Home Retail “Omni-Channel Retailing is at a Nascent Stage in India”

    “Omni-Channel Retailing is at a Nascent Stage in India”


    Omni-channel retailing is slowly catching the fancy of Indian retailers, as more and more consumers are embracing digital technologies into their buying behaviour. Rajeev Kumar spoke to Sandilya Gopalan, Vice President and Global Practice Leader for Consulting, Cognizant, to find out more about the utility of this format.

    How does omni-channel retailing provide a seamless shopping experience?
    Shoppers worldwide are no longer confined to a channel. For instance, a shopper could research online via their desktop or hand-held device, verify review comments on social networking sites, walk into a store to see the product, compare prices online, and conduct the purchase transaction in the same store or online. Omni-channel retailing is all about providing this ‘anytime, anywhere’ shopping experience. North America is at the forefront of this phenomenon. Even countries such as the UK, Australia, Singapore, and countries in Central Europe are not far behind.
    The multi-channel model grew with the addition of touch-points or channels such as e-commerce websites, mobile, social, call centre, and in-store kiosks. In the omni-channel model, multiple customer touch-points are integrated seamlessly. Shoppers also have multiple options to fulfill purchases; for example, buy online and pick up in store or deliver at home; buy at store A, pick up at store B, return at store C, and so on.
    How does omni-channel retailing work?
    An important aspect of omni-channel retailing is the supply chain. The retailer needs to invest in capabilities such as inventory visibility across the network and order visibility across channels to provide fulfillment options to shoppers in the most cost-effective manner. A single view of data about customers, products, inventory and orders is another foundational capability. Omni-channel also entails changes to core business processes and operations. The store itself remains a significant touch-point. Store employees need to possess more knowledge in serving shoppers who have access to a wealth of information about products. They also need to be trained on new policies and procedures.
    How does it benefit retailers?
    The omni-channel model provides a wealth of customer data across touch-points, which retailers can analyse to derive shopper insights. This, in turn, helps retailers provide personalised and better experiences, leading to an increase in repeat purchases as well as basket sizes. Omni-channel also leads to tapping revenue opportunities. Retailers are able to leverage inventory available in their network more effectively and avoid lost sales.
    What has been your experience with Indian retailers with respect to omni-channel retailing?
    Omni-channel retailing is currently at a nascent stage in India, but the country is heading slowly but steadily towards it. Leading brick-and-mortar retailers are foraying into omni-channel. , for instance, is making investments to be an omni-channel retailer. Their e-commerce website was launched around a couple of years ago and provides a great online experience. , the largest retail group in India, is also aiming to be an omni-channel retailer. Ezone’s online platform, which was launched recently, led to a 50–60 per cent increase in sales and is continuing to grow. Several online-only retailers such as , Jabong and Amazon have established themselves in the last few years and are slowly making inroads. Other innovative channels are also slowly emerging; for example, Delhi airport has a virtual wall for QR code-based shopping.
    What promise does it hold for the Indian retail market?
    The model is here to stay. Retailers need to differentiate themselves and establish their value proposition in the minds of customers. They also need to be ready for the long haul, since in the Indian milieu, turning this model profitable will take both time and effort. Considering the significant numbers of aspirational shoppers outside of Tier-I, -II and -III cities who do not have access to leading brands, online models provide a way to tap this market.
    What are the challenges associated with omni-channel retailing, especially in India?
    One of the key challenges retailers who embark on omni-channel initiatives encounter is establishing a unified organisation and roadmap. Retailers need to bring together different functions for this. Multiple functions – merchandising, supply chain, stores, marketing – will undergo changes in operations and will need to adapt. Setting right pricing models and policies is also among the top challenges retailers face.  Technology and infrastructure set-up also pose a key challenge. In India, internet penetration is low and the technology ecosystem required, such as Wi-Fi in stores, is not widespread. Retail organisations will need to adopt newer technology capabilities.
    Is omni-channel retailing an enabler or driver of retail’s future in India?
    Omni-channel retailing is at a nascent stage in India. Online sales still form a fraction of the overall retail sales. In the near future, retail in India will be driven more by structural changes and changes in policies and regulations that will enable Indian and foreign retailers to grow and expand across urban and rural markets.