Reset of retail with an e-tail and the long tail
The retail sector played a big role in moving some essential parts of what we call ‘living’ even during the lockdown. And as it continues to do so, we ask ourselves where it could be heading? As India and Vietnam continues to drive the digital transformation at 5G speeds, regulations and reforms – which pathways could or would consumption pass through and bypass? The Narrativ.Design team looks at the near-term narrative and the far-term narratives of the retail reset, evolving in each of these markets.
Image: © 2021 Pathfinderabhi
COVID crisis has made it clear, beyond doubt, that we are not just connected globally, we are related. And so are the numbers with the sentiments. The retail future is best captured between the ever increasing overlap of physical and digital ‘places to sell’. And the question - could the digital eclipse lead to a total darkness of the physical retail (as we knew it, called it, differentiated it)?
A look at the chart above reminds us that the reset is changing the face of retail, from physical and digital as separate worlds to a common ‘phygital’ universe for both and the better.
Retail in India and Vietnam spreads over a very long tail of traditional trade and high concentration of modern retail in urban consumption. But the limitlessness of digital shelves, speed of delivery and incentives on shipping costs could really light the fire in the rest of ‘India rising’ and ‘Vietnam rising’. And that's where a Reliance is permeating with Jio, across an estimated 12 Mn Kirana stores (Nielsen) universe (Mom-n-Pop shops), besides its recently acquired Future retail (Big Bazaar) stores, and access to digital ecosystems empowered with investments from Facebook and Google. Facebook, Amazon, Chat apps. (Whatsapp & Zalo) lower the entry barrier for setting up shop – business as usual is now a 24x7 'ecosystem of ecosystems'. Here, in Vietnam promising initiatives are reaching out across the long tail with technology and innovation in supply chain (E.g. One Mount Group). And we shouldn't miss the point of the roots of retail and the warmth of experiences.
But managing the ‘ecosystem of ecosystems’ has to replace previous habits and measurements dominated by the calculations around physical space, proximity and purchases. Coming to terms with a phygital universe unrestricted by geography and held only by the beliefs of the people in it - in all shades - is a data overload. For the time being, the digital transformation straddling across the physical and digital business-as-usual appears as patchwork with no clear narrative or a shared purpose. Data dash, regulatory concerns and quite a bit of chaos characterizes retail for now. And then Fintech joins the party with its own bells and whistles to bring the bank to the unbanked, befriend virtual currency, bypass cash and coax consumption with loyalty points.
We believe there is a blueprint. It is probably just the communication which appears chaotic. Or could it be that the blueprint is weighing the options of its unifying principle to address the questions cohesively around this 'ecosystem of ecosystems' to communicate clearly?
What should the brand retain? What should it let go? Should it swap its physical identity for a new phygital identity? Maybe the consumer would see it as a phygital citizen if they stay put and let time do the explaining.
But the ‘price and promotions’ pitch which served the core of the past retail brand narrative as the-reason-to-live for most retail giants comes to haunt it as it becomes baseline. As shopping seasons shift to the call of ‘notifications’. And add to that, the unknown unknowns - the regulatory landscape, cross category conflict-of-interests, local ingenuity, life-work attitudes changing continuously. It is overwhelming to say the least.
Imagine the retail future, at the dawn of the COVID impact passing through (i) real estate (of retail) x virtual estate (of retail); (ii) virtual future (of living) x real estate future; (iii) centralised consumption x decentralised consumption; (iv) preference for global x preference for local – among other trends. Compare the experience and expectations across the digital and physical addresses. When you do that, you would realize that the digital phase is not a total eclipse of physical retail. That's where you see why appifying the Mom-n-Pop stores by VinShop is a two way truth. Across the sub-categories of retail experience and consumption - each (physical & digital) have a point on their own and of each other.
At Narrativ.Design, we don’t see the phygital universe as a brand new tune. It is here to offer some old twists and some new moves. We view it as a great possibility of building brand new bridges between new bubbles of behavior over roots of belief. We believe asking people what they wouldn’t trade for 'convenience' or abandon for 'the lowest price' or 'promotions' is a great place to evolve your core, as a brand and business - to get a grip on the playground - with your physical or digital roots. The brand new remix of retail going forward wouldn't care less for 'lowest price' and 'promotions' - its just that, such promises will be dime-a-dozen in the phygital universe, bypassing the mainstream of the ecosystem of ecosystems being put together. Just a little bit of digital smarts, local ingenuity and a pressure to perform is needed to nudge people into it.
From a brand narrative standpoint, we see the ‘ecosystem of ecosystems’ needing to discover, define and deliver their own truths, in an endearing way. Putting tech-talk as a tick-tock in the background is important for your brand's future - acknowledging people as people and the moving parts of the ecosystem of ecosystems.
And why not? Truth is a two way street - preserving of one's own truth within the possibility the "other’s". Here lies the possibility for this frantic patchwork of ecosystems to evolve into an art. And welcome the retail reset, with an e-tail and a long tail.
© 2020 Narrativ.Design. All rights reserved. Co-authored by Neeta D'Souza, Tu Quynh Nguyen and Abhijit Das. You can reach them at firstname.lastname@example.org.