Best of both worlds


September 22, 2014

Ankita Rai, Business Standard
New Delhi, 22 September 2014

* Future Group plans to invest Rs 100 crore over next 18 months to provide consumers a ‘single view’ of its many brands across physical and digital channels. It is targeting 30 per cent increase in business once its omni-channel platform becomes operational.

* Infiniti Retail, which operates a national chain of multi-brand electronics stores under the brand name Croma, has started delivering orders placed online the same day in 16 cities where it has its stores. The number of daily clicks on stands at 2,10,000.

* Textile manufacturer and the flagship company of the Lalbhai Group, Arvind Ltd, recently launched its online custom clothing brand, Creyate, on the back of which it hopes to build a Rs 1,000 crore business in the e-commerce space over the next three years.

*, the e-commerce website of Aditya Birla Nuvo-run Madura Fashion & Lifestyle, has witnessed 200 per cent growth in its online orders since its launch in 2013 and is planning to launch store pick-up and return services. showcases merchandise for men, women and kids and houses brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England and People.

Get the drift? Most traditional retailers are moving towards omni-channel marketing. As consumers move seamlessly between digital and physical channels, even during the same shopping trip, the lines between online and in-store shopping is getting blurred, and reaching out to consumers through all possible shopping points is becoming imperative.

"When we see the world through the eyes of our consumers, we make better marketing decisions," says Kit Yarrow, professor of Marketing and Psychology, Golden Gate University, San Francisco. "A big adjustment that businesses need to make is to understand that their shoppers do not see the world as online versus in-store. It is fully integrated in their minds and lives. But until very recently, most businesses were set up with an online division that often competed with their brick-and-mortar division. That’s just going to confuse consumers, and it is not leveraging insights across teams for the betterment of the company," Yarrow says, adding, "Omni-channel retailers need to get out of silo thinking and integrate various functions."

Indeed, the survival of traditional retail depends on it. How? According to the latest AT Kearney report on omni-channel, shoppers who jump in and out of platforms are more loyal and spend more than single-channel shoppers. It also showed that brand loyalty is directly related with retail channel usage. Such consumers are 15 per cent more likely than single-channel consumers to recommend a retailer and that the average spend of three-channel consumers is more than twice that of single-channel shoppers. "It is about staying relevant. With the way the retail ecosystem is evolving, technology will change the way a customer experiences retail," says Ankur Bisen, senior vice-president, retail and consumer products, Technopak Advisors.

Think of it this way: traditional retailers are in a unique position to reap the rewards of a well-laid out omni-channel strategy. As Kumar Rajagopalan, chief executive officer, Retailer Association of India (RAI), points out, "These players already have a trusted brand. An extension of the brand offerings over other channels helps in creating better customer-centricity."

Endless aisles

The biggest challenge physical stores face is being able to showcase all the stock they have under the roof. High real estate and distribution costs also stand in the way of rapid expansion. According to a Technopak report, ‘E-tailing in India’, 56 per cent of the total organised retail is in the top 24 cities, which includes metros, and Tier-I cities. This is where the learnings from their peers in developed markets – namely, Walmart and Best Buy – can come handy. To counter the challenge posed by the likes of Amazon, most big box retailers in the US have gone online and are also opening smaller standalone stores. That’s the idea behind endless aisles, which implies that consumers have access to not just product held by the high-street outlets, but smaller stores or even online. The in-store computer terminals and kiosks allow customers to shop and purchase from a retailer’s entire inventory. Says Kumar of RAI, "Offline retailers in India can use multichannel capabilities to bring to life the concept of endless aisles, which means they would offer things that are not necessarily restricted to the physical location or capacity of the store. "

Now look at how Indian retailers are building their omni-channel capabilities. Tata Group’s retail arm Infiniti Retail advertises a shop-online-pick-up-in-store service on its online portal. Consumers can also return or exchange the products bought online in the stores. It also plans kiosks at places like airports where people can surf and place orders. Ajit Joshi, CEO and MD, Infiniti Retail, explains the benefits, "The ‘store pickup’ concept, which allows customers to order online and pick it up later from store, is popular in electronics as consumers need a little bit of handholding in terms of personalising the product being purchased."

Future Group is targeting 30 per cent increase in business once its omni-channel platform becomes functional. It recently announced a tie-up with Hybris Technology to roll out its omni-channel platform. "By next year, consumers will have the option of shopping online from our stores. We plan to first implement it in Ezone, followed by Planet Sports and Big Bazaar. We will offer services like cash on delivery; we will set up kiosks manned by franchises who will deliver at your doorstep; you can order online and pick from the store. We want to reach the customer whom we can’t reach through physical stores," says Kishore Biyani, CEO, Future Group.

"We will leverage our modern warehouses, the distribution centres and the huge customer data that we have to offer a seamless experience," adds Biyani.

