In Retail Vs Etail War, Tech Counters to Keep Ringing
Offline retail giants are
increasingly investing in omni-channel push to keep up with times
Brick-and-mortar retailers are
beginning to spend more on technology and omni-channel strategies to combat the
growing threat from e-commerce players, a boon for tech firms which had seen
revenue growth from retail decelerate in the last few years.
About 39 million Indians shop
online, according to an April report by research firm A.T. Kearney . Though it
is a small proportion of the overall population, it is growing fast.And
traditional retailers are realising that it is a market they cannot afford to
miss. Technology firms, such as IBM, Oracle and SAP , are gearing up to win the
new business.
“In the last two years, since the
recent e-commerce business started, we are seeing that the brick-andmortar
stores are realising the need for omni-channel offerings and they have started
making investments on omni-channel strategies,“ Kamal Singhani, executive
director, enterprise applications and mobility leader at IBM India, told ET.
Singhani added that Indian retailers
would need another 12-18 months before their omni-channel strategies become
competitive.
An omni-channel strategy implies
that a retailer's customers get the same buying experience and treatment in
both physical stores, online and through mobile devices.It requires significant
investment in the back-end to tie-in inventory and logistics to make it work.
Future Group has been the most vo .
100 crore cal with its plan to spend ` on its omni-channel strategy over the
next year. Kishore Biyani, CEO of the group, has said to implement the strategy
, the retail business would have to become more technology and big
data-focused. Future Group partnered with SAP to drive its omni-channel
venture.
Reliance Retail, Shoppers Stop,
Pantaloons, and even the Tata Group are investing to win a slice of the online
shopping space.
But experts say these are baby steps
and retailers still have work to do on the technology to compete with
deep-pocketed online players such as Flipkart and Amazon.
“While retailers are investing in
systems, the kind of capital expenditure that is required to actually build the
whole omni-channel experience has not happened yet,“ said Devangshu Dutta,
chief executive at retail and consumer products consultancy Third Eyesight.
“One of the first things is that they should look to move away from in-house
hosted systems to cloud-based solutions. Otherwise it is very, very large
investment, and time taken is significant.“
A sales executive with a
multi-national technology firm said the competition to win deals in the retail
space has become increasingly fierce, as companies expect retailers to spend
several hundred crores of rupees to boost their online sales.“For Indian
retailers, the writing is on the wall. They have seen some electronics
retailers struggle in India since e-commerce arrived, and now they want to
defend their turf.Most haven't pulled the trigger (on giving out contracts) but
they will start,“ the sales executive said. He declined to be identified
because he is not authorised to speak to the media.
Companies with analytics offering
are expected to benefit greatly when the buying process begins. “Accord ing to an
industry study , the company website is the mostused method for communicating
with shoppers.Sales analytics, customer analytics and web analytics lead the
way in priority order for retailers with marketing analytics not far behind,“
said Mukesh Mathur, executive director at Oracle Retail.
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Jochelle Mendonca & Neha
Alawadhi
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ET30APR15
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