RetailTech: The Next Hot Spot
Technology in the retail space is still largely untapped unlike those in FinTech, EdTech, HealthTech and MarTech. The biggest challenge is that Indian retail is still dominated by the traditional kirana store where technology for most still means acceptance of digital payments like Paytm or Google Pay. Very little tech enablement has happened in merchandising, stock management, customer insights and loyalty.
RetailTech - the field of retail technology, which encompasses a broad array of tools that help retailers manage their operations, is growing rapidly. It is a term for solutions that enable all retailers: brick-and-mortar, e-commerce, large format or traditional mom-n-pop - to manage and optimize operations. These tech tools help retailers increase revenues, reduce costs and improve customer experience.
This space is ripe for disruption, given the rapid expansion of broadband, the penetration of smart phones and the fact that apps like WhatsApp already have over 450 million users in India. Today even a consumer who makes basic purchases at a kirana store is likely to have a smart phone and even if she does not have an e-commerce app downloaded, she can easily make her choice clear through a WhatsApp message to the retailer. With voice gaining traction – this will soon move to voice messages overcoming the issue of literacy and language.
Marrying Technology With Scale
However the biggest challenge remains retail fragmentation with India having over 12 million retailers of various hues and technology capability. For a pan-India player to emerge it will take huge upfront investments and the ability to consolidate vast amounts of stand-alone stores with a common solution. Presently RetailTech players in India cater to a small and mostly organized segment. The big disruption will happen when RetailTech begins to solve for India’s larger retail universe – the traditional standalone neighbourhood convenience store.
Most mass retail brands are now reworking their distribution to deliver an omni channel experience that will entail a significant digital component. They recognize that technology tools will help increase revenues, drive down costs, and impact key metrics like improving customer satisfaction, decreasing returns, or increasing conversion rates. There is a great opportunity for both – traditional retail solution providers and retail technology solution providers to collaborate. We are well passed the tipping point as most consumers at physical retail are already equipped with a smart phone. So seamless retail solutions that help a consumer during his shopping will be welcomed and used extensively.
Using Tech To Improve Customer Experience
Increasingly, consumers are seeking a retail experience that is personalised and anchored in the Indian reality. To make a meaningful difference it is important to radically improve the customer experience without taking away from personalisation. E-Commerce in India made the big leap when they began cash-on-delivery, connectivity to mobile wallets, and no-questions-asked returns.
An excellent example of retail tech deployment is from the Nike Speed Shop in New York which allows customers to reserve shoes online to try on in-store. Customers can arrive to find a locker with their name on, which can be unlocked via their smartphone. Mobile check-out is also available, meaning customers do not even need to speak to anyone or stand in a queue, if they want to buy the shoes in question. The ultimate in convenience shopping
Some of the technology that will see rapid absorption will be around retailers using augmented and virtual reality (AR/VR) technology to help customers interact with their products remotely and make more informed purchases. Indian eyewear retail chain Lenskart has used AR to launch a virtual trial feature in stores. This – besides being wonderful for customers to see themselves with multiple pairs of glasses - has helped them ensure a great customer experience across both physical and digital stores.
Incorporation of digital payments to prevent time lost at check out and even cashier less stores - cameras, machine vision, IoT, NFC and RFID tech can track shoppers throughout the store and charge them automatically for items they pick up, eliminating the need for cashiers and checkout counters. So no checkout lines, reduced staff and data on shopper behaviour and movement within a store that will help the retailer make decisions that can better align their offerings with consumer behaviour.
Making Shopping Seamless And Retail Efficient
Omni-channel shopping is no longer a choice. COVID-19 has made online purchase, digital payments and contactless delivery an imperative during the lockdown – just as remote medical consultations and on-line education have become commonplace. Consumers who visited stores for standardised packaged goods now find it far more convenient to purchase them from their phones.
There is a plethora of data being collected, but not enough done analysing and using the data to solve problems or find new solutions. With predictive analytics this can change. Retailers can now proactively analyse consumer behaviour and trends from the past. They can now better understand consumer purchasing behaviour, personalize the shopping experience and address a consumer's needs based on where they are in the customer journey thus improving efficiencies dramatically. Predictive analytics helps retailers be smarter, more efficient, and reduce costs.
There is also an opportunity in aggregation by building efficiencies across thousands of independent stores by leveraging data to create network economy and scale across supply chain, procurement, distribution, and logistics for a network of retailers. India is on the threshold of a retail revolution and RetailTech can lead the way.
