Retailers seem to be fighting a losing battle against the growth of ecommerce, and it is only the nature of the shopping activity, especially for fashion – interactive, social, and immersive as it is – that has kept many retailers relevant and in business.

However, the defensive stance is changing, and now they’re using technology to get the customers back into the store. Forward-thinking retailers are reimagining trial rooms, stores, business processes and entire business models. It’s not a physical versus virtual approach but an approach that integrates both sides. The idea is to create a more immersive experience than pure digital retail can be, using some of the same tools as ecommerce.

It is important to remember that the whole retail environment is a “suggestive” environment. Due to cost and other operational factors most retailers are ill-equipped to provide appropriate levels of excitement, suggestion and support during the browsing and buying process.

For many, the simplest move could be screens serving up their catalogue to customers within the store. For instance, US department store chain Kohl’s has initiated connected fitting rooms that identify products the customer is carrying, and bring up not only those items onscreen, but additional colours and sizes that are available. If the customer wants an alternative, a message goes to a sales associate who can fetch the requested option. Macy’s and Bloomingdales are using tablets in the trial rooms, while Nordstrom, Neiman Marcus and Rebecca Minkoff are attempting to boost their fashion sales using magic mirrors to provide similar enablement. These devices and the processes empower and involve the customer far more, while leaving store staff free for other activities.

A step up, Puma is using “virtual trials” for its apparel products by having a customer take images of herself in specific positions, and then mapping styles on their own images to visualise how they might look. While this needs more work and investment, this is still only a more developed product browser technique from the customer’s point-of-view.

The next level, augmented reality trials and virtual fit, are significantly more sophisticated at creating simulations of a selected garment image draping and falling on the customer’s body even as he or she moves normally. Imaging and texturing of the simulated garments is technically challenging and expensive, repeated for each new style and option. The imaging also needs to mimic the “wearer’s” movements. Nevertheless, retailers such as Polo Ralph Lauren are finding it worth their while to investigate these new technologies, as these reintroduce the much needed “theatre” that are integral to a successful retailer.

For the customer virtualisation expands the number of items “taken” into the trial room, and creates more convenient product discovery. More products can be seen in the same shopping time, and sharing of images and videos with friends and family, engages them in the shopping process as well.

For retailers, the benefits multiply. Inventory can be optimised, and there is reduced handling and shrinkage. Even without sales associates, it is feasible to prompt for alternatives and related products, improving conversion and transaction values, reducing space and costs of physical trial rooms, and increasing the number of customers serviced especially at peak traffic times.

A phenomenal advantage is the data captured that is relevant while the customer is in the store, but which can be linked to future promotions. Valuable intelligence, such as what is being tried and for how long, can help the retailer to quickly gauge demand patterns, and adjust pricing and promotions. Normally retailers only capture sales transactions (post-fact), and miss out the rich information on in-store behaviour that etailers do collect and analyse.

However, massive hurdles to virtualisation remain, including data input accuracy, product accuracy, and the technical capabilities of the tech solution adopted. A bigger concern is whether technology is intuitive and seamless, or whether it gets in the way of the shopping experience. Further, consumers do have privacy concerns about the images and other data collected.

Its important to remind ourselves that, on its own, technology is just a novelty – huge transformation of business processes, organisational capabilities and behaviours must happen as well.

That is perhaps the biggest mountain to climb.

Richa Maheshwari, The Economic Times
Bengaluru, 14 January 2016

The couriers ride geared bikes and carry packages of up to 7.5 kg per trip. With incentives, a bicycle messenger could earn about Rs 7,000 to Rs 8,500 a month compared with Rs 14,000 a month for those on motorbikes, according to people aware of compensation levels.

Online retail, which is being increasingly adopted by Indian shoppers, is expected to account for 3% of the total by 2020, according to a PwC report. Further, orders per million are expected to more than double from five million in 2013 to 12 million by 2016. While this will mean more opportunities for e-commerce companies, delivery staff will have to ensure goods reach buyers in time.

The US-based online retailer is working on novel methods of delivery, including Prime Air, "designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones," according to its website.

The e-commerce giant is seeking delivery alternatives as logistics costs rise, experts said.

"In India, the density of population is higher, hence bicycles will help them reduce cost compared to motorcycles. Similarly, in the US, since the market is less dense, air cargos will help them reduce cost, reduce time and improve accuracy," said Devangshu Dutta, chief executive officer of consultant Third Eyesight. "The purpose is the same, how it is done is different, depending on the geography." Amazon said using cycles was green and enabled couriers to slip through traffic easier, when asked whether this would allow it to lower costs.

"Our focus for this initiative was two pronged – to be eco-friendly and to be able to cut through congestion in metro cities," it said. "You’ll find more people who own bicycles or if need be can afford to purchase one. It is lighter on the pocket to own a bicycle compared to a bike. We will see how it goes with Amazon with respect to safety and then decide whether we want to add bicycles to our fleet or not," said Vijay Ghadge, chief operating officer of GoJavas, primary logistics arm of e-tailer Jabong.

(Published in The Economic Times and The Times of India)

Shambhavi Anand & Varun Jain, The Economic Times

New Delhi, 6 January 2016

Discount sale on winterwear has started in the middle of the season, as an unusually warm winter has hurt demand, forcing top brands to tweak their strategies. Industry experts estimate India’s annual winter wear market at around $2.3 billion (Rs 15,300 crore). This year, sales are around 15% below the expected level because of a mild winter in the North, said two of them.

Brands such as Woodland and Marks & Spencer, which are high on winter wear, started selling winter wear in October, a month earlier than usual, expecting people to buy in anticipation of a harsh winter. While several of them are now replacing heavy woolens with light ones, brands such as Levi Strauss and Woodland started offering discounts on winter apparel, footwear and accessories as early as December 23.

"Due to the balmy winters this year, we at Woodland have tweaked our inventory at the stores accordingly. Since we see slow demand for bulky winter merchandise, we have stocked our stores with sweatshirts, fleeces, bomber and gilet jackets instead, which have been flying off the shelves. We also have a range of ankle boots, which have been the rage all winter and have replaced thigh high boots this season," said Managing Director Harkirat Singh.

Marks & Spencer is focussing on light knits, cable knits and cashmere jumpers this season.

"This winter, layering was a key trend. As every part of India does not face winter with same intensity, having a range of styles in linen refreshed in latest colours of the season really helps, so we continue to offer linen all year round," said Venu Nair, managing director of Marks & Spencer Reliance India. He refused to comment on current trading and trading over the last quarter citing the silent period before reporting its group results on January 7.

Pepe India, which is primarily a denim brand but also sells winter apparel extensively, launched its winter collection ahead of Diwali. "Normally we used to launch winter collection after Diwali, but this year we went ahead with it by October 15. We also reengineered our product line and brought more of sweat shirts and lighter denim jackets which are useful for a longer part of the season," said CEO Kavindra Mishra.

Most parts of northern India, which is a huge market for winter wear for apparel brands, has experienced warmer winter this year. According to the India Meteorological Department, minimum temperature as on Tuesday was 5-7 degrees above normal in places such as Delhi, Chandigarh, Punjab, Haryana and Himachal Pradesh.

"Winter wear is an extremely seasonal product and it is limited to a small part of the geography of India," said Devangshu Dutta, CEO at consultancy Third Eyesight. "From that point of view, the sales of winter wear would have got impacted." However, he said, it is too early until late January to term the season a write-off.

"We have seen that the weather patterns are fairly unpredictable; so you can actually get a cold snap in the middle of January and that time it pushes up sales."

(Published in The Economic Times.)