Experts highlight that the pace of AI adoption in 2024 will be much faster than earlier, but it will depend on certain factors

 

New Delhi: Indian retailers are hoping to ramp up their spending on AI (Artificial Intelligence) in 2024. They seek to achieve stronger client relationships with anticipatory analytics reshaping demand forecasting, and refining inventory management.

The rapid pace of adoption and the increasing areas of operations are owing to the successful implementation of AI in customer management, personalised offerings, ease of finding products and result-oriented productivity that retailers saw in previous years.

IndiaRetailing had earlier reported on how retail companies globally leverage generative AI’s potential in their daily operations and offerings.

These daily operations included AI-based visual searches; ad creation; image, text and video generation for marketing campaigns; supply chain management and many other areas of operations.

Data from Fortune Business Insights show that retailers spent $5.50 billion in 2022 on AI-led automation and projects and this spending is projected to jump by 34% compound-annual-growth-rate (CAGR) to reach $55.53 billion by 2030.

The report further said that India is expected to register the highest CAGR in the adoption and implementation of AI in the Asia-Pacific (APAC) region because of its high demand for automation tools.

While companies used it to boost productivity and to smoothen their daily operations in 2023, they are expected to take the usage to the next level by facilitating training for employees, increasing their spending and also enhancing the areas of operations.

“Retailers who adeptly utilise AI will emerge as the clear winners. There is a significant opportunity for retailers to enhance the accuracy of their services, and many are already advancing rapidly on this path,” said Kumar Rajagopalan, chief executive officer, Retailers Association of India.

Kumar Rajagopalan also explained the impact AI will have on consumers saying that consumers can expect a notable elevation in retail standards. “The integration of AI in retail is more than just an operational upgrade; it’s a strategic move towards creating more customer-focused and efficient retail experiences,” he added.

Areas of focus for AI in retail

According to experts 2024 will witness much broader and more impactful applications of the technology, but the focus areas will depend on industries and other factors.

“Retailers are now embracing AI not just as a tool, but as a core component of their business strategy. The ability of AI to process and analyse vast datasets provides retailers with unprecedented insights into consumer behaviour. These insights enable retailers to develop highly targeted strategies,” Kumar Rajagopalan of RAI said.

AI could be used for enhancing a host of services, from the overall customer experience to security aspects, according to Santosh Reddy, chief technology officer, ShakeDeal, a procurement-focused B2B e-commerce platform.

“2024 signifies a pivotal leap in B2B e-commerce, showcasing AI’s transformative prowess in enhancing customer experiences, operational efficiency, and cybersecurity, and we look forward to it,” Reddy said.

Kartik Narayan, chief executive officer of TeamLease Services, a staffing firm says that personalisation, customer experience, inventory management, demand forecasting, customer service automation, data analysis, market insights, automated warehousing and fulfilment will be the key areas where the retail sector is more aligned to use AI in 2024.

Another area of focus is analysing customers’ patterns and reducing manual work.

“People will use artificial intelligence to study consumption behaviour patterns and flag inconsistencies that will reduce a lot of manual and mundane work,” said Madhav Kasturia, founder, Zippee, an e-commerce fulfilment platform.

“AI will also boost the efficiency of last-mile infrastructure by examining data and compiling patterns. AI will essentially replace data analysts to start with,” Kasturia added.

Factors like supply chain, customer experience, inventory management, demand forecasting, service and warehouse automation will all be the areas that are going to witness more advancements in comparison to 2023.

“In 2024, AI algorithms will revolutionise the landscape of retail through hyper-personalised support, product recommendations, and targeted marketing,” said Sheshgiri Kamath, chief executive officer, Kapture CX, an AI-driven Customer Support Platform for Enterprises.

Kamath adds that AI tools will extend their reach to employee training, workforce management, and productivity enhancement, leveraging analytics for optimised staffing and operational efficiency with a focus on supply chain optimisation, fraud detection and security and price optimisation.

This aligns with findings of a recent survey by hiring and job search platform Indeed, which found that around 59% of employees in India are ready to use and embrace the potential of artificial intelligence and generative AI-based tools in their daily work.

Pace of implementation

While the adoption of the technology is evident, the pace depends on factors like the cost of technology, customised tools for companies, Large Language Modules and their accuracy among other conditional factors.

Kasturia of Zippee said that e-commerce will be one of the early adopters of the technology.

Narayan of TeamLease Services adds that the pace of integration will likely be rapid. The adoption pace will also be influenced by the increasing availability of user-friendly AI tools, enabling even non-technical employees to utilize AI in their daily work.

