Savvy brands and retailers had started adopting multichannel strategies before covid, but the pandemic has made it a key differentiator
Despite a dire outlook for retail in general in the pandemic year, American retail giant Target Corporation belied expectations in its third-quarter results announced last month. Its sales grew nearly 21%, with a 155% growth in digital sales, compared to the same period the previous year. The MNC gained over $6 billion in market share.
It illustrates how a well-prepared organization can come out stronger than its peers in tough times. “Our results in 2020 reflect the benefits of our flexible model, with a suite of fulfilment options," said Target’s chairman and CEO Brian Cornell in a call with CNBC on the eye-popping numbers.
The flexibility refers to an intelligent mesh of online and offline operations. So, even as digital sales grew strongly with consumers shifting to online purchases, 95% of Target sales were fulfilled by its stores. Same-day services, including order pickups and drive-ups, grew 217%. And offline store sales actually grew 10% at a time when brick-and-mortar had been written off.
Savvy brands and retailers had started adopting multichannel strategies before covid, but the pandemic has made it a key differentiator. And smack in the middle of this opportunity sits Bengaluru-based retail tech startup Ace Turtle, which has been working with global brands like Puma, Fossil and Ray Ban to integrate their offline and online channels.
Puma was one of the early adopters of Ace Turtle’s Rubicon platform, which combines routing of orders received over multiple channels with catalogue, inventory and logistics management for streamlined fulfilment. Customer data tracking and analysis also become more powerful with digitization and a single platform. This engagement got deeper during the pandemic.
“We have been using the Rubicon platform for five years, from almost its inception. This year, outreach from our offline stores to our customers has been very important, giving them the option of not having to come to our stores and yet having a connection at the hyperlocal level. Ace Turtle’s solutions for this have been very effective, such as in WhatsApp commerce. Customers can discover a product on the chat platform and then connect one-on-one with the store team closest to their location," says Abhishek Ganguly, managing director of Puma India.
Ganguly points out the difference between such an assisted purchase, supported by the store team, and an e-commerce purchase that’s simply delivered by a fulfilment centre. The store still maintains a close customer connection in the omnichannel solution, while providing customers with new conveniences required by the pandemic.
“Today, one has to be extremely flexible and nimble in solving for a customer’s new needs. Being in Bengaluru helps us in doing that because we have been working closely with a number of startups," says Ganguly.
“The initial results with WhatsApp commerce for Puma have been good, but I think we still have a long way to go," says Ace Turtle’s co-founder and CEO Nitin Chhabra. “For example, personalization is very important on a messaging platform like WhatsApp, where the customer is in a hurry. If you show her a catalogue of 500 products there, she’s not interested. But if you show her the 10 which are most relevant for her, conversions are better."
For Ace Turtle, the pandemic has brought about a sea change in its business dynamics. “Omnichannel or retail tech used to be a lot of boardroom talk. It was good for presentations but adoption was very slow in the pre-covid era," says Chhabra.
“One of the main reasons was that most retailers were using legacy systems that didn’t have APIs (application programming interfaces). They were not real time and data accuracy was suspect. Today, you need systems that talk to each other but retailers were unwilling to invest in upgrading systems."
That has changed fast in the post-covid era, as change management is now being driven from the top, with buy-in from CEOs.
“Suddenly, after the lockdowns, we had a lot of new clients and the existing ones wanted to scale up. And everybody wanted to go live ‘tomorrow’. So, we looked at the whole integration process (with the client’s systems, vendors, logi-stics providers etc.). Now, we are able to do onboarding in less than four weeks compared to two-three months earlier," says Chhabra.
Ace Turtle, which already had a presence in Southeast Asia apart from India before covid, expanded to West Asia this year. Deployment in markets like the UAE have, in fact, been faster than in India, he says. That’s because brands mostly sell through their own retail outlets, with hardly any wholesale distributors in the middle creating channel conflicts.
“In India, there are multiple models running, so each one’s omnichannel journey is different."
Sumit Chakraberty is a Consulting Editor with Mint. Write to him at email@example.com