Insights

Journey from ‘Brick to Click’

Anuj Roy, Longhouse Consulting

The consumer/retail industry is undergoing transformation as they adopt online medium to reach out to its potential customers. The Indian shoppers are getting more technology savvy and are using web as a media to source information and enhance product knowledge leading to eventual purchase. The fact most retailers are aware of is, that not only has the number of consumers who are buying online increased, but the web-influenced sales have also gone up in recent times. Based on a research done by Forrester Research for US market, the web influenced sales will account for 48% of total retail sales in 2011 and is expected to go up to 53% by 2014. In the Indian context, this becomes significant with increasing usage of the internet, improved bandwidth and the Indian consumers are expected to follow their US counterparts, all of which would shape up the new face of Indian retail. A research by GroupM Search reveals that around $1 Trillion in store sales in the US are influenced by the web and 86 percent of buyers who purchase in-store use generic terms on search engines to inform their purchase decision. As a direct result of the factors stated earlier, this is a paradigm which is increasingly driving big ticket retailers to have an online presence. Hybrid retail (with an integrated e-commerce and physical store model) is increasingly developing as an efficient model for supermarkets, wholesale clubs and retailers offering low-end merchandise and going forward this might emerge as the next big thing in emerging economies.

Online business along with ecommerce is growing very fast. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) announced that “annual growth rate is of 35% and is to touch Rs. 7000 Crores in 2015”.

The challenge that most of the retail firms are addressing is to create an online platform and leverage its existing sales, marketing and supply chain expertise to provide superior customer experience. The number of online retailers across various categories has heavily influenced the traditional brick and mortar players to consider online as a medium to reach out to its potential customers. In US the big names like Wal-Mart Stores and Target Corporation were the early adopters and established successful online marketplaces. The luxury companies initially stayed away from the trend citing factors like the impersonal nature of the experience. Even this trend seems to have changed now and one can spot a wide array of luxury players having an online footprint.

One of the key issues that every organization is trying to address is how to develop leadership teams as they embark on this journey. Some of the key questions that need to be addressed are:

• What are the skills required for the leaders?

• What kind of teams to assemble?

• What are the industry segments to look for potential talent?

• Should the business leader be from traditional consumer businesses, an internet expert, technology specialist or a sales and marketing professionals

The ability to attract and retain talent would be a key differentiator and would be the reason for success of the initiative. The extent of online experience required for the business leader is being discussed; one of the important traits of the e-commerce business head is strong commercial instinct and strategic view. The limited availability of talent who potentially fill in all the criteria is forcing people to make tradeoffs and look for individuals who can build right team to help deliver results.

One of the key skills that an online leader needs to have is the ability to leverage the existing offline set-up and work in a collaborative manner with the existing team. The ability to integrate the online business with the broader organization will often differentiate the winners from the losers.


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