With the introduction of online stores, the retail industry, especially in India, has undergone a tectonic shift and has become an exciting sector to work in — offline stores try to create a space for themselves online and, in a new trend, online stores are starting to open brick-and-mortar ones. Case in point: Amazon bookstores in the US.
The Madras Management Association’s 16th MMA All-India Management Students Convention 2017 in Chennai centred on this dynamic industry. The theme of the conference, that opened to a packed auditorium in Kamarajar Arangam, was ‘The Changing Face of Retail’.
Organised retail
The first business session was on ‘Changing Landscape of Organised Retailing’, chaired by C Siva Kumar, Managing Partner of Prabha Associates. Sadashiv Naik, CEO of Big Bazaar, and Vasanth Kumar M, Executive Director of Max Fashions, spoke about their stores and how they’re trying to keep up with consumers’ changing tastes. While Big Bazaar aims to make shopping experiential, Max hopes to attract young, fashionable customers through its digital fashion ecosystem — contest, blogs and beauty videos.
At the end of the session, students had interesting questions, such as, “If I get a US Polo shirt from, say, Jabong, and get it at a 70 per cent + 20 per cent discount, I would choose that over going to retail store. How would you address this?”
To which, Vasanth Kumar explained, “We believe in our brand positioning, which is staying away from discounts and giving consumers good products at a reasonable price. The online world will continue to be discounted. We don’t have to run behind every sale that takes place.”
Sadashiv added, “There are two types of customers. One, those who prefer discounted, branded products. And, two, the ones who value consistent products delivered at a good price. We need to be confident of our brand positioning.”
About the future
The second business session was on a topic that, despite being conducted after lunch, held students’ attention — ‘The Emerging Landscape of E-Retailing’. TN Swaminathan, professor of marketing from Great Lakes Institute of Management, Chennai, was the session’s chairman, and the speakers were Rajiv Srivatsa, Co-Founder and CPTO of Urban Ladder, and Manikandan Thangarathnam, Director of Software App Store, Amazon Development Centre, India.
Manikandan introduced the students to the wonders of technology that Amazon is currently employing. For instance, using robots in its warehouses to handle the large volumes; 30-minute delivery, where drones are used to deliver products; placing orders by verbally asking Alexa, Amazon’s virtual assistant; Amazon Go (already in operation in Seattle), where one can just walk in and buy groceries; and Amazon dash button, where, by pressing a button, you can order items that you have preselected from the company website.
Rajiv spoke to the students about nine ways e-retailing has changed since 2010 — trends that have happened in last seven years and will take place in the next three.
1) From standard to lifestyle : One of the first big shifts in e-retailing was online retail moving away from just selling standardised items to lifestyle products. Till 2011 or so, a lot websites used to sell books, mobile phones and electronic items. But then, lifestyle products entered the fray, including fashion, shoes, jewellery, and furniture, to name a few.
2) From marketplaces to brands : Marketplaces are those that allow for vendors and sellers to offer their products to customers. Amazon and Flipkart are the most common examples. But what do companies do when they want to go solo?
They build brands, and lifestyle brands at that. Companies such as Apple, Urban Ladder, Xiaomi, and Dollar Shave Club are a few examples where the brand has got its own marketplace. It has a brand that takes care of everything from manufacturing to selling products. What all these companies show is that it is not just marketplaces that have power — brands too can be built.
But as a company, you have to be sure whether you are a marketplace or a brand — you can’t be in the middle.
3) Search to 360 degrees marketing : Six to seven years ago, all product-selling on the internet was happening through Google. You typed in what you’re looking for, and the first link you saw would have been the one you would click on and buy.
Now, in the last four-five years, almost every single channel has been integrated. You can now see ads on Facebook, Instagram, YouTube and they aren’t different. Except for being customised for a particular platform, the messages are the same across these mediums.
Another fantastic marketing tool is the use of retargeting, where, if you visit Urban Ladder site and check out a product, you will see its ads on Facebook and pretty much everywhere you surf. It is annoying, but it also very effective.
4) Desktop to mobile shopping : Two to three years back, if you told people that you sell a sofa through a mobile phone, people would gawk. Today, 35-37 per cent of our business is done on mobile — and these are sofas, beds and dining tables worth ₹40,000! That's a huge evolution.
5) One week delivery to same-day delivery : In the last year and a half, Amazon and Flipkart started their prime service and its equivalent, Assured, which made same-day or next-day delivery possible. Customers have now come to expect it when they place an order online.
Earlier, companies would work with third-party logistics providers. Now, the whole operation has shifted to companies holding their own logistics arms. Logistics and operations is now one of the biggest areas MBAs could look at for career options.
6) Personalised to all recommendations : A few years back, if you saw a product, you would be shown other items that are similar to the ones you browsed. Today, recommendations are moving to systems that can identify who you are, what stage of life you are in and even which city you come from. They will then compute patterns in the background and show products or movies relevant to your mood or age segment.
This is thanks to a bunch of data and systems that take place at the back end. One of the biggest fields for MBAs in the next 15-20 years will be the fusion of data, analytics and artificial intelligence.
7) O2O to Omni channels : O2O used to mean offline to online, where you had all old-school companies trying to set up their websites and sell products online. But companies in the offline world are certainly not that adept at doing online stuff.
In the last year-and-a-half, a trend has emerged where a new wave of online companies are going offline. Amazon has set up a store in Seattle to sell books; and we opened our first store in Bangalore two months back. How online companies look at offline is very different. As there is plenty of data from customers interacting online; this can be translated to improve how customers’ experience can be guided offline.
Because we have a ton of data from customers interacting with us online, we can translate it to improve how customers and their experiences can be guided offline.
8) Humans to drones and robots : What is happening and will get more popular is heavy manpower in warehouses and deliveries being replaced by machines and robots. You might wonder what you can do in such a situation, but the thing is, if you are working in the field of operations, there is a huge amount of activity in terms of programming the robots or planning the automation.
9) Store and web to AR and VR : Virtual reality and augmented realities are the next big thing in the technological world. You have to look at VR as a space that is very similar to how mobile phones were in 2007, when not everyone had a mobile phone, and even if they did, it was probably a basic feature phone. But now, it’s an integral part of our lives.
We’ll have to assume that VR will also go through a similar phenomenon in the next four to five years. And soon, buying products via AR and VR will be a reality.