Retailers' new tactics to take on e-commerce

2014 may well have been the year of e-tailers. But concerned about their eroding bottomline, offline retailers have come up with personalized tactics to draw new and old customers. With white good products also taking the online route, brick and mortar firms have taken a heavy beating this year. “It’s never a fight between online and offline. But the disruptive pricing strategy of e-tailers is the most worrisome trend,” said B.A. Kothandaraman, chairman and MD of southern retail giant Viveks Ltd. “When online folks offer huge discounts below cost price, how can offline retailers sustain,” he asked.

Though online is only 10 per cent of the total $500 billion retail market in India, the new stream has had a free run in 2014 and pegged to touch $16 billion by 2018. Unfazed by the onslaught, retailers are trying to encash their biggest asset – human resource. “The biggest advantage and disadvantage of e-commerce is its impersonal experience. We are trying encash this by investing on sales force training and Big data,” said D. Sathish Babu, MD of Univercell.

“We spend a considerable amount in doing data analytics about the customer’s buying preference so that when he walks in to the shop, the front office salesman is able to suggest suitable products for him,” he added. In fact, Retailers Association of India has launched free 4-6-week training programmes to hone etiquette, communication and computer skills of shop floor assistants.

Adopting the FMCG retail strategy, as Spencers, Reliance Fresh and More, white good retailers too are looking to garner a share of the market with own labels. “We have launched flat panel televisions this year and hoping to get into air conditioners next year. This way we want to hold a section of customers who go for durability than brand name,” said B.A. Srinivasa, CEO of Viveks Ltd. Further, retailers are also trying to value-add services apart from offering products to engage with customers. For example, while most apparel retailers already have their customized tailoring services, retailer Viveks has come up with a plan to offer servicing solution across all product brands.