India in 10 years: The omnichannel future of retail
In today’s world, retail is split into two distinct categories—brick and mortar and e-commerce. Over the next 10 years these two worlds will begin to merge and it will be difficult to tell where one ends and the other begins.
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In today’s world, retail is split into two distinct categories—brick and mortar and e-commerce. It is my belief that over the next 10 years these two worlds will begin to merge and it will be difficult to tell where one ends and the other begins. Each of these worlds has its own strengths and is very good at delivering value in its own way. Brick-and-mortar retail gives customers the touch and feel of products and the feel-good experience of living the brand. E-commerce offers greater choice, convenience and value. While each of them is delivering to its own strengths, they both fall short of delivering the perfect customer experience.
Physical retail doesn’t give you the personal touch that a one-to-one customized page on your favourite portal can, while buying online still puts you through the hassle of returns and size mismatches. Imagine a world where the best of both mediums come together to offer a truly seamless brand experience to customers. That is the world of tomorrow.
As custodians of brands, we at Arvind Ltd have built India’s favourite brands over the last three decades. As modern retail has evolved at a rapid pace, the channels of retail have also evolved. We have moved from multi-brand mom-and-pop stores to stand-alone experience stores, to department stores, and now the online channel. The fundamental role of retail across channels is to get the product to the customer in the best way possible, maximizing convenience and experience. By splitting inventory across these channels, however, we are creating inefficiency and bad customer experience. On the physical retail side, we have inventory piling up in some stores while we are out of stock in others. We only offer 5-10% of our range as the physical store can only stock limited quantities. On the online side, we offer only a fraction of the inventory; most often, inventory that is more than six months old. This creates a situation where physical stores lose out on the sales required to be profitable while online suffers from high logistics costs, high returns and excessive dependency on discounting. All of this can be solved by bringing the two worlds together.
The physical store of tomorrow will no longer be just a point of sale. It will be a true experience zone, where technology will be used to transform customer journeys. Personalized service and recommendations through location-based applications, digital surfaces that will help you select from endless options, single-click payments, quick home delivery to nearby locations, integration to online portals, buy-online pick-up in store…these will be some of the features that physical retail will offer. Transforming an experience where you are one amongst a thousand, to an experience that caters for you and only you.
On the online side, brands will need to learn how to reach out to digital natives and make them transact without deep discounting. It will mean improving the experience of buying online through a better offering, engaging content and increasing convenience through quick delivery and easy returns. For this to become a reality, brands will need to work strategically with online marketplaces and strategically open up their inventory rather than use the online channel as a liquidation medium.
The merger of these two worlds is what omnichannel commerce is all about and that is the focus area of Arvind Internet, our digital subsidiary. By investing in a tech stack that helps digitize retail stores and connect them to the online world, Arvind Internet is already India’s largest transacting omnichannel platform. Our ultimate aim is for our customers to enjoy experiencing their favourite brands across channels in a seamless way, and we will continue to invest our time and effort in creating richer and more fulfilling journeys for them. As far as we are concerned, the digital journey has just begun and we look forward to staying at the frontier of innovation and shaping our omnichannel future.
Kulin Lalbhai is executive director, Arvind Ltd
This is part of a series of articles in Mint’s 10th anniversary special issue that look at India 10 years from now. The entire list of articles can be found here