Staying relevant: Taking a cue from online retail | The Financial Express

Staying relevant: Taking a cue from online retail

Legacy gifting firms’ digital prowess will face a test this festive season

Staying relevant: Taking a cue from online retail
According to Technopak, the Indian gifting market is worth `2.5 lakh crore.

The one thing more enjoyable than shopping is shopping from home in your pyjamas. But online shopping has done much more than making buying gifts easier. It has completely reinvented the idea of gift giving — we are searching better, from a wider assortment, and we can drop off the gift at the doorstep even when the recipient lives on the other side of the globe. Above all, at a time of our and their convenience. 

Enter technology

The demand for convenient and easy gifting tools and options have grown in tandem with hectic work schedules. While automation in logistics and AI-driven hyper-personalisation is expected to upgrade customer experience, interactive retail practices will mend the communication gap between online platforms and customers, notes Tarun Joshi, founder, Join Ventures (parent of D2C brands IGP.com, Interflora India, and a to-be-launched food company Masqa). “Proprietary tech stack, combined with a network of strategically located dark stores and mother warehouses, has helped us create the temperature-controlled, same-day delivery network,” he says. 

Join Ventures this week raised $23.5 million (`187 crore) in a Series B round, led by MO Alternate Investment Advisors. The fund will be deployed to enhance its technology and expand its dark store network.

Lighthouse India Fund III invested `200 crore ($27 million) recently in gifting platform FNP (earlier Ferns N Petals). The company—one of the first to adopt the ecommerce model in 2002— will use the funding to invest in technology to boost its e-commerce play. FNP, which has a network of over 400 franchise stores in India, also has operations in the UAE, Qatar and Singapore and plans to expand into Saudi Arabia, Malaysia, Indonesia, the Philippines and the UK.

Evidently the gifting industry is in the midst of a far-reaching transition. From establishing a strong online presence to offering customised gifts at customised timings, they are leaving no stone unturned. 

According to Technopak, the  Indian gifting market is worth `2.5 lakh crore. Of this, corporate gifting accounts for `12,000 crore and is likely to grow over 200% per annum over the next couple of years. The festive season is expected to notch up 40% of the annual sales for firms like IGP, FNP, and Archies. For the momentum to carry on, Adarsh Sharma, managing director, Primus Partners, says, they must up the omnichannel game with consistent and genuine messaging. Also, since gifting is an emotional journey as opposed to compulsive shopping, online platforms must curate a varied experience for the shopper.

In the throes of change

Most players at the moment are focused on crunching the delivery window. IGP offers same-day delivery at 400 cities and 24-72-hour delivery in over 1000 cities. With a strong presence in the top 25 cities of India, IGP sees tier-II and III cities as the new warehousing hotspots. Currently, 90% of its revenues come from the online channel.

For veteran Archies, for whom offline sales contribute over 98% of revenue, the focus is on building a unified omnichannel marketing strategy and on retailing gifts with a utility value. Personal care products, sweets and chocolates, artificial jewellery are a key part of its portfolio. Varun Moolchandani, executive director, Archies, says the brand is aiming to provide “a complete gifting solution” under one roof. By the end of the current financial  year, it hopes to touch `110 crore in sales.

It offers free delivery in two-three hours for perishable products, and for other products customers can opt for same-day delivery against a fee. By using multiple warehousing and storage locations, it is trying to expand reach and reduce the delivery time significantly. It has partnered with third-party logistics companies to leverage their network of fulfilment locations and their e-commerce supply chain expertise.

The increase in input costs have constrained growth plans of some of these players. They have had to invest in cold storage facilities and the last mile. Sharma of Primus Partners adds that supply chain delays can directly impact the customer experience and it is vital for brand  owners to regularly track their inventory and restock shelves accordingly. This again has led some of these brands to raise prices in recent months. 

“The customer is willing to pay a premium but her focus is on quality and experience,” says Vikaas Gutgutia, MD and founder, FNP. It has deployed AI chats and machine learning to synchronise its online and offline offerings and reduce customer complaints. It generates 75% of the business online, while the rest comes from its offline stores. Having clocked a turnover of `700 crore last year, the platform is hoping to cross `1,000 crore this year. 

RECIPE FOR SUCCESS

Prioritise the channel based on customer feedback and preferences

Consistent messages across channels to forge a stronger connect

Match online display and offline delivery optimally

— Varun Moolchandani, executive director, Archies

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