Omni-channel commerce, or the confluence of offline and online shopping avenues, is set to gain traction come March, with a number of retailers exploring this new retail model to retain market share in the wake of competition from e-retailers.
A number of retailers spoke of expanding their current operations across physical and digital platforms at a conference on the retail sector organised in Mumbai by the Retailers Association of India (RAI).
For instance, fashion and lifestyle department store Shoppers Stop will be placing online kiosks at its stores, where shoppers can place orders for clothes that aren’t available in their preferred colour or size, and have it delivered at home, explained Shoppers Stop’s managing director, Govind Shrikhande. Similarly, items purchased online can be picked up or exchanged in stores.
“From a brick-and-mortar model, we are moving towards a brick-and-click model and shopping stored are increasingly moving towards a click-and-collect model,” says J Suresh, managing director and chief executive of Arvind Lifestyle Brands.
Online commerce in India has attracted a lot of interest from customers and investors alike and that has made it an imperative for physical retailers to build an online presence.
According to a report by the Boston Consulting Group and Retailers Association of India, the promise of omni-channel (retail) is increasingly relevant for brick-and-mortar players as customers do not distinguish between online and physical channels but expect a seamless experience.
The report estimated that the value of the Indian retail industry will stand at $1 trillion in 2019 and the e-commerce sector is expected to quadruple from its current level to $70 billion in 2019, driven by increased internet penetration, lower cost of connectivity and expanded reach in tier II, III cities and rural areas.
Another big retail chain, Future Group is also set to introduce its omni-channel platform for different formats like Ezone, Planet Sports and Big Bazaar. The Future Group has earmarked an investment of Rs 140 crore over the next 18 months to develop its omni-channel strategy while Shoppers Stop has announced it will invest Rs35 crore on the development of technology for omni-channel merchandising.
Star CJ, another retail venture, a joint venture between Star Television and South Korea’s CJ O’Shopping, is also tapping the omni-channel route by integrating its television, internet and e-commerce footprints in India, according to Kenny Shin, Star CJ’s chief executive.
US-based ice-cream chain, Baskin Robbins, which operates in India through a network of franchise stores, is also firming up its own omni-channel marketing plan. It is tying up with online food ordering marketplace, Foodpanda, according to Sanjay Coutinho, chief executive of Graviss Foods, which is the master licencee for Baskin Robbins in India.
“Online delivery of perishable foods is particularly challenging but today we have to reach out to our customers through multiple channels,” Coutinho said. “So we are in talks to outsource our last mile delivery service to a service provider who has the experience in delivering items that are temperature sensitive.”
The integration of online and offline channels is not something restricted to business-to-consumer brands alone. Krish Iyer, president and chief executive of Walmart India, says his company recently instituted e-commerce portals in five of its cash-and-carry stores, which will be extended to all of its 20 operational stores by the end of 2015.
Retailers that are part of larger conglomerates, like Bharti Retail and Trent Hypermarket, that have expertise in technology and data analytics are looking to leverage this strength in developing their omni-channel platform.
“We already have an existing leverage in the mobile business (Bharti Airtel). We are in initial discussions to understand how we can use this leverage to create the technology platform that omni-channel retail requires,” said Craig Wimsatt, Bharti Retail’s chief executive. Trent Hypermarket, which is a part of the Tata Group and operates the Star Bazaar chain of stores, is also going to use the in-house expertise of Tata Consultancy Services, according to Jamshed Daboo, its CEO.
Best of both worlds
* Shoppers Stop will be placing online kiosks at its stores, where shoppers can place orders for clothes that aren’t available in their preferred colour or size
* Future Group is set to introduce its omni-channel platform for different formats like Ezone, Planet Sports and Big Bazaar. It has earmarked an investment of Rs 140 crore over the next 18 months
* Star CJ is also tapping the omni-channel route by integrating its television, internet and e-commerce footprints in India