“The rapid integration of AI is poised to grant a competitive edge to companies. The pace of this transformation may be influenced by regulatory factors, ethical considerations, and the availability of skilled AI professionals,” said Kamath of Kapture CX.

“The pace of AI integration in the D2C market is accelerating rapidly. As technology advances, the potential for increased efficiency and innovation in D2C through AI is significant,” said Deep Bajaj, chief executive officer, Sirona Hygiene, a company that sells feminine hygiene products.

Retailers across categories are lamenting sluggish sales over the last several months. Here’s what they are saying…

New Delhi: Retailers and restaurants across the board have been reporting sluggish sales in the last six months or so and this persisted even during the crucial Diwali season.

Now, fashion brands have advanced their annual end-of-the-season sales (EOSS) by about two weeks in a bid to liquidate their unsold inventories and shore up their coffers. “The last seven months have been a disaster for retailers,” said Kirti Khosla, director at Ark’s Consultancy, marketing agent for Milan-based Pianoforte, which sells lingerie brand Yamamay and Carpisa luggage and bags in India. “Even Diwali was not good this year.”

A chief executive of a global fashion giant said the overall consumer sentiment is playing on the business this year.

“Retail inflation has gone up so much, salaries have not gone up much and high interest rates are not helping,” he said asking not to be named. “It’s not just a slowdown for us, it’s a very bad slowdown,” he added.

Restaurant operators, from Jubilant FoodWorks Ltd. to McDonald’s South and West India franchisee Westlife Development have reported a drop in their same-store sales in the latest quarter.

Jubilant FoodWorks, which operates Domino’s Pizza and Dunkin brands in India, saw a 1.3% decline in like-for-like sales (a retail barometer to gauge sales growth/decline for stores that are open for a year or more) in the second quarter of this fiscal year compared the previous year.

Similarly, Sapphire Foods India, the India franchisee of Yum Brands, reported a like-to-like sales drop by as much as 20% this quarter at Pizza Hut India restaurants amid poor consumer sentiment.

“The first six months of the year wasn’t great and it was a complete washout if I would have to put it,” said Sagar Daryani, co-founder of Wow! Momo Foods Pvt. Ltd. that operates Wow! Momo, Wow! Chicken and Wow! China. “It’s quite shaky and quite topsy turvy,” he added.

IndiaRetailing spoke to a broad spectrum of retailers to gauge the reasons behind the slowdown. Here are the four that stood out:

End of the revenge-buying spree

Top executives at brands said Indian consumers went on a revenge buying spree post-Covid in 2021 and 2022 and are saddled with more products than they need. They therefore don’t see any urge or reason to purchase more stuff as their wardrobes are already full.

High inflation

Many retail executives cited persistent high inflation as one of the culprits behind the slowdown. Government data shows that retail inflation in India, measured in terms of the consumer price index (CPI), jumped to 5.5% in November, up from 4.8% in October. India’s CPI has been rising in the last two years—from a low of 4.06% in January 2021 to the current level of 5.5% and that is also denting sales of goods from food to fashion.

High-interest rates

The Reserve Bank of India (RBI) has raised short-term lending rates by 250 basis points (bps) since May 2022 amid surging inflation. However, since February, the RBI paused its rate hike spree and has maintained the repo rate at 6.5%. Due to high-interest rates, equated monthly instalments (EMIs) for consumers on their housing and automotive loans have gone up, forcing them to cut household budgets and avoid discretionary spending.

Cautious Consumer Sentiment

All the above factors are weighing in on the consumers’ psyche and they are cutting their non-discretionary spending. Fashion brands have unleashed their deep discounting this month to lure consumers and liquidate their unsold stocks. While Puma has started a flat 40% discount, ethnic brand Kazo has started the EOSS with up to 70% discounts, giving a peek into the state of affairs.

More such insights at India’s biggest retail intelligence event–Phygital Retail Convention 2024.

Steady and focussed infrastructure development of Northeast India is opening up the region to increased penetration of organised India, helping retailers meet the rising customer aspirations

In the last four years, more than 120 stores have been opened in the Northeast by leading retailers including Landmark Group, Tata Starbucks, McDonald’s, Forever 21 and Avantara by Trends. Out of these 100 have been opened by leading value retailers—Style Baazar, Baazar Kolkata, V-Mart, M Baazar, City Kart and Vishal Megamart. The last two months have seen around six store openings in the region by brands like Samsonite India, Chaigram, Domino’s, Balenzia, Nature’s Basket and GKB Opticals as per IndiaRetailing Insights.

