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. Vasanth Kamatgi, CTO, Ferns N Petals 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?
The Covid-19 outbreak has not only changed our day-to-day life but also the way business operates. In today’s scenario, technological innovations and digitalisation are key drivers of growth. They help improve productivity and solve inefficiencies. As the business environment is evolving rapidly, it is imperative for the retail industry to reshape itself as per the changing demands and needs. The following are some of the tech trends that the industry has adopted during the Covid-19 pandemic:
- Digital payments
- Contactless supply chain integration all the way till last-mile delivery
- Offline applications such as progressive web apps (PWA)
- GPS-based applications
- AI-based use cases such as offering product recommendations
How are technologies such as AI, IoT, robotics, AR/VR and cloud transforming the sector?
Digital transformation in the retail industry has enabled businesses to refurbish business models and operations, meet the changing customer behaviour and expectations, and stay competitive. We plan to continue to focus on digitalisation, robotics and AI to support our decision-making in every aspect of our business. The most commonly applied use cases for AI will be product recommendations, demand forecasting and customer support via chatbots. As for IoT, I have not seen compelling use cases for the technology in our industry yet as viability is a hurdle. Also, the pandemic has accentuated the need for highly efficient warehouse management with minimum human workforce, which can be achieved with the help of robotics.
Embracing cloud is an absolute must for any retail firm to even think about existence. For start-ups, cloud infrastructure brings in the benefits of quick minimum variable product, time-to-market and pay-per-use models. For large firms, cloud offers the ability to scale up infrastructure and services at a very short notice and provides a security layer.
Are you deploying any new-age technology at present? How has it helped enhance your business efficiency?
A few technologies that we are using across our business functions are:
- We are fully on cloud infrastructure
- VR: A very rudimentary application of VR for 3D view of personalised mugs and cushions
- We have already deployed a Data Lake and product recommendation on the customer data platform is in the making
- Proof of concept for automated quality control via image comparison using AI techniques
- GPS: We are piloting a delivery app, which can track the exact location of the delivery executive trackable by the customer, store manager and Ferns N Petals’ operations.
These technology solutions have helped our business by improving the net promoter score (NPS) and conversion rate.
What challenges and opportunities have come to the fore due to the ongoing Covid-19 pandemic?
This pandemic has given us a plethora of opportunities to innovate and evolve our online business. When the nationwide lockdown was announced, we launched digital products for gifting, which were developed almost overnight, such as Musician on Video Call (musical services of guitarist, violinist, flute player, etc.), Celebrity Video Messages, Digital Caricatures, Dance Class on Call and e-greeting cards that can fulfil the gifting needs during the strictest phases of lockdown. Besides digital gifts, during the rakhi season, we witnessed a huge growth in demand of 130 per cent in comparison to previous years. Overall, during this pandemic, our online business has grown about 25 per cent and we expect to continue the growth momentum of our online sales. We are also planning to relook at our warehouse management systems and add more distribution hubs.
Some of the challenges we faced are:
- Last-mile delivery – due to the perishable nature of our products, such as flowers and cakes
- Availability of raw materials
- Availability of workforce, both for product preparation/assembly and for delivery.
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?
The e-commerce business has grown during the pandemic as consumer behaviour is shifting from offline to online very rapidly. Categories that revolve around organic and healthy lifestyles are getting adopted faster than before, and eco-friendly gifting is also further growing. While pull marketing always works, at this time, push marketing channels such as content and direct marketing are yielding results. This is perhaps because consumers are spending more time online and consuming more content. We have ambitious growth plans and we are planning to invest heavily in technology and in the next 18 months, we plan to put Rs 250 million-Rs 300 million in technology to boost our e-commerce segment in the post-Covid era.