The retail industry is undergoing major technological changes driven by the growth of online shopping and off-price retailing. In 2016, retailers will have to respond by focusing on online sales, customer experience, and innovation. Traditional retailers will increase their online investments while decreasing store investments. Acquisitions will increase as retailers battle for market share. The South Asian market will become a major force in retail, driven largely by India and China.

1. THE RETAIL IT INDUSTRY –
REVIEW OF 2015 AND FORECAST
FOR 2016
Looking back at last year’s trend reveals what’s top of mind for retailers and where the industry
is headed in 2016.

2. 2
ABSTRACT
The growth of online shopping and the surge of off-price retailing are reshaping
the retail industry. In 2016, retailers who want to survive will have to respond by
restructuring their businesses. This POV captures some of the major retail
lessons learnt from 2015 and forecast for the year 2016 and beyond.
LOOKING BACK AT 2015
1. The steady growth of online sales
2015 was a year where both online and brick & mortar retail went
hand in hand. Online has now become an accepted norm by
customers. 2015 also saw a growth in the online sales by 20 to
30%.
Traditional Brick and Mortal retailers have ventured into the online
space and have started to provide an omni-channel experience to
their customers. Asia-Pacific, the fastest growing market fuelled a
25% Y-O-Y increase in global e-commerce in 2015.
2. The researching customer
Customers are becoming more educated. In 2015, more research
was done by customers before a purchase decision. 82% of
customers used a smartphone while in a store to research and
review the product options available1
. The number of researching
customers steadily increased by 20%. 4 out of 5 customers
conduct online research before they arrive at purchase decision.
3. Brand name matters
For highly prized products, unless and until they belong to
top brands, customers prefer to visit the store physically to
have a feel of the product before making a purchase.
For example, for a product like Apple phones or Samsung
phones, the buyer would not mind buying the product even
without physically visiting the store, because these brands
have created a name for them. But if an unknown brand also
prices its products at a high price, the buyer would prefer to
visit the store physically to analyse the product.
3 out of 5 customers use a search engine to find the products
they want and almost the same number of customers read
product reviews before making any purchase2
.
The above two cases are clear examples of how digital and mobile technologies have proliferated the retail market. Customers have
adopted these technologies and has changed the way they shop. Let us look how the Retail industry fared in 2015.
The retail industry is in the midst of one of the
major technological changes in the last
century.
Many retailers blended their online and
in-store verticals providing the customers with
a cohesive shopping journey.
Let us look at the following two cases
1
Google / Ipsos MediaCT, Consumer Holiday Intentions Study 2015
2
GE Capital Retail Bank Study
A consumer goes online looking for a refrigerator. He is invariably influenced by the tonnes of user reviews online. While
making a price comparison online, he discovers that a local organised retail store near his home has a great discount for the
model he has chosen to buy. He completes the purchase by physically visiting the store. This is a classic example of how
organised retailers have used their online muscle power to serve customers and boost their sales volumes.
Another user buys an Apple IPhone online and when he opens the delivered box, he finds a defect in the phone. He
immediately walks to a nearby Apple store and gets a replacement for the phone.
The above trends in IT retail in 2015 shows that 2015 has not been much different from the previous year. However things will
change drastically in 2016.

