The Challenges of a New Age Retail Store

This is 2019. But lets rewind a bit. To the year 2001. Hindustan Unilever Limited (HUL), then called Hindustan Lever limited (HLL), a $620 million Indian subsidiary of Dutch-British company Unilever, launched a service for home delivery of groceries in India called Sangam Direct. Yup in 2001, yup thats much before the ecommerce era and even before social media or smart phones.Sangam Direct What  Sangam Direct was in pre-smartphone and pre m-commerce era is what the plethora of online supermarkets like Grofers, Big Basket, Amazon Fresh are trying to tap into today. The Business model was simple. They delivered a printed product catalogue every month by mail. Interested customers just had to go through the catalogue- give the phone number a call to order. And viola! Sangam Direct would deliver your products home the next day. Backed by the deep pockets and assurance of a multinational brand like HUL, Sangam Direct was destined to revolutionise shopping. Or so it was assumed.With hindsight, what HUL failed to factor in was that the early 2000s were the glory days of retail store shopping. People had better jobs, more disposable incomes, Indian markets were starting to open up and shoppers were starting to have access to larger, cheaper and diverse product choice across sectors. But where Sangam Direct failed, another entrepreneur made hay while the sun was shining. The entrepreneur was Kishore Biyani and the business he started in the same year as Sangam Direct was called Big Bazaar. Big Bazaar as it would turn out, had successfully foreseen the retail glory days, got its formula correct and went on to make grocery shopping more of a family outing event. As destiny would have it, HUL sold Sangam Direct service which then pivoted to become a chain of retail stores under new ownership, eventually to change hands again and being taken over by Big Bazaar itself, which was now a huge conglomerate.

While retail store shopping has proven itself to be the firm favourite amongst the Indian shopping diaspora across most ambiguous or unbranded sectors, post smartphone era however, the market indications seem to be suggesting a changing trend of a smartphone addicted, time and energy conscious shopper. Smartphones have no doubt made the world extremely small and made it simpler to accomplish a lot of tasks. But in the bargain, what they have also inculcated is a shorter attention span on everything other than their smartphone screens. The Addiction of Smartphones While travelling, while waiting at a bus stop, in the middle of a conversation and more importantly for this topic- while shopping, there is a never ending urge of unlocking the phone to glance through the applications without any particular reason. A report by the New York Post suggests that urban population feels the urge to check their smartphones once every 10 minutes i.e over a hundred times a day.

Apparel retail stores in the Indian market rely heavily on luring in their customers in with what I call the Honey bee effect. Here is how it works; Retail stores dress themselves up in bright, eye catchy decor and presentation like a flower does vis.a.vis a honeybee. The aim is to attract the maximum number of bees passing by, thus achieving a greater chance of pollination and survival, or in this case- making a sale. But what if the bees were not looking or heck, bees were busy on their smartphones the whole time? Thats partly the challenge retail stores are facing in this day and age. 

But these multitude of apps on a phone are not some kind of a virus that has taken control of innocent, naive minds. They are there for a reason. They add great value to some aspect of the user`s life. Whether it is their ability to hire a cab, or send messages, get daily news, get food delivered or ecommerce, the smartphone offers the one stop place to keep the user hooked. Hence the direct competition for retail stores today is mostly the hook of the smartphone. Of-course beyond the smartphone, the regular challenges like competition and lack of avenues of marketing and connection with the customer also exist, but they deserve a completely different post altogether.

To treat the smartphone as their arch nemesis or a new age tool to adopt and become friends with is upto every retailer. Our suggestion- the future belongs to the retailer that merges the convenience of the smartphone with the quality and service of the retail store. 

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