In the past few years, online retailers have disrupted the retail universe with huge promotions and deep discounts causing a major dent to brick-and-mortar retailers’ revenues as consumers increasingly shifted towards online platforms.
But as more and more consumers moved online, brick and mortar retail majors such as Future Group, Shoppers Stop Ltd, Arvind Ltd, Aditya Birla Retail, among others, have all started warming to e-commerce, launching their omni-channel strategies and websites. Some are even making their products available online on market places like Snapdeal, Amazon and Flipkart.
Offline players are also gradually accepting that online is no more a competition but can actually help in delivering seamless experience to their consumers. “Five years ago, everyone thought of online retail as a curse but over the last 24 months the belief has completely changed. Today, online is not considered as a curse, in fact it’s a gift,” says Govind Shrikhande, MD, Shoppers Stop.
Shoppers Stop Ltd, which embarked on its omnichannel journey early this month, says that by January 2017 all its formats– HomeStop, Hypercity and Crossword– will be completely omni-channel.
“Currently, the online share in our overall revenue is 1%; over the next three years we target to take it to 10 percent through digital touchpoints, as the investments keep unfolding. Right now, we are not looking to drive traffic on our website, we first want to get our acts right,” added Shrikhande.
In June this year, Shoppers Stop partnered with Hybris Software, a SAP company and one of the world’s fastest growing commerce platform providers, to enable the retail chain to provide seamless and unified shopping experience to customers across multiple channels. The company plans to invest around Rs 60 crore over the next three years in its omni-channel technology, supply chain and talent to strengthen its omni-channel play.
“The first phase was the partnership with Hybris, which has actually transformed the Shoppers Stop experience. Next, we are investing In WMS (Warehouse Management Systems) whose execution we’ll start in December and by June next year we will go live with it. By January 2017, our full omni-channel play will be in place,” asserts Shrikhande, discussing the company’s omni-channel roadmap.
In addition to its own websites and omni-channel capabilities, the company has entered into strategic alliances with major e-commerce players as well. It has tied-up with Snapdeal, Flipkart, Amazon and Jabong to sell Hypercity’s products on these marketplaces. Additionally, it has also tied up with hyperlocal e-grocers such as ZopNow, Grofers and PepperTap, who pick up grocery from HyperCITY for deliveries.
“So the idea is to be a brick and mortar play, online play, omnichannel play and marketplace play…so that customers can find us wherever they are and want to shop from. For a retailer like us, omni-channel means putting the consumer at the centre of our strategy and allowing them to decide when, where, and how to shop. The consumer can order anytime, anywhere, and from any device,” Shrikhande points out.
Other brick-and- mortar retailers are also embarking on omni-channel journey to be present where shoppers are. For instance, Adity Birla Group has also unveiled its new venture abof.com (all about fashion), an online one-stop fashion portal for apparel, footwear and accessories for men and women. Earlier, the company also transformed its brick-and-mortar business under the Madura and Pantaloons brands into omni-channel retail — with presence across mobile apps, retail and online stores.
The Tata Group has also adopted the omni-channel for some of its businesses in the past couple of years. “Our website does not compete with e-tailers; it drives traffic to our stores,” Ritesh Ghosal, chief marketing officer at Infiniti Retail, the firm that operates about 100 Croma stores, was quoted as saying. “More than half our e-commerce sales are omni-channel sales, initiated on the web and closed at the store or the reverse.” But this is not enough; the group is planning multiple e-tail ventures. These include a marketplace under the Unistore brand, which will start with offering products from the Tata Group this year. It also started an e-tail grocery venture, my247market.com, being piloted in Mumbai.
Reliance Industries Limited (RIL) has also made its grocery business omni-channel via reliancefreshdirect.com and plans to follow in fashion and lifestyle. The company is also planning a new marketplace venture that will compete with the likes of Amazon and Snapdeal.
E-commerce accounts for just about 2% of the overall sales of the retail sector. However, it is growing fast and is expected to account for 11% of the overall retail sales by 2019, according to Think Retail, a report published by property advisor Knight Frank India Pvt. Ltd and lobby group Retailers Association of India.
With offline players unfolding their omni-channel strategies, consumers can expect a narrowing of the gap between online and offline commerce in the near future, with both focusing on consumers as the centre of their strategy.