fbpx
Connect with us
RJI

Uncategorized

Technology and AI to bring next wave of growth in retail: Deloitte – RAI report

Published

on

The joint report also highlighted some of the key trends leading to emerging retail technologies such as the use of AI for personalised shopping experiences, automation, enhanced security, data-driven decision-making and more

Mumbai: Deloitte and the Retailers Association of India (RAI) have released a joint report titled “Future of Retail: Profitable Growth through Technology and AI” at the Retail Leadership Summit 2024, advocating how Artificial Intelligence (AI) has transformed from being mere tools to being the bedrock of profitable growth for India’s consumer retail business.

According to the report, by 2025, 20% of top global retailers will use distributed AI systems to achieve holistic results, revolutionising sales, marketing, supply chains, and operations, and around 45% of marketing leaders plan to invest in GenAI in the next 12-24 months.

The digital revolution has therefore transformed retail into phygital or omnichannel experiences, disrupting traditional models where brands are using technology to enhance customer experiences and garner greater ROI. 

Anand Ramanathan, Consumer Products and Retail Sector Leader, Deloitte India, said, “The retail industry is experiencing a significant turning point, driven by changes in the global economic environment that are fundamentally reshaping consumer habits. AI is revolutionising retail, offering personalised recommendations and solutions, with 71 per cent of consumers expecting tailored experiences. This signals a move towards experiential engagement beyond mere transactions across consumer touchpoints. By focusing on enhancing operational efficiency, improving customer experiences, and making informed decisions, retailers can secure a competitive advantage.”

Kumar Rajagopalan, CEO, Retailers Association of India (RAI) said, “As we embrace the digital revolution in India’s retail sector, this report highlights the crucial role of technologies such as AI and IoT. These innovations are not just trends; they are the building blocks for future-proofing our retail industry. The insights in this report not only showcase the transformative power of emerging technologies but also provide a roadmap for retailers to navigate this new era.”

With India’s booming economy bringing more purchasing power and choice to tech-savvy consumers, forward-thinking retailers must craft superior shopping experiences. 

AI, IoT, mixed reality, and advanced analytics have the potential to streamline operations, personalise experiences, and even redefine our understanding of what shopping means.

Key trends leading to emerging retail technologies:

Personalisation and customer experience enhancement: Retailers use AI and advanced analytics to provide personalised shopping experiences. AI algorithms analyse customer data to tailor product recommendations, marketing messages, and even in-store experiences.

Supply chain optimisation: Adoption of IoT and AI to optimise supply chains. IoT devices track inventory in real-time, providing valuable data for inventory management, while AI assists in predictive analytics for demand forecasting. This trend is fuelled by the need for retailers to reduce costs, minimise waste, and respond swiftly to market changes.

Automation and efficiency: Robotics technology is becoming more prevalent in both customer-facing and backend operations in retail. Smart robots are being used for inventory management, cleaning, and even as shopping assistants. This trend is driven by the need to enhance operational efficiency, reduce labour costs, and improve customer service.

Omnichannel integration: Retailers integrate AI and IoT technologies to create seamless omnichannel experiences. By synchronising online and offline channels, retailers can offer a consistent and convenient shopping experience, which is important as consumers move fluidly between online stores and physical stores.

Data-driven decision-making: Advanced analytics and AI enable retailers to make more informed decisions. By analysing large volumes of data, retailers can gain insights into customer behaviour, market trends, and operational efficiency.

Enhanced security and fraud detection: AI and advanced analytics are employed for security and fraud detection. These technologies can identify suspicious transactions and prevent theft, both online and in physical stores, thereby protecting profits and enhancing customer trust.

The report also enlists the following innovative business models for retailers to stay relevant, capitalise on digital transformation opportunities, and align with shifting consumer preferences:

Subscription-based services: Include personalised subscription boxes using AI algorithms to predict customer preferences. This fosters customer loyalty and generates steady revenue streams.

Retail-as-a-Service (RaaS): This enables small brands to use their retail infrastructure, from physical space to e-commerce platforms, creating new revenue streams while providing a broader range of products to customers.

