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Retailers – The Sleeping Giants Of e-Commerce

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– Naresh Ahuja

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At ETP, as we work with retailers across 20 countries and over 25,000 stores and 500 brands, we have seen tremendous depth in their skills in merchandising, brand management, sales and supply chain management, their understanding of their diverse customers and employees, their ability to manage cycles and seasons and still produce a profit, their infrastructure management, their cash management, so on and so forth.

In the last one year, we have seen these giants waking up to their potential in the eCommerce space. With all their powerful management and execution capability, they could be the game-changers of this new “omni-channel” retail world. Like all large organisations with a legacy and systems and processes in place, they may not be as nimble as the pure-play eCommerce players, however they seem to have got it now and are ramping up their organisations’ technology, culture and capability to play the eCommerce game. At the same time, the eCommerce players have grown and are struggling with the lack of the same competencies that the larger retailers have.

It is a fascinating new battle front and the next couple of years will tell all. My guess is that the winners will be the ones who leverage the core competencies of retail and deploy the technological savviness of eCommerce.

 

This article has been written by:

Naresh Ahuja ETP Naresh Ahuja, Chairman and CEO, ETP Group

Naresh as the Founder, Chairman and CEO of the ETP Group leads the company with a clear focus on bringing enduring value to customers through best practices mirrored in software applications. Spanning 25 years of focus on retail domain expertise and IP development, ETP today, has a strong customer base of market leaders in more than 20 countries across Asia Pacific, India and the Middle East, and is on its way to becoming a global leader in Retail Software Solutions.

Top 5 Questions To Ask Before Investing In Retail POS Technology

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As technology continues to thrive around the world, businesses need to reevaluate their offerings and operations. In retail, the POS is where the ‘business promise’ is realized by the customer. Today, it represents much more than a system to process purchases and can be used as a powerful tool to fulfill both customer and business expectations. So here are the key checks to be made before ringing in a new retail POS system:

Does it provide true integration with enterprise data?
Julia, a customer, approaches the POS terminal to complete her purchase. Paul, the cashier, feeds in Julia’s name or swipes her membership card to access her buying history. The system interface now displays her purchase patterns and past sale analysis. Paul makes recommendations basis the most frequent bought items, preferred modes of payment, and current offerings on her loyalty credits and identifies promotions to cross/up-sell. If a product is not available in-store, he views, ships and tracks products directly from other stores or the warehouse to Julia’s desired location. Through an integrated POS system, Paul accesses real-time enterprise CRM and inventory data, store sales reports, product performance and business analysis. It empowers him to fulfill customer expectations and thus drive demand optimally.

What about omni-channel functions?
Consumer expectations are not just getting the right product at the right price at the right place at the right time, but also the right interaction and the right service everywhere! An omni-channel point-of-sale system streamlines business operations across physical and digital retail platforms. Customers value instant connect with the brand and staying informed, updated and engaged seamlessly across channels. So, while shopping in-store or on a smart device, they are greeted with personalized communication on products, prices and promotions. Retailers also manage multiple touch-points through a centralized supply chain and intuitive system interface. The capability to delight customers across multiple channels lends to a bigger market share and favorable social quotient. The sustained engagement and accessibility also fosters loyalty and distinction from the competition.

So is it completely mobile?
Often times, even the best shopping experiences are ruined by long queues at the checkout counters. In the age of instant gratification, the sight of a long waiting line would deter walk-ins and even lead to basket abandonment. Installing more POS terminals is an impractical solution in terms of added expense, floor space utilization and viability during low rush hours. mPOS technology extends the functions and capabilities of the POS system on smart devices, as an application. It helps in-store staff to approach the customers, consult them basis their CRM profile and conclude the purchase from anywhere in the store. The invoices are electronically transmitted with enough time left to receive valuable feedback from customers. Happy customers often spread the love to other prospects and drive demand. Saving in-store floor space and using cost-effective smart devices optimizes operational costs further.

But will it support business growth?
Retail is growing, markets are expanding and opportunities are abundant. Considering the time it takes to set-up or upgrade enterprise technology software, it is essential to ensure the POS system is future-ready. It needs to be easily scalable and secure with the flexibility to adapt to different markets and industry dynamism. The ROI increases steadily with low administration costs and virtual system updates across the enterprise. The POS system processes are seamlessly automated across channels, providing centralized control. This helps deliver uniform brand experience, uncompromised customer service with complete operational visibility.

