Praveen Shrikhande, the Chief Digital & Information Officer (CDIO) at Aditya Birla Fashion Retail Ltd., (ABFRL) on the company’s continued focus on technology adoption for improved efficiencies and its unwavering commitment to ensuring that both its front-line and back-end staff are optimally trained to harness technology for the ultimate enhancement of the customer experience
With 3,574 brand stores, ABFRL boasts India’s most extensive network of branded fashion distribution. With a diverse portfolio that spans value-focused fashion at Pantaloons on one end and the upscale shopping experience at The Collective on the other, the company serves a broad spectrum of customers nationwide. Its advanced technology infrastructure not only delivers a seamless omnichannel experience to customers but also empowers its front-line and back-end teams to efficiently fulfil their assigned responsibilities.
Praveen Shrikhande, the Chief Digital & Information Officer (CDIO) at Aditya Birla Fashion Retail Ltd., highlights the company’s venture into the online realm, which commenced approximately a decade ago. He elaborates, “As you are aware, ABFRL has predominantly operated as a brick-and-mortar retailer for the majority of its 25 to 30-year history. Over the past decade, we have witnessed a significant transformation in the retail landscape. Both us and many traditional offline retailers have had to adapt our offerings to cater to customers who seamlessly transition between online and offline shopping.”
Shrikhande emphasizes that maintaining an online presence facilitates the collection of valuable customer behaviour data, a task that may not be as effectively achievable with a purely offline presence. According to him, leveraging the capabilities afforded by the online platform, such as the ability to amass vast amounts of data from online shoppers, and the omnipresence of this platform accessible to customers across the country and the world, is crucial.
“Harnessing these capabilities while simultaneously maintaining the visibility of your brand in the offline world, and doing so seamlessly for customers, merchandise, and internal processes, is at the heart of the innovation and digital transformation required when transitioning from being primarily an offline player to becoming an omnichannel retailer,” Shrikhande explains.
E-commerce adoption in India
Shrikhande feels that India has lagged behind in the adoption of online retail. “If we observe what has occurred in most Western countries or even in China, online shopping constitutes over 30 to 40% of the total fashion retail market. In India, this was not the case before Covid-19; the numbers were notably low. Many believed that India’s transition to online retail would take some time. However, Covid-19 provided a significant impetus,” he shares.
It’s worth noting that ABFRL experienced a remarkable 12% surge in share of online sales following the Covid-19 period, compared to the meagre 2-3% before 2020.
However, now that the Covid-19 effect has waned, ABFRL is witnessing a substantial return of customers to physical retail stores. “Online retail is poised to remain a significant segment, accounting for 10-15% of our sales and is likely to follow the global trend of continued growth,” feels Shrikhande.
He feels that while online retail may not experience the rapid surge seen during the Covid-19 years, it will steadily expand over time, driven by the digitally savvy younger generation, who will increasingly constitute a larger portion of the company’s customer base. “We anticipate a continued increase in the share of online sales,” he adds.
Fashion can neither be pure online or offline
As Shrikhande emphasizes, fashion stands out as a category where the tactile experience of the product plays a significant role. Moreover, fashion trends are constantly evolving, prompting people to seek new styles. This intrinsic need for physical engagement will persist. Fashion differs markedly from other sectors such as electronics or groceries.
“Hence, we anticipate that a hybrid approach of online and offline retail will continue to prevail. The success of brands will hinge on their ability to seamlessly guide customers through their journey, whether it involves online exploration and offline purchase, online exploration, offline product trial, and subsequent online purchase, or various other combinations,” Shrikhande explains.
According to him, online retail provides the capability to comprehensively track a customer’s journey. When a customer visits your website or app, you gain precise insights into their preferences, the products they browse, and their intent—a level of insight that remains elusive in offline retail environments. Offline interactions with customers are usually limited to their purchases, with minimal knowledge about their browsing behaviour and foot traffic.
“However, emerging technologies are bridging this gap, allowing offline retailers to track customer behaviour as effectively as their online counterparts. The objective is to enable data analytics and machine learning to power accurate recommendations and other personalized services, both in physical stores and online,” the CDIO explains.
Furthermore, he emphasizes the critical importance of seamlessly integrating the omnichannel experience. When a customer engages with your online platform and subsequently enters a physical store, it becomes essential for the sales staff to possess insights into the customer’s online interactions. This integration fosters enhanced and more efficient customer engagement.
The pivotal strategy revolves around the translation of data analytics and technological innovations that have revolutionized the online realm into practical applications within the offline retail landscape. Essentially, this encapsulates the fundamental philosophy guiding the role of technology in traditional brick-and-mortar retail.
