Tuesday, 20 May 2014

Rise of Omnichannel & Traditional Indian Retail

I happened to come across some news about the retail industry in India. It’s a fairly recent survey about retailing in India that estimates that Indian retail industry is likely to touch a staggering Rs. 47 Lakh Crores by 2016-17, while exhibiting CAGR of 15%. While these were some really huge figures which had me stunned for a moment, it wasn’t really that unexpected. After all, India’s population is well above 120 Crores & to fulfill demand of such a large number of people, retail industry has to yield such numbers. However, that is not exactly my point. I want to touch upon the fact that Online Retail (e-commerce)  is rising with CAGRs at least 2.5 times that of overall retail industry & this has genuinely scared many of the traditional brick & mortar stores. I have one word for them ‘Omnichannel’.

There’s no need here to start another story on how cut-throat the Indian retail market is. In this battle to gain a larger share of consumer’s wallet, retailers & brands are continuously searching for new ways to increase the interactions with customers, or at least they should be searching if they want to thrive in this IT-enabled marketing storm.  Customer touchpoints are at a premium not just in India, but all over the world. But this is not new, as this white paper from Winterberry Group (http://bit.ly/T0AQT2) explains, the India spawned in the minds of some Y&R executives as early as 1972. They called it ‘The Whole Egg’. From then on, concepts like ‘Multichannel’, ‘integrated marketing’ evolved over the time. However, there was (& there still is) something lacking. While these terms talk about unifying marketing communications of various channels, there was little consideration about unification of customer experience. That is exactly what omnichannel aims to achieve. Such channel-agnostic approach could very well be the holy grail of omnichannel. This unification of customer experiences is what I’ll refer to as omnichannel for now (unless it gets radically changed). Premise is really not that difficult to understand. Technology has enabled brands to provide customers with many touchpoints, both physical & virtual (with highly interactive platforms, it’s hard to even differentiate them anymore). Omnichannel approach aims to unify customer experiences across these touchpoints, so as to have seamless switching between them, many times without the customer even realizing of a channel switch. It differs from multichannel, in that omnichannel doesn’t talk only about unification of communications; it talks about integration of entire retail process, right from information & communication to actual completion of the buying transaction.
Now that we have an essence of what omnichannel is, let us explore how our traditional retailers can apply it to their advantage. If you’re still confused about ground level impact of omnichannel, just go through 1st para of this article- http://mklnd.com/1aCxM7e. As the article goes on to explain, our traditional retailers can start with approach of white-labeling their activities. A simple e-commerce portal can be a good start. Also, whenever an e-commerce or any web site is built by the retailer, I cannot stress more upon the mobile optimization of the site. Many people are going to access the website from their smartphones & customers will quickly lose interest if they are faced with poor alignment & navigation issues. To take the mobility even further, retailers might do well to build a specialized mobile app. Not only does it add one more touchpoint to your repertoire, but it also helps a brand consolidate the brand image, enhance it by giving great service & gives an ability to communicate latest info about new campaigns, changes in the offerings & processes & so on.  To take the mobility further, retailers can also incorporate QR Codes, WiFi & Beacon technologies in their selling process. QR codes present special opportunity for customers to have faster, hassle-free checkouts. WiFi & Beacon technologies help retailers locate/track the customers & offer a personalized experience inside the physical stores. Sending personalized offers through emails & SMSs is another important aspect of omnichannel. Custom notifications at the right time can really preserve a customer’s connection with the brand/store, giving him/her the ability to continue the interaction with the firm. 

While implementing all above channels, it is drastically important to integrate them. Customer shouldn’t have to repeat the process which he/she partially completed over one channel when he/she switches to another channel.  There is no time to wait; omnichannel has already entered in Indian market.  We can find the corresponding examples in this presentation - http://bit.ly/1v2Wrsu. However, small & medium retailers seem to think of it as a white elephant which only wealthy retailers can nurture. They back off from the domain altogether & don’t look at individual components of it which they can handle currently. That is not a very advisable thing to do, especially since technology is quickly penetrating the Indian market. Traditional retailers, who are already concerned about their growth, would be better off embracing the concept of omnichannel. 

1 comment:

  1. Being channel-agnostic is the key here. A channel switch shouldn't affect the customer experience.