Retail 3.0: The emergence of the omni channel in 2017
While the roll out of GST did have an impact on consumption at retail stores, the biggest trend in the Indian retail industry in 2017 was inarguably the emergence of the omni-channel business model
- Dec 31, 2017,
- Updated Dec 31, 2017 10:43 AM IST
While the roll out of GST did have an impact on consumption at retail stores, the biggest trend in the Indian retail industry in 2017 was inarguably the emergence of the omni-channel business model (where a retail brand had both an offline as well as an online presence). And, the omni-channel model was not restricted to the physical retailers alone, but the large online stores too saw merit in having a physical presence.
So, Amazon India picked up a 5% stake in Shoppers Stop for Rs 179.25 crore, and more recently, Flipkart's fashion arm, Myntra has announced that it would be launching physical stores to retail it's private brands Roadster, HRX and All About You.
While single brand online retailers such as furniture, jewellery, eye-wear and beauty brands had already moved into the physical space, this year saw the market places moving into physical retail, a trend which has already taken place in the matured markets with the likes of Amazon and Alibaba picking up stakes in large physical departmental stores. In fact Walmart's omni-channel model has been giving Amazon a serious run for its money in the US.
The fact that consumers want to touch and feel the products they buy as much as they want to shop within the comforts of their home has compelled retailers to embark upon a multi-prong retail strategy. The physical stores also serve as a distribution hub, and thereby help reducing costs. So, if a consumer wants to exchange a product, she has the option of going to the nearest store to return the product she has bought online, browse through other options at the physical store, even try it out (in case of categories such as apparel, footwear etc) and then buy a product of her choice.
Apart from online retailers bleeding profusely because of deep discounting, the practice of offering free delivery and free returns which most online retailers are practising to acquire customers has also become a huge pain point.
So, while Shoppers Stop will sell its 400-odd brands on Amazon, the latter will get space to set up experience centres at Shoppers Stop outlets to promote its fashion brands. By selling through Amazon, Shoppers Stop can now reach to far-flung areas of the country where setting up stores wouldn't have been economically viable for the country.
Retail King, Kishore Biyani's Big Bang announcement of his company's Retail 3.0 plan obviously grabbed maximum headlines this year. After making several failed attempts in online retail, Biyani now plans to set up 10,000 technology empowered EasyDay stores in the next few years. He plans to have at least 2,000 members per store to whom he will offer the whole works of retail solutions so that those members don't need to go to any other neighbourhood store to fulfil their needs. Future Retail would offer them 10% discount on all products and it will also offer them credit facilities. The EasyDay stores will be like a marketplace, which would enable the consumers to access the company's entire inventory. He hopes to become a Rs1.5-trillion company by 2022 by blending online and offline retail.
The country's most valuable retailer, D'Mart, has also set out on its omni-channel journey. It has set up small D'Mart Ready stores across Mumbai, from where customers can pick up the products they have ordered online. They can even get their ordered home delivered, but at an additional cost. Radhakrishna Damani is known for building simple, low cost businesses and there is no way he would add unnecessary costs to his P&L by offering free home delivery.
While most Indian retailers have set out on the omni-channel journey, will it work, will it be profitable? No one in the industry has answer, as all of them are still experimenting the model.
While the roll out of GST did have an impact on consumption at retail stores, the biggest trend in the Indian retail industry in 2017 was inarguably the emergence of the omni-channel business model (where a retail brand had both an offline as well as an online presence). And, the omni-channel model was not restricted to the physical retailers alone, but the large online stores too saw merit in having a physical presence.
So, Amazon India picked up a 5% stake in Shoppers Stop for Rs 179.25 crore, and more recently, Flipkart's fashion arm, Myntra has announced that it would be launching physical stores to retail it's private brands Roadster, HRX and All About You.
While single brand online retailers such as furniture, jewellery, eye-wear and beauty brands had already moved into the physical space, this year saw the market places moving into physical retail, a trend which has already taken place in the matured markets with the likes of Amazon and Alibaba picking up stakes in large physical departmental stores. In fact Walmart's omni-channel model has been giving Amazon a serious run for its money in the US.
The fact that consumers want to touch and feel the products they buy as much as they want to shop within the comforts of their home has compelled retailers to embark upon a multi-prong retail strategy. The physical stores also serve as a distribution hub, and thereby help reducing costs. So, if a consumer wants to exchange a product, she has the option of going to the nearest store to return the product she has bought online, browse through other options at the physical store, even try it out (in case of categories such as apparel, footwear etc) and then buy a product of her choice.
Apart from online retailers bleeding profusely because of deep discounting, the practice of offering free delivery and free returns which most online retailers are practising to acquire customers has also become a huge pain point.
So, while Shoppers Stop will sell its 400-odd brands on Amazon, the latter will get space to set up experience centres at Shoppers Stop outlets to promote its fashion brands. By selling through Amazon, Shoppers Stop can now reach to far-flung areas of the country where setting up stores wouldn't have been economically viable for the country.
Retail King, Kishore Biyani's Big Bang announcement of his company's Retail 3.0 plan obviously grabbed maximum headlines this year. After making several failed attempts in online retail, Biyani now plans to set up 10,000 technology empowered EasyDay stores in the next few years. He plans to have at least 2,000 members per store to whom he will offer the whole works of retail solutions so that those members don't need to go to any other neighbourhood store to fulfil their needs. Future Retail would offer them 10% discount on all products and it will also offer them credit facilities. The EasyDay stores will be like a marketplace, which would enable the consumers to access the company's entire inventory. He hopes to become a Rs1.5-trillion company by 2022 by blending online and offline retail.
The country's most valuable retailer, D'Mart, has also set out on its omni-channel journey. It has set up small D'Mart Ready stores across Mumbai, from where customers can pick up the products they have ordered online. They can even get their ordered home delivered, but at an additional cost. Radhakrishna Damani is known for building simple, low cost businesses and there is no way he would add unnecessary costs to his P&L by offering free home delivery.
While most Indian retailers have set out on the omni-channel journey, will it work, will it be profitable? No one in the industry has answer, as all of them are still experimenting the model.