Om­nichan­nel re­tail: The game changer for shop­ping cen­tres

Com­pe­ti­tion be­tween on­line and brick-and-mor­tar re­tail­ers has blurred, with e-tail­ers open­ing phys­i­cal stores and their com­pe­ti­tion adopt­ing e-com­merce. The new des­ti­na­tion for re­tail is Om­nichan­nel and malls have to adopt it too, in­order to stay rel­e­vant

Shopping Center News - - CONTENTS - By Shubhra Saini

Com­pe­ti­tion be­tween on­line and brickand-mor­tar re­tail­ers has blurred, with e-tail­ers open­ing phys­i­cal stores and their com­pe­ti­tion adopt­ing e-com­merce. The new des­ti­na­tion for re­tail is Om­nichan­nel and malls have to adopt it too, in or­der to stay rel­e­vant in this dig­i­tal age.

To­day’s shop­per, crunched for time, is keen to find a seam­less link be­tween shop and home, and the pen­e­tra­tion of the In­ter­net and wide­spread us­age of smart­phones has helped blur the lines be­tween phys­i­cal and on­line re­tail with ‘show­room­ing’ – con­sumers vis­it­ing stores to try prod­ucts be­fore pur­chas­ing on­line. The world of re­tail is adopt­ing tech­nol­ogy faster than ever be­fore in a bid to pro­vide con­ve­nience, tech­nol­ogy which con­sumers are wel­com­ing with open arms.

While this ac­cep­tance of the dig­i­tal age has put e-re­tail­ers in di­rect com­pe­ti­tion with their phys­i­cal coun­ter­parts, it has pro­vided a gap for mall de­vel­op­ers to play a pos­i­tive role and help bridge the di­vide be­tween on­line and off­line com­merce.

Mall de­vel­op­ers spoke to Shop­ping Cen­tre News, ex­plain­ing how they are plug­ging their Om­nichan­nel strate­gies in or­der to shape a bet­ter in­te­grated re­tail ecosys­tem.

Why Malls Are Go­ing Om­nichan­nel:

In to­day’s mar­ket, it is very es­sen­tial to har­mo­nize at­ten­tion across all chan­nels. It is also cru­cial to of­fer su­pe­rior ser­vices to con­sumers, give them mem­o­rable and sharable ex­pe­ri­ences. The Om­nichan­nel ap­proach not only gives the con­sumer an op­tion to ven­ture out to shop at the store but also gives him the con­ve­nience to shop any­time, from any­where.

Puneet Varma, As­so­ciate Vice Pres­i­dent, Mar­ket­ing, and Cor­po­rate Com­mu­ni­ca­tions, Inor­bit Malls, says, “Inor­bit has al­ways worked to­wards of­fer­ing cus­tomers a great shop­ping ex­pe­ri­ence. With con­sumers get­ting more dig­i­tally ac­tive, we wanted to give them the Inor­bit ex­pe­ri­ence at their fin­ger­tips. We are the first mall to in­tro­duce the shop on­line fea­ture through our web­site and Inor­bit app. With this fea­ture cus­tomers can not only browse through lat­est col­lec­tion but also can re­serve prod­ucts and pick them up when­ever they visit the mall. Al­ter­na­tively, the mall can also de­liver the prod­uct to the con­sumer’s choice of lo­ca­tion. This fea­ture is presently avail­able in Mum­bai for our Malad and Vashi malls. It is too early to com­ment on the suc­cess ra­tion as the fea­ture is rel­a­tively new. How­ever, we are al­ready see­ing con­sumers ex­pe­ri­enc­ing the shop on­line fea­ture.”

The fu­ture of re­tail is Om­nichan­nel. This trend to­wards an Om­nichan­nel strat­egy will en­able re­tail­ers to re-think their busi­ness strat­egy in or­der to tap the best of both worlds and max­imise on foot­falls. The key to cre­at­ing an ef­fec­tive Om­nichan­nel strat­egy is un­der­stand­ing how your cus­tomers in­ter­act with your brand at each step of the cus­tomer jour­ney. Do they re­search on­line and buy in store? Do they test prod­ucts in the store, pull up their phone to look for coupons, and then de­cide whether to pur­chase now or later based on price changes? Do cus­tomers spend a lot of time on so­cial me­dia get­ting the opin­ions of their peers prior to or dur­ing shop­ping?