Currently, northeastern cities are bustling with consumerism which was unthinkable even a decade ago.

However, just a decade or so back, things were very different and many states of the region were plagued by insurgency and related violence. “Penetration of organised retail in Northeast was a big problem due to supply chain issues,” Shreyans Surana, founder and managing director of Baazar Style Retail Ltd., which runs a value retail chain Style Baazar that has 155 outlets across 9 states in East India.

Flashback

Seventy-year-old retailer K Dasgupta remembers a time when he had to pull the shutters of his small electronics store in Dibrugarh and rush home before sunset. Come 6:00 pm, and the streets would be deserted, with people preferring the safety of their homes for the fear of insurgents. That was back in the 1980s and 1990s.

Not just Assam, the entire Northeast region—consisting of Manipur, Mizoram, Assam, Arunachal Pradesh, Meghalaya, Sikkim, Nagaland, and Tripura—was plagued by political instability and imbalanced development, affecting trade and commerce.

“The demand was always there but there was a huge lack of good road and other infrastructure which led to supply chain disruptions,” added Surana, who has stores in Assam and Tripura.

The rugged hilly terrain, landslides and earthquakes the hill-locked region is cursed with, further hampered trade.

As a cumulative effect of these factors, the region that occupies 8% of India’s geographical spread and is home to 4% of the country’s population, remained politically, commercially and culturally isolated from the rest of India for several decades.

“After 2000 and 2005, things started changing. Stability started coming in, people started to venture, a lot of infrastructure development came in,” said Vikram Bothra, Managing Director of Chandan Retail that runs Askaran Binjraj, a 50,000 sq. ft. standalone fashion lifestyle department store in Dhekiajuli, Assam. The Bothra family has been in business in the region for the last 200 years and has been an integral part of the region’s transformation.

But the major thrust came after 2014. “That was when the complete business environment, new retail brands, new retail services started coming into Northeast.”

The Big Change

“Organised retail penetration is increasing and the retail landscape is transforming, it’s developing into a bigger market. In the last two years, we have opened more than 20 stores in the Northeast,” said Surana.

Retailers operating in the region attribute this change to the focused efforts of local as well as the central government in developing the region. From 2014 to 2022, 1,350 projects worth Rs.15,867 crore have been sanctioned under the schemes of the Ministry of Development of North Eastern Region (MDONER), and North East Council (NEC) in the North-Eastern States, Union Minister of State (Ind. Charge) Science & Technology, MoS PMO, DoPT, Pensions, Atomic Energy and Space, Dr Jitendra Singh while inaugurating the ‘Purvoday’ in July last year.

From 8,480 km in 2013-2014, the total length of National Highways in the North-east region increased to 15,735 km in 2022-23, showcasing a growth of 85.55%. Since 2014-15, Rs 19,855 crore was spent on developing new tracks and doubling the existing lines of the railways in the northeast region. The number of airports and waterways increased from 9 in 2014 to 17 and 18 respectively, the minister added.

“Railways now go straight up to Itanagar, the capital of Arunachal Pradesh. States like Nagaland, Manipur, Mizoram now have good rail, air and road connectivity,” Bothra said.

Current scenario

While there has been a dramatic transformation, supply chain challenges persist, due to the terrain and climatic conditions.

“Navigating the challenging landscapes of Northeast India comes with obstacles like landslides and intense monsoon rains, particularly during peak seasons. Additionally, this region faces unpredictable weather conditions and a persistent landslide risk, setting it apart from other parts of the country,” shared Amarnath Banik who is the Amazon Trucking partner for Northeast India. As Amazon’s trucking partner, Banik oversees the delivery of Amazon packages through three established routes in Northeast India, covering 13 cities in the region, including Guwahati, Tinsukia, Shillong, and Kohima.

“We can’t fight Mother Nature—there is still rain, landslides and earthquakes, Northeast is still under seismic zone 5—but today, the buildings being made are earthquake proof. The number of incidences has decreased as the government is investing in geo-seismic infrastructure so we don’t have the kind of casualties we had 10-20 years,” Bothra explained adding that this has translated into improved sourcing and replenishment.

The internet connectivity in the region has improved too in the last six to seven years with national players like Reliance and Airtel offering lightning-fast services. Rs. 3,466 crores have been spent under 10% Gross Budgetary Support (GBS) and upgradation to 4G connectivity in 4,525 villages in the region. The region now has optical fibres.

Players like DHL, Blue Dart, Shiprocket and Delhivery have started offering services here, which has improved deliveries. Delhivery alone has reported an increase of 30% in its Northeast business in the last four to five years, a source with access to the company’s report told IndiaRetailing.

