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Back-end technology takes front-seat for retailers

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For leading retailers across the country, the focus is on seamless integration, using data to understand customers better and enable back-end efficiencies

Mumbai: While customer experience takes the centre stage post-Covid for most of the leading retailers, they are also putting their efforts and monies into facilitating better customer experience through an entirely different angle: The backend.

According to a latest survey by Amazon Web Services (AWS) survey, almost 80% of retail sales are still conducted through brick-and-mortar stores and reputed retailers said that they are not only focusing on tech investment in the consumer-facing front-end but also a significant part of their tech spending go into the back-end to improve their operational efficiencies – that ultimately enhances the overall customer experience.

Retailers have witnessed a sharp increase in the number of consumers preferring to interact directly with humans in the post-Covid world rather than dealing with tech and other artificial intelligence-led interfaces.

“Our experience working with retailers post-pandemic has revealed that customers are rushing back to stores and when in a store, they want to interact with people not with technology,” said Niraj Jaipuria, founder and director, BIRetail Ltd., a data-analytics company that works with leading retailers, explaining the reason for the shift in focus of retailers.

Nissan Joseph, chief executive officer of Metro Brands Ltd. echoed the sentiments and said that as consumers have started returning to physical stores after a long gap, they are keener to interact with humans rather than a kiosk or a machine. “We would like humans to attend us in a store or wait on us in a restaurant. People come to stores asking for live interactions. But technology at the backend is critical,” he said adding that this is where Metro is focusing on.

Owing to this, retailers are therefore concentrating their technology efforts on improving their back-end and being more customer-centric.

Metro Brands for instance is making considerable investments not in buying new technologies but in seamlessly integrating the technology stacks for different functions that the company has already invested in. For instance, the warehouse management tool with the CRM tool or inventory management with HRMS.

“We spent a lot of money on integration – what is AI at the end of it all?” Joseph asked. “We use technology to turn data into information and that information to knowledge and that is a basis for decisions. It becomes much more exciting,” he added.

Sharing the example of how her organisation is using technology at the back-end to serve the customers better, Anshu Bhogra, senior vice president, Forever New Clothing said that the Australian chain that has 41 stores in India is focusing on using technology like artificial intelligence to understand its customers better.

“We used customer data and technology to understand our customers even better. Technology helped us understand our customer, her tastes and localize the product based on their needs,” she said adding that currently, that is the focus of their tech implementation.

She added that this was important to the brand as 70% of the brand’s business comes from existing customers. “The next thing that we are excited about is understanding our customers even better. We are now getting into the stage of segmenting customers. For instance, who is a discount seeker or a bag buyer and target communication based on that,” explained Bhogra adding that the brand does use technology at the front-end. For instance, it uses WhatsApp video calls for enabling home shopping. “14% of revenues come from home shopping,” she said.

Like Forever New, Metro too, is working on understanding customers better. “We have 12 million customers in our database. We want to track how they are behaving. It is a combination of collecting, storing, integrating and analysing data,” Joseph said.

Speaking about his brand, Sanjay Vakharia, CEO, Spykar Lifestyles Pvt. Ltd. said that the brand is very cautious in its approach when it comes to front-end technology investments and adoption for three reasons: primarily because the brand has vanilla products to sell, the store size is too small (about 500 sq. ft. to a 1,000 sq. ft.) for meaningful tech implementations and the brand is 100% franchised.

Therefore, like other retail chains, Spykar too is investing in improving its back-end with technology. “From an intent perspective, the brand wants to use technology to solve problems. One of the problems which we are trying fix using technology is skilling,” Vakharia said.

Other changes he revealed were more common sense based. For instance, changing the reporting structure of the omni-channel team to retail rather than the tech team.

Giving an insight into where Bestseller India is focusing on with regards to technology, Sugam Asani, Chief of Brands, Bestseller Retail India Pvt. Ltd.

“We have 400 styles in a store at any given time…for the fashion consultant to know the fabric etc would be nearly impossible. The entire conversation, therefore, is now about how we train the customer better before she enters the store. Sending data about the brand, having QR codes on products…our entire journey towards is to give the power to the customers,” Asani said.

The leaders were speaking at Retail Leadership Summit 2023 organised by the Retailers Association of India in Mumbai.

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