The dynamics in-store technologies
Shrikhande reveals that ABFRL monitors foot traffic meticulously in its offline operations to gauge the ratio of visits to sales and conversions. Utilizing visual tools linked to CCTV systems, ABFRL captures images to track the number of visitors entering the store, and this process is entirely automated.
Currently, the company has successfully integrated data streams from both online and offline sources.
Its unified loyalty programme spanning online and offline realms helps the company maintain a comprehensive record of customer purchases in both domains. “This rich dataset empowers us to tailor product recommendations and marketing campaigns for both our online and offline channels,” Shrikhande explains.
Online, identifying customers is immediate, as they log into the company’s websites. However, in a store, the journey begins by acquiring customer information, often through a mobile number or other mechanisms. This is a key distinction in how offline operations function.
To address this, ABFRL has developed tools that enable the identification of customers through their mobile numbers or other means. The same recommendation engine employed online is now available to the in-store staff, facilitating a deeper understanding of what topics to engage the customer with—an approach ABFRL refers to as ‘Clienteling’.
“We have implemented it at select brands, particularly those with high engagement levels. For instance, The Collective Brand, which represents our premium segment, has embraced this technology,” Shrikhande says.
However, he points out that not all tools are suited for every offline setting. For instance, in value-focused brands, where personal interaction with every customer may not be feasible, these tools may not be deployed universally. However, in high-value stores where effective customer engagement is paramount, one can seamlessly apply the same models that have proven successful online to enhance offline interactions.
Consistent pricing across channels
Few things are more frustrating for customers than having to painstakingly compare prices for a desired product across various platforms, be it a brand’s website or other e-commerce marketplaces. Remarkably, ABFRL has effectively maintained uniform pricing across its channels, a strategy rooted in the company’s core business philosophy, as elucidated by Shrikhande.
“In technical terms, our approach is to seamlessly integrate all pricing into a centralized system within our core ERP. This single pricing source is then automatically disseminated to all channels. Any update made centrally, reflects across all marketplaces and our websites in real time. The key here lies in the back-end system integration, which is crucial for achieving a seamless omnichannel experience,” Shrikhande elaborates.
Key in-store technological advancements
Highlighting the array of in-store technologies implemented across ABFRL’s various brands, Shrikhande says, “Customers who visit our physical stores are typically seeking a different type of engagement compared to online shopping. To cater to this, we have introduced a virtual store concept in the form of kiosks, now available in several of our lifestyle stores. We have also incorporated footfall technology, enabling us to track store visits and gain insights into the profiles of our in-store customers.”
He goes on to explain that ABFRL distinguishes between backend processes and customer-facing elements in its in-store operations. While the company has implemented Clienteling on the customer-facing side, the backend involves automating various store processes, such as store opening procedures and stocktaking.
Furthermore, for some of its brands, it is exploring the use of RFID, which significantly simplifies inventory management. Given that most of the company’s stores are now omnichannel enabled with the ability to fulfil online orders from the store, a common have encountered the challenge of efficiently picking and packing items for online customers within the store environment. Unlike warehouses where items are systematically catalogued and stored, stores have a different setup.
“To address this, we have implemented technology solutions in select Pantaloons stores. These stores utilize a mobile application that assists staff in identifying and swiftly retrieving products to fulfil online orders that will be collected at the store.”
At ABFRL, substantial emphasis is placed on optimizing backend processes, as this ultimately enhances store efficiency and order fulfilment performance. Currently, over 40% of their e-commerce orders are fulfilled directly from their physical stores, underscoring the significance of these technological advancements in their operations.
While self-checkout systems have been commonplace in the Western world for over two decades, India is gradually witnessing the introduction of this feature in select retail establishments. For instance, the recently launched Pantaloons store in Kolkata features self-checkout capabilities, but the system is activated by the store in-charge based on the specific requirements of the moment.
Integrating franchises
In the retail landscape, the Point of Sale (POS) system stands as one of the most pivotal components. Particularly for brands boasting an extensive network of franchise stores, it becomes paramount to ensure that the POS system is under the company’s management.
As Shrikhande explains, “The POS system, whether it’s within our company-owned stores or at franchise locations, is consistently managed by us. We’ve adopted this practice for several years now.”
Implementing its own POS system across both corporate and franchise stores allows ABFRL to seamlessly access a unified view of its customers, regardless of their choice of shopping destination—company or franchise stores.
ABFRL’s dedicated on-boarding teams play a crucial role in ensuring that new franchisees acclimate themselves to the company’s technology ecosystem. “Presently, we are transitioning towards a comprehensive cloud-based Point of Sale (POS) system,” he explains.