Shoppers Stop, which also operates an e-commerce portal, is confident that its omni-channel approach will start showing results within the next 24 months. Says Govind Shrikhande, customer care associate and managing director, Shoppers Stop, "Our omni-channel retail approach aims to create a seamless and convenient shopping experience for customers. A customer can shop at the neighbourhood Shoppers Stop store, shop online (, browse through the latest trends on our six million-plus-strong Facebook page, view a fashion tutorial on our YouTube channel and buy merchandise, shop at our airport stores… you name it. Customers can shop online and exchange products at our physical stores."

Aditya Birla Group-led Madura Garments, which owns brands like Louis Philippe and Van Heusen, unveiled its shopping portal last year and goes as far as to offer an in-store alteration facility for orders placed online. Says Shivanandan Pare, head of e-commerce,, Madura Fashion & Lifestyle, "We launched to cater to the changing consumer. The idea was if the consumer is going online, the brand should be there. The same thinking led us to launch exclusive branded outlets 10-15 years back." The brand also has a responsive mobile optimised site. The experience is similar to an app browsing screen.

Eyewear retail chain GKB Opticals launched its e-commerce portal in 2012. While eyewear can be a difficult category to market online, the 50-year-old retailer hopes to leverage the learnings from its 60-plus retail outlets to power its online stores. The website has a ‘try on mirror’ and a ‘face shape’ guide to help customers try-out products sitting at home. Consumers can also return, exchange and get the frames they purchased online serviced at all of its retail outlets. Dhruv Gupta, CEO, GKB Online, says, "Having an online presence has also increased traffic and engagement at stores."

For its part, Arvind’s Creyate allows consumers to create a garment on a three-dimensional (3D) visualisation engine. Customers can touch and feel apparel material and sit at the store’s iMacs to design their clothes. A 3D visualisation engine allows them to see how their final garments would look. The store also has a magic mirror that can be operated through hand gestures and consumers can use it to virtually try on garments. "As the Indian e-commerce market evolves, customers will become more discerning and come to the internet for things other than discounts and wide offerings. For the apparel category, experiential e-commerce will become more relevant," says Kulin Lalbhai, executive director, Arvind Ltd.

Easier said…

"For brick-and-mortar retailers to successfully move into other channels needs radical rethinking in terms of the service ("always open"), speed ("right now"), scale ("everywhere")," says Devangshu Dutta , chief executive, Third Eyesight.

An effective omni-channel strategy really needs to embrace every touch-point as one unified whole. "Studies have shown that physical retailers who simply try to mimic pure-play online retailers are not taking advantage of their legacy," says Nikhil Prasad Ojha, partner & head, India’s Strategy Practice, Bain & Company. "Firms must integrate both the channels if only to avoid duplicity of efforts." Agrees Vivek Mathur, CEO, Giftease Technologies, "Given that many of these are older, larger businesses, silos are often too hard to break, unless driven from the top."

In contrast, in the more developed Western markets, physical stores have played an instrumental role in the growth of omni-channel retailing. According to a recent Forrestor study, ‘Minding the Omni-Channel Commerce Gap’, such synergy has many benefits – physical stores can cut merchandising costs and improve customer satisfaction when they move online. By delivering products from local stores, online players can cut delivery cost and time. "Brands need to use their distribution network when going online. Instead of fulfilling an order from a central warehouse brands can use their nearest stores to fulfil orders," says Sushant Kashyap, who heads fulfillment and omni-channel services at Delhivery, an e-commerce-focused logistics service provider, which also offers omni-channel services to retailers to help them integrate their myriad channels.

Gupta of says that the biggest challenge is to ensure that the product is shipped on time. "Leveraging inventory across channels and geographies becomes difficult when you take into account various state tax laws," he adds. Infiniti Retail’s Joshi says, "We are working with our suppliers so that we can track each other real time. For instance, if we are pushing a sale, they should be in a position to transfer stock to the nearest distribution centre. We are also trying to minimise the time taken for a supplier to reach our local warehouse by improving our logistics intelligence."

Croma is leveraging its distribution muscle to deliver orders the same day in 16 cities where it has its stores. "If a consumer orders before 2:00 pm, a Croma employee will deliver it the same day. He will brief the consumer in case she wants product demonstration and help with data transfer for mobile phones. This is a key differentiator because everybody else is using a courier service," says Joshi, adding, "Currently, Croma has 97 stores and it has distribution centres in Bangalore, Delhi, Mumbai, Chennai Hyderabad and one in Gujarat. With this network we are currently servicing more than 300 cities and towns."

On its part, Madura leverages its central warehouse backbone to ship products. "Earlier the warehouses were shipping bulk orders. But once we went online, we had to build capability to ship individual customer orders. This required huge investment in technology and employee training to equip them to handle single shipments," says Pare.

(Published in Business Standard .)