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Retail

STOrai Magazine

STOrai Magazine

29 Dec 2021, 17:39 — 10 min read

A lot has changed since the world has been in lockdown. Customers turned to digital and are now seeking phygital experiences. Yakeen Gazi, VP - IT, Reliance Brands believes that this change is driven primarily by three factors— the environment, lifestyle change in different generations, and behavioural change in shoppers. Retailers need to redesign their stores, experiences, offerings, channels to adapt to these changes. Knowing what is changing and what will change is important for the journey.

 

Omnichannel to be omni-present

One of the key shifts has been the increased adoption of omnichannel retail because of disruptive forces like the pandemic, changing customer expectations, and the advent of 5G. Retailers will not only have to build an omnichannel experience but will also have to reinvent what omnichannel experiences mean. It has to be much more than finding the same products at the same prices across digital and physical touchpoints. It has to be the marriage of retail and technological innovation.

 

From endless aisles and seamless back-end operations that enable stores to double-up as fulfilment centres to virtual trial rooms and self-checkout options, technology will continue to drive the omnichannel shift. “If you look at a physical and a digital omnichannel experience coming together, you can start building experiences which are physical first but brought alive digitally and vice versa,” said Atul Mehta, COO, Shiprocket.

 

Retailers will not only have to build an omnichannel experience but will also have to reinvent what omnichannel experiences mean. It has to be the marriage of retail and technological innovation.

 

From the customer’s lens, there will be complete convergence in the near future. Customers will not care if it a store is physical or digital as long as the price, product, turnaround time, and experience are homogeneous. This will give rise to a truly phygital experience and make inventory planning more crucial than ever.

 

“It [Omnichannel] is about creating a common commerce layer across and putting everything together to be able to enable the features and the capabilities. It’s no more that a certain feature must be available only on one channel. Everything has to work together seamlessly to be able to deliver the overall experience because customers are expecting the same experience across all channels,” said Ranjan Sharma, CIO, Head - SCM, Captive eCommerce Business and QA, Bestseller Retail India when asked about what it means for a business to truly be omnichannel.

 

More change in customers

Today, it’s all about instant gratification. The phygital shift during the unlock phases has propelled this demand for speed and access. And when access becomes the norm and speed becomes the differentiating criteria then success rests on inventory planning.

 

Speaking about the changing role of retailers in the phygital world, Ranjan said, “Earlier we looked at them from two different lenses—the eCommerce lens and the offline lens. Going forward, they have to be looked at from a single lens, to bring needs that they have on both the sides —the digital and the physical— together and to be able to serve these needs better.”

 

Today, it’s all about instant gratification. The phygital shift during the unlock phases has propelled this demand for speed and access.

 

Yakeen also observed that customers are not changing individually, but also collectively, which means old ways of classifying them will not be valid. “When we talk about the term ‘demographic’, things like age won’t matter in the future. The way I would club people would be ‘digital savvy’ and ‘digital non-savvy’ by which I mean people that are comfortable using digital technologies for shopping and people that are not.”

 

Retailers now have newer touchpoints to focus on. For example, post-checkout experience was not a thing when shopping was just physical. One would buy the product and a large part of the transaction was done but with online commerce, the entire post-checkout journey needs to be mapped out. Retailers will have to ramp up their post checkout experience; from tracking, ensuring speedy delivery, making customers aware of seamless returns, and more.

 

What’s in store for stores

What would be the role of physical stores in the new scheme of things? “Physical stores are going to become much stronger because they are no more just an experience centre for customers, but are connecting a lot of dots. They are helping brands to engage with the customer in a much better way and give a very differentiated experience.” Speaking about their relevance for customers he added, “They allow customers to understand brands and their products better, and then customers can move to the digital channels with comfort and without any fear. And for this to happen trust needs to be built and the stores are the ones which create that trust, faith, and belief in the brand.” These phygital experiences will also open doors for premiumization for brands in the future.

 

Yakeen from Reliance Brands believes that soon there purely physical store consumer will be few and far between. He believes that it’s a permanent paradigm shift in people’s buying behaviour and preferences.

 

While digital is proliferating, the love for physical remains. Many high-growth retailers have used the post-lockdown opportunity to rationalise their footprint and expand into newer territories, especially in tier-2, tier-3 and even tier-4 towns—A trend that is expected to continue for the next couple of years since sub-regions within cities can now be serviced online with ease and effectiveness.

 

An interesting shift is that stores may not remain relevant for every category in the phygital era. Retailers selling commoditized products need not invest in physical spaces but focus on strengthening their online presence.

 

The need for offering safe experiences will continue and social distancing will remain an important consideration when designing stores. Lean time slots during the day will be used to offer invite-only curated shopping experiences.

 

There will be a better amalgamation of the physical and digital in stores with stores having tools where customers would be able compare online prices through digital kiosks.

 

New normal, new yardsticks

Digitization and omni channel retail are enabling retailers to be more engaged on a one-on-one level with their customers. This will replace standard sales-driven store metrics with newer ones that measure things like quality of time spent in a store. Positive in-store interactions will lead to digital sales and vice versa.

 

One of the yardsticks according to Ajay Mishra, Country Sales Leader – Productivity Solutions and Services- Honeywell India is going to be Consistent Revenue Generation per Store. “That is a dipstick of repeat customers and repeat category sales. That will only happen when people feel comfortable coming back to a store,” he said.

 

It will be crucial to improve and measure performance across all touch-points.

 

Good data, great practices

Digital channels have richer data points which will have to be leveraged at the storefront as well. With great data points comes greater responsibility, making ‘responsible’ usage of big data a crucial factor in business.

 

Retail technologists will have to craft technologies to ensure maximum privacy and security of consumer data. This change will also be driven by consumers. With data rights becoming common knowledge, it is set to become a huge buying differentiator in the coming times. Customers will not buy from retailers they don’t trust, even if their offerings are technologically more savvy. “If customers don’t trust the channels we create or the products we create, they’ll go back to old-fashioned ways of doing business,” said Mohit Gopal, Senior Vice President, PayU India

 

Affordability for all

Affordable technology solutions will play a huge role in democratizing experiences like loyalty programmes, bank-driven discounts, easy returns, EMIs options that only bigger players were able to offer earlier. They will become services that are ubiquitous to all retailers, irrespective of size.

 

Affordability will lead to increase in spending. “If affordability solutions are available with consumers, they will shop more, and the average ticket size will also increase,” said Mohit. He added that Fintech companies are looking at scaling such affordability solutions.

 

Affordable technologies for retailers and affordability solutions for customers — will become commonplace in the coming time. Retailers that don’t embrace these may struggle to woo customers.

 

Retail will continue to evolve. “Once we look at all of the changing dimensions, we will not just design but design for the future,” said Sushant Rabra, Partner - Digital Practice, KPMG India.

 

Also read: Tranform or be transformed

 

Image source: Freepik

 

Article & image source: STOrai Magazine

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.

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