Wednesday, February 8, 2012

Celebrating Smarter Commerce Week with 13 Must Read Tips

Last week I had the pleasure of moderating a CMO panel in Bangalore with two distinguished CMOs, K Ramakrishnan (Ramki), President, Marketing, Café Coffee Day and Ravi Prakash Vora, Vice President, Marketing, With Amazon and Starbucks both entering the Indian market this year, its interesting times for these Indian retailers and e-tailers. I also attended the Internet Retail Expo where we heard from industry experts like Mahesh Murthy and Ambareesh Murthy (no relation to each other) who concurred that successful commerce ventures will focus on delighting customers, not ones that play the valuation game.

Agreed. We all know Indian customers have always been demanding (as they should be, after all, they were the ones that fueled the India Inc. growth story thanks to their relentless pursuit for the best deal). But with income levels going up and more options available, the desi customer not only wants the best deal, but wants it delivered to their home, when they want it, with a unquestioning return policy, where you happily take anything back, just because they don't like it. Oh, and do make sure you molly coddle them with some discount vouchers for their next purchase. Seriously? Oh wait, that's me too! 100% satisfaction demanded, every time.

So what are poor retailers to do? Flashy stores or websites, more advertising, cute and likeable facebook campaigns, exclusive sounding loyalty programs, killer sales? I think we have seen it all. And these retailers are folding up, or holding on with their bare nails.

There is actually a correct and responsible way to conduct commerce. We call it Smarter Commerce - a strategic approach that places the customer at the center of your business operations. And having done this for years and helped retailers (along with banks, telcos and others) become smart and therefore successful, we have a few tips. I chatted with our Smarter Commerce expert, Sridhar Hari (@commerce2dot0) and asked him to educate me so that I could share these with you:

If you are a pure play online retailer, here is what you need to care about:
  1. Highly effective marketing campaigns that leverage deep consumer insights from both offline and online behavior.
  2. Provide information needed to make the decision making process easier for consumers. In other words, empower them thru product comparisons, social media integration, virtually unlimited catalog etc.
  3. Highly targeted cross sell and upsell that are highly personalized and enhance customer loyalty but more importantly, protect margins
  4. Effective fulfillment of orders through supplier and vendor collaboration, having a global inventory visibility and order orchestration to deliver on time every time
  5. Top notch services such as payment,s returns, exchanges and other value added services like installation or design services that are handled on a common integrated platform
In a nutshell, you acquire customers at the lowest cost. And if haven't thought through these 5 things, don't bother chasing new customers, let alone your next round of funding.

If you are a brick and mortar retailer, you need to care about ALL of the above PLUS:
  1. Cross channel strategies to drive traffic into store
  2. Buy online pickup in store or return in store
  3. Providing a website like rich information at the point of sale
So some advise for the new kids on the block who are giddy about this space. Before you get caught up in the frenzy and ruin it for everyone else, here are some collective wisdom from some really smart people who have been there and done that:
  1. Crawl, walk and run
  2. Start with a solid foundation that can support multiple business models and can scale
  3. Get the basics right and then build features over a period of time
  4. Know your customer and focus on what's important for them to transact online
  5. Fulfillment of goods in a timely manner is key. Backend processes such as warehousing, inventory management, logistics, sourcing are critical
A few things that you can do next:
  • If you have questions about Smarter Commerce, leave a comment or tweet me and I'll hook you up!
  • We have some Smarter Commerce experts visiting Mumbai February 9th evening and as my blog reader, you are invited! But you must register before you show up.
  • Check out this video tutorial on Smarter Commerce
  • You can also follow Smarter Commerce on Twitter
Get Smart and Good Luck!

1 comment:

  1. The unfortunate part is Indian Inc still considers Marketing as a cost center. There are so many loyalty programs in India by established retailers like Shoppers' Stop, Reliance retail, The Inner Circle (Lifestyle retail) and being member of all these loyalty programs I have never received any organized marketing communication/promotion/offer from them through emails apart from very generic SMS communications occasionally. Grocery retail margins might be very low in India and thus having substantial marketing budget is unlikely, but these players are big time into luxury retailing. Still they heavily lack the initiative to move to an organized marketing initiative by leveraging an EMM solution or a Marketing automation software which can actually rejuvenate these loyalty programs which unless are dead as a dodo. Indian Inc needs to be educated with examples of Walgreens or Sears of how they manage their loyalty programs and just don't have it for the sake of having a loyalty program