How The Digital Wave Is Accelerating Growth For Retail Industry
Currently, the Indian retail industry contributes more than 10% of the country’s GDP and around 8% of employment. Entry of new players in the Indian retail industry is growing at a speed that has never been witnessed before. It is expected to cross US$1.3 trillion by 2020 according to a report by Deloitte.*
It is expected that the Digital wave will further accelerate this growth by opening up new possibilities for disruptive consumer-oriented business and operational models.
The detailed version of the conversation is given below.
Every week we publish insights with a Q&A with CIOs, CTOs CMOs, and CXOs.
See the link to the previous LinkedIn Q&As by Indus Net Technologies at the bottom of this post.
Q1. Indian retail industry is expected to nearly double to US$ 1.3 trillion by 2020 from current US$ 672 billion. This is attracting new entrants who are offering disruptive customer-oriented services and operating models in which digital assets are playing an important role. How are you preparing yourself for this growth ride?
Globally retailers especially born of digital are reaching a realization that they need an integrated approach to achieve scale as well as get higher wallet share of the customer. Creating and sustaining for the long-term necessitates that the customer be served across channels consistently and this is evident from market moves of global players – Walmart going digital and Amazon going physical.
We are building capability to leverage our physical assets with digital enablement. Over the next 12 months, many of these will manifest themselves for our customers.
Q2. The death of omnichannel seems to have been greatly exaggerated. People and companies are stepping away from using that word, but they’re still subscribing to its values. Terminology aside, what do you think omnichannel means in 2018?
To us, omnichannel is all about engaging the customer at her terms on her choice of channel at a time convenient to her to offer our products and services that can be differentiated from our competitors at a value that makes it attractive for her to purchase. Once the transaction has been completed, to offer services that make us the first consideration set whenever she thinks of exploring any product/service that we have to offer.
Simply put connect the dots across all channels of communication and engagement with the customer.
Q3. Industry 4.0, or the fourth industrial revolution, is characterized by new technologies that blur the lines between physical and digital worlds—driving real-time access to new and existing data sources. Paired with powerful analytics tools, such as visualization, scenario analysis, and predictive learning algorithms, this access to data is fundamentally changing how companies operate. What are the technologies you see large retail chains using in the future?
For retail chains irrespective of size or format, it is important for them to evaluate potential disruption that a technology will create in the markets where they operate; not just tactically but also long-term. They need to think about the internal and external impact which results in increased customer conversion, revenue, profitability, efficiency and NPS (Net Promoter Score). Some will remain internal (e.g. Analytics or visualization, but they help in improved decision making which finally impacts customers).
Staying ahead of the curve is important; playing catch up can be expensive.
The list above is data-centric, I would recommend increasing the horizon.
Q4. What do you think is the most hyped up “digital technology” which may not deliver much compared to the hype that has been built around it through media and marketing?
I would probably list social media as the first one especially with the negative sentiment that has recently build up; even in the past people struggled to create models that would justify the investments made. Now they would be wary!
IoT is another one which is high on the hype curve – limited in its ability to create use cases that make commercial sense in retail.
Q5. The global retailers are increasingly using IoT for customer recognition, tracking store movement, etc. to understand the purchase patterns. Are you ready to explore IoT for generating these insights to take marketing decisions related to product display, placement, and personalization?
Customer recognition and tracking store movement using IoT? That would imply an embedded IoT solution and that will require explicit permission! Sensors to assess movement without recognition has value to high footfall stores or large stores to find out hot spots (concentration of customers in front of specific display or aisle); that will indeed influence product placement. Personalization requires identification and that as I said earlier would require customer consent.
Before IoT became a buzzword, retailers were using heat maps to analyse movement in the stores which was possible with cameras deployed across the store (primarily for surveillance though). This is, however, a scenario that played itself out in stores with limited staff; in India, almost all large format stores have Associates who can observe and make corrections quickly!
Q6. Artificial intelligence (AI) seems to be one of the core predictions for what retail and supply chain management will start relying on more in 2018. What is your take on AI tech in the supply chain as far as retailers and suppliers are going to use it?
Supply chain agility is a critical success factor for retail – to replenish quickly what is running out on the shelves. AI aids resolution, but then even TOC or Theory of Constraints does the same though with a very different solution. Linking demand to supply with high-velocity supply chain is the solution that every retailer will eventually end up adopting with or without AI.
Q7. How do you define the #DigitalSuccess of an initiative?
Baseline before getting started, it helps define success; technology-enabled process which improves the way we do business or creates a new offering to customers for me is #DigitalSuccess
Q8. Any advice or key learning that you may want to share with the fellow CIO/CTOs to achieve #DigitalSuccess in their business?
A few pointers:
- Stay focused on business outcomes
- Align leadership team to investment, return and #digitalsuccess
- Ensure process has been suitably modified to take advantage of digitally enablement (don’t automate an inefficient process)
- Understand impact across the chain – Customer Associates all the way to management, customers and finally the extended ecosystem (depending on the initiative)
- Demystify, simplify and communicate, communicate, communicate …
Q9. What is that one thing you do not want technology to change in the functioning of a Retail Business?
Personal touch with the customer!
I thank Arun, for his time and the key insights.
Read the past LinkedIn Q&A’s below:
- With Anil Kumar Singh, Director and CIO of DiGi-Agro Consulting and ex-CIO of Krishak Bharati Co-Operative Limited
- With Ranjit Satyanath, CIO of Infiniti Retail Ltd. (Croma)
- With Priya Dar, CIO, and Head of Digital Practice, Godfrey Phillips India Ltd.
- With Arvind Kumar, CIO, General Manager – IT, Elior India
At Indus Net Technologies we are creating #DigitalSuccess for global customers. We are always ready to hear from leaders on their plans to create #DigitalSuccess.
Start a conversation. Send me a message on LinkedIn!
*Source – https://bit.ly/2HE7zew
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