NASSCOM Address

R Chandrashekhar

President, NASSCOM

Consumer-Centricity     Digital as a Differentiator

Four rapid disruptions re-defining the global retail industry…

“Digital natives” – the age group of 18-24 years - shopped the most via mobile phones

Global demographic shifts

Mobile phone technology

How consumers interact, make decisions, check information, check stock, find stores, communicate

Proliferation of social networks

Developing world: Part of the daily fabric of shopping

Developed world: More communication tool than shopping tool

Evolving role of the store

Premium in the future will be on creating unique, brand-defining offers that keep customers coming back

Increasingly digital world creating empowered consumers and new business environment

Influence on Product Design

Requirement Change

Shorten Lifecycle

Closer Interaction

Demographics & Reach

The concept of customer interaction is drastically changing

Data Explosion

Where is all this data coming from?

Should I be looking at all this data?

What will I get from this data?

What are my competitors doing?

Social Media Why aren’t we tweeting?

Let’s start a blog?

Should we be on facebook?

Growth of Channels

What are the new channels and devices?

Should I be integrating all the channels?

Is my customer on all channels?

Shifting Consumer Demographics

Can I Profile my Customers

Faster time to market: Faster release of products to the market

Clarks’ 3D printing shoe prototypes on demand:

–Cut design/development cycle to weeks (prototypes in few hours vs. 2–3 weeks)

–More models of higher quality in shorter time

–Release shoes earlier in the market

Enhanced user experience (UX): Focus on customer experience

Volvo’s Roam Delivery service:

Via a smart phone app, car owners can have online deliveries left in vehicles or have returns collected from them. Owners can track when their vehicle has been opened and locked

Personal shopping via Google+ Hangout video conferencing:

Users can ask for specific clothes, book one-on-one video sessions and purchase items

Technology enabling retailers retain their competitive edge and stay relevant to their consumer base (1/2)

Digital experience

RFID tags prompt videos on “magic mirrors” about product features

>10% of all orders in flagship store now placed using iPads

Augmented reality:Virtual reality experience

Interactive Sofa Studio allows customization and on-demand manufacture of sofas through 3D printing

Gives users something tangible to base their purchase - improved retail experience

Automated delivery:For last-mile delivery

Technology enabling retailers retain their competitive edge and stay relevant to their consumer base (2/2)

Inventory accuracy to 97% in RFID pilot

– Self-driving cars delivering products to customers

– Robotic drones delivering in 30 minutes

– DHL using PARCELCOPTERS – to deliver medication and other urgent goods in Germany

Automation technology:Increased supply chain productivity Electronics shelf

labelling to automate price changes and save associate time

Automated scheduling based on forecasted demand to reduce costs due to oversupply of labor

Digital disruption – Top Priorities For CIOs In 2015

A

• Social: Sales & marketing,

customer service and recruitment,

linking insights to R&D & design

• Mobility: Mobile POS/payments,

digital signage, context-aware tech

• Analytics/Big data: Descriptive &

predictive to prescriptive, cross

channel analytics

• Cloud: Balancing speed & agility

and privacy & security. Security

(privacy/protection), regulatory

(data retention within boundaries)

• Unified transaction platform:

Fully integrated systems and

pulling together business activities

like cross-channel order,

promotion, inventory, customer

data into one environment

• Data security: Need for speedier

cloud security system. Data

management and collaborative

services to help maintain customer

confidence. Innovation in prevention,

detection, remediation

• Enterprise security: Beyond

compliance with EMV (smart payment

cards) regulations to protect

consumer data collected at point-of-

sale; other potential cyber-attack

weakness like service provider

network links, mobile devices, email

• RFID: Track products from supply

chain to consumer

• 3D printing: “Just in time” supply

chain – lower cost of inventory,

transportation

• Build a single customer experience

• Understand CxOs: Partnerships among IT, marketing, stores, and others - change CIO’s role to being a strategist

• Omni-channel: Integrating various selling channels - see inventory across channels in real time

• Need for speed: Strong governance to measure strategic, tactical and operation imperatives needs

• Up-skill staff:oAlign ageing technology / skills

workforce with new-skills workforceoAddress clients’ ageing technology

needs

•Modernize merchandising systems to optimize assortment, pricing, inventory; also support more frequent price changes

SMAC technologies B Cyber Security C Ecosystem

India’s IT-BPM retail landscape - facts and trends (1/2)

India’s IT-BPM exports: RetailUSD billion

FY2010 FY2015

4.6712808558677

5

9.8

India Retail Market

• India: Ranks 15th on A T Kearney’s 2015 Global Retail Development IndexTM

• Market size: USD 1.3 trillion by 2020

• India: Good opportunity in single-brand retail, cash-and-carry, and eCommerce

CAGR+15%

India IT-BPM exports: Retail

• 10% share in total IT-BPM exports

• 2X growth in exports since FY2010

• eTailing: Fastest growing e-Commerce segment - USD 2.4 billion; >55% CAGR since FY2010

TR

EN

DS

• Indian IT-BPM firms’ niche capabilities - improve supply chain, operational efficiencies, streamline/optimise store ops, manage merchandise, customer loyalty & build/manage multi-channel capabilities

• Analytics: Merchandise & customer analytics, churn analytics, inventory mgmt, supply chain optimisation, sales performance, market mix modeling, CRM, fraud detection and prevention

India’s IT-BPM retail landscape - facts and trends (1/2)

Key IT-BPM investments in retail

• Consulting/implementation: Product/tech implementation, bid data/analytics, custom application development and maintenance, process consulting

• CRM: Customer support, campaign mgmt marketing/promotion, customer insights/retention mgmt

• SCM: Demand/inventory planning / forecasting, procurement & warehouse

• Transaction processing: Real-time order processing mgmt, payment processing, risk/data mgmt

• Sales & marketing: Channel selection, merchandising, internet marketing, sales campaign analytics, etc.

Case examples

Syntel’s Shopper Assist: A consumer mobile app - Consumers can maintain shopping lists, access to product inventory, retailers can offer personalized services - enhance customer loyalty and engagement

Lenskart enables users to try and buy a customized pair of glasses

Snapdeal launched its logistics platform, “Safeship”, that offers an integrated order fulfillment engine to sellers

Flipkart to use analytics to help SMEs scale up business and target right customers - help decide right selling price, payment automation, proper packaging, transportation, brand building

Over 500 eCommerce centric startups in India provide opportunity for retail players to partner and expand market reach

~3,100 Start-ups

~2,000 Digital

~5,00 eCommerce

Indian Start-ups, 2014

eTailing/ RetailApparels, fashion & lifestyle,

mobile handsets & accessories, electronics, etc

~200

eCommerce enablers

~70

~50-60

~15-20

~50Travel/ Ticketing

Ticketing services, hotels and tour packages online

ClassifiedsOffering classifieds space to advertise

product, job, matrimony sites, etc

Financial servicesOnline sale of insurance

related services, utility bill payments, other transactions

Other online servicesOnline discounted deals, coupons, search sites etc

Real time analytics & trackingDelivery &

logistics

Mobile payments

Mobile advertising

Consumer marketing

intelligence

Rise of the eTailers

THANK [email protected]