Reema Basfore & Kumar Saurav
Reema Basfore & Kumar Saurav
1. Introduction
Retail sector in India is all poised to be the most promising and flourishing sector
of the Indian economy. This phenomenon would drive the economy to a greater
height and is attracting huge attention from entrepreneurs, and foreign investors
as well. Internet penetration, retail space, availability of products, a rise of middle-
class population and effective brand communication are some of the factors that
are driving the retail sector in India. This sector is also creating huge employment,
along with it, new shapes and dimensions of the organized retail sector have
emerged within the given retail industry. Same-day delivery, social commerce,
omni-channel retail, AI use, and interactive retail are a few of the important
developments in the retail sector. One of the widely implemented new retail
strategies has been the use of mobile technology during the entire purchase
process from the time customers chooses a product until he /she pays for it. The
cornerstone of a successful marketing plan in terms of retailing has been the 6Ps:
Product, Price, Place, Promotion, People, and Presentation.
The Indian retail industry off late has emerged as one of the most prolific and fast-
evolving industries due to the entry of several new players and the emergence of
new avenues. It accounts for almost 10 percent of the country’s gross domestic
product (GDP) and close to 8 percent of employment. India ranked 73rd in the
United Nations Conference on Trade and Development's Business-to-Consumer
(B2C) E-commerce Index 2019. India is the 5th largest International Retail
Destination in the world and is ranked 63rd in the World Bank's doing Business
2020 report.
1.1 Indian Retail Industry Facts and Figures (Kearney research: 2019, Bain &
Company, Flipkart.2021)
India’s retail industry is expected to grow at 9 percent over 2019-2030,
from US$ 779 billion in 2019 to US$ 1,407 billion by 2026 and more than
US$ 1.8 trillion by 2030.
It is anticipated that offline retailers in India, commonly referred to as
brick- and- mortar (B&M) merchants, will boost their revenue in FY20 by
Rs. 10,000-12,000 crores (US$ 1.39-2.77 billion).
India’s direct selling industry is expected to be valued at US$ 2.14 billion
by the end of 2021.
E-retail has been a huge leap during the pandemic.
E-retail market is expected to grow to US$ 120-140 billion by the end of
the year 2026, growing at 25-30 percent p.a. over the next 5 years.
1.3 India’s GDP Figures (Indian economic survey-2022-2023 and IMF report)
India is the world’s 6th largest economy (nominal GDP), and 3rd largest by
Purchasing Power Parity (PPP).
Due to the Covid pandemic, India’s economy suffered during 2020, with
the current GDP witnessing a negative growth of ~1 percent.
India's GDP growth is poised to remain robust in FY24.
Economic growth to be boosted by the expansion of public digital
platforms and measures to boost manufacturing output.
In the year 2021, the GDP grew ~9 percent year on year, overcoming pre-
Covid levels and it is expected to grow at a 9.4 percent CAGR during the
current year 2022-27.
India’s real GDP is expected to grow at 7.4 percent in the year 2022.
India’s Per capita income has almost doubled to Rs.1.97 lakh (US$ 2,400)
in the last ten years.
2. Background
The robust evolution of the retailing landscape has challenged retailers to operate
in a highly dynamic and customer-driven and owned market. They are expected
to continuously adapt to the changing and evolving expectations of consumers in
order to retain them.
From the times of Industrial Age departmental stores to modern-day multi-
channel, ubiquitous marketing environments, the evolution and rise of retail
business continue to change drastically still the concept where a customer is given
top-most priority with the famous adage “customer is king” seem to persist. We
will learn the evolution of retail through the parameters of convenience while the
shopping and marketing approaches are being deployed,
2.1 Convenience
Retail as an organized industry initiated in the 18th and 19th centuries with
the rise of covered markets, specialty shops, and departmental stores. The
concept of catalogues gave the opportunity to shop from home for the first
time in the late 1800’s. When their catalogues arrived. In the 1990’s, retail
stores allowed consumers to view and buy items through online. Earlier, this
was seen with doubt and avant-garde concept, however, online retail has
now evolved into a vital channel. The concept of e-commerce grew in the
early 2000’s, retail wars looked upon as brick-and-mortar shops against the
evolving online retailers. The ensuing battle has long since ended, as most
retailers now deploy cross-channel retail strategies to reach targeted
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customers both online and in physical modes. In fact, with the concept of
hybrid technology where consumers no longer perceive a distinction
between online and offline shopping. Shopping has become ubiquitous, and
people are able to use smartphones to complete transactions in the moment,
whenever they are required to make a purchase. The availability of product
information and online reviews, and shopper and attitudes now-a-days have
been influenced accordingly. Retailers can now customize their product
offerings based on the knowledge of a customer’s location and mobile
device. This facility allows retailers to provide offers that are best suited to
the customer. Retailers who use Omni-channel retail strategies to use this
data effectively are able to deliver relevant and useful suggestions to the
customers.
