Retail chains bet big on online presence as sales in stores see a drop

‘Click & Collect’, ‘Ship from Store’ and ‘Endless Aisles’, seem to be the new buzzwords for brick-and-mortar retailers. These are terms being used by offline retailers to explain their recent move to increase investments into the online space by adopting an omni-channel strategy.

Retail chains like Shoppers Stop, Tata-owned Croma, Reliance Retail and ITC show a range of products with different variants online, but may not stock all of it on their offline floors. This helps them cut down on real estate costs and allows consumers to order products of their choice.

They are doing this because sales have been affected for such retailers in categories like apparel and electronics, by e-commerce players. Retailers say that investments into technology will be an enabler for them to achieve a level playing field with e-commerce players. Avijit Mitra, CEO of Infiniti Retail, which runs largest electronics retail chain Croma, says omni-channel retail has the potential to grow as the seamless integration of online and offline will help achieve better space optimisation, faster delivery and also quicker after-sales service.

Croma has recently piloted endless aisle in store. The feature enables a customer to order from the croma.com range in the physical store by asking sales staff to place the order on croma.com .

Explaining the concept of endless aisle, Mitra says, “Suppose, we have 30 products, we can all online but stock only a few in stores. This is what we call ‘endless aisle’. We can show the products and have it delivered. While in the physical store you get the experiential aspect, in the online space, we give the range.”

Shoppers Stop has tied up with SAP Hybris to boost the omni-channel strategy. Shoppers Stop said it plans to invest ₹60 crores over the next three years in its omni-channel technology, supply chain and talent.

Shopper Stop added that it will extend its omni-channel strategy to its group companies HomeStop, Hypercity and Crossword. By 2020, the company targets to achieve 15 per cent revenue through digital-touch points.

Govind Shrikhande, MD of Shoppers Stop, said, “Among the top global retailers, nine out of 10 are brick-and-mortar players who have evolved into omni-channel entities. We plan to invest about ₹60 crores in our omni-channel efforts.”

Reliance Retail, too, said it would be launching omni-channel shopping. The company, which operates its business under five core formats – Value Formats and others, Fashion and Lifestyle, Digital, Brands, and Jewellery – has already launch e-commerce operations for its Value format through reliancefreshdirect.com on a pilot basis.

“This year will bring about a disruptive shopping experience for consumers as they embrace technology and get access to ‘anytime, anywhere’ shopping. With advanced Internet infrastructure built by Jio and a robust physical retail business built by Reliance Retail, we will create a differentiated e-commerce model for India,” Mukesh Ambani, Chairman of Reliance Industries said at the company’s AGM.

Arvind Singhal, Chairman of retail consultancy Technopak, points out that for omni-channel retail to function effectively, the experience has to be seamless and retailers must invest heavily in technology.