Es­tab­lish­ing a plan for col­lect­ing and an­a­lyz­ing rel­e­vant data is one of the first steps to cre­at­ing a fluid Om­nichan­nel strat­egy.

Putting things in con­text, Ab­hishek Bansal, Ex­ec­u­tive Di­rec­tor, Pa­cific In­dia Group says, “As the pop­u­lar­ity of on­line shop­ping has grown over the past decade, e-com­merce has be­come more than just a buzz­word for progressive re­tail­ers. It’s a vi­able ad­di­tion to the tra­di­tional brickand-mor­tar setup. Whereas it was some­thing unique and in­no­va­tive for a phys­i­cal re­tailer to have an on­line pres­ence a few years ago, it’s now highly un­usual for a ma­jor re­tailer not to have an in­ter­net store­front. In or­der to be com­pet­i­tive in 2017, re­tail­ers have to think se­ri­ously about Om­nichan­nel strate­gies that bridge the di­vide be­tween in-store and on­line com­merce.”

He fur­ther adds, “Over the years, cus­tomer pref­er­ences have un­der­gone a meta­mor­pho­sis, in­flu­enced by a global influx of brands, grow­ing econ­omy, in­crease in cus­tomer spend­ing and de­mand for the lat­est trends in fash­ion, fit­ness, din­ing and lifestyle. Pa­cific Mall, is one of the most pop­u­lar and pre­ferred com­plete fam­ily en­ter­tain­ment and lifestyle des­ti­na­tion in Delhi NCR to­day. Over the years Pa­cific Mall has be­come syn­ony­mous with en­ter­tain­ment, fine din­ing and the lat­est col­lec­tion of brands and trends in fash­ion and lifestyle. We have in­creased our fo­cus on cre­at­ing niche cam­paigns and events for our cus­tomers based on their feed­back and pref­er­ences.”

Ac­cord­ing to Nis­hank Joshi, CMO, Nexus Mall, go­ing Om­nichan­nel is the next progressive step for shop­ping cen­tres. “Om­nichan­nel re­tail­ing is a mar­ket re­al­ity and it has to be em­braced but I feel that In­dian cus­tomers take time to get ac­cus­tomed some­thing new and they will take time – maybe two or three years – to get used to Om­nichan­nel re­tail­ing and for it to reach its op­ti­mum level. Malls, with the help of avail­able tech­nol­ogy, will play an ac­tive role in bridg­ing the di­vide be­tween off­line and on­line re­tail­ing. We need to take Omni chan­nel is at ion and digi­ti­sa­tion se­ri­ously in or­der to stay rel­e­vant to our pa­trons.”

Benu Se­h­gal, Head – Re­tail and Mar­ket­ing, Am­bi­ence Mall, says, “Tech­nol­ogy is tak­ing over every­thing. Re­tail­ers and malls have to em­brace Om­nichan­nel. Alone phys­i­cal re­tail for­mats can sur­vive but e-com­merce just can’t sur­vive on its own. These two are off­shoots of re­tail and their mar­riage is very nec­es­sary for a re­tail to grow in holis­tic way. But de­spite this, it’s a lu­cra­tive propo­si­tion. Malls need to tread on this path very care­fully, they should weigh every­thing – es­pe­cially a rev­enue share model with their ten­ants – be­fore jump­ing on the Om­nichan­nel band­wagon.”

Se­h­gal, fur­ther adds, “Tech­nol­ogy is the trend that is go­ing to shape the fu­ture of shop­ping malls. We should be thank­ful to tech­nol­ogy and not threat­ened by it be­cause even in de­vel­oped coun­tries, e-com­merce has not gone be­yond cap­tur­ing 15-18 per cent of the mar­ket. The re­main­ing 85 per cent still go to brick-and-mor­tar stores. The 15 per cent mar­ket share which e-com­merce has cap­tured has helped re­tail in the sense that it has taken brands to the

In or­der to be com­pet­i­tive in 2017, re­tail­ers have to think se­ri­ously about Om­nichan­nel strate­gies that bridge the di­vide be­tween instore and on­line com­merce.

re­motest of the vil­lages. So, in a way, e-com­merce is cre­at­ing aware­ness and gen­er­at­ing more cus­tomers for brick-and-mor­tar.”