Experience and community-focused retail: Transforms retail spaces into experience hubs, offering workshops, product demonstrations, and community events, driven by customer data insights to enhance engagement and brand loyalty. Connect customers with shared interests and local vendors.

Report by BCG, RAI explores recent trends shaping the future of retail businesses

The Boston Consulting Group (BCG) and Retailers Association of India (RAI), have jointly published a report titled “Unlocking the $2 Tn Retail Opportunity in the Next Decade: An Activist Agenda”. The report examines recent trends across sub-sectors, identifying key themes shaping the future of retail and their implications for retailers. It poses key considerations for retailers in current times and seeks to highlight imperatives for value creation. 

India continues to be a bright spot among the major economies – growing fastest among the top 5 global economies and is expected to become 3rd largest by GDP in 2030. India’s retail market is expected to reach $2Tn in the next 10 years and presents a large opportunity for retailers. 

Organized retail in India has consistently demonstrated faster growth in comparison to the underlying category. However, performance in the recent quarters has been subdued owing to potential headwinds. The drop in the growth rate for organized retailers is higher than that of category. Some large retailers have reported a decline in LFL store growth. Profitability at the same time has remained consistent and in line with global peers.

The report delves into key factors propelling the pace and shape of growth, especially shifts in consumer spending preferences, trends on affluence, increasing urbanization, supply expansion and channel shifts. 

The report lays out imperatives for retailers to win by adapting the model given the trends. It also lays out how best-performing retailers (on shareholder returns) drive both above-market growth and profitability.

“The Indian retail sector will more than double in size to 2 trillion dollars in the next decade – across categories and formats – and the successful retailers are the ones who continue to challenge the perceived growth profitability trade-off”, stated Abheek Singhi, Managing Director and Senior Partner at BCG.

The trends covered in the study are a combination of short-term and long-term drivers. It is important to note that while themes are universal, there are bound to be nuances and retailers will need to discern the impact of various factors on their business. The report also prompts retailers to address key considerations for sustainable growth in future.

“The retail sector offers very significant opportunities, but at the same time, we see very significant variation in performance across retailers. In the retail sector, opportunity abounds, yet so does a stark divergence in performance outcomes. The key to standing out and achieving success lies in retailers’ commitment to sharpening their CVP & the delivery model, leveraging the transformative potential of AI & analytics and aggressively managing costs” explained Namit Puri, Managing Director and Senior Partner, BCG.

The report highlights 5 value creation themes that retailers can activate, providing inspiration from global retailers. It advocates challenging traditional trade-offs with innovations in business models, leveraging digital and GenAI for personalized customer experiences, enhancing value chain efficiencies with AI, fostering partnerships to unlock new revenue streams, and adopting systemic localization in merchandise & formats to win in “Many Indias”.

“New-age retailers globally and in India have challenged traditional trade-offs in consumer propositions. This has enabled retailers to provide superior offerings ‘consistently’ and deliver breakthrough LFL growth. Retailers have also leveraged AI and data actively” explained Bharat Mimani, Managing Director and Partner, BCG.

“As we stand at the cusp of a transformative retail era, it is crucial for Indian retailers to embrace the wave of constant innovation. This report not only highlights the immense potential in our rapidly evolving market but also provides actionable insights for retailers to adapt and thrive amidst changing consumer preferences and technological advancements. By focusing on personalized customer experiences, exploring new collaborations, and leveraging AI for efficiency, we can propel India’s retail industry towards unprecedented growth and global competitiveness. This report is more than an analysis; it is a call for Indian retailers to innovate, collaborate, and lead the charge in shaping a dynamic and prosperous retail landscape for our nation.” opined Kumar Rajagopalan, CEO, Retailers Association of India (RAI) 

The report serves as a guiding frame for retailers to reflect on the recent changes in the retail sector and implores to address key imperatives & immediate priorities. It also attempts to guide the reader to re-imagine businesses by taking inspiration from retail peers who have challenged existing inefficiencies and model trade-offs and found success.

Retail Jeweller India News

Continue Reading
Advertisement

Latest News


Notice: ob_end_flush(): Failed to send buffer of zlib output compression (0) in /home/retailjewelleri/public_html/wp-includes/functions.php on line 5420