Retail outlook: Small is the next big thing

In retail business, ‘big’ means ‘economies of scale’. Little over a century ago, retailing thrived only on agricultural produce. The most affluent businesses were based on the size of the farmlands and trading abilities of farm produce. Soon after the industrial revolution was set in motion, in the mid-70s and 80s, the power of technology slowly reached the common man. Thanks to thought leaders like Steve Jobs and Bill Gates! This opened a world of opportunities for many technology-driven middle-class aspirations.

While initially, the opportunities were limited to technologically-savvy people, by the 90s common people had started reaping the benefits of technology to keep them relevant, efficient and competitive, mostly through. 
However, the usage in most cases even today is limited to communication activities and minimal amount of online transactions, which too evolved recently.

Retailers and technology: While people across the globe are now technologically adept, but when we talk of them as consumers, they feel left out, as their local small retailer has not been able to keep up to the trend. So the big question is how we can leverage technology for small retailers to make them efficient and competitive, while enhancing the consumer experience?

In India, online transactions have been the talk-of-the-town in the last few years due to massive marketing activities backing them. But in reality, it is just around 2-3% of the overall retail industry. While the Indian retail industry is being captured by larger retail organisations, the market dynamics worldwide is changing towards smaller formats. With this transformation worldwide, it is evident that small format retailers will be able to succeed faster and quicker. You don’t need to have the size and resources of a large retailer or the organisational wisdom gained through the stars of premium institutes to effectively run your small and medium retail business. Neither do you have to invest in expensive technology!

What’s required: Small retailers must come together through a common technology platform that gives them the opportunity to connect, promote and transact seamlessly between their customers. They must ensure that they are able to provide a personalised experience that consumers these days look for. To provide that experience, retailers should know more of their consumers and their expectations. 

To gain more such consumer information, retailers should start engaging through shared socio-retail engagement platforms. This will help them to collect and track data to understand their buying habits, and therefore, in delivering a memorable small-retail experience.

Economic Gain: We must note that there are about 14 million registered retailers and 20 million unregistered retailers in India (the latter are mostly small retailers) with a combined capacity of 15 per cent share in the GDP. Once a seamless technology platform is offered to all stakeholders of retail industry, the growth trajectory of Indian retail industry can hit 22-25 per cent growth rate annually from the current 18 per cent, in the next 5 years.

The author is founder and CEO of Netree, a retail engagement platform