Are you game to Click and Collect ? (Side-effects of COVID-19)

 While there were a few topics that I wanted to blog about in 2020, much of the focus and energy was spent on adapting to the new normal. Nevertheless , COVID-19 forced us to reinvent the way we live, work, shop and socialize (or rather socially-distance!). My novel experience in the post-lockdown era was of 'Curbside pickup' at Ikea, Hyderabad store (which they call ' click and collect'). Contactless and safe but at a fees of Rs 200, it costed same as for home-delivery of light-weight orders. And that is where it pinched !

IKEA India Curbside Pickup

👉 Curbside pickup requires a customer to order online and then pickup the order from a fixed spot in the parking lot of the store. It is a variation to Buy online pickup in store (BOPIS) or click and collect, where the customer has to step in the store to collect the order, and has been decently successful in the West in the last few years.

Click and collect offers major benefits to customers in US or Canada as it offers Convenience of digital shopping, speed as same day pickup is available and saves shipping charges. In the COVID-19 times, it also offers the critical advantage of safety as the customer doesn't need to come in proximity to store staff or other customers.  68% of US shoppers made multiple BOPIS orders in 2018, proving it's demand. US retailers like Kohl's, Best Buy, Dick's Sporting Goods added curbside pickup amid COVID-19 while shutting down stores to help customers shop in a safe way. 

While we like to learn best practices from around the world, my understanding is that we Indians wouldn’t embrace the idea of click and collect. The prime reason is that we view shopping in a different light as compared people in western countries.

• Shopping as an entertainment - For decades, shopping has been a sort of entertainment, a social experience and one of the best ways for passing time for us. Be it the ladies shopping for hours for traditional wear like suits and sarees, women and older folks in the family shopping for vegetables or the involvement of the whole family in selection of consumer appliances. It has been the easiest and most common family activity on weekends, followed by a food-treat.

• Lack of avenues for outing (other than malls and high streets)-  In the modern scenario, this idea of shopping as an entertainment has led us to the malls as our favourite recreational location. It is a no-brainer for a weekend outing for the masses. Malls offer a clean and cool replacement to the not-so-clean parks and hot and humid weather, which is non-conducive for most outdoor activities.

• Not habitual to outdoor sports or activities - If we move the time-frame to a decade back, I don't think more than 10% of present-day Indian runners or cyclists were actively pursuing these sports. Since many decades, Indians have been detached from sports or outdoor activities, thus, leaving the free-time available for shopping, watching TV or attending to household chores.

• Stores’ Curbside/ Parking isn't too approachable - Unlike US, where malls and shopping centers are spread out horizontally with vast parking spaces, Indian malls are stacked up tight vertically. So a customer wouldn't go through the hassle of parking in a mall and going to the store in a jam-packed elevator to collect his order. It makes all economic sense (time and money) to have it delivered at home.

Meijer Hypermarket in Michigan, US

Forum Mall in Bangalore, India

• Low or No Shipping charges - Also, shipping is mostly free in India, usually above order value of Rs 500 ($7) or in some cases Rs 1000 ($14). Plus, one can save on the ever-rising fuel costs if one choses not to drive to the store. 

     It will be interesting to see if the Indian consumer evolves in the post- COVID-19 era to embrace click and collect model or we just let this 'good practice from the west' pass. 

Is it time for CPG brands to go Direct?

A regular morning for us could start with Colgate brush and toothpaste, Red label tea, Lux soap, Head & Shoulders Shampoo, Maybelline beauty (or Gillette grooming) products, Kellogg's cereal, Amul milk and then zip zap zoom to office. Our interaction with these Consumer Packaged Goods (CPG) or Fast Moving Consumer Goods (FMCG) continues throughout the day. These are high frequency, low cost purchases for a consumer and were traditionally associated with lot of loyalty as a Colgate using household did not easily switch to Pepsodent. Gone are those days, however, as not just big television-ad brands but smaller private label brands from retailers have been substituting our regular CPG companions at home.

There have been discussions if these CPG brands should sell directly to consumers, bypassing the distribution network comprising of Wholesaler-> Distributor-> Retailer (your kiranawala or the likes of Walmart, Big Bazaar). The adoption of e-commerce by consumers in the last few years is a great driver but the benefits to CPG brand need to be evaluated. I conducted a quick dipstick survey (of urban educated consumers of various age groups) to understand if there is any existing adoption to buying directly from CPG brands.

