Bengaluru: Fashion retail company Max Fashion Retail (Retail World Ltd) is launching a new omnicommerce channel, which will allow users to place an online order within the store using digital kiosks, and have it delivered to their doorsteps, executive director Vasanth Kumar said in an interview.

The retailer is targeting generating 5% of its revenue from the new omnichannel business in the next one year.

The company has deployed the omnichannel strategy in 10 stores across Bengaluru in a tie-up with e-commerce solutions provider Ace Turtle. The order processing, back-end technology stack and logistics support will be provided by Ace Turtle. Sales representatives at the store are also equipped with tablets to assist customers to choose their clothes.

Digital kiosks set-up inside Max stores will enable users to browse through the entire fashion inventory currently available at the store, as well inventory available in other Max stores in Bengaluru, Kumar said. All orders are delivered free of cost with no minimum order value. “In the three months we tested it (omnichannel strategy), we were able to get around Rs1,000 per order," Kumar added.

With the omnichannel strategy Max Fashion will be able to cut the shortage of product varieties at physical stores and increase retail conversion rates. According to Nitin Chhabra, chief executive officer of Ace Turtle, retail fashion stores usually have a conversion rate of anywhere between 18% and 30%. This means that out of 100 customers, only 18 to 30 customers end up purchasing goods.

The main reasons for low amount of retail conversions include non-availability of right size or colour at the store, and shortage of inventory. “In stores, we have challenge in terms of stock availability and also offering variety since, we keep introducing a new range every alternate month. So when the stock gets consumed, some customers find that they don’t have the perfect fitting size or colour of their choice. With the new strategy, we have networked the entire store inventory from 10 stores in Bangalore into the kiosk," Kumar added.

Typically, a Max store has around 40,000 Stock Keeping Units (SKUs) in its local warehouse. A stock keeping unit is a number assigned to every product range available at a retail store. By connecting inventory from all 10 stores, Max is able to expand the available inventory at digital kiosks to 100,000 SKUs. So when a user browses through clothes at a physical kiosk at Max, he is basically looking at inventory from nine other stores.

In addition, Max has also curated ‘looks’—combination of clothing styles—at the digital kiosk, to help customers choose products faster. “We are coming up with 200 new looks for our omnichannel customers by end of next month across categories like sports, formals, casuals, and others" Kumar said.

Several e-tailers including online furniture company Pepperfry, eye-wear brand Lenskart, and lingerie brand Zivame have opened brick and mortar stores realizing the opportunity in offline retail. According to India Retail Ecommerce 2016 report by eMarketer, retail e-commerce accounted for around 2.5% of total retail sales in 2016 and is expected touch just 5.0% by 2020. China, on the other hand, had a retail e-commerce share of around 18.4% in 2016.

In November, Future Group, which owns own retail chains like BigBazaar and EasyDay stores, unveiled an omnichannel strategy. It partnered with seven start-ups in artificial intelligence, machine learning, and voice recognition to build its new strategy. Mint reported in October that Amazon India is also looking to partner with large offline fashion brands and make investments in offline retailers in India.

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