Amazon & Shoppers Stop will jointly benefit from our commercial deal: Govind Shrikhande
In conversation with Govind Shrikhande, Managing Director, Shoppers Stop, who spoke about the company’s business tie up with Amazon India.BY Tanya Krishna | October 06, 2017 | comments ( 0 ) |
Retail giant Shoppers Stop confirmed that it has entered into a commercial agreement with Amazon India to sell its products on the latter’s marketplace. Shoppers Stop has agreed to sell 5 percent stake for approximately Rs. 179 crores to Amazon NV Holdings LLC, the investment arm of Amazon. Shoppers Stop, in a BSE filing, said there is no separate monetary consideration other than the mutual covenants and agreements of the parties.
Earlier, Shoppers Stop had said in a statement that Amazon’s first investment in a brick-and-mortar retailer in the country should not be considered a back-door entry by a foreign retailer into multibranded retailing. We spoke to Govind Shrikhande, Managing Director, Shoppers Stop, about the said agreement and also about how the proposition is a win-win opportunity for both the entities.
Shoppers Stop has entered into a commercial agreement with Amazon India. Tell us about the details of this agreement
Shoppers Stop Ltd. and Amazon.in have entered into an exclusive partnership for the department store format, whereby Shoppers Stop will have an exclusive flagship store on the Amazon marketplace; Shoppers Stop and Amazon India will conduct joint marketing efforts; and Amazon experience centers will be created across the physical network of Shoppers Stop stores.
How will Amazon help Shoppers Stop in marketing and sales of the latter’s products and vice versa?
Amazon India will provide marketing, promotion and visibility support to promote the sale of Shoppers Stop’s portfolio of 400+ brands on Amazon.in. And there will be Amazon experience centres within Shoppers Stop stores for customers to touch and feel to experience its products before buying them. Both the entities will jointly conduct mutually beneficial marketing and promotion activities for better sales. We are extremely excited about this tie-up and we believe it will be a multiplier effect because the traffic that Amazon gets is much larger.
What has motivated Shoppers Stop to go for such digital transformation?
In line with our omni-channel retail vision for the company, we have strengthened our partnership with Amazon to deepen our presence in the online space. In addition to our own shopping site shoppersstop.com (which gets 4 million visitors per month) and mobile app (2 million downloads), we will now be able to leverage the expansive reach of Amazon.in via our exclusive brand store on its website. Overall, this alliance with Amazon.in will give a significant fillip to the growth of our omni-channel business.
What percentage of the company’s revenue come from digital touch points? What is the target percentage Shoppers Stop is aiming at in the next 5 years?
Currently, about 1 percent of our sales come from online. We had targeted to reach 10 percent of sales from online by 2020 through our own omni-channel efforts. We believe that our partnership with Amazon.in will allow us to reach that target much quicker.
How important do you think is offering an omni-channel experience for a retail business? Tell us about the technological upgradations at Shoppers Stop.
We have to follow our customers’ preferences in order to remain relevant and a preferred shopping destination and today customers don’t distinguish between channels. They demand the same experience whichever touch-point they use. So yes, omni-channel is very essential. Amongst the top global retailers, 9 out of 10 are brick and mortar players who have evolved into omni-channel entities.
Our omni-channel journey began in 2015 with our partnership with SAP for their Hybris software - the world’s fastest growing commerce platform provider – aimed at creating a seamless and unified shopping experience to customers across multiple channels, that is, physical stores, web, social and marketplaces.
Subsequently, we have adopted multiple technologies such as Warehouse Management System (WMS), Order Management System, CRM, Enterprise Service Bus and River Sand Master Data Management to enable one-view of the customer, one-view of order and one-view of inventory. This will allow us to provide our customers with a contextual, targeted, personalized and integrated shopping experience.
What does future behold for digital retailing?
We believe that to really succeed in the future, retail needs to be an amalgamation of online and offline, that is, O2O platforms.