Striking a balance between offline and online retail, while embracing technology to enhance the overall customer experience, offers the best chance of success in today’s dynamic and ever-evolving retail landscape.
Online retail in India is a disruption. India as a consumer market has traditionally preferred offline shopping as its norm. However, in recent years it has begun to shift towards online retail as a potential alternative. Unlike other disruptions, like how the traditional yellow and black cabs have completely given way to ride-hailing, online retail is still regularly challenged by offline retail in becoming the dominating mode of shopping in the country.
The increasing internet penetration, growing smartphone usage, availability of affordable data plans and the rise in e-commerce offerings and platforms have contributed to the surge in online shoppers. Aided by a more extensive variety of products, attractive discounts and hassle-free doorstep delivery, online shopping is becoming more and more attractive. Alternatively, traditional offline shopping offers consumers the ability to interact (see, feel, touch, smell, taste) with the product, housed in familiar ‘brick-and-mortar’ stores, with personalised customer services based on personal relationships with the vendors; hence still possessing the ability to attract a very large section of society, which offers instant gratification that can never be replicated by online retail – no matter how fast the delivery is.
With both of these models finding an uneasy balance at the moment, it has become crucial to delve deeper into the shopping needs of contrasting audiences and bridge the generational divide in Indian retail, especially to understand what model will have longevity in this relatively unique situation.
Understanding the generational divide:
As different generations have grown up with distinct experiences and technology, their preferences for shopping have naturally evolved. Younger generations, such as Gen Z and millennials have embraced online shopping as a part of their everyday lives; while other cohorts, including baby boomers and Gen X, have shown a more enduring affinity for offline retail.
According to a survey by PwC, marketers, and retailers are increasing their usage of social media, which has some crucial contributions to decision-making. Targeted advertising and promotions have piqued the interest of 31% of respondents participating in the survey, rising to 43% among Gen Z. When it comes to advertisements, 37% lean towards a direct link to discounts and promotions for their preferred brand or product. Sponsored social media adverts draw in 34% and 35% believe that traditional TV still influences their decisions, indicating that the medium’s extinction may be exaggerated. Understandably, nearly half of the TV-watching cohort (49%) is made up of baby boomers.
Baby Boomers and Gen X: Nostalgia, personal touch, and trust:
For the baby boomer and Gen X generations, the allure of offline retail lies in nostalgia and the sensory experience it offers. The ability to touch, feel, and try out products before making a purchase remains a fundamental aspect of their shopping process. They appreciate the tactile nature of shopping and value personal interaction with knowledgeable sales associates.
Moreover, these generations place high importance on trust. They have spent decades building relationships with local brick-and-mortar stores, and the familiarity of a physical store offers a sense of security and confidence in their purchases.
Additionally, baby boomers and Gen X individuals tend to have higher disposable incomes and a greater inclination toward luxury or high-end products. Offline retail allows them to indulge in a luxurious shopping experience that caters to their refined tastes.
Gen Z and Millennials: Convenience, price, and digital integration:
In contrast to their older counterparts, Gen Z and millennials have been at the forefront of the digital revolution. They have grown up with technology and embrace the convenience and accessibility that online shopping provides. The ability to browse through countless products, compare prices, and read customer reviews without leaving the comfort of their homes has revolutionised their shopping habits.
Furthermore, these generations prioritise value for money. Online platforms often offer competitive pricing, discounts, and deals, which align with their budget-conscious mindset. The cost-saving aspect of online shopping, combined with the convenience of doorstep delivery, presents a compelling case for embracing e-commerce.
According to a report by CBRE, more than 70% of late millennials prefer buying their clothing, footwear, and cosmetics online.
The hybrid shopping experience: Bridging the generational gap:
With clear generational preferences, it is essential to acknowledge the evolving landscape of retail. Increasingly, consumers are seeking a hybrid shopping experience that combines the best of both worlds. Click-and-collect services or farmer markets for groceries are examples of continuously changing dynamics in retail.
Hybrid shopping allows retailers to connect with communities both online and offline. By leveraging social media, online promotions, and influencer marketing, retailers can engage with younger consumers and create brand awareness. Simultaneously, physical stores provide a space for face-to-face interactions, personalised assistance, and the opportunity to build trust and loyalty within local communities.
By blending offline and online channels, retailers can offer a seamless and personalised customer journey that caters to the diverse needs of different generations. This model has the potential for longevity, with its evolution stemming from the integration of technology that further enhances the shopping experience, regardless of whether it is offline or online. Technologies like augmented reality or interactive in-store displays have the ability to bring both generations closer while maintaining their unique preferences.
Conclusion: Hybrid shopping is shaping the future of retail in India:
According to the consumer insights survey by PwC in February 2023, as the cost of living rises and supply chain disruptions affect product availability and delivery dates, customers are adjusting their purchase patterns in-store and online. Hybrid shopping, a blend of offline and online experiences, provides the best approach to bridging this gap.
Acknowledging the evident generational divide and the factors that shape each cohort’s shopping preferences is crucial for retailers and brands seeking to cater to their target audiences. Striking a balance between offline and online retail, while embracing technology to enhance the overall customer experience, offers the best chance of success in today’s dynamic and ever-evolving retail landscape.
(This article is authored by Vineet Rao, Founder and CEO, DealShare)