Survey findings indicated more adoption to buying directly from FMCG brands in Gen Y (born between 1980-1994) as compared to Gen Z (born between 1995-2010) and even less in Gen X (born between 1960-1979). However, both Gen Y and Z are buying more of the small, online-only FMCG brands from online retailers like Amazon instead of the individual brand websites.

So does it make sense for FMCG brand to sell directly to consumers?

Big FMCG players like Procter and Gamble (Gillette, Tide, Pampers), ITC (Kitchens of India Ready to eat food)

• Why- For consumer data insights (like buying behaviour, preferences, etc.) to help in New Product Development and managing Product Lifecycles; testing new products and markets, customer engagement to retain loyalty
• When- Losing market share to private label of retailers, retailer discounts putting pressure on margins
• Where- Online/ Mobile, Social, Shop-in-shop, Pop-up stores
• How- Subscription Model (like shaving, diapers monthly supplies), IoT-based (like Tide button attached to your washing machine which when pressed creates an online order for Tide)

Small, Newer FMCG players like Dollar Shaving Club (US), Birchbox (US), The Man Company (India), Being Juliet, Peebuddy (India)

• Why- Market entry or market penetration- less costly than investing in distribution network
• When- New products, no shelf space given by retailers due to their high bargaining power, niche products
• Where- Online/ Mobile, Social, Pop-up stores
• How- Referral schemes (for acquiring customers through word-of-mouth), Subscription Model (like shaving, diapers monthly supplies)

I believe that the timing is right for brands to try reaching customers directly in India as FMCG is the next big growth category in online retail and one-third of the FMCG sales in India is influenced by digital mediums (Google-Bain study)  Although it will be a fraction of total sales for the big brands but the consumer insights will be the gold mine to dig for on this path. And for the thriving small FMCG players, these wouldn't have existed without the direct channels.


(The opinions expressed in the blog are personal)

Use of Technology to improve Customer Experience: A Reality Check

Last year I was working on a paper on enriching customer experience (CX) in the digital age with examples of pioneering global brands. However, recently I was faced with a reality check on current use of technology to enhance CX in India during my frequent shopping trips to the organized retailers. The technological interventions to enhance CX in-store are incremental, the online buying is admirably smoother but omnichannel experience is still distant.

My No.1 pick in impressive in-store interventions is Virtual Mirror at Caratlane's store (Brick and click jewellery retailer)  for trial of earrings. The staff was not too forthcoming to offer a trial but the resulting experience was good. It seemed time-saving and convenient for a customer than trying-on each piece of earring individually (additionally considered not-so-hygienic internationally).

The other in-store technology interventions seemed to be laggard adoptions of global trends. Few examples were:

• Self Checkout Kiosk at Lifestyle - Caught my eye and appreciation but then I realized it is merely an 'assisted checkout' by store staff and only they have the access to remove the RFID tag from the shopped item.

• Customer Feedback at Shopper's Stop - Placed at all Point of Sales and at Customer Service Desk, the tabs request a smiley-based feedback (Happy, Neutral, Sad). However, it felt like one-way communication with no opportunity to offer real qualitative customer feedback.

• Price Check Kiosk at IKEA - Placed at some odd locations in your long journey in IKEA store, it is helpful as IKEA price labeling does not communicate the selling price too well.

On the online side, department stores like Shopper's Stop and Lifestyle have integrated their card rewards program to their online retail sites to check and use the points. But it is far-off from omnichannel experience of single customer and order database where customer information and order history from both channels is visible in both channels. If the groundwork is missing, one can forget using advanced analytics attempting to track customer preferences, contextualize insights and give personalized offers to customers.

On a concluding note, I want to mention about some non-technological interventions around CX - how shoe retailer Skechers has a sanitizer bottle on their POS (hygiene never hurts). Considering shopping and eating-out goes hand-in-hand in India (more revenue share of food than shopping in the malls), it is sheer common sense yet none of the dedicated shoe retailers had thought about it.

On a side note, talking about contextually targetting customers in a physical world - have you ever seen an ethnicity-based mannequin? Well the young Sikh boy mannequin in a small Sikh pilgrimage town made me rethink that innovation and inspiration can be found anywhere. 

