Mr Punit Modhgil, Founder-Director, Octane.in presented the Report : The State of Retail e-marketing in India: Insights from the India Retail e-Marketing Study 2013 @ ReTechCon 2013.
The key findings by this survey are:
- 27% of offline retailers surveyed have planned to embrace online retail
- 27% of the retail companies surveyed heavily use technology for marketing efforts while 44% use it to some extent. On the flipside 26% of respondents say they use minimal technology while 4% don’t use technology.
- About 55% of offline retailers using mobile as amarketing channel while only 10 of the online retailers are doing the same
- While 58% of offline retailers think sales and special offers get them maximum customer engagement, while 20% of online retailers think similarly.
- Of the surveyed offline retailers, close to 71% chose social media for marketing investments while 36% chose email marketing. At the same time, for online retailers 70% of them prefer social media at the same time 70% prefer email marketing too.
- 80% of all e-commerce companies and about 51% of all offline retailers revealed to have sales revenue in the 0-100 crore range. At the same time, about 20% of online retailers and 23% of offline retailers chose the 101-500 crore range. According to RAI-Octane data there are no e-commerce companies in the 500+ crore revenue range, while 27% of offline retail respondents do fall into that category.
- Only 2% of all retailers surveyed for this study seem to be dominating their markets with over 75% market share, while a slightly larger 4% of the retailers revealed to have between 51% to 75% of the market share. 59% of retail companies are struggling to find sure foothold.
The interactive session, “Use IT or Lose IT”, presented by Mr Vikram Idnani, Head-IT, Trent Ltd and Mr Siju Narayan, Smarter Commerce Lead, IBM, grab the audiences’ attention instantly with presentation of real life experience by retailers when it comes to dealing with technology platform.
Outside-in Experience: Optimized use of existing technology
The experience can be outside-in when an outside agent, here in this case an IT vendor, came to rescue in terms of helping in utilization of unexplored features of a software application. The moral of the story here is proper use of technology propels growth, materializing the expectations you have for the application.
Inside-in Experience: Identify problems and deploy the apt technology
Here the situation is all about a problem a retailer is facing and how internal discussion ultimately leads to identifying a technology platform that results in the betterment of the situation. The moral is solution was in internal discussion leads to rectification with the help of outside agent.
What can lead to optimal use of technology?
Make sure that users know how to use it
Make sure users use it
Keep asking: “What more?”
Think “Low cost start-up, long term use”
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Decoding this concept was the objective of the panel discussion on – Engaging the Empowered Customer – Omni Channel Retailing. Panelists for the session included – D. Baskaramoorthy, Vice President Sales, Posiflex Technology; Kashyap Mehta, Head – ecommerce, Infiniti Retail Ltd.; Manoj Kumar, Chief Executive Officer, edabba.com; S Natrajan, Country Business Manager, Embedded Markets, Intel Technology India Pvt. Ltd.; Vikran Potdar, Head – IT, Big Cinemas and Siju Narayan, Smarter Commerce Lead, IBM.
Kashyap, “Providing a single source of truth to the customer constitutes Omni Channel retail. It is not about providing an alternative channel to your customer to shop but it is about building and integrating the entire ecosystem of the various channels available.”
Kumar went on to add, “It is all about putting the customer at the centre and serving him through whatever channels he chooses to shop with. The final agenda is to give him an experience of shopping from a single ‘company / brand.”
The panelists were unanimous in their views – that offering an omni channel retailing experience was where all the retailers aspired to be. But there are several many inter-relating factors to achieve this. One of the major factor rested with having a seamless internet penetration in the country and once this would be resolved, India could be at par with other evolved Western / developed countries which had majority of their shoppers integrating the online and offline medium to shop.
Touching upon the subject of customer loyalty, Potdar’s view was that the Entertainment industry was different from Retail. In retail, having a loyalty program was almost a matter of “hygiene” with most customers expecting a “standard” bouquet of rewards. In the entertainment industry – loyalty was driven by geography – customers are usually not willing to venture to single screen theaters unless they are within a convenient travel radius.
