The retail sector has been undergoing rapid digitalisation in the past couple of years. New-age technologies such as artificial intelligence (AI), internet of things (IoT), augmented reality (AR)/virtual reality (VR), cloud and big data are increasingly making inroads into the sector as enterprises are taking concrete measures to provide a more immersive experience to their customers. The ongoing Covid-19 pandemic has further provided a thrust to digital uptake in the sector. As such, the e-commerce market is expanding at an exponential rate. That said, the deployment of these technologies comes with its own set of challenges. Varun Alagh, Co-Founder, Mamaearth shares his views on how ICT is transforming the retail sector and the various opportunities/challenges that the Covid-19 crisis is presenting…
What are the key ICT trends shaping the retail industry at present?
Technology is evolving at a pace faster than we could ever imagine and it is changing the way every industry does business. Retail businesses are also adopting ICT to their advantage and transforming the way we shop. IoT is set to enhance the shopping experience by making it possible to deliver personalised services to each customer. According to NASSCOM, the IoT market in India is expected to reach $15 billion this year, accounting for almost 5 per cent of the total global market. India is expected to have more than 2 billion devices connected to the internet by 2025. IoT is not only changing the way we live by enabling connected homes and buildings, but is also changing the way we do business. Companies can now track information on how customers are engaging with the products through their digital devices and use this data to optimise their user experience. Another powerful tool for retailers is the recommendation engine that analyses customers’ shopping behaviour and helps them find things they did not even know they needed.
How are technologies such as AI, IoT, robotics, AR/VR and cloud transforming the sector?
Even though the concept of VR has been around for a while, it is a trend that is continuing to expand and is making waves across sectors. There is a significant potential for using VR in online retailing. It allows businesses to create much more immersive and engaging experiences for shoppers. Even AI in retail is being applied in new ways across the industry – from sales and customer relationship management applications to manufacturing, logistics and payments.
Are you deploying any new-age technology at present? How has it helped enhance your business efficiency?
Being a digital-first brand, technology is essential to us. Customer acquisition is done on the digital medium and the major part of our business is direct-to-consumer (D2C). Our focus on UI and UX comes from having a holistic and strategic approach for the entire customer journey. This has helped us in acquiring the right insights and building long-term relationships with our consumers. We are also using technology to communicate our brand story to consumers and create a unique brand identity. From social media marketing to content-driven purchases, we are tapping the influencer market and gaining customers through digital word of mouth.
What challenges and opportunities have come to the fore due to the ongoing Covid-19 pandemic?
In the initial days of the lockdown, we were hit by a manufacturing slowdown, like everyone else in the industry. We recovered quickly and bounced back to our pre-Covid growth. We are currently servicing more than 26,000 pin codes, including the red zone, which is around 85-90 per cent of all pin codes in the country. With increasing public awareness and demand for hygiene products, we have even launched a new line of products, centred around personal hygiene, which are now reaching the warehouses and are ready to be shipped.
What kind of change has the Covid-19 pandemic brought to your business and marketing strategies? What key emerging trends do you expect in the near future?
As a company (Honasa Consumer Private Limited), we are building digital-first, millennial D2C brands. In India, only 3-5 per cent of sales are currently online in the personal care market, that is, well over $15 billion. This number will easily double in the next seven to eight years. And we will keep finding different FMCG niches where there is a need for digital-first disruption.
The Covid-19 pandemic has only strengthened our strategic decision to build digital-first brands. There is a significant change in consumers’ attitudes and shopping behaviour that has led to the start of a new digital era. People are now embracing technology more than ever and this technology adoption is expected to continue post-Covid as well.