How to unlock a $2-trillion chance in India's retail industry by next decade

India's retail is $2-trillion story in making, BCG said in a recent report. Despite subdued performance in recent quarters, the industry continues to be optimistic about the outlook and long-term structural tailwinds. 

While the report points to short term stress, profitability at the same time has generally remained consistent and 
largely in line with global peers, the report added.  This report on "Unlocking the $2Tn retail opportunity by next decade: An activist agenda", jointly developed by Boston Consulting Group (BCG) and Retailers Association of India (RAI) tables a view on recent trends in the retail sector. 

Retail is going through key shifts on the back of steady growth in disposable incomes, shift in spending to experiences and increased savings, return of store expansion momentum through small formats and increasing affluence. 

Given the rapidly evolving environment, retailers now face pressing considerations across critical business elements which needs steering to drive sustainable growth in the future, the report observed. Globally, and in India – retailers who have successfully managed to balance both growth and profitability have delivered top quartile shareholder returns.

"We believe this calls for activist interventions and if done well, the retail industry has potential to unlock $2Tn opportunity over the next decade in a stainable, non-dilutive manner. As retailers think about this journey, it would be useful to consider pivots across 5 key imperatives," the report said. 

These five imperatives include
-- A superior consumer proposition enabled by business model innovation 

 --A seamless and personalized consumer experience enabled by Digital and AI 

-- Unlock value chain efficiencies with use of AI to challenge legacy practices 

-- Accelerate growth from new revenue streams created by leveraging partnerships 

-- Improve relevance of format and merchandise to the catchment through systematic localization 

While the imperatives are useful across the board, retailers must ensure the right adaptation to  ensure it is in line with the underlying  category and consumer trends, and the specific context to make it effective, the report said.