O2O Strategic adaptions to generate suitable, substantial and sustainable competitive advantage.

1. EXECUTIVE SUMMARY
Overview
Despite of having triple the size of retail market, and more than double per capita
GDP, China is facing hard competition from India for the first position of attractive
retail destination in the world GRDI*.The reason behind this is that Indian retail
industry is still massively under penetrated. The industry is having enormous
scope and source of competitive advantage, in increasing revenue, reducing cost,
increasing speed, expanding reach, eliminating inefficiency, increasing
effectiveness. It is a garden of opportunity there is nothing about luck it's all
about pluck, pluck and pluck. The strive of this whole project is to generate a
source of “Suitable, substantial and sustainable competitive advantage” which
could facilitate us to achieve an equilibrium between “Value, Variety and
Convenience”.
Issue
Retail in India is witnessing unprecedented growth driven by favorable
demographics, young and working population, rising income levels, urbanization,
double income household and growing brand orientation. Both organized
retailers and E-tailers grew at a robust CAGR of 18% and 41% respectively. E-
tailers have witnessed more than double the growth than that of retailers. Which
is fueled by their responsive modal equipped with door step delivery and COD.
The creamy layer the “Millennial youth” took a newfound shine to buying
products so conveniently on the internet. Industry leader like Flipkart & Amazon,
were reported to have clocked 300%–400% growth initially. Indian retail market is
expected to easily achieve the mark of more than a trillion dollar retail industry
by 2022. This appeared eminently achievable that internet retail would be <10%
of total Indian consumption and there was nothing but headroom for growth.

2. Keeping an eye on the rapid growth, market size and customer lifetime value
the E-tailers sought the competitive advantage in “Acquisition”, activities
related to generate more and more market share weather its predatory
pricing, heavy discounts, Higher customer acquisition cost. Three vital steps to
generate a source of competitive advantage is to “Create, Capture and Deliver
the desired value to the prospects”. The E-tailers were continuously delivering
the value which they have subsidized not created, in this acquisition spree.
They single mindedly focus on acquisition matric, failing to adequately examine
secondary and more important metrics like retention. At no point they give
weightage to the quality of customers being acquired, their ability or
willingness to use or pay for the product in the absence of the discount and
subsidized services.
“Value was, is and will always remain the driving force of Indian retail
industry”, what lend credence to this view is the typical “Value minded” and
“Vendor agnostic” tendency of Indian consumer, who tend to have the best
value for each penny spent. The diminishing retention of E-tail's consumer
base in absence of discounts proved it too. The question at this juncture that is
worth asking is; weather organized retailers can reclaim their lose ground by
creating this well proven value?
Solution
Success in retail is no longer defined by how you want to sell but, by how
customer wants to buy. Due to the advent of smartphones and high speed
internet, “The shopping is anywhere and everywhere” The modern consumer
moves fluidly and instinctively across retail brands and channels at the swipe
of a finger or the click of a mouse. The uncertain myriad demand of modern
consumer requires a modal which respond towards the pull of consumer's
demand rather than anticipation in pushing supply towards a certain projected
demand.

3. To allure the prospective customer It is mandatory to understand first what
customer wants from his shopping experience. The entire shopping journey
comprise four mind states IDAS (Impression, Desire development, Action, and
Satisfaction). It's imperative to understand that today's shoppers want to satisfy all
four mind states equally. E-tailers imparts a seamless & fluid buying experience
and make it easier than ever to navigate abundant choices and locate the best
deals with a finger stroke, they can research products, compare prices, and
ultimately make a purchase. This seamless experience accommodate the very
short attention span of shoppers and keep them engage with their channel as they
satisfy their different shopper mind states at the swipe of a finger or the click of a
mouse.
On other hand retailers have built their offer around the “Action” mind state only,
ignoring the importance of rest of the three mind state. Limiting retail
experiences to “Action” is dangerous. As online shopping has grown, Action part
have also begun to move off the high street and away from the malls. This
modern scenario has left the showroom for the Practices like 'show-rooming' —
exploring in-store with one retailer but buying online with another. It will
continue to take more business away from physical stores unless retailers re-think
what their store experiences should bring to the consumer.

4. The need of the hour for retailer is not to look at store design or operations in
isolation. Consider the retail experience in totality, as a matrix, and look for ways to
enhance shopper's experiences across channels and mind states. Help the
shoppers move through it's experience, effortlessly, and on their own terms.
The most fervent issue in current scenario for retail industry is to achieve the best
strategic fit for their business modal. All the global retail players weather E-tailers
or retailers creatively inculcating the favorable attributes from each others’ modal.
Termed as “O2O” “On line to offline” or “Offline to Online”. For the global retail
industry coming five years is for O2O.
.
The strive of this enterprise is to take an innovative initiative to blend the best of
both the modal which could filter all the weaknesses and adapt the strengths of
both the modals to achieve a strategic fit on the spectrum of uncertain demand
and responsiveness. Which facilitate us to generate a source of competitive
advantage which not only enable us to penetrate metro & Tier 1 sphere but also
substantiate our position in existing market.
Unorganized Retail
Organized Retail
E-Commerce
O2O
Region and their trending retail format

5. Key offerings
Stand out of the crowd and
offer a fusion distribution
modal which minimize
customer's cost, hindrance
and risk. Create excitement,
inspiration and ensure the
highest level of retention
and recurrence.
Innovate
Minimize the cost in a way that
don't harm the business and
optimize resources, key
amongst them are; space
optimization to minimize the
holding cost and efficient
inventory management.
Cost Optimization
Redefine the purpose and
philosophy of a store, develop
the store more than just a place
to acquire merchandise. It must
help people enrich their lives.
Otherwise it's just transecting. A
website can do better than this.
Redefine stores
Chalk out a progressive protocol
system to obtain an equilibrium
between holding cost and flow
of goods, improve sell through,
minimize tied up capital and
shrinkage, widen offerings and
increase responsiveness
Inventory
Management
Trim down the holding cost and
tide up capital immensely to
achieve a stage of self-sustained
growth.
Self-sustained
growth
Achieve economy of scale
which further facilitate us to
develop in store labels. As
leading E-commerce companies
generate 25% of their total
revenue from their private label.
Develop Private label

6. In the era of unorganized retail, the
religious practice of ERP and
complete hold on downstream and
upstream activities helped Vishal
retails to generate a source of
competitive advantage which bring
tremendous growth to the
organization. Only Vishal was a
players who swim across the flood
which sunk giants like Koutons,
Priknit, Big apple, Six-ten etc.
Vishal Retails
A sheer strive of implementing Amazon
business modal in India didn't work well
until flip kart adapt COD from china as a
competitive advantage.
Flipkart
A meticulous copy of Instacart enables
Grofers to generate the competitive
advantage even in grocery industry with
paper thin margin.
Grofers
Competitive Advantage

7. Walmart’s “Scan and GO”
Despite of enjoying the largest retailer’s
position and delivering the best value to
consumer Walmart incorporated “Scan
and Go” facility to mitigate the hassle of
check out process which enriched the
consumer’s shopping experience
immensely.
Tesco’s “Home +”
The innovative implementation of virtual
stores fuel the frisk growth of Tesco in South
Korea and made it the second largest retailer
in the country within a short span of time.
Reliance’s “JIO, retail”
In present scenario the most anticipated
project of Reliance is “Jio retail” which is
talk of the town. B2B format is just a
cover up of information gathering
process (Location based consumption
pattern) same what amazon did early via
Junglee.com.
Big Bazar’s “BBD”
Though it was a complete failure but
Big Bazar also tried his hand in fusion
distribution modal.
O2O Adaptions