Omni-channel: Understanding issues involved in convergence of retail channels in India

How about you notice a dress on facebook page of a retailer, order it from your phone, pick up through a brick and mortar store, and if necessary leave a message for returning it online or returning it from drop-off point in a near kiosk. Simultaneously, getting a message on your mobile regarding personalized offers and recommendations based on your likes and preferences and also getting help to navigate the store to find what you like. As a customer, it sounds interesting but is it a reality.

Yes, the 'omni-channel' is the latest strategic trend which has become abuzz in Indian retail industry. Broadly this term signifies convergence of all platforms, be it online, offline or through mobile phones. Omni-channel provides retailers with a single view of customer and creates a seamless shopping experience for customers across all possible platforms. Retailers have started to realize that regardless of whether shopping is done online or in offline stores the brand experience, merchandise, and promotions   should be consistent across all retail channels. The omnichannel strategy pivots on the idea that providing a seamless shopping experience in offline stores and through a variety of digital channels not only segregates retailers from their peers, but also gives them a competitive edge over online-only retailers by leveraging their store assets.

Currently, most of Indian retailers operate in silos with no consideration on how one channel affects the others. They provide isolated customer experience that is mainly channel driven not capability and customer driven. But with omni-channel coming of age, retailers are now embracing new strategies to ensure its success by integrating those silos. Major retailers' in India are started to build their omni-channel capabilities by keeping the customer at the focal point. According to recent report in 2017 (Retailers Association of India and digital marketing agency ValueFirst report ), the size of modern retail in India is expected to double from $13 billion to $25.7 billion in three years which is driven by omni-channel retail.

Shoppers Stop hopes to complete its INR 60 crores Omni channel project by 2017. Tata Group's retail arm Infinity Retail has started converging its online and offline stores by allowing customers to pick up, return or exchange the products in the stores which are purchased online. In June, 2017 the group has bought Gurgaon-based GrocerMax to enter the online grocery business. This new venture will help to set up the online platform for Trent Hypermarket, an equal joint venture between Tata and British retailer Tesco. Reliance Retail has also entered into the omni-channel retailing across all verticals. It has already forayed into online channel through reliancefreshdirect.com.  Apart from these, players like Madura Fashion and Lifestyle, GKB Opticals, Adidas and many more retailers are aiming to converge various shopping platforms in near future.

Omni-channel strategies can help retailers to offer tailored promotions or discounts, drive loyalty and increase revenues. This is supported by findings of a study conducted by Retail Systems Research on Omni-Channel, which points out that 47% of retailers consider that multi-channel customers are substantially more profitable than single channel customers.  

It seems to be a stimulating time in Indian retail scenario as retailers are realising the growth opportunities by upgrading omni-channel capabilities. But the success and failure of omni-channel strategies relies on its impeccable execution. Looking at the prospects of omni-channel, retailers are planning to make investments in new technologies and building on their capabilities. But all this investment may be at the toss if retailers do not pay attention towards certain critical issues like training, compliance, governance and process re-engineering.

Retailers are required to go beyond the technology to store operations and include a new level of real time interaction management, analytics, and customer communications management. It may be difficult for the retailers to develop and deliver such leading-edge omni-channel capabilities, measure and track customer engagement across channel. But as some retailers can do it, customers will be conditioned to expect it.  Thus, retailers will be expected to create a cohesive customer capability layer that enables consistent branding and experiences. Apart from this, retailers must develop their customer related capabilities for providing personalization, which entails a deep understanding of customer groups, cultivate a holistic strategy to target, engage and reward selected behaviours.

To encounter these challenges, retailers are required to focus on sense and response intelligence and location based services like RFID, near field communication (NFC) and payment, iBeacon etc. Retailer are also required to empower associates with in-store task management solutions to engage and serve customers effectively. These real time tools allow retailers to create, assign, allocate and control tasks for providing more meaningful personalized in-store experience and increased customer satisfaction. Retailers are expected to redesign stores to be an omni-channel hub and to bring the web and mobile experience into the store so that customers can perform all the functions across channels. Lack of strong integration between all systems that deal with omni-channel capabilities impedes a single view and seamless customer engagement.

(The writer is Associate Professor (Marketing) at Institute of Management Technology, Ghaziabad.)