Indian Retail Operations Benchmarking & Excellence Survey 2014 - The State of Multichannel Retail

Building on Retail Association of India’s (RAI) industry ‘Excellence’ agenda from 2013,this year’s RAI-TCS knowledge initiative on Retail Operations Benchmarking and Excellence Survey (ROBES) focuses on the state of multichannel retail in India. The survey report will be presented at the Retail Leadership Summit 2014  in Mumbai.


Consumers have increasingly taken to e-commerce, and retailers in India have responded by gearing up to run this emerging business model in tandem with their physical stores. RAI and TCS have looked at developments in this area to gauge the maturity of current practices and to identify best-in-class KPIs and processes. They highlight the milestones companies must achieve in the transformative journey to become a truly integrated multichannel retailer.
The report considers more than 40 Indian retail brands (across four segments) alongside insights from their more mature global counterparts. It aims to serve as a ‘multichannel retail guide.’ It highlights the current state of affairs, the best practices to be pursued and the improvement opportunities available to retailers. It aims to serve as a guiding light for retailer’s developing an ‘e-merging’ retail model for the future.

Executive Summary:

  • Brick-and-mortar retailers have begun their multichannel journey in earnest. For most, non-store revenue is currently less than 3 percent. This is indicative of a high potential for growth.
  • The primary objective for multichannel initiatives is geographical expansion (21 percent of respondents) and revenue enhancement (18 percent), which is likely to be driven by the online market place as a growth channel (23 percent). However, with an eye on improving customer experience (21 percent), retailers have a strong focus on their own e-commerce website.
  • With ‘showrooming’ affecting segments such as CDIT and mobile phones (which are early adopters of multichannel) and faced with customers who straddle shopping channels with ease, most retailers are making concerted efforts to re-invent themselves. They plan on doing this by understanding the non-store customer, offering a seamless experience and revamping delivery and payment mechanisms.
  • Buoyed by growth rates of more than 15 percent, large retailers are leveraging non-store channels to reach tier-2 and tier-3 cities and farther flung areas where they do not have a brick-and-mortar presence.
  • Smaller players view this as an opportunity to compete on a more level playing field with chain stores: the non-store channel has led to a democratization of brands.
  • Large players will have to be equally nimble when dealing with an increasingly demanding and educated customer who is a first adopter of any new technology.
  • Retailers are increasingly looking to create specialized structures to cater to non-store channels. However, intra-organizational collaboration remains a big challenge. Collaboration between store and non-store channels is also a key challenge – some retailers (21 percent) are taking steps to incentivize cross-channel collaboration.
  • Operational hurdles remain. Most retailers are still finding their feet in terms of managing their assortment, order management, inventory, delivery and payment systems. It is encouraging to see CEOs and COOs sponsoring multichannel initiatives in 70 percent of the retailers surveyed.
  • The Fashion and CDIT segments have been highly receptive to the online marketplace. There is a lot of commoditization and brand clutter in this space. Any kind of differentiation is yet to evolve.
  • Physical stores continue to enjoy higher loyalty from customers than non-store channels. Primarily this results from the lack of a unified CRM program across channels.
  • Non-store channels have demonstrated around 30 percent higher returns compared with the physical store.

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