Retailers are focussing on multichannel retailing as an opportunity to grow business, increase consumption, and reach out to more consumers as this gives ample scope to grab more eyeballs and saves them from high rental costs. A grocer must build his business from a customer centric perspective, which must include serving customers via many channels (internet, telephone, home delivery, mobile vans, catalogues, kiosks). Indian grocers must leverage many retail channels into their business to ensure that they are omnipresent . No doubt, technology, social media, blogs, etc, will form a very important part of their growth strategy.
Day two of the recently concluded 7th Food & Grocery Forum India held the session," Multi-Channel Retailing for Maximum Outreach to Every Possible Customer and Growing Share of Modern Retail in Food and Grocery," moderated by Sreejith Mohan, GM & Head, Buying and Category Management, Godrej Nature’s Basket. He started the session with an audience poll asking how many among the audience has shopped online and how many has shopped online for grocery products. While 85 percent of the audience said they have shopped online, only a handful raised their hands for online grocery shopping. This set the context for the discussion: Do customers buy grocery online? What are the incentives and deterrents for consumers to shop for grocery online?
Karan Mehrotra, MD, Localbanya.com, said, “Retailers are ready to go online because consumers are ready to buy online. Conventional physical retail does not fulfill all of customer demands and hence they come online for their regular grocery purchase. The key for any online business is the mobile space."
Shaurya Mehta, COO, Ekstop.com said that one of the winning customer value propositions for any online retailer has to be convenience through mile delivery.
The entry barrier for online retail is low. The challenges come with scale especially when there are infrastructural problems. So, as and when an online retailer starts scaling up, the business should focus on the backend infrastructure.
Mehrotra claimed that every aspect of their business is customer focused and customer oriented. Amazon is the greatest proponent of customer centricity philosophy. This has helped Amazon to establish their brand and build a loyal customer base. Perhaps by following this strategy, online grocery retailers in India would also gain customer loyalty.
The question then shifted to how an online grocery retailer can be profitable. Mehrotra and Mehta shared interesting perspectives on this. Both of them believe that their businesses have to have a lean and nimble.
Darshana Shah, Sr VP, Marketing & Visual Merchandising, Hypercity, said that there are still a whole lot of shoppers for whom shopping is an activity. Online cannot give the visual and sensory feelings, the sampling excitement and other experience that shopping in a brick and mortar can. But, at the same time online presents enormous opportunities to complement brick and mortar business of hypermarkets. Hypercity is already doing home delivery for high end brands. The chain is now piloting online retailing for F&V category.
Shah also said that their loyalty programme is playing a big role to make relevant offers available to customer and no wonder it is contributing 50% to sales.
Manoj Satia, MD, Direct2U Retail, represented the aspiring physical retailer who wants to get into online to leverage the lower cost model. He believes that staples is going to be a substantial mix of the product and would be a significant proportion of online grocery sales.
On the other hand, Pradipta Kumar Sahoo, Business Head, Safal, Mother Dairy, does not see a lot of promise in F&V category because of big challenges in the entire F&V e-retailing value chain. He said, “People are now looking at F&V from a health perspective. F&V brings footfall to stores. But retailers are using the category to pull customers at the expense of margins. This is a disservice to the category.”
