Selling via physical stores is the most preferred model of running a retail business, according to 9 in 10 retailers across generations, revealed NeoGrowth’s latest NeoInsights Study. This includes retailers who have both online and offline sales.
The 7th edition of NeoGrowth’s NeoInsights Study, titled ‘Unlocking Generational Preferences among Indian Retailers’, explores the generational differences among young (aged 18-40 Years), middle-aged (aged 41-50 Years) and experienced (aged >50 Years) retail business owners in terms of their mindset, business practices and perception of the Indian business ecosystem. Further, it highlights the contrast between first-generation retail business owners and those from family-owned retail businesses. The study surveyed nearly 3,000 MSMEs across more than 25 top cities in India.
Arun Nayyar, Managing Director and CEO of NeoGrowth, said: “MSMEs are the biggest drivers of India’s economic growth. While Indian retailers are fast integrating digital tools seamlessly to transform shopping experience, majority of these retailers continue to prefer the convenience of a physical store in order to forge stronger bonds with their customers. At NeoGrowth, we recognize this dynamic approach as a harmonious blend of traditional values and digital advancements, perfectly aligned with contemporary consumer expectations.”
“The evolving landscape, driven by digital innovation, also underscores the importance of both financial success and customer satisfaction in the growth trajectory of Indian Retailers,” added Mr. Nayyar.
Business motivators and success indicators
While 1 in 2 retailers cited profits and growth as their primary motivators to start the business, another significant factor was building on prior industry experience (25%), according to the study. Other motivators included financial freedom, and family business support.
Beyond profitability and growth, retail MSMEs believe the value they provide to family, employees and customers is also a sign of their success. 50% retailers considered fulfilling family aspirations as a good indicator of their success, while 48% considered repeat or referral customers, and 42% believed that the growth of their employees was another relevant indicator.
77% of retailers indicated that they are looking forward to undertake business expansion through diversifying product offerings, entering new markets and exploring new channels of business, illustrating how they are embracing both expansion and innovation to drive growth and gain a competitive edge. Showcasing agility to adapt to changing market conditions, 87% of the respondents said that they would seize new opportunities to build capacity and capability in their businesses.
India provides a conducive environment for business
Three-fourth of the respondents believed that India provides a conducive environment for business growth. The optimism is higher in experienced retail business owners with 86% feeling that India offers a supportive business environment.
More than 50% of retail MSMEs are leveraging various government schemes to grow their businesses. Programs like ‘Make in India’ and ‘Digital India’ are instrumental in providing the necessary infrastructure and digital tools for business expansion.
Retail MSMEs enhancing physical stores with digital tools
96% of experienced retail business owners, and 89% of both middle-aged and young retail business owners prefer to sell via physical stores. This highlights a strong reliance on traditional retail methods across all generations.
Additionally, the study found that 58% of the young retail business owners take assistance from social media platforms to generate business. This dual approach allows them to maintain a robust physical presence while also tapping into the digital landscape, creating a comprehensive strategy to reach a wider audience.
Indian Retailers are focused on Customer Centricity
Referrals are the leading strategy for attracting customers among retailers, with 78% of experienced retailers prioritizing this approach to drive business. This emphasizes their commitment to relationship building, which fosters trust and loyalty among clients. Additionally, 58% of middle-aged retailers focus on enhancing their physical storefronts as a means to attract customers, recognizing the importance of a strong in-person presence.
By leveraging these strategies, Indian retailers not only strengthen their customer base but also cultivate a community of satisfied clients who can advocate for their services. As they adapt to changing market dynamics, the combination of referrals and physical storefronts positions Retail MSMEs for sustained growth and success.
You can read the full report here: https://www.neogrowth.in/neoinsights/