Another interesting point of discussion revolved around the changing shopping habits of consumers and whether access to organized retail has created a greater number of impulse purchases. Kumar felt that with ecommerce, purchases were moving to an ‘aspirational’ or ‘dream’ purchase plane. He said, “Exposure in various forms is increasing consumption today!”
Narayan attributed the advent and influence of social media in shaping purchase behavior. Internationally 74 percent shoppers accept recommendations from their social network for upcoming purchase.
The panel concluded by discussing the role of technology in winning customer loyalty. Potdar highlighted the importance internal customer satisfaction being of prime importance as according to him, an empowered front end staff is in a better position to ensure that customer in turn is empowered.
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“Three statements define us: “Jugaad”, “Cash is King;” and “Sasta, Sundar, Tikau” – Dewang kicked off the panel discussion on Payment Solutions in India at ReTechCon 2013.
What technology is doing in payment solutions:
Naveen Surya, MD, ItzCash Card Limited : “Technology removes friction and reduces counterparty risk to enable the non-cash portion of the economy to grow.”
“In India cash is still king. 90% of all monetary transactions in India are cash.” “Payment solutions enable those who don’t have a debit / credit card – which is 80% of the population in India. This includes 16 to 20 year olds in urban centers, who may not have independent credit cards or bank accounts. The first generation payment solution was the digital wallet – as a customer, you went to a bank filled out a form and were able to access you money digitally. This was not unlike a debit card, but you didn’t need a bank account; and you got access to your money through an ATM. “
Payment solutions for the mobile market:
Deepa – e-bay evangelist – “India is a market of mobile “firsts” – we’ve adopted smart phones faster than other markets. 68 mio Indians visit online shopping sites but only 9 mio are buying so there is a lot of potential. Mobile is mostly being used for ‘showrooming’ right now.”
“Some options in the market are for example what is used by ebay – the platform is called “paisapay”. It functions like an escrow i.e. merchant gets payment only after the consumer gets the product. To give you a sense of how fast the market has adopted – in 2004, 15% of our transactions on ebay were online via paisapay – today, in 2013 its 95%.”
Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.; “Bookmyshow is 14 years old. We’ve gone through the dot-com bust, scaled down and then scaled up. As a merchant, we go where the consumer is – it’s as simple as that”
“Till 2002 – 99% of transactions from the call center. No debit / credit card penetration. We were a call center and delivery company. Even in those days, with payment systems being rudimentary at best, we could still profile and tell a lot about consumer behavior. For example – there was a customer in Delhi – who would have tickets for family style entertainer movies delivered to an address which was different from the one given when wanted to view “adult” entertainment – a clear “tell” that he was – shall we say “a colorful personality”. Today 17% of all our transactions are via the mobile, and more than 70% are on the web. We are integrated with 32 payment gateways – we are agnostic to the solution provider. When transactions with one gateway taper off or fall, we auto-switch and load balance.
Biggest issue faced for the large scale adoption of payment solutions
Naveen Surya, MD, ItzCash Card Limited : “Failure rates on payments through gateways @ 25 to 30%. For Credit cards its about 9% and with net-banking its about 15%.”
As a merchant, what is the biggest requirement from payment solutions
Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.; We want one-click payments. The time-gap between the consumer thinking about something to the time its delivered to him should be minimalistic.
The main reason for payment failures is usually – server to server. In other words, unstable data connections – between the user and the payment gateway lead to dropped transactions.
Pramod Jajoo, CTO, BigBasket.com: “Payment security is still the biggest issue in the mind of the customer – about 65% of our transactions continue to be Cash on Delivery.”
Role of regulations
The panel felt that the Reserve Bank of India has played a catalyst’s role in upgrading the payment infrastructure in the country (from ECS to NEFT to RTGS platforms) – given the many complexities of geography, Telecom density, telephony etc. Fraud rates have come down significantly (especially in international credit card transactions) in the last 10 years – and the customer does not have a problem with trusting online-payment mechanisms. This is in contrast to several other emerging markets (e.g. Russia, Brazil) where adoption has been hampered by customer concerns around security.
