The growing smartphone numbers and Internet access trends (140 million smartphones estimated to grow to 500 million by 2020, 300 million Internet users growing rapidly) indicate that ‘Digital’ has become a significant part of consumer behaviour in India, and the propensity to go digital is increasing day-by-day. E-commerce organisations have leveraged this digital wave quite significantly as evident by their growing gross merchandise volume (GMV).

So the question that arises is: how do organised retailers ride this wave rather than consider it as only a threat to their business model?

The answer lies in the consumer behaviour itself: while consumers are increasingly adopting e-commerce, a significantly large percentage of consumers continue to use a mix of physical and digital during the shopping journey. While consumers are increasingly becoming tech savvy and want the convenience of shopping anywhere anytime, they still appreciate the ‘touch and feel’ experience provided by brick and mortar retailers.

Retailers can clearly score over the e-tailers in terms of leveraging this consumer behaviour—they can provide them a seamless experience across the offline and online channels (for example, the flexibility of buying and receiving delivery: buy-online-pickup-in-store, buy from one store pick up from the other, buy in store receive at home, browse free Wi-Fi in store to order: all these options could be provided only by a retailer with both physical and digital channels). Simply put, building this seamless experience for the shopper across channels is called “omnichannel”. Learnings from international retailers suggest that omnichannel is a powerful way for the retailers to leverage the trend and accelerate their existing growth rates.

What is omnichannel and what does it take to implement at a retailer? Omnichannel is a new way of life for the retailer. It is not just about opening a new channel but also re-evaluating the retail architecture thus warranting a comprehensive look at all business functions, individually and as integrated units. Omnichannel integrates many cross-functional elements comprised of technology, operations, and governance. To deliver their omnichannel roadmap effectively, retailers need to think about changes required across resources, operations and technology.

Among others, five key areas which require evaluation by a retailer aiming to be omnichannel are:

o Organisation mindset & structure: Implementing the omnichannel vision requires a change in the mindset—from selling through channels to selling through the enterprise in an integrated manner. One needs a re-look at the organisation structure: a key objective could be enabling collaborative working across channels, and not working in silos. Implementing omnichannel will require retailers to evaluate significant changes in reporting structures, incentive schemes and performance management

o Supply chain and distribution network: Retailers will need to re-evaluate their current supply chain and distribution to support the change in consumer purchasing trends. Inventory ownership will need to move from channel-specific to enterprise owned, with clear visibility of inventory across all consumer touch points

o Experience in physical stores: Stores will become key interfaces in providing a seamless experience to the consumers. Retailer need to evaluate altering the physical footprint and formats to effectively meet consumer preferences. The role of a store associate needs to be re-looked at, as it may shift from merely processing in-store transactions to servicing always connected consumers

o Technology: Technology will need to be leveraged as a key enabler across functions. Retailers will need to ensure real time connectivity between the front end physical store/ website and the back end. Enhanced in-store technology and applications may provide a new level of service experience to consumers

o Analytics: Leveraging advanced analytics to develop consumer insights across consumer touch-points and using those insights across functions: marketing, supply chain, etc. has high potential to develop significant differentiation for the retailer.

In addition, Indian retailers have their unique challenges which need to be met. With significant number of Indian organised retailers operating on a franchisee model and most franchisees operating on a standalone basis, retailers may need to put in place an incentivisation structure which encourages franchisees to embrace omnichannel systems. The GST rollout effective April 1, 2016 would certainly simplify the current complex taxation structures.

As retailers build their omnichannel organisations, they must be well aware that going omnichannel is not a one-size fits all approach. Each retailer needs to develop clarity on its own positioning, define its own omnichannel vision and build its own roadmap. While omnichannel is a new way of life, going omnichannel is not a choice for the retailers anymore: it is an imperative.

Neeraj Jain is senior director and Rohit Bhatiani, director at Deloitte India