<\/a><\/p>\n Retailers around the globe are attempting to build the right strategy that helps reap success in emerging markets. Kedar Mehta, from TCS’s Global Retail Consulting Practice describes this ‘E-Merging’ Indian retail model. The model combines the best of offline & online retail ecosystems and moves retailers towards an Integrated Multichannel Retail Model.<\/p>\n Introduction <\/a>This is but a sample of the latest in Indian retail.\u00a0 The directional trend underlying these stories is a unifying theme \u2013 the challenge of developing the ‘correct’ Indian retail business model.<\/p>\n This article highlights the potential of ‘E-Merging’ Indian retail \u2013 a model that combines the best of offline & online retail ecosystems and profitably meets the expectations of a digital era consumer.<\/p>\n Drivers for Integrated Multichannel Retail<\/strong> Real estate rentals are expensive: Rental proportions at 10-15% of revenue negatively impact format breakeven<\/p>\n Disconnect between assortment width and shrinking format size: While, revenue hits plateau after threshold square footage; and retailers are using the recession to optimize footplate, consumers are looking for increased depth and width of assortment. <\/a>Multichannel customers with shifting loyalty: Channel switching by consumer for best purchase proposition is moving retail towards multi-channel.<\/p>\n Disruptive Technologies : including emerging channels such as Smart TVs, home shopping networks, kiosk \/shopping etc.<\/p>\n Reach new markets quickly & efficiently: Non-store channels help reach new markets quickly, without the need to establish physical stores.<\/p>\n Business Case for Integrated Multichannel Retail<\/strong> <\/a>The basic premise for developing an Integrated Multichannel Retail model, especially in the Indian retail context, is the likelihood that such a model will best optimize the revenue realization for a retailer (by reaching more locations & consumers via the web),\u00a0 while reducing operational costs (by opening fewer physical stores & augmenting service delivery with a mix of offline & online operations).<\/p>\n According to model estimates covered in a TCS paper, for an Apparel Retailer, a 5% of revenue movement to online channel can result in 3.44% savings in OPEX and 15.52% improvement in EBDITA. With inclusion of more non-store channels, the model efficiency is likely to improve, depending on how the business mix is developed. 4i Model for Integrated Multichannel Retail<\/strong> These maturity levels are a continuum – A retailer needs to traverse these based on a qualitative & quantitative analysis across eight critical business areas:<\/p>\n This framework allows a retailer to assess where their organization stands today, to benchmark with leaders, to identify gaps and to monitor progress in the journey towards becoming a truly Integrated Multichannel Retailer in today’s digital era.<\/p>\n <\/a>Global vs. Indian Retailers \u2013 Status Check<\/strong> Clearly, Indian Retailers have a lot to learn from the Global Best Practices and have a long way to go in the 4i Integrated Multichannel Retail journey.<\/p>\n Global Best Practices towards Integrated Multichannel Retailing <\/a>Next Steps for Indian Retailers<\/strong> Indian retailers in their endeavor to transform into an Integrated Multichannel Retail entity, that is pr<\/a>esent every where an Indian customer shops, need to initiate the transformation with 3 simple steps:<\/p>\n 1. Benchmark current organizational multichannel retail initiatives versus the rest of Industry \u2013 for example TCS and RAI have collaborated to produce quantitative industry level reference benchmarks. <\/a><\/a><\/a>Kedar Mehta is a Managing Consultant with TCS Global Consulting Practice (Retail & CPG Group) and consults with retailers in their Strategy, Marketing and Operations Improvement Initiatives.<\/p>\n Acknowledgments:<\/strong> Retailers around the globe are attempting to build the right strategy that helps reap success in emerging markets. Kedar Mehta, from TCS’s Global Retail Consulting Practice describes this ‘E-Merging’ Indian retail model. The model combines the best of offline &… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[13,46,35,43],"tags":[9],"_links":{"self":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1549"}],"collection":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/comments?post=1549"}],"version-history":[{"count":5,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1549\/revisions"}],"predecessor-version":[{"id":1563,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1549\/revisions\/1563"}],"wp:attachment":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/media?parent=1549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/categories?post=1549"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/tags?post=1549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nMarks & Spencer’s India plans addition of 80 stores in India by 2016. Amazon India pilots its e-commerce deliveries with Indian Post Office. Puma India aspires to generate 10% of its sales in India through online channels by 2015. 52% of Mumbai’s 40-odd malls are struggling. Indian internet user population is going to exceed 243 million by June 2014. Future Group launches Big Bazaar Direct \u2013 a cross between e-commerce and door-to-door sales.<\/p>\n
\nBefore we look at the Integrated Multichannel Retail model for Indian retailers, let’s first quickly examine the drivers that are encouraging and enabling the development of this model :<\/p>\n
\nNeed to optimize inventory carrying cost<\/p>\n
\nGenerating 5% of your Total Sales from the Online Channel can lead to a 15% increase in EBIDTA.<\/p>\n
\nSimilarly, precise models can be outlined for other retail formats, like CDIT, Home Improvement, Jewellery, etc.\u00a0 to determine the correct online-offline mix.<\/p>\n
\nNoted below are the 4 distinct stages of the Integrated Multichannel Retail journey that retailers need to undertake and the key business initiatives they need to ideate and execute upon below.<\/p>\n
\nAccording to model estimates covered in the TCS paper earlier, below are the maturity stages of Global Retailers vis-\u00e0-vis Indian Retailers today with reference to the 4i Model of Integrated Retail.<\/p>\n
\nThis is an illustrative list only, but it provides insights about the business process, service and technology benchmarks to be pursued.<\/p>\n
\nIndian retail has the tremendous potential of 1.2 billion consumers, but is constrained by expensive customer connection points in the form of physical stores. The emergence of the 3 Screens –\u00a0 Laptop, Smartphone & Flat Panel TV – can augment physical stores, increase customer reach and relevance of customers engagement.\u00a0 A small percentage shift\u00a0 of the business to digital channels can bring in much needed efficiency in the retailer’s business leading to significant improvement in profitability.<\/p>\n
\n2. Evaluate your organization across the 3 measurement parameters \u2013 KPIs, Process Maturity and Strategy 2014 covering the key organizational functions of Sales, Operations, Customer Experience Management, Technology and Financial Management.
\n3. Conduct a diagnostic study to understand your organizational multichannel maturity by leveraging the 4i model
\n4. Create an Integrated Multichannel Roadmap for execution<\/p>\n
\nSanjeev Seshagiri Athreya, Managing Consultant, TCS Global Consulting Practice (Retail & CPG Group) \u2013 for his valuable inputs and insights that helped enrich this article.<\/p>\n","protected":false},"excerpt":{"rendered":"