“Businesses like Amazon too have contributed to improving the logistics landscape in Northeast India,” Banik said, who was able to grow his trucking fleet from 50 trucks and 60 drivers in 2019 to 200 trucks and 250 drivers in 2024.

Banik shared that Amazon successfully addresses hurdles in the region by developing robust transportation networks, establishing alternative routes, and prioritizing local connections.

“Our reliance on strong local ties, skilled drivers, and a well-structured contingency plan has proven effective in navigating the demanding landscapes of the Northeast and ensuring timely deliveries,” Banik said.

The Amazon way

Amazon provides extensive recruitment and training to drivers as well as regular health check-ups and comprehensive accident insurance to drivers to ensure their safety.

Technology plays a crucial role in enhancing operational efficiency. “We make use of Amazon’s diverse range of technology-driven products and value-added services (VAS),” Banik explained.

“The Relay app, which includes Relay for Carrier and Relay for Drivers, offers real-time visibility into trips and performance while streamlining check-in and checkout processes. These tools facilitate immediate communication during contingencies, ensuring smooth operations and support,” he added.

Additionally, Amazon integrates GPS monitoring into its technology platform for vehicle execution and surveillance. It is integrated with every vehicle responsible for transporting goods, and offers detailed insights into various parameters, facilitating the tracking of package movement. It also helps dispatch a replacement vehicle and arrange for repairs in case of a breakdown.

With the infrastructure boost continuing and giants like Amazon contributing to the region’s development, retailers expect the supply chain scenario in the region to further improve. “In the next five years, I see a traction of good, organised retailers in NE India,” said Surana.

Did you know?

States in Northeast India are referred to as Seven Sisters and a Brother. While Manipur, Mizoram, Assam, Arunachal Pradesh, Meghalaya, Nagaland, and Tripura are the seven sisters, Sikkim is referred to as their brother.

More such insights at India’s biggest retail intelligence event–Phygital Retail Convention 2024.

From improving product recommendations and personalised fit suggestions to delivery, here’s how retail biggies are using artificial intelligence to offer delightful customer experiences

New Delhi: Retailers in India are betting big on enhancing the customer experience (CX) with the use of Artificial intelligence (AI) with heavy investments planned in the technology this year 2024.

According to experts, the integration of AI in retail is more than just an operational upgrade; it’s a strategic move towards creating more customer-focused and efficient retail experiences, especially when the scale of operations is large like in the case of fashion e-commerce platform Myntra.

“With a catalogue as vast as ours, comprising 2.3 million styles from 6000+ brands across fashion, beauty and lifestyle, as well as the need to be on top of the fast-evolving fashion trends, it can get challenging for shoppers to find the right product and discover trends,” Myntra’s vice president (VP), of product management Lakshminarayanan Swaminathan said.

Not just Myntra, but other players too are using AI for better CX. Here’s how…

Amazon

The horizontal marketplace has recently added a new feature where it uses AI to help customers find the perfect fit while shopping online as per a recent blog by Apoorv Chaudhri, director of computer vision and machine learning at Amazon Fashion. This feature gives customers shopping for fashion products various options such as personalised size recommendations, fit review highlights, size charts with AI-powered data, AI-backed fit insight tools and so on.

The company also utilises AI in its digital pharmacy business helping improve prescription processing speed, pricing, customer support and delivery.

Myntra

The fashion e-commerce major uses AI and other emerging technology to enhance the overall shopping experience for its customers, the company said. The company uses features like My Stylist, MyFashionGPT, and Maya that enable customers to have a more enhanced and meaningful discovery-led shopping experience.

MyFashionGPT, a generative AI tool for fashion, beauty and lifestyle allows users to search for outfits using natural language. The feature currently boasts nearly 2 million monthly users on average.

My Stylist, an AI-powered design tool, analyses user preferences combined with a deep understanding of trends, enabling users to discover and shop for complete looks.

Maya, the AI-powered chatbot, streamlines discovery and refines choices for customers, eliminating ambiguity in decision-making. The chatbot is adept at handling a wide range of complex queries. Being contextually aware enables Maya to provide recommendations to customers based on the multiple conversations that occurred in the same session, responding in real time.

Peesafe

Gurugram-based personal hygiene brand Peesafe uses AI in areas like personalisation where it recommends products, offers tailored promotions, creating targeted marketing campaigns based on customer data and shopping history. In addition to this, Chatbots offer 24/7 customer support on product information, order tracking, and issue resolution.