Pushpa Bec­tor, Ex­ec­u­tive Vice Pres­i­dent and Head – DLF Pre­mium Malls, also says, “We are aware of the strength of Om­nichan­nel ex­pe­ri­ence for the clients and con­sumers and we are work­ing to­wards achiev­ing this for all our malls.”

Adds Anu­pam T, Vice Pres­i­dent, Oberoi Mall, “We are cur­rently eval­u­at­ing and ex­plor­ing the Om­nichan­nel route. We hope to move on this very soon.”

Turn­ing The Game On Its Head

In the same way that malls help re­tail­ers to sell their prod­ucts in their re­spec­tive malls, they can also fa­cil­i­tate their ten­ants in sell­ing goods on­line as well. E-com­merce-in­spired shop­ping cen­tre web­sites al­low shop­pers to browse for goods and lo­cate them in the shop­ping cen­tre or buy them di­rectly from re­tail­ers’ own on­line stores. Dressed as smart shop­ping com­pan­ions for cus­tomers, mo­bile apps and loy­alty pro­grammes can help land­lords truly un­der­stand their cus­tomers. Think about the wealth of data you have when app users share their out-of­mall lo­ca­tion through GPS, a cus­tomer’s in-cen­tre jour­ney us­ing in­door wayfind­ing, his pur­chas­ing his­tory through points gath­er­ing and re­demp­tion sys­tems and his favourite stores and prod­ucts through mo­bile search func­tion­al­i­ties. Hav­ing a well per­form­ing web­site is the best lure for at­tract­ing new on­line-minded re­tail­ers that may even­tu­ally open a shop in your mall. In­creas­ing web traf­fic is crit­i­cal to se­cur­ing your place in Google rank­ing (your on­line real es­tate) and for mon­etis­ing on web­site through af­fil­i­ate mar­ket­ing, ad­ver­tis­ing or di­rect sales. In­stead of cov­er­ing in­for­ma­tion, of­fers and events for your mall only, think of re­port­ing ad­di­tional top­ics rel­e­vant to cus­tomers in your catch­ment area. This in­flu­ences your short­term web­site per­for­mance as well as your strate­gic po­si­tion in the long run.

In­stead of bring­ing the mall on­line, why not bring on­line into the mall. So­lu­tions such as pick up & re­turn points, vir­tual dress­ing rooms or dig­i­tal in­spi­ra­tion cor­ri­dors are based on on­line re­tail plat­forms, but drive traf­fic to the mall. A typ­i­cal pick up point drives foot­fall through on­line pur­chases not just from re­tail­ers in the cen­tre, but also from those not in the cen­tre. Talk­ing about how Om­nichan­nel strate­gies will be the next game changer for shop­ping cen­tre sec­tor, Der­ick Michael, COO, Amanora Mall, says, “Shop­ping cen­tres are un­der­go­ing a ma­jor evo­lu­tion at the mo­ment. Yes, e-com­merce of­fers a sense of ease when it comes to shop­ping, how­ever malls of­fer an experiential el­e­ment to re­tail which is hard to repli­cate in the dig­i­tal world. There is such a mas­sive amount of con­tent dumped on the cus­tomers with on­line of­fers, dis­counts, fes­tive sales that the cus­tomer ends up spend­ing a con­sid­er­able time just sift­ing through the in­for­ma­tion in search of the de­sired prod­uct. You may have no­ticed sev­eral prom­i­nent e-com­merce brands mov­ing to a re­tail place to de­velop a phys­i­cal con­nect with the cus­tomer, which will never lose im­por­tance. Om­nichan­nel strate­gies are there­fore of ex­treme im­por­tance and over time, both (re­tail & e-tail) will learn to co-ex­ist as they are in­de­pen­dent on each other.”

