The paradox for modern trade retailers in India

The modern trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semi organized and unorganized retailers.

Darshan Appayanna Jan 11th 2019 A-A+
Darshan_Appayana.jpg

India has been going through a marked disruption in the way retailers have done business in the last decade.

While ecommerce has had a significant impact on non-food retailers, the food retailers are starting to see the impact of changing consumer habits on their core business – Groceries – staples, fresh and frozen, and household products. 

The grocery penetration snapshot: 

•    Ecommerce companies is still in the low single digit numbers
•    Modern trade companies are in the teens
•    Neighbourhood semi organized food markets have been on a steady rise
•    Still, the unorganized mom-pop stores have a largest share in the market

... Modern Trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semiorganized and unorganized retailers. This creates a double whammy for MT companies as they need to both compete in terms of technology with the ecommerce companies and have the agility/ability to provide customized neighbourhood products and customer service to compete with the semi organized and unorganized retailers.
Darshan Appayanna
Head-Digital and IT, Trent Hypermarket

The double whammy

Modern Trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semiorganized and unorganized retailers. This creates a double whammy for MT companies as they need to both compete in terms of technology with the ecommerce companies and have the agility/ability to provide customized neighbourhood products and customer service to compete with the semi organized and unorganized retailers.

To counter this, MT has to bring in big cultural and technology changes to be able to meet both ends of the spectrum. The staples, groceries and household products business work is a low margin business where operational and process efficiency is key to be profitable. And quality of products is foremost to retaining current customers and attracting new buyers.

What the ecommerce companies have done is consumarize the MT business!

This is where technology can play a key role in making a MT company more successful than another by bringing in a better customer experience at the store, any time anywhere service, a 360 customer engagement, streamlining processes to bring in operational efficiencies, and most importantly, being relevant to the millennial consumers with aggressive digital engagement.

Some pointers that will help MT companies be better aligned and ready to meet this challenge are: 

1. Adopt Multi-Use Technologies – to reduce siloed technology cost and become more agile. 

Using video surveillance infrastructure - not just for store monitoring but also for traffic pattern analysis, personalization for customers with targeted promotions, and to build a comprehensive customer profile. 

Store WiFi technologies to provide better omnipresence experience to customers and better customer engagement. 

Edge Compute technologies to provide real-time interactions with customers, store staff, amongst others. 

2. Digital store display systems: Use for not just price display but also monetizing the infrastructure by providing product advertising and gamification for better customer engagement.

3. POS systems: Monetize POS infrastructure to display promotions, personalized customer discounts, and advertisements.

4. Digital presence – Mobile, web and store to be in syn:  Keeping a unified, common, and similar experience across all modes of interaction with customers is key, which required the backend technology stack to talk seamlessly with all these modes with a comprehensive 360 view of customers and products. 

Darshan Appayanna is Head-Digital and IT at Trent Hypermarket

Disclaimer: This article is published as part of the IDG Contributor Network. The views expressed in this article are solely those of the contributing authors and not of IDG Media and its editor(s).

The paradox for modern trade retailers in India

The modern trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semi organized and unorganized retailers.

Darshan Appayanna
Darshan_Appayana.jpg

India has been going through a marked disruption in the way retailers have done business in the last decade.

While ecommerce has had a significant impact on non-food retailers, the food retailers are starting to see the impact of changing consumer habits on their core business – Groceries – staples, fresh and frozen, and household products. 

The grocery penetration snapshot: 

•    Ecommerce companies is still in the low single digit numbers
•    Modern trade companies are in the teens
•    Neighbourhood semi organized food markets have been on a steady rise
•    Still, the unorganized mom-pop stores have a largest share in the market

... Modern Trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semiorganized and unorganized retailers. This creates a double whammy for MT companies as they need to both compete in terms of technology with the ecommerce companies and have the agility/ability to provide customized neighbourhood products and customer service to compete with the semi organized and unorganized retailers.
Darshan Appayanna
Head-Digital and IT, Trent Hypermarket

The double whammy

Modern Trade retailers are stuck between the disruptive ecommerce business and the neighbourhood semiorganized and unorganized retailers. This creates a double whammy for MT companies as they need to both compete in terms of technology with the ecommerce companies and have the agility/ability to provide customized neighbourhood products and customer service to compete with the semi organized and unorganized retailers.

To counter this, MT has to bring in big cultural and technology changes to be able to meet both ends of the spectrum. The staples, groceries and household products business work is a low margin business where operational and process efficiency is key to be profitable. And quality of products is foremost to retaining current customers and attracting new buyers.

What the ecommerce companies have done is consumarize the MT business!

This is where technology can play a key role in making a MT company more successful than another by bringing in a better customer experience at the store, any time anywhere service, a 360 customer engagement, streamlining processes to bring in operational efficiencies, and most importantly, being relevant to the millennial consumers with aggressive digital engagement.

Some pointers that will help MT companies be better aligned and ready to meet this challenge are: 

1. Adopt Multi-Use Technologies – to reduce siloed technology cost and become more agile. 

Using video surveillance infrastructure - not just for store monitoring but also for traffic pattern analysis, personalization for customers with targeted promotions, and to build a comprehensive customer profile. 

Store WiFi technologies to provide better omnipresence experience to customers and better customer engagement. 

Edge Compute technologies to provide real-time interactions with customers, store staff, amongst others. 

2. Digital store display systems: Use for not just price display but also monetizing the infrastructure by providing product advertising and gamification for better customer engagement.

3. POS systems: Monetize POS infrastructure to display promotions, personalized customer discounts, and advertisements.

4. Digital presence – Mobile, web and store to be in syn:  Keeping a unified, common, and similar experience across all modes of interaction with customers is key, which required the backend technology stack to talk seamlessly with all these modes with a comprehensive 360 view of customers and products. 

Darshan Appayanna is Head-Digital and IT at Trent Hypermarket

Disclaimer: This article is published as part of the IDG Contributor Network. The views expressed in this article are solely those of the contributing authors and not of IDG Media and its editor(s).