Cross-channel retailing is on an upsurge in India but the retailers need to address the marketing needs by devising competitive strategies.
The 20th century, often named as the Space Age, also witnessed great strides in the fields of science and technology, medicine and numerous other entities. The last quarter of this era also happened to be the harbinger of a new concept of international order – access to information and communication. This has been ideally reflected by the breakthrough achieved in the information technology (IT) sector.
Extensive and effective computerised network has lent a fillip to the commerce vis-à-vis the identification and assessment of almost all products and services. Apart from competition among the stakeholders in the trade and industry, it has streamlined the modes of procurement of raw materials, production, management of logistics and, above all, the marketing mechanism for standardised delivery systems.
Such a strategic shift in the relevant paradigm is attributed to e-commerce, which in turn has reinforced the market and open economy practices across the world leading to the concept of cross-channel trading. Great strides in technology like Wi-Fi acted as a catalyst in the development of cross-channel trade on almost all the fronts.
M-commerce replacing e-commerce
The tiny chip has worked wonders that none could dream of around three decades earlier, which is evident from the multiple functions that one can operate from a mobile phone set. In other words, m-commerce has replaced e-commerce and revamped cross-channel trade within a span of 10 to 15 years.
These developments have enabled the emergence of cross-channel retail trade, particularly in the consumer durables sector. The access of free in-store Wi-Fi is another trend which is catching up fast. It helps buyers accessing first-hand information to the minute details of any product listed in the cross-channel link, as today’s consumer is much more informed than ever before, armed with smartphones, and they expect to get a personalised service.
With more and more customers using mobile phones in stores for shopping, the mobile product comparison threat continues to exist but stores can embrace it as a new opportunity to know their target mobile customers better. Through the cross-channel solutions, the retailer gets the real-time visibility into all the channels, which include POS (points of sale), warehouse, order management, inventory management, e-commerce, mobile platform, sales back office and analytics, simultaneously. This seamless linking of all the information and business processes offers great flexibility to the retailers for streamlining and improving operations, increasing customer satisfaction, and in turn raising the profitability.
In addition, the installation of in-store devices like kiosks or digital signage offer combined digital and physical experiences where buyers can order products, search for items and check the availability of the stock.
Simultaneously, the retailer can also keep pace in terms of publicising and marketing their wares including services, the aspects of pricing and follow-up services through constant inventory control.
Various reports and case studies on the development of cross-channel trade have depicted varying trends, which in fact cannot be universalised as per the American experience since society in the US, by and large, is consumerist. Further, the behavioural patterns have also varied from company to company in the analysis of experts who undertook the research studies.
Cross-channel retailing scenario in India
As for the cross-channel trade in India, the scenario is different from the US experience, leave alone Walmart having made inroads in the Indian market. Several pros and cons have to be reckoned, such as the authenticity of the retailer, the credit-worthiness of the buyer and the laws that provide protection to the end consumers.
Leading management consultants and market analysts such as KPMG and Tata Consultancy Services Limited have voiced optimism on the future of cross-channel trade in India. In their view it has boosted bottom-line via focused marketing strategies and cost-effective quality as well as inventory control of the products and services. They have contended cross-channel trade has rejuvenated the retail market in India. For instance, certain effective business practices are necessary to ensure the sustainable success of cross-channel trade in India. And heading the list is the need for the retailer to win the confidence of the consumer.
A viable formula for cross-channel trade to thrive in India, the retailers must address the issues of marketing through competitive campaigning, aggressive promotions through established sales outlets, facilities for e-payment transactions and assured delivery at the doorstep of the consumers since they may be unaware of the physical presence of an unknown or less-known retailer. Besides, the IT industry must monitor the trends so as to develop relevant software and upgrade it periodically.
A stumbling block for the cross-channel trade in India happens to be the conventional existing market functioning in the country. The overall mind-set of the traders is apprehensive that the FDI in retail sector and online trading practices could usurp their business.
This psyche has gained nationwide momentum since many political parties have come forth in support of the local traders although the apex bodies of industry and commerce like the Federation of Indian Chambers of Commerce & Industry (FICCI) and Associated Chambers of Commerce & Industry of India (ASSOCHAM) have welcomed FDI in the Indian markets. Of course, these bodies represent more of corporate entities than the trading community in a neighbourhood.
Indian software exporter Tata Consultancy Services had published a White Paper on cross-channel trade in India, titled ‘The Challenges of Cross-Channel Fulfilment to the Retail Supply Chain’. In the report, it has spelt out the causes for the decline in retail sales including cross-channel trading that it attributed to the global recession since 2008. Consequently, the consumer confidence had ebbed due to the pessimistic signs in the economy, the study revealed.
Nonetheless, the White Paper has noted that the computer literacy and wider applications of IT across India was yet to reach the desired level as another reason for the retardation in cross-channel trade. According to this two-part, in-depth survey, the inclusive utility of technology has direct implications on the retail industry.
It has also mentioned that the multiple channels of engagement with the consumer have matured as a result of which customers who are brand conscious have begun to expect a novel and hassle-free shopping experience through various channels.
To this end, the retailers have to make a number of radical changes in order to satisfy this modern consumer. Since these strategies require huge investments in the stores, website, supply chain systems, technology and employees, only a few retailers are able to implement them. However, unfortunately, retailers have little choice, as cross-channel retail is here to stay.
About the author
Sunando Banerjee, is working as the Channel Business Manager of Openbravo for the Middle East and Asia Pacific Region. Openbravo is the leading provider of browser-based open source businessapplications for the cloud, with more than 6,500 organizations in 60countries relying on Openbravo software every day