In recent years, the retail landscape in India has witnessed significant changes as consumer shopping preferences evolve. A recent survey by Grant Thornton Bharat titled “Beyond the Basket: Understanding Consumer Preferences within Omni-Channel Setups” highlights a clear trend: while quick commerce (Q-commerce) is popular for daily essentials, physical stores remain the preferred choice for high-value purchases.
According to the survey, an impressive 85% of respondents indicated that they prefer Q-commerce for their food and grocery needs. This preference reflects the growing demand for convenience among Indian consumers, where timely delivery of everyday essentials has become paramount. The ability to order groceries and essential items with just a few taps on a smartphone has transformed shopping habits.
However, when it comes to high-value items such as electronics, jewelry, or luxury goods, over 50% of survey participants still favor traditional brick-and-mortar stores. This preference underscores the importance of experiencing products firsthand and seeking the assurance often associated with in-store shopping. Naveen Malpani, partner and consumer industry leader at Grant Thornton Bharat, emphasizes this duality – although consumers are gravitating toward the efficiency of online platforms for routine purchases, they still hold a deep-rooted trust in physical retail for significant investments.
The retail industry is increasingly striving to find a balance between digital convenience and in-person assurance. The integration of online and offline experiences is crucial for retailers who aim to cater to the diverse needs of their customers. As the survey indicates, more than 30% of consumers are opting for Q-commerce, signaling a shift toward hybrid shopping models combining both worlds.
However, traditional retail stores face challenges that may hinder their growth. A significant 38% of respondents cited limited product ranges as a major shortcoming of physical stores, while 37% indicated that higher prices formed a significant barrier to their purchasing decisions. These pitfalls highlight the need for retailers to expand their offerings and provide more competitive pricing to retain customers.
To adapt, many retailers are incorporating hybrid models into their business strategies, blending online shopping with traditional retail experiences. This approach is not just beneficial for the customers but is also becoming vital in staying competitive within India’s dynamic retail ecosystem. The advent of regulations such as the Data Protection Act 2023 is expected to foster a more secure digital shopping environment, further promoting this hybrid retail growth.
Despite the advantages of Q-commerce, operational challenges persist. The survey points out that high operational costs associated with warehousing and quick delivery significantly cut into profit margins, with delivery expenses consuming up to 70% of gross margins for orders averaging between ₹300 to ₹500. Effectively managing these costs while meeting customer expectations is critical for Q-commerce players looking to scale their businesses.
The rapid rise of quick commerce platforms can be both an opportunity and a challenge. As consumer behavior shifts, businesses that can create seamless experiences across both online and offline channels will be the frontrunners in this evolving landscape. Malpani underscores the importance of adaptability: “As consumer preferences evolve, businesses that can seamlessly integrate online and offline experiences will be best positioned to succeed in this rapidly transforming retail landscape.”
In summary, the insights from Grant Thornton Bharat’s survey reveal a nuanced picture of consumer preferences in India’s retail sector. The popularity of Q-commerce for daily essentials starkly contrasts with the continued reliance on physical stores for high-value purchases. Retailers must understand this duality, adapting their strategies to enhance both online and offline shopping experiences. By addressing the challenges that come with each model, they can ensure customer satisfaction and drive future growth in this competitive market.
