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KONNECTED to consumers
A Deloitte—FICCI report, September 2017
Through this Deloitte India and FICCI report, ‘KONNECTED to consumers’, we delve into various trends and processes which are shaping the consumer industries in India. A holistic view of the aspects influencing a consumer’s journey–from gathering information about a product to purchasing and product reviewing–is explained.
About the industry
The consumer industry is one of the most dynamic and amongst the fastest growing industries in India. Consumer retail forms an integral part of the industry with a current estimated size of more than INR 45 trillion. It is further expected to witness a Compound Annual Growth Rate (CAGR) of over 10% in the period 2016-21 to reach a size of INR 85 trillion by 2021. Thus, it plays a pivotal role in the growth story of Indian economy through noteworthy contribution towards the national GDP, attracting significant foreign investments and technologies, and generating vast employment opportunities.
Consumers have taken the front-stage in the constantly evolving retail environment, thus making the industry amongst the first to be influenced by technological advancements and innovations. As industry players embrace technology to enhance the consumer experience, it has become imperative for them to remain connected to consumers throughout their retail journey.
In today’s world of digital evolution, technological disruptions are increasingly becoming a norm in consumer industries. While these technologies make the consumers’ retail journey more convenient, at the same time they also necessitate the brands to be abreast of the dynamic retail environment and keep evolving constantly to edge out intense competition.
What is changing?
The digital era has transformed the consumer retail journey and is driving the modern-age trade in India. To understand the consumer behavior of modern-age shoppers, the Knowledge of consumer data and insights is gaining traction and the companies are expected to increase their focus on techniques like predictive data analytics and IoT to forecast purchases. With the rapid growth of internet penetration, supported by the improving 3G and 4G infrastructure, the Omni-channel approach is unlocking the prospects for various brands in the form of increased sales and reach. To support this, various government initiatives and National policies are impelling the growth of businesses and benefitting consumers through relaxed FDIs, flowing PE/VC investments, GST introduction, etc.
The constantly changing business landscape is making the retail environment more dynamic in terms of innovation, with novelty to play a crucial role in attracting the new-age shoppers. Further, companies are realizing that environment and social practices are driving sustainability and influencing consumer behavior, leading them to integrate responsible practices within their supply chains. With convenience abridging the gaps of last-mile and rural outreach, innovative distribution models and hyperlocal trade would add an additional layer to attract shoppers.
Though the concepts like AI, AR & VR, IoT, etc. are new-fangled in India, these technologies are already augmenting the customer experiences, supported by rapidly growing internet accessibility and technology start-ups. Consequently, this has given rise to digital payment modes where e-wallets are scaling up the payment ecosystem and handiness, which got a major boost from the government’s stand on promoting a cashless economy. With technology in the fore-front for all these developments, the businesses are expected to use digital marketing as their growth engine to improve the engagement levels with connected consumers.
The report ‘KONNECTED to consumers’, delves into such various aspects which are at the forefront of the consumer industry connectedness. It demonstrates the imminence of technologies and processes, which would integrate the entire retail journey and provide a seamless experience to the consumers. While consumer data and insights form the backbone of these technological advancements, government support through national policies and regulations would drive them towards a steady growth path.
Towards the end of the report, key action items for industry stakeholders – majorly government and businesses – have been recommended. These recommendations, provided along with their priority levels, also highlight their engagement intensity with the consumers, thus presenting clear actionable steps to realize the industry’s growth potential in a connected and comprehensive way.