Convenience over Experience or Vice versa?

At last count, the quick commerce players such as Blinkit by Zomato, Zepto and Big Basket are said to have delivered over 1,000 units of the newly launched iPhone 16 series. In contrast, a single Apple Authorised Reseller (AAR) store – the exclusive Apple franchises across India sold over 150 units a day on 20 Sep. 2024 when the iPhone 16 was launched.

The staff at one of the stores told me Sat. 21 Sep. that the sales was bit dull being the second day while he was confident of selling over 200 pieces on Sunday, as he expects a lot more customers to drop by at the store. There are an estimated 3,000+ AAR in India, though all are not equal in footfalls and revenues. 

During my 40-min hang out at the store, there were at least 30+ Apple aficionados at the store (along with yours’ truly!). I spotted a few kids in their early teens with their parents exploring the new launch of iPhone, Apple Watch among the iPad and iMac. 

Two elderly couples, possibly in their 60s came to have a curious look at the range of Apple products. They seem to have come with an intention to buy, I could make out. 

 

The typical fanboys and fangirls were engaged in a thorough dissection of the various features of the device even as the store staff struggled to answer many of their tech queries.

 

There is a charm in offline retail, after all, I reckoned.

Last week, Hari Menon, Founder & CEO of Big Basket, which was launched in 2012 and sold off to the TATA Group in 2021 said at an event that local shops (read Kiranas) were not under the threat of Q-Commerce. 

Incidentally, Big Basket launched its quick commerce service with the iPhone 16 – an order places at 0800 hrs was delivered at 0807 hrs on 20 Sep.

 

Despite the convenience of doorstep delivery of groceries and household items, pet food, fresh food and everything in between over the last few months, electronic items too, why do people still step out of their homes and shop at offline stores – to buy the iconic Apple devices or Apple, the fruit?

As the adage goes, humans are social animals and need company. They need to simply step out of their physical bondages (read: comfort zone) to get a peak at what’s happening around them and around the world.

 

Take the film industry’s conundrum, for example. When the OTT model of watching and consuming entertainment took shape during and after the Covid-19 lockdown in 2020, visitation to cinema theatres was declared a no-hope zone. Yet, movies are raking in crores of box office collections – the only catch, audience want crisp scripts and not just stellar star cast.

Even though foodtech players like Swiggy and Zomato are minting in billions of dollars annually, offline visits to restaurants has not dwindled. 

For most restaurants, their delivery channel through foodtech is between 15-20%, and consumers continue to visit their premises just like before 2020.

 

Quick Commerce brings in tremendous convenience for consumers while E-Commerce offers a massive range to shoppers, as they can sift through thousands of products before they buy. 

However, what amount of dent it would create to offline and neighbourhood shops is yet to be seen. “Picture abhi baaki hai mere dost”, as Shah Rukh Khan would say with a grin.

AI in RetAil

I had the good fortune to speak early September at one of India’s most prestigious educational institutions, Coimbatore Institute of Technology, which has been a breeding ground for several top technocrats this country has produced. 

Among various notable such people include the current Chairman of the eponymous TATA Group, Mr. N. Chandrasekaran. 

I was invited to speak at RISE 2024, the in-house conclave of the college, where I addressed over 300+ students and faculty members for over 90 mins. 

 

That I succeeded yet again, keeping the audience awake right after the lunch break, has been a sort of a successful streak to me as a speaker across various conclaves, conferences and events worldwide since 2006. 

Perhaps, it was the intriguing subject that I chose this time around, to keep the listeners not just awake, rather get excited about the possibilities that Artificial Intelligence brings to Retail. 

Way back in the 90s, my first brush with retail was shopping at the ration shop in our locality every month, where I would be assigned by my parents, the task of bringing rice, sugar and kerosene, among other things. 

Why kerosene – we would use them to boil water for bath using a pumping stove! 

Later on, I witnessed firsthand the early days of organised retail in India, with the mushrooming of concepts such as Lifestyle and Shoppers Stop in fashion and the likes Subhiksha, Stop and Shop, Nilgiris and RPG Retail’s Foodworld in grocery retail. 

 

When I joined the erstwhile Madras’ first Baskin Robbins ice-cream parlour as a part time employee in 1997, I witnessed and used the billing machine for the first time, which kept a track of the day’s sales.

