Future of Retail; Bringing the store to you

Google Glasses coupled with 3D printing opened up a whole new dimension of shopping. I had written about this and a blue sky idea was that people might move away from purchasing products to buying 3D print designs and make their own products at home. This is very much a possibility in the future when the materials and composites required for various kinds of 3D printed products as also 3D printers become main stream and a part of most homes.

In the meantime there is another interesting technology which might merge the physical and online retail worlds to give you the best of both.

Shoppers opt for eTailing because of price, convenience and range. The competitive advantage of convenience is coupled by the fact that online retail is not constrained by physical store size. This enables them to offer a far wider and deeper range, called as a long tail of merchandise.

Shoppers also take the trouble of going to physical stores in order to browse and have a shopping experience which consists of “Touch, Feel and See”.

Imagine a scenario where you want to shop for a new dress and you sit back in your recliner and the store actually comes to you and enables you to shop. Is that not a fantastic combination of physical and online retail? 

Is that possible?

There are emerging technologies which enable visualization which has led to innovations like virtual dressing rooms. However, a new technology when coupled with visualization might actually bring the shop to you in the near future.

Microsoft has been working on a technology called HoloLens. 

Very simply put, this creates a 3 dimensional holographic view for the viewer and they can interact with the same. This video would give you a better idea about HoloLens.

How is this relevant and applicable to retail?

Retailers can leverage this platform to create 3 dimensional stores which can be accessed by the shopper in the comfort of their home. Creating such 3D stores is already possible and being used for a different purpose. Today there are several IT solutions that create a 3 dimensional rendering of the store and make is quite realistic. See the first video to get an idea about how 3D store would look like and the second video to see how Carrefour has used Google Street View to create a virtual shopping experience using kiosks and hand held devices. 

The logical next step would be to project this as a 3D immersive hologram in the coming years.

Combine these technologies and it would be possible to bring home the store. Add on technologies which are being worked on like delivering sensory influences such as smell and a feel of touch. Voila, your store will be as real as it can be and more importantly, exclusive to you.

In such a scenario, if you want to buy a new dress you might sit back and slip on your HoloLens device or some other similar device and the store comes alive before you. You can browse, use visualization to try on dresses, check out accessories, compare prices and much more.

As compared to printing products at home, bringing the store home seems much closer to reality. This is all the more pertinent in the current context where both physical and online retailers realize the need to be present on both platforms. A giant like Amazon has opened physical stores and several physicals stores are in the online space.

Bringing a store home is now possible and a retailer who gets their act together to make this happen might establish a strong competitive advantage, especially in India.

Indian Retail & Social Media

When the whole world is going gaga about social media and now people are starting to talk about the possible decline of the same, Indian Retail seems to be watching this trend from the sidelines with some token presence here and there.

Big Data, the next big thing in Analytics has caught everyone’s attention but the root of this lies in being able to connect the dots across various data points of a consumer, especially their behavior and preferences expressed on social media. I wonder how Indian Retail will leverage big data without any meaningful engagement of the shoppers on the various social media platforms.

A recent initiative by a toy store chain led me examine this issue and ET Retail has published a two part article about this. 

Click here to read Part 1 which examines this in detail.

Click here to read Part 2 which is prescriptive and outlines some of the basic steps that are required to engage the shoppers on social media platforms.

In summary, the core thought is that social media needs to become an integral part of the Retailer’s strategy and cannot be limited to SEO efforts only.

Image courtesy - slashgear.com 

Ingenuity of the small shop keeper

Sometime ago I had written about the app developed by Neiman Marcus and how they had rolled it out under the umbrella of NM Service which offers a personalized shopping experience. They then discarded that by giving their store staff iPhones to be able to connect with the customers. It must have cost them quite a bit to go through that learning curve.

My admiration for the small, stand alone shop keepers in India went up another notch when I read this article about how one of them has started to leverage WhatsApp for better customer connect and service. Although several Retailers and shop owners have populated facebook and some are even active on Twitter, the use of WhatsApp to be able to connect in real time and provide immediate service is a great idea.

I am sure that many more such store owners will soon adopt this idea. This flexibility and nimble footed response to customers is just one of the things that chain Retailers need to learn. The other interesting lesson is the ability to adopt low cost or even zero cost resources to improve their businesses.

Such a cost sensitive thinking towards effective solutions will go a long way in ensuring success, especially in retail which is a low margin business.

Retail Trend: Reimagining CRM and loyalty programs with technology

A recent news was about an interesting app rolled out by the up market department store chain; Neiman Marcus. This enables their customer to be linked to a specific sales associate and for a start enables the staff to update the customer about new arrivals, it alerts the store staff when the customer enters the store, etc. Obviously this enables a whole new level of personalized service and customer relationship management (CRM). This video about NM Service would help you understand how this works.

 

With a new year around the corner I have been fielding questions about what does the immediate future hold for shoppers and Retailers. A recent post of mine was about technology changes, namely 3D printing and Google glasses, which might redefine shopping and it might come into our lives even as you read this post. To use Neiman Marcus as a case to point, they have unveiled a range of exclusive gifts for Christmas which can be printed out in their store!