Nis­hank from Nexus mall, says, “For adopt­ing an Om­nichan­nel strat­egy there are lot of strate­gies that need to be im­ple­mented. Sys­tems need to be in place as the lo­gis­tics and de­liv­ery pro­cesses are an in­te­gral part of Om­nichan­nel re­tail­ing. If your sys­tems are not in or­der then chances of pil­fer­ageare very high. Also, the in­ven­tory turnover rate needs to be paced up by re­tail­ers

and the right fore­cast­ing for the right kind of SKUs is im­per­a­tive. Cross-check­ing that the right de­liv­ery has been done and ac­cu­rate in­for­ma­tion of back­end needs to be there. Again, malls will be work­ing on a rev­enue share model with ten­ants, so that is some­thing that needs to be well or­ga­nized be­fore a mall de­cides to go Om­nichan­nel.”

Varma from Inor­bit malls, says, “It is quite chal­leng­ing to bring in a new sys­tem into an or­ga­ni­za­tion. While the brick-and-mor­tar ap­proach is in place, in­cor­po­rat­ing an on­line ap­proach that works seam­lessly with off­line chan­nel has a lot of tech­ni­cal chal­lenges. It takes a lot of plan­ning to stream­line the new pro­cesses that come into pic­ture, for­ma­tion of teams, train­ing the teams, man­ag­ing the in­ven­tory, and fix­ing tech­ni­cal bugs be­fore go­ing live.”

Although Om­nichan­nel ex­e­cu­tion is un­de­ni­ably a top pri­or­ity for re­tail­ers, they are still striv­ing hard to ad­dress sev­eral un­der­ly­ing is­sues hin­der­ing the ef­fec­tive de­liv­ery of this ex­pe­ri­ence. Brands are in­creas­ingly find­ing it dif­fi­cult to move away from chan­nel-spe­cific si­los, and con­sol­i­date all cus­tomers and mer­chan­dise re­lated data into cen­tral­ized lo­ca­tions.

“Cus­tomer si­los and lack of holis­tic vis­i­bil­ity into cus­tomer data­base across chan­nels make it dif­fi­cult for re­tail­ers to un­der­stand and an­a­lyze cus­tomer data to of­fer con­tex­tual mes­sag­ing and per­son­al­ized ex­pe­ri­ence. This siloed and non-in­te­grated cus­tomer data is re­sult­ing in mul­ti­ple copies of cus­tomer pro­files, lim­it­ing un­der­stand­ing of cus­tomer be­hav­iour, pur­chase pat­terns and un­even cus­tomer ex­pe­ri­ence. Le­gacy IT sys­tems make it sig­nif­i­cantly chal­leng­ing and com­plex to man­age in­ven­to­ries across chan­nels. Lack of clear vis­i­bil­ity in in­ven­tory causes re­duced ac­cu­racy, fre­quent out-of-stock sce­nar­ios in one chan­nel and sur­plus in­ven­tory in an­other chan­nel, re­sult­ing in re­duced sales and in­creased costs. These chal­lenges limit the abil­ity of busi­nesses to iden­tify, track and man­age in­ven­tory, im­pact­ing ef­fec­tive or­der ful­fil­ment across chan­nels,” saysPa­cific Malls’ Bansal.

He fur­ther adds, “One of the most im­por­tant chal­lenge that busi­nesses face­to­day is siloed or­ga­ni­za­tional teams work­ing in­de­pen­dently for e-com­merce and store chan­nels in an or­ga­ni­za­tion. This not only lim­its col­lab­o­ra­tion, but also makes it dif­fi­cult to en­able process in­no­va­tion which is a must for adopt­ing Om­nichan­nel strat­egy.”

Data Gath­er­ing Eas­ier with an Omni chan­nel Strat­egy:

Ac­cord­ing to Benu Se­h­gal, in to­day’s age day and it is nec­es­sary to be tech­nol­ogy savvy and all de­ci­sions should be taken on the ba­sis of avail­able­data.

