Retail is a dynamic business whose next-generation growth will be powered by online. But how is e-commerce reshaping the retail landscape and what action must retail CEOs take to ride this new-era wave? This was the theme of a session moderated by business journalist and news anchor Shaily Chopra, the panellists including Hosam Arab, CEO, Namshi.com; Jeremy Johnston, CEO, Zohoor Alreef; Muhammad Chbib, CEO, Citra Style.com; Khurshid Vakil, co-founder and CEO, Marina Home Interiors; and Vivek Pande, CEO-Lifestyle Group, Khimji Ramdas
The retail environment is more dynamic today than ever before. Competition is intensifying and shifting to new arenas as consumer purchase decisions rapidly evolve. From window shopping in storefronts to surfing on smartphones, a tectonic shift is taking place in the shopping habits of new-age consumers, thanks to the power of technology at their fingertips. In parallel, online shopping is ushering in a new dawn of consumerism, reach and convenience. So it’s not enough for retailers to understand the needs of customers today but to forecast their needs tomorrow.
How are brick-and-mortar and online retailers adapting and innovating their business models to cope with fast-evolving consumer behaviour, rising shopper expectations and technology that’s changing at breakneck speed? Is an adequate ecosystem in place, in particular, online payment solutions and logistics delivery services, which are essential for a seamless customer experience? What are the key challenges online players need to address with their vendors and technology partners, and how do they plan to live up to investor expectations? Is there a different demographic at play in the online space, with women and children having more power in decision-making than in traditional brick-and-mortar retail, where the decision maker may be some other member of the family? Do online players sense this difference?
Hosam Arab, CEO, Namshi.com, opines the core skillset for next-gen CEOs will remain the same, although he points out that in retail, implementation and execution will be the most important differentiating factors for them. Citing the example of customer service, he says while it’s easy to highlight this aspect, the difficult part is implementing great customer service. “We spend – and will continue to spend – a lot of time thinking about our people, how to engage and motivate our staff to understand our customers and their changing requirements. It’s important in our business – fashion retailing – to forecast trends for at least six-to-nine months. Our buyers rely on real-time data gathered from sales on our website as well as general buying patterns to get a perspective of what customers are likely to buy in the coming months. We generated 20-25% of our revenue from m-commerce from the beginning of 2013, which has gone up to 70% today,” Arab observes.
Jeremy Johnston, CEO, Zohoor Alreef, also feels the next-gen CEO will be very similar to the current generation CEO because, regardless of how retail is changing, it’s always going to rely on people, process and products. “What’s going to change is the way CEOs see the big picture of how retail is going omni-channel, and how they are going to put together and lead a cohesive team that understands omni-channel retailing. We’ve recently upgraded our CRM and loyalty programme to reward our customers with points instead of discounts as we did previously. We expect to gain a lot more information about how our customers shop and how we can make up for lost opportunities to engage with them,” he explains.
For Muhammad Chbib, CEO, Citra Style.com, the biggest challenge facing next-gen CEOs will be speed of decision making and speed of execution. A CEO manages a business, which means managing costs and resources to generate revenues and profit. The nature of the business will not change. What will change is the way CEOs interact with different stakeholders in the business, delegating and empowering people to take decisions. “It’s essential for CEOs to reinvent themselves and their businesses to survive. It’s up to them to decide whether they should do it themselves, or collaborate with experts or hire the talent required for the purpose. As an e-commerce player, we have the advantage of not being limited by legacy systems that fail to evolve. However, we face challenges in our supply chain if our suppliers don’t upgrade their systems and processes to match our requirements. In such cases, we either impose our technology practices on them, or suggest solutions they can implement to make their supply chain more efficient. Or we can choose not to work with them if they reject technology. We are pressed for time in the e-commerce business, so we prefer to work with suppliers who are tech-savvy and ready,” Chbib elaborates.
Khurshid Vakil, co-founder and CEO, Marina Home Interiors, calls for flexibility, which he sees as another form of adaptability, saying retail CEOs cannot afford to not adapt to the changing retail landscape and consumer behaviour. Nor can they match or stay ahead of customer expectations without technology, which is the engine of progress in their business. “Next-gen CEOs must realise they have a next-gen customer who they must learn to gratify. They must understand their potential customers, their attitudes and expectations and the brand value offered to them. Accordingly, they’ll be able to create their niche in the marketplace. In our business, which is positioned as premium, customers may research the product on our website, but most transactions happen in our stores, because the buying decision is linked to emotional factors such as touch, feel, measurement and comfort,” Vakil explains.
Vivek Pande, CEO-Lifestyle Group, Khimji Ramdas, points out that a retailer can’t be everything to everyone. At the end of the day, retail CEOs must identify their niche – the business in which they are better than their competitors – and dedicate all their resources – financial, digital and human – to own that segment of customers. “Let’s not forget technology itself is evolving. But it’s become simple for both retailers and customers to understand and use. We employ technology for Pizza Hut’s CRM system in Oman. Earlier, we would send a common message to all our customers. With technology, we can segment our customers into categories and gain valuable insights into each customer base. We’ve learnt that 12% of our customers contribute half of Pizza Hut’s revenue. So we can now target each segment with separate messages and promotions. We’re still not exploiting the full power of data analytics to generate sales, which gives us vast opportunities to explore,” Pande points out.