 

This lovely pendant can be printed (!) with the shopper’s initials at the store.

 

Even assuming that printing of products at home will take time as 3D printer penetration in households is a constraint, there are other implications to these development. If we are to combine all these separate technologies, it would lead to a completely new paradigm in shopping, especially in the CRM and loyalty space.

 

Imagine this, which could be a reality very soon. You as a shopper enter the store where the staff have been fitted with Google glasses which is linked to the loyalty database. As soon as the staff sees you, they know your name and can recall your preferences, etc. The staff will be able to wish you in a personalized manner and interact with you. Add on 3D printing and the staff might be able to print out a unique and personalized SKU for you. Your experience will be one of a kind and cannot be duplicated easily by a competitor. In essence the CRM would be at the absolute best.

 

Is it practical? Is it cost effective? Which formats can afford this?

 

Yes, it is practical and depending on the format and cost structure the technology will pay for itself in terms of customer retention and profitability. I have never been a big fan of loyalty programs by mass merchandisers and I don’t think that this is a path they should even consider. A typical CRM program would approximately cost 3% of sales and in the case of mass merchandisers who focus on pricing and volumes this cost would be better spent on lower prices of the KVIs.

 

On the other hand lifestyle and specialty formats should definitely explore this, especially in India. A good CRM program can ensure that loyal customers generate anywhere upwards of 50% of the sales for a retailer. Therefore, incremental marketing costs can be dramatically cut and such a technologically enabled CRM program will give more bang for the buck. The other direct benefit is the increased conversion rates. This means that the staff would be interacting with more of actual buyers instead of potential buyers, thereby making the staff more productive. Lastly, the lifestyle and specialty stores can also work towards rationalizing their assortment and increasing the stock turns, leading to increased profitability.

 

Needless to say, all these would remain as useless gizmos if the Retailer does not leverage the data being generated to customize their offerings. Just having loyalty cards, giving points or outfitting the staff with Google glasses will not make any customer happy unless they get some direct and tangible benefit from these initiatives.

 

CLICK HERE to join the debate about technology impact on CRM

What a Birthday present!!

Almost to the day, it has been a year since “An Indian and A Retailer” made its debut. The thoughts of this blog grew into an in-depth, experiential book about Indian Retail, titled “The INDIAN reTALEs”.

All this happened in the space of the past 365 or maybe 366 days!

And on the first birthday of the blog, I hold a physical copy of “The INDIAN reTALEs” and wish a very happy birthday to the blog.

This book has been published by Unicorn Books and is now available for purchase with an online discount of 25% at pustakmahal (dot) com. It would be available at leading book stores over the next couple of weeks.

Please start enquiring at your nearest book store about the book and get your hands on it as soon as possible.

Thanks to everyone who supported, encouraged and motivated me along this journey. Hope you enjoy reading the tales as much as you have this blog.

What an idea!

Sometime ago while I was browsing in a supermarket I noticed a person checking out products on the shelves and then fiddling with his mobile phone with a stylus. He would again check out something on the shelf and shift his attention back to his mobile. At first I thought he is one of ‘those’, people who are chronically addicted to their mobiles. Having seen increasing instances of such mobile centric behavior, I have a strong thought that human evolution might lead to ears with Bluetooth like capabilities and fingers which are more like the stylus.

Anyways.

Coming back to the story, I realized that the person was actually noting down something from the shelves. I could think of only two possibilities; one being that he was checking the stocks or he was checking the prices and was from a competing store.

(Please overlook the poor quality of the picture as it was taken with my mobile in indoor lighting)

My curiosity was piqued and I approached him to enquire. He was indeed taking stock and also taking down the requirements for each of the SKUs as he was the distributor’s representative. Being very impressed by this use of technology I requested a picture of his devise, which is what one can see here.

It is indeed heartening to see the slow intrusion of such technology into Indian Retail which has typically chosen man power options in the technology vs. people cost benefit analysis.

This person visits the stores, checks the stocks and captures the requirements, goes back to office and updates everything by plugging his phone to a computer. Technically he need not even go to the office and can do this from anywhere by sending it over a call or as a message.

This is just a representative use of technology in retail which is today affordable and helps increase efficiency and productivity. More importantly, the accuracy increases vastly in a context where data accuracy was guestimated to be anywhere from 60% to 80%.

Of course there are myriad such things which can bring about significant operating changes and shall detail a few in the coming posts.

Lastly one should remember why adopting such technologies is considered difficult in the Indian context. It is simply a matter of cost.

Quite a few number of years ago when a new store was being planned, the debate was about having a hand held, radio frequency based device to manage stock receiving, inventory checking, etc. versus having it done manually. Needless to say the manual way won out because the other option costed some 3 or 4 times that of doing it manually. With technology costs coming down (take the case of Netbooks) Indian Retail might find the time right to explore some interesting technological options in several functional areas. However, the fact of the matter is that a device that appears affordable at USD 1,000, might trigger second thoughts because; at INR 45,000 for a 3,000 sq. ft. store, it is Rs. 15 per sq. ft. and the meter starts ticking if multiple such devices are required to make it effective.