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How Is 2021 Going To Be For The Distribution & Retail Segment?

Retailers have also realized that they need to be prompt with their actions and strategy implementation considering it is a time-sensitive segment and any missed opportunity could lead to the benefit of their competitors.

Photo Credit : Shutterstock

The retail segment has undergone various changes in the past few years. While it was a little less organized, it is now taking steps towards being a properly organized and evolved segment. Experts believe that the industry performed magnificently well during the last three years. However, with the entrance of the pandemic in 2020, not only the economy faced an upheaval but the market scenario and the consumer preferences underwent a major transformation. But the industry took things in its stride by focusing on the provision of online sales to meet the rising demand of the consumers. However, 2021 seems to be the year for recovery and one of the key focus areas will be to enhance both B2B and B2C relationships.

Growth of the Indian retail industry

As per a joint report by FICCI and Deloitte, the Indian retail industry, which is presently growing at 10 percent, is expected to almost double to Rs.85 trillion (lakh crore) by 2021. This growth will be majorly driven by consumer data and technology disruptions. Along with this, consumer preferences will be the focus for all brands and retailers. The report further states that consumer retail is an essential part of the retail industry and has a current estimated size of more than Rs.45 trillion. It is expected to witness a CAGR of over 10 percent in 2016-21 to reach a size of Rs.85 trillion by 2021. Additionally, digital marketing spends by advertisers is also anticipated to double in the next 4 years to 24 percent of the total expenses.

Differentiation, omnichannel strategy, and ensuring collaborative efforts is the need of the hour

However, in 2021, there will also be an increased competition in the already competitive market. While with the digital acceptance, the retailers will be working to meet the surging consumer’s demand; they will have to focus on their USP so as to differentiate them from the other brands in the market and increase their preference by the consumers.

Differentiation will be the need of the hour. Hence, to ensure this, the retailers will be focusing on revamping their revenue business models as they now understand that with the changing times change in strategies is essential. Along with this, they will also focus on offering exclusive subscriptions or memberships to ensure consumer loyalty, developing new partnerships and collaborations with key FMCG and consumer durable players, and an omnichannel digital experience. Since there is increased use of smartphones, apps, the internet, and social media, there will be a dire need for the retailers to come up with extraordinary omni-channel strategies along with the perfect blend of an offline and online extension of customer experiences.

Improved relationships with suppliers and distributors

2020 made the retailers realize the loopholes in their functioning. Many of them understood that they were not well equipped to meet the sudden changing and bulk requirements of the consumers. Hence, in 2021, they will also divert their attention and efforts on improving their relationships with their suppliers and distributors to avoid the crisis situation of delay in deliveries and out-of-stock products.

They will now invest all the more in their supply and distribution networks to ensure seamless functioning. Additionally, quick order delivery, logistics, and inventory management will also witness increased investments.

Additionally, retailers have also realized that they need to be prompt with their actions and strategy implementation considering it is a time-sensitive segment and any missed opportunity could lead to the benefit of their competitors. They might take away the consumer base within a snap by offering exciting deals and services. Hence, it is a critical time for the retailers to earn back consumer’s confidence and re-instill their self-confidence by extending their best foot forward, examining all the gaps in the supply chain and distribution network along with thinking through the perspective of the consumers and coming up with relevant solutions.

Organized and e-commerce retail sector to grow

As per IBEF’s Industry retail industry report 2020, the Indian retail industry accounts for over 10% of the country’s GDP. India is the world’s fifth-largest global hub in the retail space. It also states that by 2021, traditional retail will hold a share of 75% with the organized retail share reaching expecting to reach 18% and e-commerce retail will be reaching 7% of the total retail market.

Digital adoption

To keep up with the technological trends, retailers will also introduce AI technology in their operations to ensure flawless working. Artificial Intelligence based chatbots , customized and personalized offerings will also see a rise. Additionally, they will be a greater need to track and store consumer data. Internet will help in this task of gathering and analysis of consumer data and will also play a major role in pushing the growth of consumer business retailers.

Summing Up

2021 will also see the shoppers coming back to the physical stores for shopping and the brick and mortar will experience growth yet at the same time it will face an increased competition. However, online shopping will continue to grow owing to the safety concern of consumers. The primary focus of the retailers will be on enhancing B2B and B2C relationships and inculcation of a combination of offline and online strategies. On the whole, 2021 seems to be an optimistic and progressive year filled with growth and opportunities.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Siddharth Grover

Director, Groversons Group Pvt. Ltd

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