeal to omnishoppers who are addicted to cashback deals and coupons online where redeeming is all about instant gratification. So merchants will have to introduce mobile-based rewards and promotions that give instant benefits. Witness the way Payback and Big Bazaar declared doubling of points on designated three days last month if shoppers bought and redeemed at the store. Expect more such innovations.

Tackling the four-letter word

Once an ally, the word ‘sale’ is now anathema to stores. Extreme discounts by online retailers, from Flipkart’s Big Billion Day to Myntra’s End of Reason Sale, has caused offline retailers deep distress. But the answer, say experts, may lie in taking a leaf out of the e-commerce handbook and adopting dynamic pricing. It’s a challenge, admittedly. Online retailers such as Amazon can change prices based on demand 2.5 million times a day compared to the few times that a label- and MRP-oriented store can do. But thanks to technology such as electronic shelf label and LCD displays, physical stores can fight back with dynamic prices on a daily basis too. Watch it start taking off in 2016.

Conversational commerce

Physical stores are finding a great ally in chat-based concierge services such as GoodService and Joe Hukum that help people shop from home. An increasing set of people in cities are using these services to order food, grocery and even apparel! With Uber getting into the game through its shopping concierge operator that aims to unlock the 90 per cent of commerce that’s not on the Internet, this could be the game-changer that physical retail was waiting for!

Happy shopping in 2016!

Published on December 31, 2015
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