Digital has been a driving force behind seismic shifts in consumer behaviour, evolving business models and public policy amendments over the past few years. As Indian economy strives to maintain positive growth outlook, the upcoming budget is perceived to play a critical role across the key facets of it. Consumers, businesses and public sector entities are all looking forward to equitable measures to boost growth - the conversation this year is likely going to be around enabling businesses undertake radical transformation steps to meet the latest consumer preferences and rolling out regulatory and compliance policies underpinning an inclusive economy.
Here we explore three overarching themes for the key stakeholders in this year -
1. 3Cs will be key to unlocking customer value. In India, consumer preferences are an interesting mix driven by wide-ranging demographic and behavioural attributes; the evolution pattern is skewed amongst metro cities, towns and rural areas – however, three key trends are emerging on the back of connectivity, awareness and new channels:
• Convenience – the individual advantages of online and offline channels would need to stretch beyond their current state to deliver on the fundamental expectation of convenience; while e-commerce as a segment in India will continue to grow given its small penetration so far, consumers are leaning towards transacting more with players who are mastering the recipe of offering convenience in-line with their individual preferences irrespective of the channel.
• Confidence – consumer loyalty is becoming a complex function with ever increasing parameters of value realisation through relevant assortment mix, product authenticity, quality, fair price, consistency and transparency. For retail organisations, this has become the next frontier; being able to build and scale necessary digital capabilities will decide the share of consumer wallet they can attract.
• Control – along with businesses, consumers have started to realise the importance and implications of their data. Different demographic groups view implications of data sharing with businesses, social networks and other platforms differently – there is a general sense of gaining control and consent about what is getting stored about them. As companies aim to get more data about their audience and customers, it already is time for businesses to have transparent policy in place for what data they acquire, store and share.
2. The 3 Cs that Businesses will count on this year ever more than before. Businesses of all size and age have recognised the importance of harnessing technology to stay relevant, offer value and thrive. While some are rewiring their fundamental capabilities, others are stitching up their differentiators using cloud-native accelerators, AI/ML enabled decision support systems and embracing a working culture fit for the millennials. Following three areas are likely to attract majority of focus and investment this year:
• Customer to Human – as consumers’ ability to accept generalized communication continues to lower, businesses are developing capabilities to engage with their audience at a more human level with relevant content. Today, customer journeys are similar to our roads and transport system; they don’t always follow a set pattern. Ensuring engagement at all touchpoints offers consistent messaging is the biggest challenge to solve for enterprises using the technologies available. Intelligent marketing and dynamic promotions, multi-variate merchandising recommendation engine, responsive supply chain and connected manufacturing are some of the capabilities getting embedded in the value chain architecture.
• Collaboration – building adjacencies in businesses can prove extremely valuable to widen the customer reach and get opportunities to serve the audience that organically would not have formed part of the target segment. As marketplace platforms mature and government brings in policy around FDI and e-commerce – businesses should proactively look for opportunities to strengthen their value proposition through an ecosystem of partners. An underlying requirement to make this happen would be to build inter-operable systems complying with industry standard and open architecture protocols.
• Culture – the era of digital is about ‘survival of the fastest’; the real assessment of how effective business transformation strategies are, is in organisations’ ability to quickly set them in motion and bring out market offerings ahead of competition in an iterative manner. Fostering a culture and mindset of continuously improvising and innovating using digital technologies would make or break business ambitions – this is true for startups, MSMEs and large conglomerates alike. Focused and systematic efforts would need to be made to make workplaces fit for the future.
3. 3C of the government will center around creating right balance and enable all stakeholders. The Government can play an important role of an enabler for businesses to harness potential of digital technologies by rolling out equitable policies for sustained contribution to the economy. While cloud and other technologies ensure a level playing field for businesses of all size, the government has a challenging role to extend measures that promote investment, growth and consumption. Key focus areas will include:
• Capability enhancement – India Stack and continuing upgrades to UPI, video eKYC along with digital MSME have been great catalysts for small-medium players; further enhancing the capabilities to enable public and private players to develop innovative solutions and deliver services at scale will be critical.
• Catalyst to spur growth – India’s startups, MSMEs and large enterprises have got unique understanding of their consumers; amplifying their core competencies and help them build adjacencies will have profound uplift in terms of inclusive growth. Providing tax incentives to startups and incubators could promote the much needed culture of innovation-led growth. Another high impact area for the government could be to devise regulatory framework and welfare schemes for building smart rural communities, better disaster management and emergency services on the back of technology innovation, infrastructure, connectivity and advanced agriculture practices and introduce feedback loop to track its effectiveness.
• Create balance and maximize outcome - expectations from the upcoming union budget would be to maximize outcome by striking right balance amongst getting foreign investment and world-class technologies and, protecting and promoting indigenous products and services. Devising equitable regulatory framework and policies is the need of hour for global and local players alike.
In summary, this union budget is an opportunity for the government to infuse balanced measures at a time when economy is in transition towards becoming one that is driven by aware consumers and businesses that are ready to rewire for future.