NEW DELHI :
Physical and online retail will have to converge into a “phygital" model to cater to consumers, who increasingly shop on both mediums, Future Group chief executive officer Kishore Biyani said on Thursday.
Biyani, whose company runs some of the country’s largest retail stores such as Big Bazaar, EasyDay and Central, said a hybrid model is likely to help businesses going forward.
“I think physical has its own advantages and nuances and digital has its own advantages. Both happened in different eras—and they will meet. I think, in another three-four years, it will become “phygital" in a way, because every physical retailer will have to have a digital presence and even digital people will need to go physical. Ultimately, there will be two hybrid models that will emerge that will help the businesses perform better," he said.
He was speaking at a two-day event hosted by online retailer Amazon in the capital that saw its founder Jeff Bezos address an audience on Wednesday.
Biyani is expected to meet Bezos on Friday in Mumbai against the backdrop of Bezos’s commitment, made on Wednesday, to invest $1 billion in new money to help digitize India’s small and medium businesses.
Biyani’s Future Group and Amazon recently partnered in India after the American online retailer picked up a stake in Future Coupons, a Future Group entity. The two have also announced a distribution tie-up. Biyani has long been a champion of brick-and-mortar retail after successfully giving India one of its first department chains, Pantaloons, in the 1990s. Future Group sold a majority stake in Pantaloons in 2012, and it is now part of rival Aditya Birla Fashion and Retail Ltd.
However, Biyani, who belongs to a family of textile traders and started off by supplying textiles to garment makers, has dabbled in online commerce several times, but with limited success.
Future Group runs over 1,500 stores across 400 cities, selling brands and retail formats, such as Brand Factory, ALL and Fashion at Big Bazaar online. In fact, it has scaled back its online businesses. The group shuttered assisted e-commerce business Big Bazaar Direct in 2016 three years after launching it, as soaring costs made the business unsustainable. It also merged online furniture retailer FabFurnish with HomeTown in 2017.
But it has been stitching associations with online retailers as it seeks to participate in the country’s small but growing online retail market.
On Thursday, Biyani said e-commerce has changed the rules of engagement for retailers.
“Earlier the brand used to search for the customer. Today, the customer is searching for the brand. Because you (online retailers) have changed the rules of the game. Today, you can search for a product in which you discover a brand and once you start using it, you see the reviews, and ratings that are building a brand today," said Biyani, who was in a fireside chat with Amazon’s vice-president for seller services, Gopal Pillai.
He added that “the rules of engagement have changed and, I believe, brand building in itself will become very different than what it used to be. I think the new generation knows this much better than us. We have to learn from them how to build brands."