India’s organised retail stock has reached 64.3 million sq ft as of H1 2021 and is anticipated to cross 82 mn sq ft by 2023, according to a report by CBRE South Asia Pvt Ltd.
The report, India Retail Reboot 2021, highlights that Delhi and Bangalore are top the sectors’ development with an anticipated addition of more than 5 mn sq ft of the general organised retail stock respectively followed by Hyderabad anticipated to add more than 3 mn sq ft.
As per the report, the receding pandemic, commencement of a vaccination drive and lifting of restrictions towards the finish of 2020 resulted in enhanced footfalls across higher streets and malls. The recovery gained additional momentum in early 2021, in particular across southern and northern cities as Pan-India retail sales in February 2021 touched just about 93% of February 2020 (pre-Covid) levels.
However, restrictions impacted customer self-assurance and acquiring activity as soon as more. But, in contrast to the national lockdown in 2020, the influence on retail was not as extreme for the reason that most restrictions have been regional / localized. The gradual lifting of restrictions because early June led to a steady rise in footfalls. This recovery was initially led by North India, exactly where a somewhat stronger bounce back from the second wave was witnessed and mainly recreation-led footfalls enhanced across prime malls and higher streets. From July 2021 onwards, this recovery was visible across other regions in the nation as effectively and Pan-India retail sales reached more than 70% of the July 2019 levels.
In truth, with the onset of the pandemic, the customer behaviour shifted towards ‘conscious buying’, top to a considerable shift in customer acquire behaviour each across physical retail and E-commerce. The F&B, E-commerce, pharmaceuticals, and the standard grocery retailers as the major performing sectors witnessed steady development regardless of the pandemic.
Commenting on the announcement, Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE, stated, “The overall outlook for the Indian retail real estate market continues to be positive at the back of an accelerated vaccination drive, policy reforms, and increasing urbanization. Moreover, with more investors looking at REITs and fractional ownership for the commercial segment, the sector is embarked on a growth trajectory.”
Bimal Sharma, Head, Retail Services, CBRE, stated, “The Indian retail sector stands at a chance of transformation as retailers continue to adapt their store formats to address the needs of different customers across markets and geographies. The pandemic has led retailers to explore newer trends like digitally enhanced experiences, pop-ups, omni-channel retailing, etc. While we expect brick & mortar stores on hi-streets & in shopping centers to continue to flourish, retailers will have to rethink and realign their business strategies to meet the demand of the customer that is constantly exposed to the evolving online shopping experience.”
“With the renewed demand and bounce back of retail, we are seeing a number of international brands both in the retail & the F&B sectors showing interest in the country and we expect to see them enter India starting early 2022 which would contribute to the overall sectors’ growth going forward,” he added.
Future trends for sectorial development:
Apparel and Footwear:
# Pent up demand is probably to lead to a powerful rebound
# Retailers are anticipated to continue ramping up their digital / on line capabilities
# Store-based retailers will focus on exclusive buying experiences
# Malls focussed brands are probably to expand in standalone / mixed use developments to widen their footprint.
# A handful of brands are altering their retailer sizes and layouts as effectively
Health & Beauty:
# As acquiring patterns normalise, beauty specialist retailers are anticipated to make a powerful comeback
# A quantity of new multi-brand formats are evolving and expanding, each on line & offline
Electronics and Appliances:
# All national retailers have substantially enhanced their on line presence and have attempted to address all the buyer demands.
# Multi-brand outlets are probably to turn into a preferred option amongst customers and retailers such as Croma and Reliance Digital are anticipated to continue expanding
Department Stores:
# One-quit buying encounter format is probably to stay well known amongst customers
# All division shops are obtaining revolutionary techniques to engage with their shoppers, and some have also utilized customized / on line platforms to enhance sales.
Hypermarkets, Supermarkets and Traditional Grocery Retailers:
# Consumers will continue to stay worth-conscious
# Comeback of non-necessary sales is probably to help recovery and development across supermarkets
# Low penetration of contemporary grocery retailers, decrease genuine estate charges and availability of bigger spaces presents tremendous expansion possibilities in tier II and tier III cities
E-commerce and F&B E-commerce:
# E-commerce is anticipated to witness higher development going forward as effectively and but would co-exist effectively with retailer-based retail channels. Integration of the two is probably to improve.
# Dark kitchens / shops in partnerships with on line & other retailer-based retailers will be the crucial to offset logistical challenges in the future
# Expansion into tier II and tier III cities is probably to be the next stage of development in the F&B e-commerce category as effectively
Retail Outlook:
The pandemic produced an urgent require for the retail sector to adapt to the evolving industry landscape. Trends that have been on a multiyear trajectory saw dramatic acceleration and the retail business witnessed more innovation in the previous year than it did in the prior decade.
CBRE has identified six imperatives that are anticipated to aid retail stakeholders adapt to a altering customer landscape whilst pursuing new possibilities.
1. Restructuring retailer-landlord relationships – Post the pandemic, more partnership like agreements began to surface in between landlords and retailers. Landlords supplied various relief measures to accommodate retailers, ranging from short-term rental rebates, rental reductions, and deferments with some also exploring lease restructuring and match-out subsides.
2. Navigating the digital shifts –Technology in retail is swiftly evolving in particular post the pandemic. Virtual fitting-space technologies will aid to synchronise the store’s inventory and point-of-sale systems, enabling shops to catch up to information-wealthy e-commerce by offering insights on information points such as time spent in fitting rooms and conversion prices.
3. Tapping the altering customer behaviour – Consumers today are particularly agile, volatile, demanding and tech-savvy. Given their preferences and the pandemic associated disruption, retailers really should focus on reinventing their advertising techniques and believe of revolutionary techniques to know their customers improved.
4. Omnichannel to be the new omnipotent — Online buying has enabled shoppers with this comfort in a protected atmosphere. The alter in customer buying patterns has ensured that retailers look at omni-presence. Omni-channel is anticipated to be the fallback program for corporations in the course of uncertainties / lean financial cycles.
5. Reshaping the notion of a “store”, absolutely free standing shops to proliferate – With inventory management currently becoming optimised with the help of predictive demand analytics, brick and mortar shops may well at some point turn into inventory absolutely free as purchases would be dispatched from warehouses to consumers’ properties upon payment. CBRE foresees the redistribution of space in between the several locations of retail shops such as fitting rooms, item testing zones, choose up counters and stockrooms.
6. Rethinking retail asset management techniques, well being, and security to stay paramount – Physical spaces are probably to be re-believed and social distancing may well stay in impact going forward as effectively – interest will be paid to vaccinated employees. Developments that are at the moment beneath building / planned are anticipated to make provisions for more open and green spaces in their design and style layouts. In addition, adoption of PropTech is probably to take centre stage in the upkeep across the retail-constructed environments.