(Note: The opinions expressed in this blog are personal)

Hej IKEA - High-five !!

On my return to India from Canada in 2011, hubby and myself had to set up our home in our work city (Gurgaon) from scratch. I would have cribbed a zillion times when I had to run from local markets to malls for months, in search of furniture, furnishings, home-ware, kitchenware and decor. The only wish I had back then was that we have a big-box retailer like Ikea, Home Depot, or even Walmart (it's home section is pretty decent).

After 7 years, the wish has been granted (not by GOD but by GOI) and Ikea will be opening it's first store in Hyderabad (my current location) on July 19th. Just 100 meters from my office, the sprawling 4 lakh sqft premise is nothing short of an eye-catcher. Many people that I know are excited, specially the ones who have bought new residences or are planning renovation. Amidst the excitement of being the first few thousands of Indians who will experience Ikea India, I do have a few thoughts:-

1. Furniture Assembly Service is Paramount - Indians have always had their furniture delivered and assembled by furniture vendors. It is a no-brainer that DIY (Do-It-Yourself) does not fancy us. Ikea has tweaked its business model in India and will offer assembly services (probably by own or third party vendor). How they manage this last touch-point in their customer journey is crucial as it may make or break the customer experience.
2. Targetting few or many - As per my understanding, a few target customer segments in Hyd will be:-




• Educated, high-income, IT/ Pharma professionals (mostly immigrant so buying/renting property and setting up home in new city)
• NRIs returning from onsite assignments in US, etc. - habitual to big-box home retailers
• Upper middle class/ rich - looking for some non-furniture categories due to Ikea's international appeal
• Middle-class working population, aspirational -looking for value for money categories
3. Food for Conversion- Ikea claims that 'Food is their best sofa-seller' as they feel that conversion is higher if customer is satiated and not hungry, though food business earns less than 5% revenue globally. Extending the tradition, it is opening a 1000 seater restaurant in the store. My apprehension is that just like food-courts in Indian malls get more footfalls than the retail stores, Ikea may soon realize that it was better to open a stand-alone restaurant than a store. And why not, it is customizing the menu for India and including veg options like idli, sambhar, biryani and samosa. (Hungry anyone?)
4. Big-box Retail losing glory- Globally retail stores are shrinking in size and KPIs like Sales per sqft and GMROF (gross margin return on floor area) are more relevant than ever. How Ikea will be profitable in 4 lakh sqft of retail space has to be ascertained? Organized retailers like Future Group's Home Town (with revenues in the range of Rs 500 crore) have not been able to grow the category much in organized retail. Moreover, I hope they have enough parking and do not end up jamming their vicinity (the high traffic prone Hi-tech city area), resulting in negative customer experience (CX).
5. Technology for Customer Delight - Ikea is way ahead in transforming customer experience, through emerging technologies like Augmented Reality (AR) and Virtual Reality (VR), than any organized Indian retailer. It's AR-enabled mobile app Ikea Place (using Apple's ARKit technology) enables users to preview placement of virtual furniture in their homes to visualize if the piece fits in, and it can subsequently be ordered on Ikea website. My view is that in short to medium term, if it is able to offer such global tech experiences to Indian customers, it will up the customer experience quotient manifold. 

Ikea Place App (Pic Credit: IKEA)

(This blog's formatting in blue and yellow, is dedicated to Ikea's brand logo)

Disclaimer: The blog is based on my personal experiences and strictly reflects my individual opinion.

Future of Grocery e-tailing in India

India’s online grocery market is a fledgling worth $100 Mn (in 2016), with a few online retailers like Bigbasket and Amazon, and negligible presence of modern physical retailers (like Big Bazaar, Reliance fresh, D-mart and ABRL More). Indian consumers have graduated to buying their smartphones and apparels online but are still hesitant in shopping online for their food.

