The next few years will see the battle for e-wallets intensify among retailers and e-tailers
By Sanjay Gupta
Retail, like many other post-liberalization phenomena in India, is unfolding in a curious way.
In the first wave, we saw the Shoppers Stops and Big Bazaars of the world develop millions of square feet of retail space all over India. First in the metros and then in the A and B class cities. (Perhaps we are in the C-town phase right now.)
All those glitzy malls and neatly lined up goods and goodies immediately captured the imagination of the country’s swelling upper middle-class, middle middle-class, lower middle-class and what-class-you.
And not unlike other sectors, retail too had its share of growth pangs—one of the critical ones being lack of a holistic technology infrastructure that could smoothen the links in the chains’ operations, sourcing and customer service.
It was not uncommon (and still can be seen) to witness frequent stock-outs, failure of barcode scanners, confusion in the loyalty schemes and poor customer redress systems.
But as some of the early gusty wind blew its course in the initial years of hyper-growth retail, and as converting more footfalls into additional buyers became increasingly challenging, the players took a relook at their expansion plans, store formats and, yes, technology-enablement.
The role of IT in driving business has also come to the fore with the entry and relative sophistication of several e-tailers, notably, Flipkart, Myntra and eBay, among others (global behemoth Amazon is a recent entrant that is sure to create ripples). The consumers, having gained some e-confidence from exposure to online banking and ticketing, began showing a more than transitory interest in what these guys had to offer—which, at the moment, is quite a lot, ranging from diapers to dinners.
The online retail startups were initially ignored by the “big-and-mortars”. But when the sites got significant traction from buyers, they got tense, went into brooding, and came up with their own online shopfronts.
The way the boundaries between retailers and e-tailers are overlapping, thinning or merging is interesting to watch. If anything, the next couple of years will see the battle for shoppers’ e-wallets intensify (provided the nagging questions of FDI in retail are settled in a pro-growth manner and connectivity takes those next leaps in bandwidth and penetration).
Going forward, enterprise IT investments in retail should also grow beyond the current estimates of about $2.5 billion (as per a Gartner report, this is growing annually at over 12%).
In fact, in addition to those show windows and inviting images, technology can prove to be quite a differentiator in attracting and retaining consumer interest—for retailers and e-tailers alike.
– Sanjay Gupta
Editor, Express Computer
