With the pandemic-induced disruptions faced by the retail industry over the past 18 months, the future of the retail sector will be defined by a “multi-channel approach” where online and offline channels will not only compete, but also support each other.

According to the Deloitte-Mapic India report, the future of the retail sector will be a blend of brick-and-mortar stores with online selling platforms, with both likely to continue to grow in markets like India.

Retailers will need to constantly evolve their operating models adapting to technology changes and enhance shopper experience. Already, retailers are fast adopting an omni-channel strategy, digitising their operations, and focusing on sustainable business practices to operate efficiently.

“While the world continues to flip between lockdowns and phygital presence, companies are adapting to a new avatar of a modern-day shopper where Retail 4.0 will be the ultimate convergence of the traditional and online channels,” the report added.

Rajat Wahi, Partner, Deloitte Touche Tohmatsu India LLP said, “Today’s consumer is a convenience-craver, who is looking for value, instant gratification, range, and assortment across any channels he/she shops at. Covid-19-induced lockdowns over the past 18 months have dramatically changed shopper journeys and behaviours. From online research and buying to increased preference for comfort and digital payments/e-wallets, home delivery and ease of returns, internet-based shopping trends are likely to continue even as malls and shopping centres open up.”

“Technology acceleration and adoption across the consumer and retail industries will continue to play a critical aspect for surviving and thriving in the new normal and coping with the rapid changes. In addition, retail businesses will need to continue to focus on the in-store and online customer experience-led engagement to cater to a new, tech-savvy, and conscious consumer,” Wahi added.

The report pointed out that factors such as consumers’ shift to smaller and localised stores as well as online shopping with a strong focus on convenience are changing the retail landscape. There is also the emergence of the direct-to-consumer channel which is bypassing existing distribution models and fuelling creation of new retail models.

At the same time there are challenges of deteriorating impact on margins due to higher online delivery costs and complexities of omni-channel approach. “Digital success is likely to require more efforts in the next few years,” it pointed out.

“There is a compelling need amongst retailers to define the next stage of digital differentiation, one that accounts for new retail models and encompasses the full value chain and technology operating model to drive unified vision and strategy. ,” the report stated.