At its stores, the company uses smart shelves, personalised digital signage and AI-powered self-checkout kiosks. Other indirect areas where it employs AI include predictive analytics for anticipating customer needs, maintaining stock levels, predicting future trends and sentiment analysis.

Shoppers Stop

Department store chain Shoppers Stop uses large language models (LLMs) and AI to develop Conversational AI.

“We are also experimenting with the metaverse as a novel avenue for customer engagement, in addition to already existing solutions, such as virtual try-ons, immersive brand experiences, and interactive shopping environments,” said Sandeep Jabbal, Chief Digital Transformation and Information Officer in an interview earlier.

The company aims to enhance customer experience with generative AI and conversational AI, with a focus on enabling personalised product recommendations interactive engagements, and real-time assistance.

Indiamart

Using Artificial Intelligence has helped the B2B marketplace become a conversational commerce hub, facilitating 45 crore conversations last year on the lead management system. The AI-based matchmaking technology on the Indiamart platform matches buyer needs to the most suitable suppliers, ensuring seamless connections beyond the restrictions of location or size of the business. Beyond this, AI & ML are also leveraged in various platform aspects, such as multilingual search results and intelligent cataloguing for easy AI-powered product image editing.

AI in stores

In addition to what the retailers are doing, there are several areas where AI is being used. Giving a perspective on where tech service providers are working with retailers on AI, Ajay Aggarwal, head of Retail at Nihilent Ltd. said that retail brands are incorporating AI into their strategies to derive added value from existing loyalty programs.

“By gaining a deeper understanding of customer basket trends and patterns, these brands aim to employ AI-driven insights for the development of personalized marketing strategies, ultimately enhancing customer loyalty and overall satisfaction,” Aggarwal added.

The company help retailers enhance in-store customer experience with AI.

“We are also using AI to enhance in-store customer experience for retailers. Additionally, AI enhances in-store experiences by analysing CCTV feeds, offering insights into footfall patterns and shopper behaviours, identifying high-intent shoppers and more,” said Dipankar Mukherjee, Chief Innovation Officer, Nihilent Limited.

AI Impact

Brands are already experiencing benefits associated with AI. For instance, Pee Safe has seen increased customer satisfaction, loyalty, personalised experience, and quicker resolution.

“Other benefits include higher conversion rates and sales, reduced operating costs and competitive advantage,” shared Vikas Bagaria, Founder and CEO.

In the case of Myntra, those using the MyFashionGPT are adding products from 16% more categories on average than usual.  “1 million of our customer base are currently engaging on average with My Stylist every month. Maya, our AI-powered chatbot users are conveying overwhelmingly positive sentiments, as reflected in the approval ratings,” Swaminathan shared.

Giving insights into the advantages reported by its retail partners Aggarwal of Nihilent said, “We have achieved over a 25% improvement in overall inventory efficiency for the food brands we have partnered with, directly influencing their top-line revenue and profitability by minimizing daily stock-outs and food wastage”.

A primer on the 13 unfair digital commerce practices prohibited by The Central Consumer Protection Authority which impair consumer interest

As many as 71% of online consumers surveyed by research firm LocalCircles reported being subject to hidden charges for purchases via apps and software as a service (SAAS) platforms. These charges were not presented upfront when they were finalising the purchase but only popped up when making the payment.

Furthermore, 67% of the 44,000 consumers surveyed fell prey to a subscription trap. What they assumed was a one-time software or service later turned out to be a subscription.

Hidden charges and subscription traps are among unfair trade practices under the Consumer Protection Act, 2019 identified as ‘dark patterns’ by The Central Consumer Protection Authority (CCPA).

Exercising the powers conferred by Section 18 of the Consumer Protection Act, 2019, the CCPA issued “Guidelines for Prevention and Regulation of Dark Patterns, 2023” on 30 November 2023. The guidelines cover 13 dark patterns specified by the CCPA.

While they specifically seek to protect consumer interests in e-commerce transactions, the guidelines apply to all platforms that offer goods or services in the country. And even include advertisers and sellers. They seek to hold brands that use deceptive practices accountable and penalise them.

“Every brand needs to embrace these standards and create a more trustworthy and responsible atmosphere for online commerce, putting consumers’ trust at the forefront. This will help create a fair and transparent marketplace where consumers can buy products without the fear of being cheated,” Rahul Singh, Founder EcoSoul Homes said.

What are dark patterns?

The CCPA defines dark patterns as “any practices or deceptive design pattern using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do, by subverting or impairing the consumer autonomy, decision making or choice, amounting to a misleading advertisement or unfair trade practice or violation of consumer rights.”

