Winds of change are blowing across the Indian retail sector, considered the fourth largest retail market in the world, but also the smallest organised retail market. However, thanks to GST and e-commerce along with huge FDI coming in, the retail sector has started getting automated in a very structured way. Microsoft, the world’s largest software maker, is making the most of the opportunities here. Close to 15,000 retail outlets are now running Microsoft Dynamics—a line of enterprise resource planning and customer relationship management software applications—in the country. These are across industries like pharmaceutical, apparel, multi-brand retail outlet, fashion & lifestyle, FMCG, consumer durables, grocery and jewellery. All in all, four out of the top five retail outlets in any sub-vertical of retail run on Dynamics. In a joint interview, Simon Davies, vice-president, Dynamics, Microsoft Asia and Samik Roy, country head (Dynamics), Microsoft India, decode the digital opportunity in an interview with Sudhir Chowdhary. Excerpts:
What is the role of Microsoft’s Dynamics 365 in a retail organisation?
Roy: Microsoft is working with retailers to take advantage of today’s innovations to unlock new opportunities to change and grow, built on four key pillars. D365 is a single platform that automates the entire process from ERP to distribution to retail outlets with CRM across the entire value chain. It automates all the way from procurement of raw materials for manufacturing to mPOS at the retail store. As D365 is the amalgamation of Microsoft Dynamics AX for Retail and Microsoft Dynamics CRM, it provides an omni-channel solution.
In the retail context, if an organisation is using Dynamics 365, there are tools which will help them to listen and engage with the consumer socially, both from a marketing point of view and through social listening. This will enable organisations using Dynamics 365, both to understand the customer better, to be able to provide a timely offering, and to be able to manage the rest of the processes associated with retail.
Can you share examples from India as well overseas of how brands have benefited?
Davies: One of the best examples that I can remember is Michael Hill Jewellers, which is a global jewellery operation, headquartered out of Australia. We have helped them in profiling their customers and offering them the right purchase deals. We have also helped them expose the inventory in all their stores across a region, or even across the world, to initiate making use of the available inventory across different locations.
Roy: India has several such examples, one of them being Wildcraft, which went into a niche segment of adventure with products like rucksacks, bags, shoes , and segmented its consumers into people who like adventure and camping. So, to be able to understand the target audience and their consumption patterns along with the buying behaviour, they went back with targeted campaigns on a repetitive basis which were designed after understanding personalised needs and demands. Building on to the existing repeat purchasers of Wildcraft, they expanded their merchandise around their core area which was around adventure, and D365 helped them in making their place in the niche market, understand those set of customers, and expand their footprint to increase sales thereafter.
How can a salesperson know the walk-in customer/buyer/prospect today?
Davies: Technologies like mobile and social interactions have created much more personalised expectations, and nowadays we see retail organisations being successful in creating that deeper connection. High-end fashion retailers such as Ralph Lauren and Chanel, are focused on creating personalised journeys by knowing and understanding its customers and creating relevant interactions with them through multiple channels and platforms.
Roy: In India, unlike the international markets, the consumer likes interaction and physical touch points, and research has shown just that. This is where we see the scope of automation, in terms of the ability to recognise a consumer, identify his/her behaviour and preferences, understand the trends of procurement, loyalty towards a brand, and his/her expectations while delivering the product or service.
Data and Machine Learning (ML) can aggregate all these together and empower the sales person interacting with the consumer to have a meaningful dialogue by offering a product or service of interest. This makes the consumer interaction much richer and helps to increase the chances of converting a footfall into a sale. A consumer will always be willing to travel miles to an outlet which recognises her and provides the product or service of need. That builds brand loyalty and encourages repeat visits for purchase. It’s what I call “Heart Share” and “Mind Share” leading to “Wallet Share”.
How has e-commerce impacted the strategy of a digital store? How do we establish the definition of “digital” in physical stores?
Roy: E-commerce brought in several opportunities such as 24×7 shopping, personalised understanding of consumer needs and wants as per disposable income, consumer responses to a product, and loyalty towards a brand or a product. More so, it also understood and kept a record of previous purchases, post-buying consumer satisfaction and cross-sales/up-sales recommendations basis others’ purchasers with the same products and compelled you to buy more.
Consider all the above and walking into a store with exactly similar offerings, no queue for payments and instant delivery. That’s the experience.
Davies: E-commerce has forced physical store retailers to think about bringing-in such personalised experiences and adapt to the next level of automation with a human face unlike a human-less interface in e-commerce, which Dynamics can deliver.
What is the future of retail in your view?
Roy: ML and Artificial Intelligence (AI). The ability to understand the consumer and have a movable dialogue with them with respect to their likings and preferences, previous buying habits and recommendations basis the same makes it easier for any retailer to convert consumers into customers.
Davies: Taking all this information together and processing all this data with cloud and Big Data, the accessibility of machine learning and AI processes that are delivered through the Microsoft cloud.
What will be the top three disruptions – process or technology – in retail?
Roy: E-commerce very clearly is a positive disruption. The second is the social aspect of it. The retailers want to bring in the automation to be able to understand consumer psychology which becomes a basic requirement in situations of crisis. That’s where Microsoft Dynamics help, pulling in all the elements like machine learning and chat bots as a part of Azure, Kaizala—Microsoft’s mobile app and service designed for large group communications and work management, etc., which are well-integrated to build on efficient and effective CRM. More so, the increasing awareness among consumers also acts as another disruption and might lead to losing out on sale in situations of incompetent store attendants.