‘Retailers facing industry disruption from e-commerce’

Retailers are now looking at express stores designed to address the needs of the urban shopper as against the traditional suburbanite.

Much smaller in size, the express stores offer grocery and grab-and-go meals and snacks, along with other traditional mass items such as clothing, electronics, and household items.

Welcome to the new world of retailers. As technology breaks down the entry barriers, traditional retailers are confronted by a plethora of new competitors from niche online specialists. While many see this as the end of physical retail, Vivek Puri, Group Vice-President, at Publicis.Sapient, a marketing and consulting company, says creative marketers can aspire to the examples set by players such as Amazon and Alibaba: their commitment to the customer and the unerring use of customer data to formulate relevant offers that set the trend in retail.

The ability to differentiate brands and stores has become harder than ever, says Puri, as click-and-mortar retailing continues to drive omni-channel strategies. Consequently, fierce competition has increased table stakes. “Even Amazon is investing in physical channels now,” he added.

Publicis.Sapient, the digital business transformation hub of the Publicis Groupe, works with the top 52 North American brands as well as Indian majors. Aided by his team, Puri has led digital transformation journeys for leading retail brands both in the US and in India.

Stating that retailers are looking at every opportunity to maximise revenue, optimise customer acquisition costs and improve customer loyalty, Puri said companies are increasingly leveraging technologies to identify and target the right audiences with the right content. Terming it the ‘Amazon effect’, Puri insists it is the age of massive industry disruption. “Customer experiences and expectations are changing. Customers want connected experiences and everybody is facing this challenge. We see a lot of niche retail plays coming in which are disrupting the space, like direct-to-customer plays and highly contextualised personalised play, which are eating into the share of the retailers,” he said.

Puri told BusinessLine that there are several similarities between retailers in North America and India. “If one takes a look at the macro trend in retail, grocery is big overseas. The same is the case in India too,” he said.

“Between now and 2026, there is bound to be a four-fold increase in e-commerce. What is 10 per cent of total sales today would go up to 40 per cent. Brick-and-mortar players will require a different level of transformation,” Puri added.

A global study predicts that 70 per cent of consumers will shop for their groceries online by 2024, up from 31 per cent today. Online grocery sales are expected to touch $100 billion by 2024, which will be a huge growth opportunity for the digitally laggard food and grocery industry.

“There are certain segments within retail like grocery and food where consumer behaviour is changing rapidly and fuelling technology. This is a sector that will witness prominent change, and traditional retailers will need to protect and grow their territory. We are looking at a similar journey in India,” he said.

Enabling tech

Publicis.Sapient works with multinational retailer Carrefour in Europe, among many other prominent retailers. Pointing to a 60 per cent reduction in footfalls in North American retail stores between 2010 and 2016, Puri insisted that a similar trend is playing out in India.

He highlighted 15 different technologies that would play a big role in enabling retail, such as automated vehicles, drones, Artificial Intelligence, Machine Learning, robotics, 3D printing, and blockchain.

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