In his LinkedIn blog post on the topic, Col. Zahl Tantra, Cluster head, North, Auto & Farm Sector, Mahindra Logistics Ltd. further explained the concept. “Dark patterns in digital commerce in India are a serious issue that affects the rights and interests of consumers,” he wrote.

“They are deceptive and manipulative user-interface practices that online platforms use to trick or coerce consumers into making choices that benefit the platform but not the consumer,” he added.

Tell me more…

The 13 dark patterns identified by CCPA are:

1. False urgency: This involves creating a false sense of urgency, scarcity such as limited-period offers or few airline seats/products or movie tickets left that pressures consumers into buying a product or service in haste. This usually plays on the consumer’s fear of missing out (FOMO).
2. Basket sneaking: This is a form of cart manipulation and involves including items or services in the shopper’s basket without their explicit consent or awareness.
3. Subscription traps: Facilitating a straightforward service sign-up process for consumers while intentionally complicating the cancellation procedure, often achieved through concealing the cancellation option or imposing multiple steps, making an opt-out difficult.
4. Confirm shaming: “This dark pattern involves the use of a phrase, video, audio, or any other means to instil a sense of shame, guilt, or ridicule in users to persuade them to purchase a good or service from the platform or extend their subscription to a service, mainly for profit by stifling their freedom of choice,” explained Ashima Obhan and Aparna Amnerkar of advocate and patent consultancy firm Obhan & Associates on their website.
5. Forced action: This refers to compelling consumers to purchase extra items, subscribe to unrelated services, or share personal information just to access or buy the products or services they initially desired.
6. Nagging: This involves bombarding users with continuous communication including repeated requests, and information prompts to push a transaction unrelated to their existing relationship.
7. Interface interference: This dark pattern involves manipulating the design interface in such a way that it highlights certain information that the platform wants to push while concealing other details, to mislead users from taking intended action such as deleting an account.
8. Bait and switch: This involves using a proposition to lure customers and then delivering something else.
9. Drip pricing: Showing one price before purchase and adding extras later or not disclosing in-app purchases and other additional charges that the user would have to pay and revealing them only on payment or at later stages of using the service or platform.
10. Disguised advertisement: Camouflaging ads as forms of content, such as user posts, news articles, false promotions or reviews.
11. Trick Question: Intentionally using vague or confusing language, double negatives, or other similar tricks to misguide a user from taking the desired action or prompting another action.
12. Saas Billing: In this, a subscription is extended or overcharged discreetly such as converting free trials to paid subscriptions, debiting user’s accounts without notification, and auto-renewing monthly subscriptions.
13. Rogue Malwares: This involves using fake ransomware or scareware leading users to believe that their computer is infected and persuading them to pay for a fake malware removal tool, which installs additional malware on their devices.

“The list of scenarios is comprehensive enough to prevent brands from wilfully (or otherwise) impairing the consumer’s autonomy, decision making or choice. This intervention was long due!” Siju Narayan, a retail industry practitioner and chief experience officer, Rexemptor Consult LLP, who found these “innovative marketing tricks” a major irritant and one that impacted customer experience (CX) irreparably.

How does it impact e-commerce players?

The guidelines compel digital players to follow transparent practices at every stage.

“Now, brands will be forced to adopt a more “honest” approach to enabling a truly frictionless customer journey (resulting in great CX!)—but this will come at a cost since the erring platforms will need more than a few tweaks to fall in line,” said Narayan. He added that the cost of such tweaks will always be far less than the cost of noncompliance with the guidelines.

The industry practitioner explained that apart from the financial liability (Rs. 10 lakh to Rs. 50 lakh) and two years of imprisonment, erring brands will face the prospect of being disowned by already-attention-deficit consumers. “Not a happy prospect in today’s hyper-competitive world,” he added.

According to Singh of EcoSoul, these regulations will not only protect consumers from exploitation online but also help honest brands to grow and flourish and bring a fair and transparent marketplace.

More such insights at India’s biggest retail intelligence event–Phygital Retail Convention 2024.

Sandeep Jabbal, Chief Digital Transformation and Information Officer, at Shoppers Stop, speaks about the company’s technology strategy, areas of investment and focus and key challenges

New Delhi: With almost two decades of experience in the realms of technology and digital transformation, Jabbal stepped into the retail industry as Head of IT at Marks and Spencer Reliance India Ltd. Since then, Jabbal has been using his tech expertise and knowledge to help major retailers like Jubilant FoodWorks Ltd. and Shoppers Stop, a department store chain part of the K. Raheja Corporation to successfully navigate the tricky and ever-evolving technology landscape.