Vendor or partner?
Implementing technology is a long-term commitment which requires equal collaboration between the solution partner and the retail organization. While a software vendor might support to the point of implementation, a solution partner will share business goals towards innovation, growth and profitability. It is vital to choose a solution partner who has created a solid foundation in the industry with the experience of working with retailers of similar size and scope of operation as you. Your investments are better protected with a company which has reached the scale to support you globally but keen on continual customer satisfaction to accommodate your unique requirements. The solution partner should be able to dedicate expert teams with in-depth best practices knowledge. This helps structure the implementation, training, consecutive project phases and support in line with the business projections.

Mobile Technology Redefining Retail

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Recently, Flipkart – India’s leading e-commerce marketplace offering over 15 million products cross 70+ categories, announced it would convert into a mobile app-only format within the year. Flipkart’s mobile traffic was at 6% a year ago, but it has increased more than 10 Times since then. The move makes sense as India is the third-largest internet market in the world with more than 243 million users, trailing China and the US in that order. Boston Consulting Group expects more than 580 million people in India to use the internet by 2018, 70-80% of them accessing the web on mobile phones.

Mobile technology has brewed exponential change in retail operations. We dive deeper into the main and most successful components of the same:

Mobile Point Of Sale (mPOS) technology has removed physical limitations on a sale check-out and created more in-store floor space. mPOS technology empowers the in-store staff to use wireless, intuitive mobile and tablet applications to accept payments on the spot. For example, the ETP MobileStore MPOS application integrates in-store item record, customer data, sales person information, product barcodes and multiple payment transactions with electronic invoice capability. This enables features like queue busting, mobile CRM, easy customer/inventory lookup, price check, quick customer service, customer registrations and promotions gratification. mPOS reduces walk-outs and reverses the trend of small basket check-outs through up/cross selling, based on personalized customer profile and secure, faster modes of payments.

Beacon is a hardware technology of nominal cost and it is small enough to be installed anywhere in the store. This battery-friendly device uses Bluetooth to transmit messages or prompts to smartphones and tablets around the store location. With the requisite permissions, beacons integrate with the company’s analytics software and access the customer’s buying history. The messages can be targeted according to past sales, current customer location, average time spent in the store, and more. It seamlessly combines the data captured from both online and physical store, directing online preferences to the retail store. According to customer research, 63% of respondents can be persuaded to enter a store by a push notification sent to their smart device via beacon technology.

The mobilization of shopping with m-commerce has grown exponentially across the world due to the swift adoption of smart mobile devices. The unique selling point remains the convenience of shopping anywhere, any time with multiple payment options. Big data analytics has helped retailers fuel their mobile marketing strategies through data-driven insights. It has helped brands reach consumers who cannot access conventional retail touch-points.

Macy’s became the Retailer of the Year 2014 by embracing image recognition, beacons, mobile wallets and event-driven mobile commerce, bringing added convenience and excitement to the shopping experience in a way few other retailers can match. Mobile technology would continue to thrive, develop and stimulate retail transformations that evolve the customer experience. In the near future, models like social media retail, virtual showrooms and 3D printed customization are going to head the next stage of change.

Asian Retail – The E-Commerce Effect

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Last year eCommerce sales in Asia grew 36% to $615 billion, making it twice as big as the U.S. online retail market. The most illustrious example of this phenomenal growth would be the eCommerce giant Alibaba breaking records with the largest global IPO and raising $25 billion. eCommerce has redefined retail, independent of physical establishments and creating a profitable platform for global expansion. Increasing internet and smartphone penetration has made eCommerce and m-commerce the prime medium to reach consumers in both developing and developed markets. The exploration and expansion of e-commerce in retail has brought powerful technical, logistical, commercial, strategic, behavioral and social dynamism in the market. The popularity of eCommerce is due to many factors, the most basic being easy access to global products, more competitive prices and marketing information with the enjoyment of instant gratification while consuming digital products and services e.g. music, travel tickets, e-books, etc. When these factors are combined with the convenience of avoiding queues and shopping in the comfort of homes and offices, cash-on-delivery at doorstep through personalized service, discounts possible through direct channels, incentivized promotions, and so on, eCommerce becomes not just an off-shoot of retail but the main driver of the industry in Asia, and across the world.

