The pandemic has been around for more than a year now and dealing with it, has been a huge challenge for the retail industry, with each passing day. Back in 2020, many businesses were bright-eyed and ready for new opportunities. Retailers never imagined that by late March their doors would be forced closed and, in some cases, never reopen. But many of the retail players quickly rose to address the challenges – necessary to adapt and continue to serve their customers. One thing resonated throughout the year – resilience.
To understand the challenges and new roadmaps and constraints related to transformed e-commerce and Omnichannel retail, the fourth session of ‘Omnicomm Intelligence Series’, powered by OMUNI, discussed the necessary changes and themes basis a roundtable session.
This episode of the ‘Omnicomm Intelligence Series’, saw retail leaders sharing the lessons they have learned, how they have grown, and prevailed to enhance the retail customer experience embracing process and technology improvements in the last one year. The session titled, ‘Surviving The Pandemic-Lessons Learned In Online Retail,’ was moderated by Mukul Bafana, CEO & Co-founder, OMUNI.
The other panelists were:
- Sumit Dhingra, VP & GM – India & South East Asia, Crocs
- Ayush Tainwala, ED, Bagzone Lifestyle
- Lavin Lekhraj, Director, Cottonworld
Mukul Bafana opened the discussion by introducing the panel and asked them to express their observation on the transition of retail and express the thought process from their brand perspective on grounds of the current scenario.
“Despite the challenges and suffering, the pandemic has been a tremendous learning experience for the retail industry. The new normal as we address it, has brought in unique challenges for retailers and ecosystem partners where they were looking at different module of operating. Every team was working on different initiatives in the past but now pandemic has fast forwarded and changed the outlook of consumer demand. There has been a huge shift in the mindsets and behaviour of consumers, as now they have the advantage of shopping from multiple channels beyond just stores,” Bafana highlighted.
Further, he asked the panelists to give an overview of the challenges faced by them during this period.
Sumit Dhingra, VP & GM, Crocs-India & South East Asia explained, “Fifteen months back, we were so puzzled about the situation and challenges. The revenue was hit along with the inventories. There was no cash flow and also there was a huge concern about the safety of the employees and partners. The first goal was to keep everyone safe and second was to keep the business running. We set out two sets of path for the organisation. The first was to create a set of path, where we focused on keeping things under control, cashflow, inventory, lack of manpower etc. The second focus was on creating a clean inventory system, which would help us in taking better business decisions.”
The pandemic also brought us some opportunities in the form of e-commerce and digital platforms, which turned out to be the only revenue generating medium in the lockdown phase. As a result, every brand and retailer invested largely in technology and also built their future strategies around it. We were a digital platform before lockdown but we took initiatives to make ourself more digital oriented in this time frame. We have navigated lots of learnings from the situation that will help us in long run even after the pandemic is over,” he added.
“What we learned from the pandemic was that the consumers had a different approach towards each and every product and category. New trends and buying approach were all over the market. Food service brands and departmental stores were in huge demand. To counter the situation, every brand had different mindset and approach. Online platforms became the most preferred shopping option, and we also reallocated our resources from offline to online to fulfill the demands of the consumers,” mentioned Ayush Tainwala, ED, Bagzone Lifestyle.
“Fé Lavie, due to its online presence, practically saw 2X-3X growth during the pandemic. We had implemented big local sourcing manufacturing initiative 1 year before the start of the lockdown and there we accelerated use to come back to other supply chain issues rather other brand facing international supply chain issues in India. Handbags as a category is easy to buy online, easy to return, easy to gift is very easy to kind of adapt and shift category like lingerie especially high end lingerie is difficult to sell online and every category kind of slot in middle,” he added further.
“The pandemic has driven us to a conclusion that digital is the future of retail. Before the lockdown, our online presence was zero, but we worked in this area and as result we did better business in second lockdown in comparison to the first one. I think that the whole cycle has changed since 2019 and retailers are now looking towards online channels as the new market place,” says Lavin Lekhraj, Director, Cottonworld.
|Incremental Contribution: Digital pre v/a post pandemic
Talking about the incremental contribution from the digital standpoint, Ayush Tainwala mentioned that on an average every brand contribution towards online has doubled during the pandemic.
Sumit Dhingra agreed, “Online penetration has doubled undoubtedly, but the main reason for this is also because stores were not operational for a large amount of time. Since reopening, the stores have been witnessing a decent number of footfalls and it is indeed a good news for the retailers.”
Supply Chain and Inventory
When asked how brands managed the inventory lock up from happening and what role technology played in helping them to sort the supply chain issue, Dhingra mentioned, “One of our key defensive goals was to ensure that the inventory is allocated properly across channels. We helped our offline partners with the cancellation order as we didn’t want them to be stuck with inventory without having a sales plan. The second focus was sorting the existing
inventory and relocating it according to the devised sales plan. The third thing was being super agile on the whole supply chain and ensuring that there is flexibility on supply chain in terms of lead times.”
Lavin Lekhraj too agreed, “Everything was shut, including the stores and malls and with no new orders being placed, there was a huge pile up of the stock. Also due to the lockdown, there was no status of the fresh stocks too. Like other retailers we too had the doubts, like when the business would return to the normal level or around 50 per cent. How will we manage the inventory rate, if the normal pick-up rate will increase? Will we have enough inventory to last for 2-3 months, if a certain category picks up the demand? With the help of technology, we made our warehouse inventory online, so that we are fully be aware of the demand and order available.”
Looking for avenues to reach customers
“Creating online portals and websites for the sale of the products has been a good strategy for retailers. I think Indian the market will continue to be dominated by marketplaces, and it will be encouraging to see that in future 90-95 per cent of the business revenue coming from the online marketplaces. Malls being the physical format of the organized retail are not seeing much revenue currently due to the COVID restriction and guidelines, where as online giants are tremendously profitable,” Ayush Tainwala added.
Sumit Dhingra too highlighted how they have been using technology as a conduit to reach out to the consumers. “We are experimenting with live streams and have launched products on social commerce for the first time properly and we have also done live streams for our stores. We have also used influencers to market the products,” he added.
He further added that malls will remain an important part of their retail journey even though at present the digital business may look like the harbinger of growth. Dhingra highlighted that no one channel for retail can grow in isolation, rather every channel needs to grow hand in hand with each other, be it offline or online.