What does the exit of Flipkart and Future Group Show?
Why did the promoters of Flipkart and Future Group choose to exit? Clearly, the next phases of growth in the retail space are going to be tougher, more expensive and a lot more complicated. In their erstwhile shape, neither Flipkart nor Future Group had the balance sheet muscle to invest heavily in digitization and customer experience. The Indian Retail space now almost becomes a 3-way battle between Amazon, Wal-Mart and Reliance.
With all the three players gunning for the neighbouring Kirana shop, the consolidation of retail is going to be total and also a lot more rapid. That also means that the big 3 will heavily leverage on digital strategies to redefine the customer experience in India. Here is how the customer experience is likely to change in India.
- India gets introduced to the Omni-channel experience
The omni-channel experience is all about creating a click-and-mortar structure where the push and pull models of retail work simultaneously and seamlessly. In short, new retail will be the convergence of physical and digital commerce. The focus of retail will shift to making products available where and when customers want; and not about footfalls any longer.
One standout feature of the omni-channel experience will be the customized shopping experience. Imagine your shopping cart auto filled each month based on your previous 3 month purchases and delivered for your approval. This will reduce your effort substantially. This type of customized shopping experience will increasingly become the norm.
- Future is about Cloud and Integrated Ecommerce
One of the big challenges that small retailers have faced is with respect to inventory matching and management. With the cloud available at a low cost, all these small retailers can be integrated on a cloud platform and provided centralized order management and inventory management. That will actually add value to the retail chain.
- Better use of bots and robotics for the ultimate retail experience
The next step is robotics. There is likely to be an increased use of robotics and automated machines in retail counters, inventory management, and dispatch management. This will not only ensure long term cost efficiency but also automatically digitize the experience and create an invaluable database to mine and act on.
- Get used to more intense use of artificial intelligence
What we have seen till now on the retail front is just the tip of the iceberg. The actual shift could be seen in the next few quarters. There will be intense use of technology at the front end and at the back end. At the front end, technology will be used to enhance the customer experience and to customize the product and solutions to their unique needs.
At the back end, the extensive use of technology will be towards creating an ecosystem where customer demand becomes a simple pull factor. Indian retail is surely moving in that direction!