From there to now, the use of technology in Retail has not just stunned me, rather has kept me guessing on what’s coming next. 

  

I have been using Apps such as Amazon, Zepto, Swiggy for e-commerce, household and grocery shopping and for ordering food respectively for over a decade now. The amount of machine learning and artificial intelligence used by these companies, especially the likes of Amazon, is very interesting. 

Offline retailers in India have been laggards to embrace artificial intelligence, primarily due to heavy investments that go in to building such modules. However, the choice for them is limited. The writing on the wall is clear - start building AI into your business planning NOW or perish. 

 

One could argue that even a rudimentary ERP is in nascent stages in Indian retail, let alone AI in Retail. However, the choices we have on hand are extremely limited. 

One of the key reasons for loss of sales is not having the right merchandise at stores, and not lack of footfalls. 

Embracing AI / ML is a must for offline retailers, which was the essence of my presentation at the institution. Will share the link of my lecture here, soon. 

Much ado about quick deliveries

Among the most happening news last week was the latest fund raising of Zepto, a Quick Commerce company. In all, the company has raised over USD 1 Bn (INR 8,200 Cr) in 12 months and is currently valued at USD 5 Bn (INR 60,000 Crores). And what business is Zepto in – as we all know, a term popularly addressed as “Quick Commerce”, a richer offspring of e-commerce. 

If e-commerce companies deliver goods in 1-3 days, Q-commerce companies deliver in 15 mins or less. This is a kind of invention of a product (or service) that no one really wanted. 

When e-commerce in India started getting bigger around 2012 – 2016, delivery in 3 days was a “wow moment” for customers. And then came Amazon’s Prime subscription with which 1-day delivery was made possible. From 2018-2022, one-day delivery was almost the norm, be it Amazon or Flipkart or Myntra or Ajio or any other. 

Circa 1996. That was when I was first exposed to modern retailing. My mother asked me to visit a particular shop where the sugar was cheaper than at the neighbourhood ration shop where we would usually would buy dal, pulses, kerosene and sugar, of course. 

The name of the shop was Subhiksha. It wasn’t just a new shop, rather a new concept. Where one could stand across the counter, look at various products and ask for them to be shown and then decide if one wanted to buy or not. 

Quickly, Subhiksha moved in to one of India’s first ever self-service models of grocery retailing, where one could walk around the store, browse and buy. Add to it, there were several offers and promotions offered by brands.

Cut to Sep. 2024. 

Shoppers browse the apps of Zepto, Blinkit (by Zomato) or Instamart (by Swiggy) alike and then order stuff (that they mostly don’t need, atleast immediately) and those which could be delivered in just a few mins. 

Thousands of users have shared their dissatisfaction that their orders didn’t reach on time as promised – 10 mins or less. I wonder, when did consumers, let alone humans become so busy, that a wait of 10 mins for grocery (or 30 mins for pizzas) is considered eternal? And the FoMo of missing out on ephemeral offers! Phew. 

Back in the day when Dominos would advertise that their pizzas would be delivered in 30 mins or consider it for free, many customers prayed that their deliveries be delayed, so their pizzas would come free. This is just the bane of humankind.

The only characteristic that differentiates humans vs animals is that of greed. The love for greed that consumers carry is incomparable to any other living beings. Even the wildest of animals will hunt their prey only when they are hungry. And this greed (for offers, discounts and promotions) is what keeps us retailers going. 

However, humans (as consumers) in several occasions buy things which they never needed in the first place. And at times when their shopping was inconsequential. 

Take End of Season Sales (EoSS) for example.

Shoppers wait for the occasion and throng branded shops at malls and high streets to buy apparel, shoes, accessories, home improvement items and what not. And then struggle to find use of these products, which end up rotting in wardrobes unused. 

Similar is the Q-commerce conundrum. 

All of a sudden, men, women and children in metro cities yearn for pantry and grocery items to be delivered before half a litre of milk comes to a boil. As if we are headed towards a catastrophe or an Armageddon moment. 

What started off during the Covid-19 lockdown – such as the fear of avoiding shops due to crowds, has now become a staple at several thousand household across India. Scarcity (of time)has never been more celebrated ever!