She ex­plains: “Based on data, we should see where con­sumers are go­ing af­ter watch­ing a movie – are they go­ing to the food court, do they pre­fer fine-din­ing or ca­sual din­ing? So, all this in­for­ma­tion has to be col­lated and those in­for­ma­tive de­ci­sions have to be taken and lease pe­riod for the brands need to be de­cided ac­cord­ingly.”

Reaf­firm­ing Se­h­gal’s point of view, Varma says, “The big­gest ad­van­tage of go­ing Om­nichan­nel is data gath­er­ing, min­ing and an­a­lyt­ics. With these tools in hand, man­age­rial de­ci­sion mak­ing in ar­eas like leas­ing, op­er­a­tions and mar­ket­ing be­comes sharper and helps boost over­all pro­duc­tiv­ity.”

Turn­ing into a Holis­tic Omni chan­nel Shop­ping Cen­tre:

To­day, hav­ing a pres­ence on mul­ti­ple plat­forms is the only way to thrive in the re­tail space. The trend of Om­nichan­nel re­tail strat­egy is here to stay and this con­cept is go­ing to be equally ad­van­ta­geous for both re­tail­ers and con­sumers. In the com­ing years, the con­flict be­tween on­line and phys­i­cal stores will fade, as both the plat­forms will come to­gether and re­tail­ers will fo­cus on es­tab­lish­ing them­selves strongly on both the medi­ums to pro­vide a com­pre­hen­sive user ex­pe­ri­ence to their cus­tomers.

Talk­ing from his ex­pe­ri­ence Bansal­says, “The Om­nichan­nel re­tail strat­egy is no doubt, the fu­ture of com­merce. Con­sid­er­ing the cur­rent re­tail sce­nario, In­dian re­tail­ers have come to re­al­ize that only by im­ple­ment­ing Om­nichan­nel strate­gies they can fully reap the po­ten­tial­ity of mod­ern re­tail. Thus, even big re­tail brands such as GAP, Vero Moda, Wood­land, Only, Shop­pers Stop, Jack & Jones, and Best­seller are diver­si­fy­ing their busi­ness and tak­ing mea­sures to in­te­grate or­der man­age­ment and in­ven­tory man­age­ment to pro­vide cus­tomers with an un­par­al­leled Om­nichan­nel shop­ping ex­pe­ri­ence.”

Om­nichan­nel cre­ates op­por­tu­ni­ties to reach out to a wider au­di­ence that ul­ti­mately drives sales. It adds on to the to­tal prof­itabil­ity in long run not only in terms of rev­enue but also brand eq­uity and trust.

Var­masays, “A suc­cess­ful Om­nichan­nel works well if you have an ef­fi­cient and ex­pe­ri­enced team. Im­part­ing train­ing to the team across chan­nels is very cru­cial. Apart from this main­tain­ing the in­ven­tory which is in sync with the avail­abil­ity of the prod­uct is also im­por­tant. This can hap­pen if re­tail­ers have an ex­cel­lent in­ven­tory man­age­ment sys­tem in place.”

Way For­ward:

The Re­tail in­dus­try has wit­nessed sub­stan­tial growth and progress in the past few years. Due to some re­cent pol­icy changes in­clud­ing lib­er­al­iza­tion, dis­in­vest­ment, FDI pol­icy, GST im­ple­men­ta­tion, ma­jor in­ter­na­tional and global play­ers have shown a keen in­ter­est to set shop with am­bi­tious plans to ex­pand in the fu­ture cities.

In re­cent years, the sec­tor has wit­nessed two dis­tinct chan­nels gains promi­nence mainly brickand-mor­tar and e-com­merce. Though grow­ing smart phone pen­e­tra­tion and bur­geon­ing on­line re­tail plat­forms have cre­ated diver­sions, off­line re­tail is here to stay. The trend to­wards an Om­nichan­nel will en­able re­tail­ers to re-think their busi­ness strat­egy in or­der to tap the best of both worlds and max­i­mize on foot­falls giv­ing the per­fect cus­tomer ex­pe­ri­ence.

To­day, hav­ing a pres­ence on mul­ti­ple plat­forms is the only way to thrive. The trend of Om­nichan­nel re­tail strat­egy is here to stay and this con­cept is go­ing to be ad­van­ta­geous.

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