Retailers should shape up their thought process: Kishor Chitale

The newly released report of Capegemini on value chain emphasizes that there is no more future supply chain but the future value chain while observing the fact that Indian retailers are still thinking in the online and offline way instead of omni-channel way. Highlighting more on the findings of the report Kishor Chitale, CEO- Local Business Services India & Middle-East, Capegemini India spoke to Indianretailer.com during Retechcon 2016.

What are the findings about Indian retail market in your newly released report on global value chain?
It’s a global report applicable for India. There is no more future supply people are talking about it’s a future value chain as every element of supply chain demanding more value.

We are seeing the change in the Indian market because of the internet penetration and also the boom of e-commerce. There is spurt in e-commerce and it will stabilise as we are seeing the challenges faced by the online suppliers to meet the demand of last mile delivery. The scenario will further change as online players are trying to strengthen the back-end system for physical delivery.

The offline players are also opening more channels online. They are also opting to the new way of dealing with customers with within store experience and that is what will change and narrow the gap between online and offline.

In line with global retailers do you think Indian retailers are fast pacing towards complete omni-channel presence?
Very few companies are even thinking in those lines, their thinking process is of online and offline. There is nothing called offline and online rather we should talk about omni-channel. The more flexibility you provide to the consumer and more ready you make your organisation you will survive because at the end of the day all these changes are happening only because of one thing that is customer becoming the king.

Which key three things will help retailers sustain longer and will click and collect model largely evolve?
Most critical is how retailers gear up with three things that is process of model changes, technology adoption and getting the people ready for change. The retailers which will manage these three things will survive. Apart from this omni-channel is must have, robust back-end is must have and skilled labour is must have factors.

Though eventually retailers will integrate all their channels of trade it might not be the click and collect that will evolve as the Indian psyche believes in touch and feel. Some goods like groceries you cannot click online and collect offline.  

How the contribution of e-commerce can be increased from meagre to considerable for the retailers?
The retailers will have to fine tune their channels aligned to the consumer behaviour and the data analytics and buying behaviour pattern study will play an important role for them. Again it is related to their consumer loyalty programme if they will track their consumers in a more structured manner then they will be able to increase the volume coming out of online shopping and physical delivery.

What is the current market size of retail and e-commerce in India?
Market size is something beyond a common man. As an organisation we know there is market size that companies like us would address. Our role is provide kind of a road map for anyone who wants to play in India and play an important role for online, offline and omni-channel retailers.

By what percentage the market is growing?
For e-commerce it’s a starting point and it’s very small. Now an online retailer can always show a growth of 100-200 percent but there will be a stability factor that will come in as we go on.

What will define the future of retail in India?
They will have no choice but to go omni-channel. Also the hyper local concept will come into the picture because that’s how the retailers will be able to reach the end consumer in the fastest possible way, at the cheapest possible price and with the variety available. The retailers which will shape up their overall thought process and transform the strategies in-line with future change will survive and others will struggle or will be out of the market.

There will not be the one factor that will dominate the future growth. The companies that have mature way of dealing with supply, visibility to their suppliers supply and visibility to their consumer’s consumer in B2B space those will survive. If they will lack that visibility then they will fail. 

What is a global view of the Indian retail market?
Known globally, India is a huge potential and very vibrant market. It’s a market that everyone wants to tap not just because there is a favourable policy side but also because there is a market that exists. Always there is a opportunity for retailers to start with. There are very good examples of foreign retailers started six years back and doing a very good job. It’s upto the retailers who are smart and ahead of time can combine both and be strong.