Indian Retail in 2023 would have to cater to the need for instant gratification that has been further intensified by same-day delivery promise, and hyper-local operators. Ironically, this is not a new trend.
For ages the neighborhood kiranas have offered instant delivery to their loyal customer base, even sourcing products not in stock. However, technology has broad-based this trend.
Data and its use
Despite the hue and cry about privacy, the fact remains that we are very generous with our data. Most smartphone users have hundreds of apps and I doubt if they know the extent of permissions given to these apps. The phone can pretty much eavesdrop on your real life and phone conversations. If you think I am exaggerating, consider this example; While using the Google Maps application, I decided to switch off the data as I had a pretty good idea about the route. Even without data, the Maps app continued to show the directions!
This generous sharing of data is essentially enabling retailers to understand every facet of a shopper’s behaviour, and even influence purchase.
Amazon had filed for a patent way back in 2012 for anticipatory package shipping. In simpler terms this means that the shopper’s purchase can be “predicted”. That is why the term predictive picking has been in use wherein the retailer gets a product ready for dispatch based on anticipation of purchase.
Machine learning, AI and Analytics
Machine learning from trends, AI and related analytics can not only influence shopping behaviour but have immense potential in managing a lean and mean supply chain. A retailer makes more money when he carries less inventory but generates high sales, therefore rotating his working capital in a profitable manner.
The Covid disruption to supply chains across the world has only underscored the importance of using such technology for managing an efficient supply chain regardless of where the sourcing is being done. An in-depth understanding of sales patterns and analytics pertaining to the same would not only help in supply chain management but also help in deciding dark store locations and layouts, redefining a ‘hub & spoke’ model, helping redesign store layouts, and managing staffing in an efficient manner.
However, in the Indian context there are two constraints. First is the validity and accuracy of several datasets required for such analytics. Second is the willingness to walk in that direction. Most retailers have reward points and rarely use the data generated from such loyalty programmes.
Multi-channel retail
Today, everyone claims to be on the journey to be an omni-channel retailer. The reality is that most of these claimants are operating as multichannel retailers. This means that they have an offline and online presence with some minimal interface and integration between these two. True, omni-channel should offer the BAFARA – ‘Buy Anywhere - Fulfil Anywhere - Return/ Replace Anywhere’ value proposition to a shopper.
An example of a true omni-channel would be as follows - Assume that I forgot to pack a formal shirt and I placed an order for a shirt on the app on my way to the airport. The delivery of this is to be done to the hotel I am staying in at my destination. So, I bought it on my way to the airport in one city and the fulfilment is going to happen in another city. Once I receive the delivery, I discover that it’s the wrong size. In this situation I should have the flexibility to get it replaced immediately by going across to their store and exchanging it.
As of now, shoppers in India have the option of multi-channel options and even there, the shoppers have split their purchases across channels. Functional purchases have gone back to the trusted kirana or a default shopping list from an online retailer. Experiential shopping is still drawing shoppers to the stores and malls. This is bound to continue in 2023 and even beyond.
the big dream
Open Network for Digital Commerce (ONDC) is a mega and ambitious project. The idea is filled with possibilities and the pilot rollouts happening across the country are interesting experiments. Will this become a mega online platform and displace known online retail giants? We have to wait and watch.
V Rajesh is a Retail and Shopper Behaviour Expert who has authored several books, such as ‘The Indian reTales’, ‘Out Of Syllabus’ , ‘Break Free’ and ‘The Ultimate Guide to Smart Shopping’