The Evolution of Retail Consumer Experience in India

To say that consumer shopping has undergone a paradigm shift over the past two decades would be an understatement. To illustrate this transformation, let’s take the example of Neha, a 34-year-old resident of Malad, Mumbai. Her shopping experience, like many others, is now influenced by multiple, converging touchpoints. For instance, after coming across an advertisement of a new mango ice cream on social media, she no longer calls her local ‘kirana’ store to deliver the ice cream. Instead, she browses her favourite quick-commerce app to purchase the ice cream with AI-generated suggestions reminding her of her daily shopping items which she would want to add to cart before she completes the purchase in just a few taps on her mobile. Neha's story is similar to countless other consumers in the country as technology, data and brands are shaping the consumer experience.

In late 90s and early 2000s, the Indian retail sector was dominated by neighborhood ‘kirana’ stores which catered to local needs. During this era, retailers influenced a large chunk of the consumer’s decisions and preferences as brands relied heavily on above the line (ATL) advertising, promotions to trade and the power of word-of-mouth. 

India's transition from traditional to organised retail was not as swift as the West. While organised retail introduced consumers to enhanced shopping experiences with superior service, expansive product displays and improved store ambience, personal interactions and trusted local vendors were still valued highly. However, with time, modern retail also gained the consumers’ trust when promotions like maximum-savings days came into prominence. Large retailers capitalised on this evolution by launching consumer loyalty programmes which fostered brand allegiance and rewarded repeat customers. Such shifts also nudged the neighbourhood ‘kirana’ stores to move to a ‘self-service’ format to give their consumers the look and feel of modern retail along with an enhanced assortment and larger discounts. 

As modern retail was trying to expand and create a strong foothold in the Indian market, the rise of telecom and smartphones with 3G network in the 2010s gave way to the advent of e-commerce, which marked a significant shift from experiential to efficient shopping. Consumers were now spoiled for choice as they were able to shop from the comfort of their homes with a simple click. Thousands of online reviewers, rather than local retailers or in-store promoters, became influential voices. The convenience of easy returns and competitive pricing took precedence over in-store ambience and personal interactions making e-commerce platforms an attractive and popular choice.

Since 2015, omnichannel retail has revolutionised shopping in India by seamlessly blending digital and physical experiences. Services like ‘click and collect’ bridge online convenience with in-store interactions, allowing consumers to order online and pick up purchases in-store. Enhanced store locators drive traffic to nearby outlets, while the concept of endless aisles has expanded product availability beyond physical inventory. Loyalty programmes have become seamless across platforms, enabling customers to earn and redeem rewards anywhere.

Millennials and Gen Z have driven the growth of direct-to-consumer (D2C) brands by preferring brands whose vision aligns with their personal values. The purchase decision now encompasses more than just the product, and brand narratives that resonate with consumers are an important influencing factor for their choice. Social commerce platforms have also transformed shopping into interactive experiences, allowing brands to engage directly with consumers and build communities. Live shopping has taken consumer engagement to new heights, especially in fashion, where brands are investing in infrastructure for long-term growth rather than relying on marketplace platforms.

The COVID-19 pandemic further accelerated digital adoption in Indian retail, with curbside pickups providing safe shopping alternatives during lockdowns. Technologies like virtual try-ons, and augmented reality (AR/VR) allowed consumers to explore products from home for even high involvement categories like eyewear and spectacles, with contactless delivery becoming a standard practice ensuring safety and hygiene. The current digital environment empowers small sellers to expand their reach to tier 2 and 3 cities with subscription models, fast delivery, easy returns and efficient purchase operations which collectively enhance the consumer experience.

Today, Indian consumers demand driven by AI and data analytics driven hyper-personalisation which offers tailored recommendations and dynamic pricing. They expect channel fluidity with seamless movement between apps, websites, physical stores and social media without disruption. In categories like luxury, fashion and electronics, the overall shopping experience often outweighs price considerations as consumers seek added value and enhanced experiences.

The evolution of retail in India reflects the dynamic interplay between technology and consumer behaviour where seamless and personalised shopping experiences take centre stage. Looking ahead, the Indian retail sector is poised for further growth and innovation. Phygital stores, blending physical and digital elements could offer interactive, tech-driven, in-store experiences. Further, AI-driven conversational commerce could facilitate personalised interactions and voice-activated shopping while the metaverse promises to introduce virtual retail spaces, offering immersive shopping experiences that redefine consumer engagement. Sustainability and ethical practices are also gaining importance, prompting retailers to adopt eco-friendly options and transparent supply chains. As consumer preferences evolve, retailers will have to continue to find innovative ways of adopting technology while enhancing customer experience.

 

This article is contributed by Ravi Kapoor, Partner, Leader - Retail & Consumer and Balaji Venkatraman, Director- PwC India.