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Indian retail has an exciting potential of 1.2 billion consumers, but is constrained by its relatively inadequate and expensive customer connection points in the form of physical stores. The Federation of Indian Chambers of Commerce and Industry (FICCI) through its recently held event “Massmerize” in Mumbai stressed the need for multi-channel retailing.The emergence of digital channels (laptop, smartphone, and flat panel TV) can augment the retailer’s physical stores in India for not only increasing customer reach but also engaging them through channels that are relevant during their shopping journey. A shift of small percentage of the business to digital channels can bring in the much needed efficiency in the retailer’s business leading to significant improvement in profitability. For a retailer to make this happen, it needs to collaborate very closely with its suppliers and synchronise its operations with their FMCG partners.
According to a white paper on “Driving Indian Consumption Through Integrated Multichannel Retailing” released by FICCI and TCS, Indian retail is poised to become a 1.3 tn dollar opportunity by 2020. Modern retailers in the past have tried to capitalise this opportunity by increasing their store presence across major cities in India. On the other hand, FMCG companies have tried to enhance their distribution reach. FICCI believes that this opportunity, however, cannot be solely addressed by the conventional brick and mortar retail channel. This is because the opportunity is dispersed across the country, where a billion-plus customers need million sales and service touch points. Retailers’ current operating models are not geared up to cater to such unique and ubiquitous customer demand across these million touch points. According to FICCI and TCS, modern retailers have the potential to reach US$ 10 bn of sales through digital, mobile and other non-conventional channels by 2020. The knowledge paper recommends multi-channel retailing as an inevitable choice for Indian retailers for enhanced customer experience and business sustainability.