“We are one of the last markets to adopt chip and pin – this is an area where a regulatory push could help. POS devices will morph only where there is customer adoption. The fastest way to consumer adoption is through regulation”.
How should a merchant approach this space?
“Merchants should focus on what they do best – supply. “That’s where marketplaces can play a role; as they can be leveraged for traffic and logistics. “ – Deepa (E-bay ecommerce evanlegist)
“Merchants should be spending their time strategizing on how to better the shopping experience, their merchandise mix, how to increase sales, how to create loyalty, what social media strategy to use – they should not have to worry about payment solutions”.
Alternative payment platforms – are they good?
The panel felt that, from a long term, structural perspective, alternative payment platforms were not healthy. In other markets, some of these platforms have been associated with less than positive press – e.g. money laundering / terrorism connections.
“It’s not alternative payment platforms that are needed – it’s inclusive platforms which can cover as many payments modes as possible and as much of the population as possible”.
Audience question: Interchange rates – are they optimal?
Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.; “Of course, as a merchant I would like interchange rates to soften. From a consumer adoption perspective, the lower the interchange rates the more the choice to the customer in terms of the entry of additional payment solutions providers. In the credit card space – there are only 2 major players (Master / Visa) – and the issue is not about whether the rates are high or low – the issue is that the rates are different for online versus offline transactions. This difference (1% for offline versus 4% for online transactions) is substantial. In the debit card space, the RBI stepped in and set the rates – it is not optimal for a Regulator to step in and set rates – especially if you want to encourage large scale adoption and move away from a cash based transactional economy”.
Dewang Neralla, Director & CEO, atom technologies: “Structurally speaking, over time, the market should move to an acquirer centric model. In the past rates were based on an “issuer centric” model – but again, from the perspective of creating scale – it’s a move that should take place.”
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The session “‘The Moment of Truth? Check Me Out’: Queue Bursting Technology” analyzed the basic problem of queue at the bill counter and the hassles customers face wasting time which dampens the shopping spirit leaving a negative impact on customer loyalty.
The session was moderated by Vikram Idani, Head-IT, Trent Ltd. The eminent panelists were Amit Bhatia, Head-Retail Solutions, NEC India Pvt Ltd; Asif Merchant, MD, Catwalk Worldwide; Manoj Gor, Regional Senior Manager, PVR; Rahul Puri, AVP IT & CISO, Jubilant FoodWorks Ltd; Ranjan Sharma, Head-IT & Supply Chain, Bestseller Retail India; Uzwal Kumar Chatterjee, VP & Head IT, Mahindra Retail Pvt Ltd.
Mr Idani initiated the discussion asking each panelist
What is the moment of truth for you?
For Mr Puri it’s customers hitting POS, placing orders and paying before the counter; for Mr Sharma since Bestseller is in the space of fast fashion the stores need to exude freshness, be it in merchandise or window; for Mr Chatterjee Mahindra Retail-owned Mom & Me is in specialized retail space so brand awareness amongst the customers is the moment of truth; for Mr Merchant the Indian brands need to wake up to deliver services on par with international standard.
The requirement of queue bursting
Young generation, who are buyers of fast fashion, do not like to wait to check out. The problem intensifies during EOS (End of Season) sale, but Mr Chatterjee shared that that time can be utilized by developing interesting mobile apps for in-store promotion.
Mr Bhatia shared how queue bursting solutions worked for PVR, saving 40-50% of time, increasing 40-50% sales.
How successful is self check-out?
Self check-out kiosks and hand-held terminals are some solutions for queue bursting but do they fit in every store format?
The panelists opined that for some high-end store it works but not for grocery stores where customers visiting are not that tech-savvy.
Instead, omni-channel retailing is one effective solution for queue bursting. Mr Bhatia stated that even Walmart is winding its self-kiosk checking out services; it’s not successful for Ikea in the US. But Mr Merchant felt differently. According to him, it’s not convenience but discount online attracts customers.
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