Consumer durables retail efficiency- Images Retail-December 2013


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Consumer durable retail in India have
an extended and a peculiar value chain. Efficiency and integration can bring about a sea change across all points in the 'search to service' business processes.

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Consumer durables retail efficiency- Images Retail-December 2013

  1. 1. TECHNOLOGY Consumer durables and electronics retailing have an extended and a peculiar value chain. Shijo Sunny Thomas writes about an integrated technology layer that will help make the ‘search to service’ process convenient for all stakeholders. A CONSUMER DURABLES RETAIL EXPERIENCE: THINKING OUT OF THE BIG BOX peculiarity about consumer durables and electronics retailing is that it requires a very close collaboration and monitoring amongst retailers, manufacturers, distributors, supply chain partners and finance companies – more collaboration than other retail formats. Consumer durables store retailers in India can breathe a sigh of relief, as ‘showrooming’ has not evolved into a concern as it has in the US. There is still a lot to go before the current smartphone wielding Indian shopper starts scanning barcodes in stores to order the same product online at a lower price. It has more to do with the lack of shopper trust in ordering high-ticket durables online, than better value being found in retail stores. A lot of shoppers are not too convinced yet with the online delivery chain for big box items. The erosion of the current comfort zone is just a matter of time. 62 . IMAGES RETAIL . DECEMBER 2013
  2. 2. However, a different kind of phenomena is emerging in India. Many urban shoppers are researching and comparing products online. Once the research is done, they come armed with this information to stores to pick the store associate’s brain on the features and specifications of the product. Subsequently, the shopper ensues in a negotiation on the price with the department or the store manager. Obviously, the store cannot match the online price, often due to the credibility of the online price source, yet the shopper is offered a comfortable discount. Price is not the decisive factor in these purchases, the experience with the store associate and the brand reputation of the store is. The store purchase of durables also gives a sense of confidence to the shopper on the post-purchase activities. There is always someone to call to check for the delivery time, installation status and organise a quick resolution of any post-installation issues. If the calls fail, the shopper knows that there is a place to drive to, ‘to sort things out’. What this brings to the forefront is the fact that the new age Indian shopper is well informed, connected, technology savvy and expects a huge amount of value transparency in the purchase. This is coupled with high expectations related to the post purchase service reliability, timeliness, visibility and convenience. Delivering exceptional pre-purchase, in-store and post-purchase value to shoppers have become a mandate and a key differentiator in this retail segment. Retailers can provide the expected value to the shoppers by being aware, agile, responsive and operationally efficient. These are tall words to use and it all ultimately boils down to consistency and control in downstream retail execution. Achieving operational efficiency and operational integration is a mainstay of this business segment. In order to derive an efficient and integrated store operations model in the consumer durables retail segment, it is imperative to understand every customer touch-point and how these points can be integrated with the retail organisation. Once these touch-points are identified, it can be determined whether a higher value can be provided at that touch-point and if it can be achieved through technology integration or realigning the business process or both. Let us take some of these touchpoints as examples and derive how these can be integrated with the retail backbone. Purchase of a consumer durables product is often a planned activity where the customer begins by gathering information about the product. A retailer should aim at being present at prominent e-locations, which the customer would visit to search for product information. from the product manufacturer. The product information management system should be flexible enough to accommodate product videos, which showcase scenes such as unboxing, installation and demonstration. An added advantage would be to generate social media feeds on new product launches, which guide the customer to a location where detailed information related to the product is available. The customer should get the feeling that they are interacting with a brand that knows the products it is selling. The designated associate for that product department will have more information to share about the product than what is described in the e-catalogue. The store associate can be equipped with a product Some of the examples are – retailer e-commerce site, price comparison engines, streaming media sites such as YouTube, social media, product review sites, etc. A retailer should look at feeding these locations with comprehensive product information and also facilitate the comparison of various products. The product information repository for a consumer durables retailer should be considered as sacred. Often, the product specifications are so detailed in nature that it requires a constant and filtered connection with the product manufacturer. This ensures that information is received completely, accurately and directly The product information management system should be flexible enough to accommodate product videos, which showcase scenes such as unboxing, installation and demonstration. An added advantage would be to generate social media feeds on new product launches DECEMBER 2013 . IMAGES RETAIL . 63
  3. 3. TECHNOLOGY walkthrough checklist wherein the associate can engage the customer in a discussion to specifically understand their needs and preferences. This can be enabled through a mobile device integrated with the product information management system combined with a recommendation engine that will suggest models based on customer profile and preferences. Now that the associate has wooed the customer into buying the product, the next step often in India is a negotiation on the price. This is where a store associate might not have the required authority and this is just where the department head or the store manager should step in. Often, When the customer visits the store, it is imperative that the same product information is available within the store on a mobile device as well as with the store associate. This helps both the decided as well as the undecided customer some price override approvals will be required from a category or operations person, not located within the store. An approval workflow on a mobile device can help ensure that approvals can be obtained quickly and integrated with the POS application. Additionally, warranty registration can also be triggered to the manufacturer for confirmation. The point in durables retail where the rubber meets the road is in the delivery and installation of products at the customer’s desired location. This is easier said than done. Often the product will need to be shipped to the customer location from a captive warehouse, 3PL managed warehouse or a distributor’s warehouse. The actual delivery might be performed by 64 . IMAGES RETAIL . DECEMBER 2013 own logistics, 3P logistics partner or by distributor managed logistics. The installation is often done by an entity appointed by the product manufacturer for that location. For some products, an installation team does the installation from the retail organisation. It is obvious that the moment the order is generated from the store system, it should trigger a series of sequential requests to multiple internal and thirdparty entities to facilitate the delivery and installation of the product. If the customer could track this process, there is nothing more desirable than that. Although it may sound like an extremely complex technology landscape requiring extensive efforts, it is really not so. Today, there are specialised tools available that combine the power of integration, business logic, workflow and mobility in such a way that highly tailored, light-weight and integrated applications can be created in a matter of hours. What further lowers the TCO is the fact that these non-mission critical applications can be created and securely hosted on the cloud on a usage-based pricing model. On the other hand, standard integration methods reduce the cost and complexity of the integration itself. Whether it be product information management systems, CRM systems, store systems, social media sites, product comparison engines, manufacturer applications or logistics partner sites, these cloud integration tools have readily available integration methods to rapidly and cleanly integrate with any external or internal applications. This ensures that retailers’ IT teams are not busy chasing and resolving integration bottlenecks. For a consumer durables and electronics retailer, being fast and responsive is a part of the organisational DNA. The value that the customer gets from an integrated retail organisation is immense and satisfying. Designing that value is often about thinking out of the big box. About The Author: Shijo Sunny Thomas is the Industry Lead for Retail & CPG at Fujitsu Consulting. He works closely with retailers in coinnovation of retail solutions for the store and the enterprise.