Correct application of omni-channel retail to help brands boost sales
As per a Forbes India report, Indian consumers, who earlier equated fashion buying with ‘touch and feel’ experience, are slowly warming up to online shopping. Figures indicate India’s online penetration in fashion and lifestyle, which stood at 9-10 per cent in 2019, is expected to rise to 14-17 per cent by 2022. Indian brands aspire for at least 20-30 per cent share of their business to come from online channels.
Brands can explore this growth through two avenues: marketplaces like Flipkart and Amazon and own websites or apps. Of these, marketplace is a more dominant sales channel and constitutes around 80-95 per cent of any brand’s business. A marketplace enables brands to quickly respond to consumer needs with minimum investments in technology and manpower. However, Indian marketplaces focus more on growing their private labels besides forcing brands to shoulder customer discounts, increase marketing spends and be account table for returns.
Despite this, brands cannot simply pull away from marketplaces as building their own websites is challenging given their offline mindset, inadequate capacity building and their incapability to fund early losses.
Clear demarcation of roles
To succeed in online operations, brands need to clearly define the role of each of their online channels and invest accordingly. For instance, they need to focus on their websites for selling fresh merchandise, and exclusive and customized collections. They can launch special online-only assortments or marketplace-specific merchandize to avoid conflict with offline channels.
Brands can also improve customer retention by launching omni-channel loyalty programs or investing in platform-specific marketing, with clear ROI markers jointly owned with the marketplace. Another way they can gain speed to market is by building the right ecosystem of partners. They can invest in relationship managers that conduct Joint Business Planning (JPB) exercises with the respective marketplaces.
While building their websites, brands need to develop a single view of customer across channels to be able to drive hyper-personalization and superior omni-channel experience. They can deploy web crawling to capture competitor data around assortment, pricing etc.
For fashion and lifestyle brands in developed markets, multiple sales channels improve customer interaction. However, India is yet to fully warm upto omni-channel retail as elements like buy only return in store, click and collect self check-out as these concepts are not so relevant in the Indian context.
Focus on staff training and inventory management
In post-COVID world, the need to balance profitability with social distancing norms will drive brands to limit store sizes. This in turn, will help to curtail their inventory sizes. Facilitating ordering and shipping-from their local stores can help brands reduce shipping costs by over 50 per cent. It can also reduce their delivery times from a few days to a few hours. Brands and retailers need to have a single view of inventory across stores and warehouses, with minimal latency. They also need to train their store staff on the use of online stores/endless aisles, updating inventory as soon as a product is sold offline. Adjusting the knowledge of their store staff for omni-channel operations can help brands treat their stores as an experience centers for customers leading to online purchases or as a fulfillment location.
Thus, in order to reinvent strategies and boost sales, it is very important for brands to choose the right omni-channel partners and execute them well.
