Driven by changing lifestyles, strong income growth and favourable demographic mix, the Indian retail sector is on the cusp of exponential growth. It is expected to rise to USD 833 billion by 2013; growing further to USD 1.3 trillion by 2018. This would be a compound annual growth rate (CAGR) of 10 per cent according to a report commissioned by India Brand Equity Foundation (IBEF) and AT Kearny. Consumer spending has risen sharply across segments. The youth population has seen a significant increase in disposable income and a marked shift in spending habits.

Discretionary spending rose an impressive 75 per cent in the past four years alone. Also, organised retail, which is pegged at around USD 8.14 billion in India, is expected to grow at a CAGR of 40 per cent to touch USD 107 billion by 2013.  

Despite projected growth of the retail sector, it faces challenges. The Indian consumer has evolved rapidly and has his own distinct set of needs and aspirations. Retailers need to understand their customers better to retain them, strategise better to attract new ones, continue to build loyalty and grow their business.

Data analytics can play a crucial role by providing facts and information by revealing hidden trends and capturing key insights, upon which retailers can base their strategic plans and operational policies, marketing outreach programs and tailor offerings.  A key challenge for organised retail is well entrenched competitors.

Adopting data analytics enables retailers to predict the behaviour of existing and potential customers. Experts believe that to reap the maximum benefits from data analytics, firms have to invest in the right technology, hire the right people and last but not the least develop standardised and robust processes of data collection, data retrieval, data analysis and strategy implementation. All of which require domain expertise and a huge quantum of investment. This is where partnership is of critical relevance. Specifically in the current context where customer buying behavior has undergone a transformation and more and more customers are getting value conscious - it is imperative to collaborate and share best practices with an aim to provide greater value to (common) customers. An example is the American Express Business Insights programme, which provides analytical knowledge to help companies grow revenue, acquire new customers, build loyalty and expand operational footprints.

Everyday spends significantly increase over the weekend

We found that due to the changed economic environment, while most consumers have made cutbacks in their discretionary expenses, everyday spends have been comparatively insulated; in fact everyday spends significantly increase over the weekend (as per our analysis over 50 per cent of retail spends occur on weekends). With eating out, watching movies, mall trips and socialising with friends a part of the urban consumer lifestyle, weekends have assumed immense importance for marketers and consumers alike. This helped create a winning consumer program together, we launched a weekend program - ‘Xtraordinary Weekends’- to support our customers’ need.

Our experience with close partnerships and relationships demonstrate that this is the new business reality and the way to derive success. It is definitely a win-win situation for all stakeholders including big and small retailers. The new, changing face of Indian retail demands that we devise and employ new game plans; imaginatively and with a lateral perspective.