Sustainabilty and technology
Shrikhande highlights that sustainability in the fashion retail industry encompasses several dimensions. One aspect involves managing the retailer’s own carbon footprint, an area where ABFRL has achieved notable progress. Its commitment to sustainability entails the adoption of renewable energy sources and optimizing electricity consumption, among other measures.
The other facet pertains to the entire lifecycle of the fashion industry, which is beyond the direct control of a retailer. The processes encompassing textile manufacturing and recycling are part of a broader landscape. “The apparel industry as a whole is exploring ways to address these challenges. We’ve explored certain technologies that enable the tracing of raw materials used in the production of garments. Some textile companies offer solutions in this regard, and we are considering their integration to empower customers with the ability to trace the origins of the materials used in their garments,” he explains.
On the customer front, recycling plays a pivotal role, although India differs from disposal-oriented economies. “In India, the concept of ‘use and throw’ is not as prevalent. Therefore, recycling isn’t a major concern here. However, we are working on establishing a system for efficiently managing garment exchanges, allowing customers to replace old clothing with new ones. Additionally, we aim to leverage technology to enhance the entire recycling process,” Shrikhande explains.
On AR and VR
Shrikhande acknowledges that augmented reality (AR) and virtual reality (VR) are still in their early stages. He explains, “The concept of the metaverse experienced significant hype about three years ago, but its adoption remains limited. The primary obstacle is the high cost of devices. Creating a seamless AR and VR experience is futile if people do not possess the necessary devices. Unlike mobile phones, which are ubiquitous, the prevalence of AR and VR devices is still relatively low due to their cost.”
Therefore, the use cases for AR and VR are still evolving, and the entire ecosystem needs further development. It’s a combination of the device, the applications, and customer adoption—all three elements must reach a critical mass before these technologies become truly viable, according to him.
Expanding on this, he adds, “With any new technology, it’s challenging to predict when it will mature and become widely accepted. When it does reach that point, adoption can escalate rapidly, as we’ve witnessed with smartphones—the classic example.”
Meeting customer expectations
In conclusion, Shrikhande offers insights into the core customer expectations when engaging with a brand, whether through offline or online channels. He states, “Customers anticipate that their retail experience, be it online or offline, should be efficient and hassle-free. When placing an online order, the expectation is to receive the order promptly, stay informed about its status, receive updates about new product launches, receive personalized recommendations that align with their preferences, and enjoy enhanced engagement opportunities with the brand.”
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The dynamics of in-store technologies in India
The landscape of the digital customer experience is still in a state of evolution. Elaborating on this, Shrikhande shares, “For instance, consider Amazon Go, where there is no staff; you simply enter, select your items, and exit, with everything from billing to handling being automated.”
According to him, virtual try-ons and similar innovations are emerging, but widespread adoption remains limited. “This is partly due to the fact that, when customers visit a physical store, they still prefer interacting with a human being and not necessarily looking at coming across technological innovations. Therefore, the current focus should be on empowering store staff through technology, rather than using technology as the primary means of customer interaction.”
On being asked whether the Indian customers desire this change of having high tech solutions online as well as offline, he shares, “There is no one-size-fits-all answer. Customer preferences vary significantly from brand to brand and product to product. A customer shopping at a Pantaloons store, for example, differs markedly from a customer at a Forever 21 store, both in terms of profile and digital maturity.”
Consequently, for a company like ABFRL, embracing technological experimentation becomes crucial. “Rather than making assumptions about customer preferences, it’s essential to explore cutting-edge technologies. Experimentation with technology is essential because when the right solution emerges, rapid deployment will be necessary,” he says.
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The top areas of focus
- Omnichannel: This entails the ability to handle online orders and facilitate in-store pickup or combining backend systems to make store inventory accessible online. “Omnichannel technology has been a crucial enabler for us, enabling seamless customer support across both online and offline channels,” says Shrikhande.
- Marketing Automation: In today’s retail landscape, the ability to engage with customers through platforms like WhatsApp and Chatbots is paramount. “The realm of customer engagement and marketing automation, including these technologies, ranks second in importance,” the ABFRL CDIO says.
- Supply chain optimization: Numerous technologies are involved in determining what products should be stocked at each store, considering the finite space available. Customer preferences can vary significantly by region, making it challenging to decide the right product assortment for each store. “Store replenishment technology comes into play here, backed by extensive analytics. Past sales data is analyzed to make data-driven decisions about which products are likely to perform best in specific stores,” he explains.
- Data Analytics: Shrikhande underscores the significance of data analytics, encompassing machine learning and artificial intelligence (AI), as a critical investment. ABFRL has established a central data warehouse and is now migrating it to a cloud-based infrastructure to harness the full potential of these technologies.
