Adapting to the challenge that brick-and-mortar retailers have been facing from their online rivals, who offer the convenience of shopping from home, the country's largest listed retailer, Future Group, has decided to implement a so-called ‘omni-channel’ commerce model — a combination of e-commerce and physical retail.
While Future Group cannot compete with an Amazon or a Flipkart on the discounts that the latter offer on certain products, it will try and compete with them in terms of reach, according to chief executive Kishore Biyani. The retailer will utilise technology to receive orders for products from customers and its extensive network of stores to deliver the goods. Pure-play online retailers are hamstrung by the fact that they don’t have any physical presence and have to deliver goods using courier services, which adds to costs.
Under the new strategy, Future Group will invest around Rs100 crore in developing a digital platform that will allow it to sell goods to customers through multiple physical and digital touchpoints, across the various retail formats it operates, such as the Big Bazaar chain of hypermarkets that sell everything from groceries to apparel, and electronics store Ezone.
The omni-channel model will be rolled out over a three- year period to cover all stores across formats, according to Rakesh Biyani, joint managing director of Future Retail. He stated that the new technology could help Future Group stores see a 6-9% increment in same store sales.
Future Group will be tying up with Hybris Software, an SAP company, to implement the new model. The idea is to allow customers to enjoy multiple options for purchasing products and getting them delivered. Customers can shop from home and get goods delivered at their doorstep, like they do at other online marketplaces. But in addition to that, customers can also shop online and pick up the product at their convenience from one of the many physical stores Future Group operates; or place orders in stores and have them delivered at home.
“This new model can help us in generating additional business of up to 30% from our existing level of inventory by allowing customers to access them through various physical and digital channels,” Kishore Biyani
said. “Also, by offering multiple product offerings to customers on a
single platform we can ensure that we get a greater share of the customers’ wallet.”