Shoppers Stop, which commenced its journey in 1991 with its inaugural store in Andheri, Mumbai, initially focused on men’s wear. Since then, it has burgeoned into a retail powerhouse, boasting around 105 department stores, around 88 beauty stores, and around seven home-stop stores across 56 cities.

With a total area of 4.1 million square feet (sq. ft.), it caters to an extensive customer base, handling over 49 million walk-ins annually. The workforce comprises over 18,600 employees, which the retailer calls customer care associates. Shoppers Stop’s influence extends beyond mere scale, offering a diverse range of products from over 800 brands, a mix of national, regional and owned and international.

With iconic brands like Kashish, Haute Curry, Fratini, and Life, Shoppers Stop aims to provide diverse fashion choices while streamlining the shopping experience through consistent store designs across all brands. The company’s evolution underscores its commitment to seamless customer experiences. By integrating offline and online channels, the company ensures real-time visibility of merchandise across platforms, synchronized marketing campaigns, and pricing parity. Additionally, with plans to expand its beauty segment through SS Beauty and other mono brands, Shoppers Stop continues to innovate and adapt to the evolving retail landscape.

The company’s revenue from operations was up 8.83% to Rs 1,237.52 crore during the third quarter of the financial year (FY) 2023-24. During the quarter, it added 13 stores, which include four department stores, four beauty, four Intune and one airport store.

Jabbal, who is Shoppers Stop’s Chief Digital Transformation and Information Officer sheds light on the role of technology in enhancing customer experience, working on an omnichannel model and the relevance of cloud technologies in an exclusive interaction with IndiaRetailing.

Edited Excerpts…

What role has technology played in enabling the growth?

Technology has significantly contributed to Shoppers Stop’s expansion by enhancing customer interactions, personalising experiences, and increasing operational effectiveness. Benefiting greatly from a unified view of customers, it has facilitated customised shopping experiences through the use of Artificial Intelligence (AI) and Machine Learning (ML) for precise and personalised marketing campaigns. Furthermore, existing technological capabilities have enabled Shoppers Stop to rapidly scale up, streamlining and reducing the time taken to launch new stores.

It has also enabled the organisation to expand beyond retail and diversify—exclusive distributorship for multiple luxury international beauty brands. Integrations with key business partners are done to create business agility and shorten the supply time from a vendor’s warehouse to Shoppers Stop’s store.

What is the company’s approach towards technology and how does it manifest in its implementation?

Our approach towards technology is characterised by a proactive and forward-thinking approach. This is evident in our strategic investments and initiatives aimed at simplifying processes for both customers and operations. This is manifested in our commitment to adopting advanced technologies and leveraging digital tools to streamline operations and expansions.

In addition, the cloud transformation journey forms the key to our technology strategy and major applications and infrastructure changes were undertaken this year. The trend will continue next year with the target to build a resilient technology platform to minimize operational disruptions.

Can you identify a few areas in which technology has helped Shoppers Stop change the game?

Areas, where Shoppers Stop has leveraged technology, are notably through virtual try-on features that include skin analysers and makeup simulations. The recent introduction of a fragrance finder solution at airport stores simplifies fragrance discovery for travellers. Shoppers Stop has also released a personal shopper app designed for employees, facilitating personalised service.

Additionally, by partnering with leading cloud original equipment manufacturers (OEMs) to delve into AI and investing in low-code no-code (LCNC) solutions to overhaul legacy systems, we have enriched customer engagement. Strengthening the core retail processes for supply chain and finance, we maintain a best-in-class warehouse solution. Our mobile-first strategy has enabled store teams to be more productive on the move.

Tell us about the cutting-edge technologies you work with.

We are leveraging large language models (LLMs) and AI to develop Conversational AI. We are experimenting with the metaverse as a novel avenue for customer engagement, in addition to already existing solutions, such as virtual try-ons, immersive brand experiences, and interactive shopping environments.

Can you shed light on your omnichannel strategy?

Shoppers Stop has effectively harnessed technology to enhance its omnichannel strategy, notably through the endless aisle feature. This service enables customers to order products online from within the store if their desired size or style is unavailable on the shelves, effectively merging in-store and online shopping experiences.

This service, along with other digital initiatives like personal shopper services and a robust online presence, underscores the company’s commitment to a seamless, omnichannel experience for customers.

How much of your business comes from offline versus other channels?

Approximately 96% of Shoppers Stop’s revenue is generated through its offline channels, highlighting its strong presence in physical retail. The online channel accounts for about 4% of the business, serving as a digital complement to its offline operations.

