Rising prominence of e-commerce is creating opportunities for every retailer and the long-term outlook for the industry looks positive, supported by rising income, favourable demographics and increasing urbanisation, said Spencer's Retail Chairman Sanjiv Goenka.
The future of retail lies in ‘Omni-Channel'' approach, which means converging sales through both physical stores and online, according to the latest annual report of Spencer's Retail.
Besides, consumer lifestyles have undergone a "massive change” after the pandemic, leading to the emergence of newer articles of consumption even as the importance of some other “diminished”.
"Rising prominence of e-commerce is creating opportunities for every retailer and this trend is likely to continue. Retailers could leverage digital channels (e-commerce), enabling them to reach out to more consumers," said Goenka while addressing shareholders.
Talking about Spencer's e-commerce business, Goenka said it has witnessed multifold growth in the online space.
"There is a huge opportunity, not only through the current model which is achieving rapid growth but it can also scale up much further by adding multiple products, markets, and new geographies,” he added.
Spencer's Retail has already been offering online shopping options through its website and mobile app.
"During 2020-21, it also pioneered in phone and WhatsApp Chatbot ordering, along with various tie-ups, including Uber, Swiggy, Dunzo, RWAs and others to strengthen its Out-Of-Store channel. Spencer's has witnessed 6.5x growth in their e-commerce business from 2018-19 and 4.5x growth from 2019-20,” the annual report said.
Over the long-term outlook for the retail industry, Goenka said it "looks positive, supported by rising income, favourable demographics and increasing urbanisation."
The pandemic has made it imperative for retailers to go beyond normal channels and adopt an ‘omni-channel’ approach – converging sales through both digital and brick-and-mortar shops.
"The future of retail is ‘omni-channel’, converging sales through both physical stores and online. Retailers with unique and differentiated positioning will continue to do well,” the annual report said.
According to the company, organised retailers are likely to benefit from consumers tilting towards organised space.
"The company is continuously enhancing its omni-channel approach and strengthening its ‘Out-Of-Store’ delivery channels to continue to co-serve with brick-and-mortar channels,” it said.
It has undertaken a hyperlocal approach, reaching out to the customers directly. At the same time, it is also engaged in contactless delivery through ‘Out-Of-Store’ mediums, while taking benefit of the e-commerce growth wave.
"The company has also attained a better customer reach with the introduction of new brands, products, marketplaces and serving in newer geographies,” it said.
Citing data from a World Economic Forum report, Spencer's Retail said the consumer spending in India is expected to grow to $6 trillion by 2030. The growing consumption is driven by rising households income, it added
According to RP-Sanjiv Goenka (RPSG) Group retail arm, this changing consumption creates opportunities for organised retailers such as Spencer’s.
"To grab the opportunity, the company is trying to enhance its reach through various platforms including digital. Spencer’s is continuously placing its offerings to the customers and also has in place marketing strategies that help increase the brand recall and create brand awareness," it said.
On the business, Goenka said 2020-21 saw the benefits of the rapid and robust integration of Nature's Basket, which it acquired from Godrej Industries, with Spencer’s ecosystem.
"Nature's Basket has benefited from synergies which include lean and efficient operations, cross leveraging products and significant cost savings,” he added.
In 2020-21, Spencer's Retail, which operates 197 stores including Nature's Basket, had a consolidated revenue of Rs 2,428 crore.
