HOW TO CRE­ATE A THRIV­ING RE­TAIL ECOSYS­TEM FOR THE FU­TURE

Progressive Grocer (India) - - India Retail Forum 2017 -

Retailing has un­der­gone a sea change over the past decade. The easy avail­abil­ity of cap­i­tal and the trans­for­ma­tional im­pact of tech­nol­ogy have had a pro­found ef­fect on the in­dus­try. In­creas­ingly, on­line shop­ping is be­ing com­bined with tra­di­tional shop­ping trips to brick-and-mor­tar stores. Now, even though omni-chan­nel and e-com­merce are com­ing up in a big way, there is still a lot of scope for the ecosys­tem as a whole to grow to­gether. “I am sure the trade would find a good syn­ergy. Tra­di­tional shops have to be taken care of be­cause at the end of day any per­son would love to go out and ac­tu­ally ex­pe­ri­ence the shop front. Peo­ple might ac­tu­ally buy it on­line, but would still like to go to the shop. I think these are val­ues that In­dia will def­i­nitely keep on,” said Arvind Var­chaswi. He added: “I think the fu­ture of re­tail in In­dia is go­ing to be a love mar­riage be­tween e-com­merce and phys­i­cal store. I think a lot of it has ac­tu­ally hap­pened.”

While on­line is set to grow, the ma­jor­ity of sales still come from stores. This is the re­al­ity, in the In­dian con­text as much as it is in the US where 90% of re­tail is still brick-and- mor­tar and is es­ti­mated to re­main at 80% level even in 2020. This creep­ing in­crease in on­line sales has more to do with the rapidly in­creas­ing dig­i­tal in­flu­ence than with the ac­tual can­ni­bal­iza­tion of sales. The ma­jor­ity of cus­tomers who come into stores have ac­tu­ally re­searched on­line about what they want to buy. They have made the com­par­isons in terms of fea­tures, prices and other ben­e­fits they want to de­rive out of the prod­uct. So the time they spend in the store is very less. They are pur­pose­ful when they come into the store, know ex­actly want they want, buy and leave. Also the in­crease in the val­u­a­tion of on­line play­ers de­spite their losses and the con­comi­tant de­cline in the val­u­a­tion of phys­i­cal re­tail­ers de­spite the sales and prof­itabil­ity are be­cause of the pre­vail­ing per­cep­tion that the fu­ture be­longs to on­line busi­ness. “Re­ally speak­ing, it is all about how the buyer and an­a­lyst are look­ing at it. Def­i­nitely, the on­line trend is go­ing to grow faster but there is space for both to co­ex­ist, to col­lab­o­rate and to grow to­gether and sat­isfy the cus­tomer,” said Govind Shrikhande, .

“I think the col­lab­o­ra­tive model has al­most be­come the way to live. If you look at Ama­zon Now, Paytm Mall and Shopx, they are com­bin­ing mod­ern re­tail with the tra­di­tional. The col­lab­o­ra­tion is not nec­es­sar­ily about the money to be in­vested but more about col­lab­o­ra­tion of ideas, in­fra­struc­ture, peo­ple and skills. In my view, the next five years is the best op­por­tu­nity for In­dia to col­lab­o­rate, whether it is col­lab­o­rat­ing with small or big play­ers. The im­por­tant thing is to re­ally cap­i­tal­ize on this op­por­tu­nity,” said B.S. Nagesh. “The win­dow to ex­pand is in the next five years; it a huge op­por­tu­nity and fran­chis­ing is a big part of be­ing able to move fast and uti­lize cap­i­tal in a very ef­fi­cient way. Part­ner­ing with some­one in a par­tic­u­lar mar­ket helps to bring in a lot of use­ful back­ground in­for­ma­tion on how to op­er­ate on a day-to-day ba­sis,” said Philip Auld.

Go­ing for­ward, there is also a per­cep­ti­ble drive to­wards the omni-chan­nel model by many pure-play re­tail­ers. Omni-chan­nel busi­ness is be­com­ing in­creas­ingly rel­e­vant and has its roots in the con­nected cus­tomer equipped with smart­phones, tablets and com­put­ers. Cus­tomers ex­pect a seam­less ex­pe­ri­ence and do not tend to dis­tin­guish be­tween on­line and phys­i­cal chan­nels when shop­ping. Af­ter the ini­tial pe­riod of doubt and hes­i­ta­tion, the re­al­iza­tion has fi­nally set in that each chan­nel has its fair share of chal­lenges and op­por­tu­ni­ties and adopt­ing the right com­bi­na­tion of omni-chan­nel retailing is the way for­ward. Those re­ally quick to adopt the omni-chan­nel play can ex­pect to be a win­ner in the re­tail uni­verse.

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