Name three challenges you face in implementing technology across such a large business.

Challenges in technology implementation include managing change and ensuring business adoption, which requires careful coordination and support across all levels of the organisation. Scalability and seamless integration of new technologies with existing systems present complex obstacles.

The last major challenge is maintaining the highest standards of data security and privacy in an era of increasing cyber threats. Technology transition is always the most difficult phase when a fine balance needs to be maintained between keeping the lights on and at the same time creating a robust transformation journey.

How does Shoppers Stop use AI/ML?

We started with deploying traditional ML models like K-means, logistic regression, and decision trees for developing models for persona, propensity, Recency, Frequency and Monetary (RFM) and Market Basket Analysis.

We have also started work for adopting advanced AI models leveraging recent developments in LLMs for in-depth customer insights and improved customer interactions. ML is also applied in many areas of network security with traffic pattern recognition and intelligent pack filtering.

How do you aim to enhance the customer experience using technology?

We aim to enhance customer experience by leveraging cutting-edge technologies such as cloud technologies, generative AI and conversational AI, with a focus on enabling personalised product recommendations and interactive engagements, real-time assistance and, ensuring a seamless and engaging shopping journey for our customers. Recognizing the customer as a single entity irrespective of the multiple channels on which our customers shop, is a key goal for us in customer satisfaction.

Which technologies are you investing in for the future?

We are strategically investing in cloud technologies and areas to eliminate single points of failure to ensure future readiness. Similarly, on the infrastructure side, we are investing in building network redundancies and other business continuity solutions.

Which retail technology will redefine the shopping experience in the future?

Generative AI and Large Language Models (LLMs) will revolutionise retail by offering highly personalised shopping experiences. These technologies will enable tailored product recommendations and enhanced customer service through conversational agents, improving engagement and setting new standards for customer satisfaction and loyalty.

Over 60% of people prefer shopping via apps over websites with a clear preference for marketplace apps

New Delhi: The day-to-day inception of new brands in the e-commerce ecosystem has changed the shopping behaviour of customers online. There have been different changes in purchasing habits, choices, and mindsets of online shoppers nationwide.

Approximately 12.5 crore consumers in India have embraced online shopping, with a significant portion hailing from tier 2, 3, and 4 cities. Online shopping has emerged not only as a convenience but as a lifeline, especially for individuals in these regions where access to the latest products in physical stores is limited, according to a report titled How India Shops Online: Consumer Preferences in the Metropolises and Tier 1-4 cities by PwC India, released at an industry event by the Retailers Association of India.

These consumers, distinct in their digital literacy, infrastructure access, and socio-cultural influences, are driving a retail revolution in the country, the report said, adding that this presents a monumental opportunity for brands to tap into this booming market.

“India’s online consumption gravity is decisively percolating to markets beyond metros. This report creates an industry-first insight on some of the unmissable category-wise nuggets a brand needs to imbibe to success in the rest of India,” said Ravi Kapoor, Partner and Leader – Retail and Consumer Goods, PwC India.

What drives online shopping?

Urban-Rural Disparity

A significant shift is observed in the shopping behaviours of consumers from tier 2, 3, and 4 cities, compared to their urban counterparts. While urban dwellers are enticed by perennial discounts and the convenience of online shopping, consumers from the rest of India regions are driven towards online shopping by factors such as limited product availability and stockouts in local offline stores.

App Preference

Over 60% of surveyed respondents prefer shopping via mobile apps due to ease of navigation, user-friendly interfaces, and vernacular support, highlighting the importance of app-based platforms in India’s e-commerce landscape.

Influence of Social Media

Social media platforms play a pivotal role in driving product trials, with 62% of users trying products after seeing them on platforms like Facebook and Instagram. Urban and rest of India consumers exhibit differing preferences in social media channels for product discovery and trials.

Payment Preferences

While both urban dwellers and the rest of Indian consumers display comparable acceptance of UPI payments, cash on delivery remains the preferred option among the latter to minimise fraud risks. Generation X from the rest of India regions prefers card transactions for mid-high-value purchases, citing transaction safety as a key factor.

Category Preferences

The report delves into specific category preferences among consumers, highlighting varying trends in fashion, sports and fitness, electronics, home and kitchen, beauty and personal care, health and wellness, and grocery segments. In these categories, urban dwellers prefer online shopping for its quick delivery which meets their demand for instant gratification, even if it means paying a premium. In contrast, the rest of Indian consumers focus more on finding the best deals and discounts online.