Nike’s brand president Trevor Edwards recently commented on Nike’s mobile traffic exceeding desktop for the first time – “eCommerce has been a winner both from a growth and a profitability standpoint. We are going to continue to invest in digital. We believe that’s where the consumer is and is going. And that’s where our brand is and is going. So we’re going to continue to invest there. But from an economic standpoint, it’s been a very positive driver for business both at top line and bottom line.” He believes this is a signal that the company’s long-term efforts to cash in on cross-channel promotions are starting to take effect.

Following are some pivotal eCommerce trends in Asian retail:

China will exceed $1 trillion in retail eCommerce sales by 2018, accounting for more than 40% of the total worldwide. China’s eCommerce market is forecasted to be larger than those of the U.S., Britain, Japan, Germany and France combined. The future development of China’s eCommerce channel is closely linked to technology developments and also the behavior of Chinese consumers, including the way they research and order products online, and their preference for speed and convenience.

The number of internet users in India soared from approximately 20 million in 2004 to nearly 250 million in 2014. An analysis of the demographic profile of internet users further testifies that eCommerce will rise rapidly in India in the coming years. Around 75% of Indian internet users are in the age group of 15 to 34 years. This category shops more than the remaining population. With a new pro-business government, the eCommerce sector is maturing and a number of serious national and international players are entering the market.

The highest B2C eCommerce growth rate in South East Asia is seen in Indonesia. The fourth most populous country in the world, Indonesia has a relatively low penetration of internet users, evaluated below 30% in 2013. However, by 2016 the number of internet users is projected to top 100 million, with online shopper penetration also increasing. Shopping via smartphones is also on the rise, with some merchants reporting as much as one third of total online sales coming through m-commerce.

Despite its relatively small population, Singapore ranks high in eCommerce indexes due to its developed infrastructure. The highest internet penetration in the region, the world’s highest ranking in ease of conducting business and one of the top 3 best logistics infrastructures in the world with a high-performing payments system make Singapore an attractive market for online retailers.

Vietnam makes for a fertile eCommerce market and as close to 87 million aspiring consumers are taking advantage of increased broadband availability and steadily growing incomes. Its eCommerce industry was valued at $300 million in 2011, but global reports estimate that it has grown and will continue to mature at a rate of 75 percent each year until 2015.

South Korea is the third-largest retail eCommerce market in Asia-Pacific, after China and Japan, and the seventh-largest retail eCommerce market worldwide. Retail eCommerce sales in South Korea are expected to reach $36.76 billion in 2015.

Japan is a strong and mature eCommerce market, with a high proportion of urban population and significant internet penetration rate at almost 80%. 75% of the population have purchased products online, and 89% of this group have done so from a mobile device.

ETP Group – Getting It Right In Retail

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In 2014, 50,000 retail associates used ETP Retail Software Solutions to serve 180,000,000 consumers, selling USD 15,000,000,000 of merchandise. Over 300 global brands in 20 countries, across 10 time-zones, in 200+ cities, at 25,000+ stores, in 5 languages, run on ETP. More than 500 enterprise software projects were successfully implemented for leading retailers throughout Asia Pacific.

Founded in 1988, ETP Group is a leading retail software solutions company headquartered in Singapore with a presence in 20 countries across Asia Pacific and the Middle East. ETP’s value proposition is its ability to create innovative retail software solutions, to deliver domain expertise through its  best practices knowledge base and expert team of consultants adding up to 1800 man years of retail expertise in various retail verticals: Apparel, Fashion Footwear, Sports Goods, Luggage and Hand Bags, Time Pieces, Luxury Goods, Mobile Phones and Accessories, Electronics and Multimedia Communications, Furniture and Home Furnishings, Jewelry and more.

ETP’s Retail Software Solution – ETP V5 is an enterprise class, scalable and secure platform for large to mid-sized retailers. ETP V5 includes forward looking innovations in omni channel store solutions, marketing campaigns and CRM, supply chain management and warehousing, merchandise planning, assortment planning and OTB with powerful analytics solutions. With a simple and user-friendly interface and a range of mobile, social media and web apps, it is tuned to the new generation of retail employees.