2.2 Marketing
At the onset retail marketing was limited to signage and packaging, During
the Industrial Revolution, merchants started using direct mail, catalogues,
and sometimes salesmen to increase awareness among the customers. The
concept of ‘celebrity marketing’- was being practised by giving products for
free to members of the nobility in order to receive publicity and raise the
product’s prestige. With the evolution of the retail market, retailers stressed
upon the 4Ps concept – Product, Price, Place, and Promotion, to sell their
products. Apart from it retail marketers also used their personal credibility,
and goodwill to get customer loyalty which in turn helped them to
understand more about the customers. Elements of marketing
communications like Billboards, and Magazine ads were deployed.
Senco Jewellers, Haldiram, Ganguram to name a few shops from different
fields used their credibility to establish rapport with the customers.
In modern-day big data is driving changes in the way retailers’ approach
consumers today. The use of data with customer preference information
through CRM, demographics, and location data empowers retailers to
mitigate large customer segments into relatively smaller segments.
Segmentation of customers has facilitated retailers to create Omni-channel
retail strategies, with more targeted and precise advertising that caters to the
needs and experiences of targeted segments. Customers are empowered with
useful and actionable information about products, pricing, and competition,
and they also want retailers to know them as well.
Some merchants are also using their data for cross-selling, which results in
more successful email marketing through targeted product recommendations
and retargeting.
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First, they find support for their prediction that paper shopping lists include
more products than digital shopping lists and that the products on paper
shopping lists are generally less hedonic than those on digital shopping lists.
Second, the authors find that shoppers with a paper shopping list made more
planned purchases than those with a digital shopping list.
Third, digital list shoppers made more unplanned purchases than paper list
shoppers.
5. Literature Gap
From the above literature review, it has been identified that the above researcher
have not thrown much light on the evolving newer market that comes under the
ambit of retailing. Moreover, the drivers of modern-day retailing like the
application of smartphone and online brand community has not been discussed in
an elaborate way by the above researcher. Therefore, this paper attempts to
highlight and discuss in detail the above gap in the evolving retail scenario.
6. Research Methodology
We have ensured to highlight the data as and when we mention any facts or our
view points. We have totally relied on the authentic secondary data being
published by reliable sources.
7. Key Drivers in the Evolving Retail Landscape
7.1 Smart Phone and Retailing
In today’s context, the retail customer experience should be seamless while
shopping online, visiting a store, or resolving any issue. We can see that all of
these channels diligently involve smartphone to varying degrees; sometimes
while customers go for price comparison or to check product reviews, go for
purchase using an e-wallet, or receive personalized promotion offers via SMS
or through different social media channels. With the usage of smartphone,
customers are laden with more information. Retailers can now be more
relevant and personalised, which will enhance both the website and in-store
purchasing experience. This includes knowing the customer's location in real-
time and reviewing recent purchase history.
Smartphone penetration: Indian Context (Global Statistics)
45 percent of consumers use their smartphone for price comparisons, and
65 percent of consumers have concerned apps on their phones.
It is estimated that almost forty-seven population of our country is
equipped with internet facilities.
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800
600
400
186
200 89
0
FOOD and groceries Lifestyle Electronics Others
Item
80
60
40
20
0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Year
billion $
11. Suggestions
Payment interface should be made robust.
Tier 2 and tier 3 cities have great potential; hence efforts should be given to
improve the technological infrastructure.
The future lies in customisation which could be more effectively reached with
the diligent application of AI and data analysis.
C2C retail should be patronised since it would give rise to Homepreneurs.
Retail players must offer integrated sales channels to give a seamless
customer experience.
Retail marketing is going to move around speed and convenience hence the
players should be facilitating on these parameters.
12. References
1. Agarwal, V., & Mishra, S. (2008). Role of Retailers in Reducing Inventory
and Improving Customer Satisfaction: An Empirical Study of Consumer
Durables. Indian Journal of Marketing, 38(9).
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Retailing. Indian Journal of Marketing, 37(10).
3. Bhatnagar, G. (2004). Retail Revolution. Indian Journal of
Marketing, 34(11).
4. Bijmolt, T. H., & Verhoef, P. C. (2017). Loyalty Programs: Current Insights,
Research Challenges, and Emerging Trends. Handbook of Marketing
Decision Models, 143-165.
5. Economic Survey of India.(2022).India's Internet Data Usage Shoots Up to
14.1 GB per month,Inc42.
https://inc42.com/buzz/indias-internet-data-usage-shoots-up-to-14-1-gb-
per-month/
6. Fan, L., & Jiang, Y. (2018). Don’t surprise me: how Social Relationships
Shape Consumers’ Attitudes toward Probabilistic selling. Journal of the
Association for Consumer Research, 3(3), 440-450.
7. Green, D., & Harney, M. (2017). More Than 8,000 Store Closures were
Announced in 2017—Here’s the Full List. Business Insider.
8. Lee, L., Inman, J. J., Argo, J. J., Böttger, T., Dholakia, U., Gilbride, T., &
Tsai, C. I. (2018). From Browsing to Buying and Beyond: the Needs-
Adaptive Shopper Journey Model. Journal of the Association for Consumer
Research, 3(3), 277-293.