(Pic credit: CNBC.com)

The early takers of grocery e-tail are time-starved urban young working couples, who perceive grocery shopping as a mundane task. However, there is a meek possibility that the Indian consumer would ever be awed by a shopping experience, to the likes of retailers like Waitrose, UK. This coupled with traffic jams, parking hassles, long queues at checkout on weekends, can facilitate the switch over to digital channels.                                                                          

Modern retail chains have their own set of challenges competing with the large unorganized retail and thus, have either faltered in online selling (Big Bazaar), or have a very limited presence (e.g. Reliance Fresh was selling in 2 cities as opposed to stores in 93 cities) or have not dread into it (Dmart). They lag on the fulfilment front too as Reliance offers next day delivery, in comparison to the 60 minutes delivery promise of Bigbasket.

(*Hypercity & More delivering in a few cities through partnership with Zopnow)

Missing the Opportunity of Omnichannel

Internationally, retailers like Target and M&S are leveraging their stores and digital channels like online, mobile, and social, to create a an omnichannel shopping experience, where the retailer is able to create single view of its inventory and customers.

The problem is when physical retailers disregard the small percentage of sales obtained from their digital channels, usually <5%. Instead they should view the overall impact of the digital channels on their business through KPIs like average spend of omnichannel customers (shopping in both stores and digital channels) versus store-only customers, increase in store footfall due to digital marketing, etc. 

Example: In case of Target ($15Bn food business) 

• online subscribers spend 6 times more online than non-subscribers and still make the same number of trips to the store as the non-subscribers. 
• omnichannel customers shop 3 times more often, producing 3 times more sales as compared to store- only customers.

Modern retailers like Future Group, Reliance, ABRL More need to not only embrace digital selling platforms but also think of an omnichannel strategy to retain and delight its existing customers. These retailers also to rethink the role of the stores, from being only point-of-sales to being distribution centers to serve the catchment areas, for their online orders. They can rope in skilled third-party logistics services to manage last-mile deliveries or even offer Buy online pickup in stores (BOPIS) so that customers are saved from long checkout queues.

Major Players in India’s Grocery E-tail

Bigbasket, launched in 2011, services 25 cities with a listing of 18000+ products. It has set good standards of customer service through its wide assortment, quick fulfilment through its largely inventory-led model (inventory is sourced and stocked by the e-tailer) and no-questions asked refund policy. It attempts to compete with neighborhood stores through express delivery (within 60-90 minutes) for certain common grocery items and same or next day delivery for all the listed items. It launched its robust mobile app at an appropriate time when the acceptability for mobile apps among urban Indian consumers had increased.

Amazon- Gaining foothold : Companies have to compete with Amazon not only in terms of product assortment but also customer experience. In US, Amazon Fresh partners with local specialty stores for delivery of fresh groceries and Amazon Prime Now app sells both food and non-food items, delivered within 2 hours. In UK, It has a tie-up with supermarket Morrisons to offer 1 hour paid grocery delivery in London and neighboring areas. In China, Amazon is experimenting with drone deliveries to reach shoppers within 30 minutes. In India, Amazon has launched - Amazon Kirana Now mobile app, which follows a hyperlocal model and delivers in 2 hours, and Amazon Pantry, which delivers groceries the next day.

Amazon has futuristic innovations in Retail like Amazon Dash, where FMCG products can be ordered through the press of a button placed in consumer’s home; or Amazon Go, the no-queue no-checkout store, created using IoT technology. Such innovations can be a game-changer for the grocery landscape if launched in India.

Potential of Grocery E-tail

Indian grocery e-tail will carve its own path and may not replicate the results of other countries. The partnerships of some of the modern brick and mortar grocery retailers like Big Bazaar, Spar, Hypercity, etc. with Amazon may give short-term gains to the former but it may result in these online retailers to be the winners in the long-term. Instead, modern physical retailers need to devise out their omnichannel strategy to win and retain their customers. The time to act in online grocery space is now, lest you miss the bus!

(Disclaimer: The blog strictly reflects my individual opinion.)

Global Retail- 5 Hot Trends

Over the past few years, retail industry has been both enabled and disrupted by technology. Online retail has created newer service levels for consumers, thus, challenging traditional retail to catch up.  Traditional retail, in turn, is re-inventing the customer experience at stores and experimenting with omnichannel. In this context, the 5 hot retail trends to watch out for are:

• Personalization – Retail is moving from a ‘one-size fits all’ model to a personalized model. The key driver in this trend has been online retailers (like Amazon), which churn out millions of personalized offers for its customers. It is enabled by technology which can identify individual customer preferences and offer related content about promotions, events, product launches, etc. resulting into higher conversions. Departmental store retailer John Lewis is making use of beacon technology to deliver personalized messages in-store.