ETP’s 25 years in the retail space has resulted in ETP building a powerful and solid domain expertise, demonstrable through its renowned best practices templates, which are used during the implementation of the ETP V5 solution. Companies looking for advanced technology to improve their business efficiencies and a long term, stable partner find value in ETP.

On The Horizon – Retail 2020

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“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – Socrates

Retail is changing, as an industry, as a business and even as a concept. The rapidly evolving dynamics of demographics, emerging markets and raw materials, disruptive technologies, changing lifestyles and consumer expectations are some of the key elements to bring about this change. As the renowned scholar is quoted above, these conditions cease to be a challenge if retailers actively participate in building new self-sustaining retail ecosystems that explore opportunities to convert people not sales.

“Leading retailers will be those that are the best conversationalists and are good at listening to their shoppers’ needs, along with communicating a secure and self-confident image to their consumers. They will need to re-act quickly, be where the shopper is and offer relevant messaging all in the timeframe that is important to the customer.” says Al Meyers, Director of Retail and Consumer Practice, PwC.

Citing a Jones Lang LaSalle Report – Real developments will come through new ideas and a more sophisticated execution of those ideas. Consumers want emotion and they want realness; a poor imitation will fall flatter than a bad joke. They want local and global, they want ethical, they want smooth seamlessness, they want great design. They want more authenticity and they want more lively change.

Naresh Ahuja, Chairman & CEO, ETP Group , represented similar views at the 5th Annual Retail Congress Asia Pacific 2015. During the panel session, he elaborated on how customer experience and satisfaction, in the final mile of fulfilment, is one of the most critical factors for retailers.

New Age Retail – Business Culture And Engagement

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The retail industry is one of the main drivers of employment around the world and a major contributor to the GDP increase of most Asian countries. The retail arena has been transformed through multiple market upheavals and strategic developments – from opening economies leading to true globalization in the industry to emerging markets rising as dominant competitors. Parallel to this, technological evolution created burgeoning business domains e.g. ecommerce, mobile applications, social media communication etc. establishing changing consumer preferences and expectations.

The industry has been historically the first avenue of employment for many new workers. The changing rules of retail combined with the upsurge of young, educated workforce in Asian countries has greatly propelled business growth and foreign investment. There is a need for stabilizing business culture and engagement which encourages the workforce to pursue opportunities in retail and form a stronger industry foundation.

“Asia has the potential to drive innovation in areas such as e-commerce and in developing new products. Japan, South Korea and Taiwan are home to some of the world’s leading electronics companies. And, China and India’s consumers are some of the world’s most active users of mobile technology and social media,” says Michael Cheng, PwC’s Retail and Consumer Leader for Asia Pacific and Hong Kong/China. “While shopping via social media platforms is still a new trend, it won’t be long before consumers jump on the s-commerce bandwagon.”

To understand and harness the dynamics of new-age retail, leading retailers and industry experts from across the world will be congregating at the 5th Annual Retail Congress Asia Pacific 2015, Singapore. As Key Partner to the event, ETP will be leading discussions on Asian retail and its emerging markets.

Shopping Today Is A Highly Social Activity

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Leveraging social media to enhance customer engagement
– Rudi Steffens
ETP blog social shopping

I am writing this as a father, husband and retail industry professional. Today, people are connected through several different mediums and channels and businesses are no different. The lines between personal and business connections are blurred and sometimes even non-existent.

Social media is the new super power of buying and selling. If I want to know about a product, I go online and in most cases use the social media portals. I don’t just want to know what my friends think about a product, I want to know what the world thinks! The more information I can get my hands on, the more informed choice I can make. I want to walk into a store, pay for my product and walk out. I can do all of this today because of social media.

Consider these facts from Internet Retailer’s Newly Released 2015 Social Media 500

The top 500 online merchants –

  • boosted their collective number of Facebook Likes 33% in 2014 to 915.7 million
  • grew their Twitter followings 26% to 88.6 million
  • increased their Pinterestfollowers 16% to 34.7 million
  • 78% more video views on YouTube for a total of 3.89 billion

Mobile technologies enable retailers to offer in-store discounts to shoppers who are checking prices online while at the store. Customers expect stores to have apps that help with aisle navigation, product location within the store and quick product pick-up. Video chats on smartphones in brick-and-mortar stores enable shoppers to have a live chat with product experts and not have to wait for a shop assistant to become available. Free in-store Wi-Fi encourages this updated shopping experience. The ongoing convergence of the in-store and online shopping experiences continue to present both a challenge and an opportunity for retailers. When it comes to embracing social selling, those with the right technologies in place to meet and even exceed the customers’ growing expectations are sure to be rewarded for their efforts.