3. 3
PREDICTIONS FOR 2016
Retailers who are on brick and Mortar will start their investments online. Consumers are using mobile phones and smart devices to
research products and prices now, more than ever. Studies have found that 9 out of 10 mobile phone owners in Brazil and more
than 5 out of 10 in the United Kingdom use mobile devices to learn about retail offerings3
.
To attract online consumers, retailers in all markets are using social media channels. Many Chinese retailers are encouraging their
customers to write purchase reviews in exchange for loyalty points or online coupons, realising that product reviews influence
online purchase decisions and have a positive feedback to encourage sales. This trend will only increase in 2016. The top social
media platforms have millions of users and retailers will tap into their user-base for boosting their sales.
1. Traditional players will increase focus on online sales
The world is talking about CX. Retailers who are already online will invest more in providing superlative customer experience.
Retailers will focus on fast loading websites, user friendly site, stronger content, online reputation management, creating better
in-store experiences and much more.
Superior CX has a big role to play in fostering customer loyalty. Creating a unique customer experience will continue go a long way
toward building loyalty in 2016. Shoppers, especially millennials, are craving for fortifying experiences from brands and products.
A classic example, Apple stores around the globe. They focus on building relationships by delivering an experience to their
customers. Unlike many other retailers that keep their product as their core, Apple stores concentrate on building relationships with
people. With this focus, Apple has become the most profitable retailer per square foot in the globe4
.
2. Customer Experience (CX) will be the focus
Retailers will have to get more creative and skilful to attract customers. Retailers recognize that, to attract the sophisticated
consumers, they must offer a compelling online value proposition. The successful retailers will adjust their online offerings
accordingly. Retailer websites will eventually evolve into product encyclopaedias with detailed product images, specifications,
suggested item pairings, and user reviews.
Online retail will see lot of innovations in 2016. In 2016, retailers will focus more on personalised marketing and use digital
technology (predictive analytics, automation and artificial intelligence) to connect with shoppers and potential buyers. Clothing
retailers would invest in virtual trial rooms which will give the online customer an idea of how a particular clothing will fit them. Dell
specialises in innovative personalised marketing by offering a broad range of custom built computers from systems exclusively
designed for small businesses to mobile workstations to fit user needs. Persona based marketing will help the retailer to understand
the customers’ pain points and deliver an experience that can solve those problems. This in turn will boost customer loyalty to the
brand.
3. Innovations will be on the rise
3
AtKearney The Global Retail Ecommerce index
4
Forbes - Sites - Retail
The ongoing shift from offline to online is reshaping the retail industry, with significant investments being made on the online space.
In the initial years when retailers started migrating online, the retail industry experts were of the opinion that e-commerce retailers
would become less attractive investments because people felt uncomfortable using their credit cards and giving their personal
information to internet shopping sites. All of this has changed over the years.
4. Investment on traditional retail stores will come down

4. 4
5
BCG Global Wealth 2014: Riding a Wave of Growth
Online Retail is slowly taking its dominance in the South Asian Market. India will be a major player in the south Asian market. 30 to
40 % of the global online sales will be contributed by India and South Asian countries. PwC and The Economist Intelligence Unit’s
2015-16 Outlook for the Retail and Consumer Products Sector in Asia predicts that Asia’s retail sales will grow by 8.5% in US dollar
terms, higher than the global average growth rate of 5.6%. By 2018, it is estimated that Asian retail sales will amount to US$10
trillion, much of which will be driven by India and China. According to the Boston Consulting Group, Asia Pacific will contribute to
over half of the global private financial wealth growth by 20185
.
6. South Asian market will be a force to reckon with
This phenomenon is on the rise and we will see many headlines like this all through the year
Multiple acquisitions of retailers will make headlines in 2016. The larger retailers will acquire smaller retailers. The vice versa is
also a possibility if the smaller retailer is cash rich. The following acquisitions have already made headlines in the retail space.
Online shopping has grown around the world exponentially. The internet is only going to become more popular and consumers
worldwide will become more comfortable about the security and on-time delivery of their purchases. The UK and the US are the
most highly penetrated online retail markets in the world. So this trend towards e-commerce dominance will likely continue to
spread globally.
5. Acquisitions will make headlines
DollarTree, a 4000 plus retail outfit acquired Family Dollar, a 8000 plus retail chain enabling them to operate more than
13,000 stores, with sales exceeding $19 billion annually
Chinese E-Commerce player Mogujie will take over rival Meilishuo and form a new company with annual sales of about $3
billion. Both players are women-focused platforms
The French retailer Carrefour bought the e-commerce site Rue Du Commerce from real estate giant Altarea Cogedim
Clothing retailer Le Tote has taken over the resale platform Threadflip
Traditional retailers will focus on online sales which will result in lesser investments in traditional store. Innovations will
be on the rise with a focus in delivering superlative CX. Acquisitions and mergers will be a common trend. South Asian
market will emerge as a retail super power. Technology is the key catalyst for Retail success.
Recap
ABOUT THE AUTHOR
Phani Kishore Burre
Associate Vice President –
Head of Retail Technology
Solutions, CSS Corp
Phani is a senior management professional with over 16 years of experience in Retail, Supply Chain
& BFSI domains having gained valuable expertise in managing end to end products and projects. He
has strong knowledge of defining future technology roadmaps. He has rich retail experience in
providing service delivery for store POS systems across the globe for one of the top retailers,
involved in architecting and developing a thin client POS used by few jewelry retailers in north
America. He is an excellent communicator and has contributed extensively to the industry in the form
of thought leadership articles. At CSS Corp, he heads the retail technology solutions function.
©2016. All rights reserved. All names of technology providers and brands used in this document are for reference only.
The rights belong to the respective copyright, trademark and IP owners. For more information visit. www.csscorp.com