Anuj Kejriwal, CEO & MD – ANAROCK Retail
If we see the beginning of this calendar year, which is the last quarter of the financial year (2022-23), retail leasing in India has grown by almost 130% (Y-o-Y). Despite the anticipated global slowdown, there is a positive outlook for the sector.
These headwinds and recession pressures have clearly not impacted the consumers and we can see that retail consumption has strengthened based on the rebound in their shopping patterns.
So why do you think there is a sudden shift in the retail industry?
There are multiple factors leading to the growth in India’s retail industry. Consumer preferences have changed, the younger generation is far more exposed to international brands, market sentiments are positive and of course there is significant improvement in the ease of doing business.
In this ever-evolving landscape of retail, the co-existence of physical and digital experiences has given rise to the brick and click strategy. This hybrid approach where our traditional brick-and-mortar stores have integrated with online platforms has truly been a game-changer globally.
Today several large brands are experimenting with different strategies while creating a seamless retail experience because consumers across the country no longer differentiate between offline and online consumption channels.
The objective of every retailer today is to expand their customer base and focus on transforming the design and purpose of retail spaces by creating experiential hubs and versatile spaces, for which they are implementing innovative strategies across different digital platforms and targeting the untapped markets in Tier 2 and 3 cities.
Technology in Retail
Brands are focused on adopting cutting-edge technology to engage customers in a more immersive and experiential manner. Augmented/Virtual Reality and Artificial Intelligence are the new buzzwords for hybrid shopping which are picking up fast. Expectations are clearly soaring. With the widespread adoption of digital payments and new regulatory frameworks, we are sure to see more cheer in the sector.
The brick and click model generates a wealth of data through online transactions, customer interactions, and in-store activities. Retailers are smartly leveraging this data to make informed decisions about inventory management, marketing strategies, and customer preferences. This data-centric approach is reshaping the retail real estate landscape by influencing location decisions and space utilization.
Co-existence is key!
There is clearly a symbiotic relationship between brick-and-mortar establishments and digital platforms…it’s not competition, it’s collaboration that leverages the unique advantages of each other. The seamless integration of these two realms surely promises a future where we can cater to a diverse range of consumer preferences. It’s not just a passing trend but here to stay through a dynamic and sustained approach, offering customers the best of both worlds.
What to watch out for?
The market is ripe both from a developer and occupier perspective. Today most of international brands prefer India to expand their business as it is a low-cost geography that can give good healthy returns in the long term. With the first retail REIT and new regulatory frameworks, there is a huge attraction for institutional investors to invest in retail real estate.