The question is, what can the retailer do to make me come to them and purchase a product?

They could make my choice easy. I want to be proactively informed about new products which are linked to e-commerce and m-commerce channels. These mediums need to be user-friendly and should have my profile saved with the option to secure and save my payment options for quick checkouts. Remember my kids’ birthdays and remind me about Valentine’s Day. Know what I bought last time and recommend something new, based on my buying history and feedback. If I feel the offerings are curated as per my taste and desires, I am sure to come back for more.

Lastly, service with a smile and with value-driven choice.

International Retail Expansion In India

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India dominates the future plans of most CXOs of global enterprises around the world. This is especially due to the new pro-business government inclined to push past facial foreign engagement which was adopted most of the last decade. Serious steps and calibrated operations are put in place to create an internationally savvy, productive ecosystem for major industries like retail, technology, hospitality, manufacturing etc. Most international businesses are planning to accelerate existing operations or enter into fertile ventures in the country. As an emerging market strategy, India accounts for a large chunk of their capital allocation, largely due to the educated, abundant and young work force with proficient skill-sets from manufacturing, engineering to creative arts and life sciences.

“India is blessed with a greater degree of persistence than the average emerging market (EM) when it comes to portfolio inflows. During the market ‘taper tantrums’ last year and in the more recent October correction, India suffered outflows along with other EM equity and debt markets. But recovery in portfolio flows after each disruption has tended to come sooner and more convincingly in India’s case than for other emerging markets.” says Geoff Lewis, Executive Director-Global Market Strategist, JPMorgan AMC in Money Today – December 2014.

Indian Retail Sector is continuing to grow despite irregular global economic trends. A.T. Kearney, a global consultancy firm, has ranked India as the fourth most attractive nation for retail investment among 30 emerging markets. The Business Monitor International India Retail report has estimated that the total retail sales in India will grow from US$ 411 billion in 2011 to US$ 804 billion by 2015. Robust economic growth, high disposable income with the end-consumer and rapid construction of organized retail infrastructure are key factors behind the forecast.

A panel of retailers and market experts will discuss the challenges and growth opportunities for international retail in India at the Retail Congress Asia Pacific 2015. ETP Group is proud to be the  Key Partner  at the Retail Congress Asia Pacific 2015.

Why You Need To Be Pro-Phygital In Retail

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The term ‘Phygital’ is derived from the existing and emerging technology which employs the concept of bridging the gap between the physical and digital world, through convenient and interactive experiences.

In retail, phygital signifies the convergence of the physical and digital marketplace which helps brands and enterprises to engage customers on a broader spectrum and create a retail ecosystem which is truly seamless.

To cite a couple of examples, Tesco’s Homeplus pioneered the virtual supermarket where consumers scan the QR code of the product they’d like and the item is automatically added to an online shopping cart. Post payment through the secured mobile app, shoppers can continue towards home to find a bag of groceries on their doorstep. Brazilian fashion retailer C&A created a store with real-time “likes” counters on its clothes hangers. The like data was taken from C&A’s Facebook page where the clothes were listed for people to interact with, allowing customers at the store to see how many people online think that a particular product was a good buy.

The last couple of years have shown us the phygital marketplace is teeming with opportunities and retailers have just begun to explore and execute the same. In many ways, it is the organic evolution of the omni channel retail space with a multi-dimensional approach to not just increase customer reach and revenue but also create experiences that weave themselves perfectly into the customers’ lives.

Charles Darwin said, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Shoppers today have adapted to change and traversed onto the interchangeable, interdependent and integrated multiple channels of retail.

Global leaders in retail will engage and exchange their perspective and ideas on the evolution of phygital retailing at the Retail Congress Asia Pacific 2015. ETP Group is proud to be the Key Partner at the Retail Congress Asia Pacific 2015.