Even as the coronavirus pandemic ebbs, the Indian retail space is witnessing growing footfalls across retail and recreational spaces. The retail sector made a robust recovery in the second quarter of 2022, with transaction activity growing by more than 100 per cent on a quarterly basis. Overall, in H1 2022, it reported massive growth of more than 160 per cent y-o-y, according to a report by real estate consulting firm CBRE South Asia.
The report, titled ‘The Retail Perspective on Experience and its Impact on Real Estate’, said that while relevant and viable online retail may not suffice to satiate retail needs as outing, experience, and leisure are critical factors needed to balance the retail equation and will continue to draw in-store shoppers.
The CBRE report said the experience was a critical factor driving how retail spaces were designed even before the pandemic. However, following the pandemic, the productivity of retail spaces came into sharper focus, with ‘experience’ becoming more crucial due to its ability to increase customer engagement and not just sales. As a result, experiential retail is currently counterbalancing the prevalence of e-commerce and ensuring profitability by increasing the brand’s physical presence.
“This can be advantageous given the pent-up demand from customers who, following the two-year COVID-19-induced isolation, are now increasingly becoming active in the physical realm. These customers are now looking for engaging, immersive, and convenient experiences that give them a reason to visit stores rather than make purchases online,” the report said.
It added that across cities, brands are resizing and recalibrating their physical store strategies to diversify their portfolio and expand their footprint, with ‘experience’ fast becoming an important frontier to bridge the retailer-consumer gap.
“H1 2022 saw more than 500 per cent increase in project completions compared to a year ago. We expect these positive sentiments to sustain in the near term even as retailers explore innovative means to attract consumers and drive sales on both online and online fronts,” the report said.
Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “Physical retail locations must evolve into places where people want to go rather than have to go if they are to succeed in the future. While we have reasons to believe that retail business activity has already moved towards pre-pandemic levels, COVID-19 has modified consumer priorities. It is therefore imperative to deliberate on how real estate stakeholders can improve their spaces to enhance the experience quotient and subsequently value.”
Ram Chandnani, managing director (advisory & transactions services) of CBRE India, said that in the current scenario, it is imperative to figure out how players in the retail space can improve physical experiences.
“CBRE suggests a multi-pronged approach for doing exactly that – this consists of diversification of store formats and functions, leveraging data science to develop customized location strategies based on the catchment, repurposing existing stores, creating a personalised experience, and developing fruitful partnerships. Moving forward, embracing digitisation to amalgamate traditional retail will be imperative,” Chandnani added.
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