The founder of Selfridge’s store said a 100 years ago: “Excite the mind and the hand will reach for the pocket”. This is ringing especially true for the Indian retail sector today. Rising incomes, favourable demographics, changing lifestyle of the growing middle class, entry of foreign players and increasing urbanisation are opening up new doors for the retail sector. However, competition has become intense too. It means the race to innovate and remain relevant to shoppers has gained momentum. The ones who can adopt new technologies, access data and continuously upgrade the in-store experience will be the ones to survive and score.
The recent takeover of Flipkart by Walmart assumes a special significance, almost representing a point of inflexion for the sector. This will be the ultimate convergence of the online and offline retail in India. This deal holds significance for a number of reasons. First and foremost, for the e-commerce start-up ecosystem in India, it lays to rest the sceptics’ constant debate on profitability over valuation based on future potential. For the retail sector per se, it would open the gates to investments and practices of the parent major in areas such as groceries and fresh vegetable retailing. Most significantly, this biggest global e-commerce deal lends a strong story to be showcased for the big FDIs inflow into the country, not only for the start-up space, but others as well. Berkshire Hathaway picking up stake in Paytm is a case in point.
The competition in this converging retail environment may end up being among four-five players in the large format retail in the O2O space. Aside from this big bucks business, the smaller vertical formats focussed at certain product categories will make a space for themselves as long as they are able to give better products and services than the large format retail. Geographically, the sector would also focus on the semi-urban towns where the growths would be higher.
A report by Deloitte states that in the coming years, three key roles will be critical for winning: Fulfilment Experts, Data Scientists and Technologists, apart from great store leaders, merchants and planners. There will be special emphasis on capabilities such as analytical thinking, inspirational leadership and global mindset. For managing a large workforce there would be a need for smart HR playing a critical role in attracting, retaining and engaging talent. It would be critical for any organization to be flatter, flexible, amenable and agile to the needs of changing organizational requirements.