• Omnichannel, the anytime anywhere retail – Omnichannel retail is the peak of maturity wherein a retailer operating in multiple channels (like store, online, mobile, TV) provides consistent shopping experience to the customer. Fashion retailers like Macy’s, Nordstorm are pioneers in providing visibility into their inventories and customer data across channels. Others face challenges in terms of tweaking business processes for cross-channel fulfillment, customer returns, attributing sales to a channel and the like.

• Shrinking Stores – Retailers are stringently reviewing operational costs as more sales are being poached by online retail. Real-estate being a major cost, loss-making stores are being shut down and new stores are being launched in smaller square-foot area. Even though US has the highest retail square footage (47 sq.ft. per capita), sales per square foot is continuing to decline. In 2016, Macy’s shut down 36 stores, Best Buy closed 30 stores and Walmart has announced 269 store closings.

• Experiential Retail – E-commerce evangelists may pronounce the end of physical retail, but it will merely transform to a more experiential form providing social gratification. This new era of experiential retail will convert a mundane shopping experience into fun through value-added services (like coffee-shops) or technology enhancements (like augmented reality, interactive technology,etc.). French sports retailer Decathlon has created basketball and volleyball courts besides it's stores in India, where people can play free-of-charge. 

• Technology Disruption- The current technologies are more of disruptors than mere enablers. In the store, beacons, mobile and wearables technology are enabling personalized shopping experience. Virtual reality is offering shoppers an option to virtually try-and-buy products. Robotics is being experimented for shopping carts by Walmart. Artificial Intelligence (AI) is powering voice recognition technology to place orders and automation through bots. Internet of Things (IoT) is connecting millions of low-cost micro-devices to collect data and provide valuable insights in customer buying behavior, with the help of advanced analytics.

Disclaimer: The blog is based on my personal experiences and strictly reflects my individual opinion.

Moving over from Physical to Experiential Retail

E-commerce evangelists are busy pronouncing the end of physical retail. Being an e-com enthusiast, I believe that e-com is here to stay. However, being a retail passionate, I also believe that physical retail can never die. It will just transform to a more experiential form providing social gratification.

A recent NRF article corroborates this- “The challenge for a retailer today is to rise above a line item on a to-do list; it’s to provide a solution to shoppers’ needs — in a way that gets the shopper to emotionally slow his pace and breathe.” This is being called as the new era of experiential retail, which I couldn’t agree to lesser.

Experiential retail could be described by some as converting a boring experience of browsing, trying and buying into something fun and exciting, using things like augmented reality and interactive technology (Source). Innovations in store technology like beacons, virtual mirror and advent of IoT can surely change the way we shop.

Additionally, there are examples which have less to do with technology but more to do with the value added services provided at the store or the expertise of their sales staff. Two such retailers (both in sports retailing) are worth discussing.

Image Source: Decathlon India website

1)   Decathlon – It is a one-stop solution to amateurs’ sport needs covering around 40 sports. Some of the best things about the store are - huge store size and wide-spaced aisles that give plenty of space to test equipment like cycles, kid scooters; trial rooms located right at the end of aisles selling apparel for specific sports; clear labeling; helpful staff; long selling hours (10 am to 10 pm) and ample parking space.

Decathlon develops and sells its own products, which have a decent quality and affordable price. This makes them more penetrable to the masses. 

However, the highlight of the Decathlon stores is their basketball courts available for playing free-of-charge. In countries like India, where community sports spaces are grossly inadequate, this is a welcome change. The shop-front courts provided a lively aura to the Decathlon store that I visited (situated on the outskirts of Hyderabad, India). 

2)  The Bike Affair – As the name suggests, it deals with everything around cycling. Not just the core product – cycles (or bike), but all the accessories related to it. Along with that they provide maintenance services, rent bikes, arrange knowledge-sharing workshops and cycling events.

Their loyal customers are cycling enthusiasts who come to them not for the product or the discounts, but for the know-how of its staff. Although this is a boutique store, but I can’t resist to compare it with Apple stores which are famous for their ‘Genius Bar’. 

It would be worth-while to see more and more retailers take on a transformation journey to move from transactional to experiential form.