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Viveat Susan Pinto, Business Standard \n<\/i><\/p>\n
Viveat Susan Pinto, Business Standard
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Mumbai, 5 May 2016<\/i><\/p>\n
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Fabfurnish.com,\nthe online furniture retailer acquired by Kishore-Biyani-led Future\nGroup, was relaunched on Thursday with a fresh campaign and a slew of\ndeals. It marks a new chapter in the evolution of the group, which is\nbest known for kicking off the modern retail revolution in India a\ndecade ago.
However, when Biyani, 54, laid his hands on the\nRocket-Internet-promoted company last month, it did come as a surprise.\nThe Marwari businessman has been a fierce critic of the e-commerce\nbusiness model in India, saying it is designed to lure consumers with\ndiscounts with little focus on profits. He had told Business Standard\nearlier that he was waiting for the bubble to burst before he would\nmake his moves.
That moment appears to have arrived. Fabfurnish\nis his first acquisition but more such deals could be in the offing. “I\nam not closed to the idea,” he says. “I will do it selectively and\nensure our investments make money,” he adds.
It is clear the\nlines between physical and virtual shopping are blurring for him. In a\npress conference on May 4, he said he plans to merge the group’s home\nfurnishings business under HomeTown with Fabfurnish and subsequently\nde-merge it from flagship Future Retail.
The goal is to unlock\nvalue and make his home furnishings business a stronger enterprise in\nthe face of increased competition. Once the online and offline arms are\nmerged, HomeTown is likely to reach a turnover of Rs 1,000 crore within\na year. It closed the last financial year with revenues of around Rs\n750 crore.
The driving force
<\/span>Biyani’s\nhybrid business model, also called omni-channel retail in industry\nparlance, is a compulsion, say analysts. With consumers today spread\nfar and wide, brick-and-mortar retailers have been left with no option\nbut to add an online leg to their offline operations in a bid to reach\nas many customers as possible, and quickly.
Biyani has been at\nwork on an omni-channel presence for a year now, trying to create a\nseamless and consistent brand experience across his group’s retail\nchannels: bigbazaardirect, futurebazaar.com and offine stores. Other\nretailers, including Reliance Retail, Aditya Birla Retail and Shoppers\nStop, have also been working on creating an omni-channel presence in\nrecent months.
“The endeavour\nis to reach more consumer touchpoints and ensure you are there while\nthe action is on. The ultimate objective is customer acquisition. That\nwill mean that you have to go where he or she is,” says Devangshu\nDutta, chief executive, Third Eyesight, a consultancy firm.
<\/span>A\nrecent study by the Retailers Association of India and Mumbai-based\ndata analytics firm Hansa Cequity says that nearly 74 per cent Indians\nshop across all channels including neighbourhood stores, modern trade\noutlets and online platforms.
The study also notes that a\nsignificant number of these consumers still prefer to touch and feel\nproducts before buying, implying therefore that an online-only model is\nnot enough.
Domestic e-tailers have picked up this cue. The top\nthree e-commerce majors -Flipkart, Snapdeal and Amazon – have all gone\noffline in the last six to eight months to ensure the “touch and feel”\nexperience is provided to consumers.
Flipkart, for instance, has\ntied-up with brick-and-mortar retailer Spice Hotspot to provide access\nto its exclusive range of phones offline. Its fashion arm Myntra is in\nadvanced talks to acquire brick-and-mortar chain Forever 21, which will\nallow it to stock its online catalogue offline.
The same goes\nfor rival Snapdeal, which has initiated tie-ups with The Mobile Store\nand Shoppers Stop for mobiles and apparel, respectively. Amazon, too,\nis tying up with small retailers across the country in a bid to allow\nconsumers with no internet access to shop online in these outlets. It\nis also setting up Amazon-branded stores offline.
Additionally,\nthe top three e-tailers have pick-up stores offline where consumers\nwho’ve purchased products online can get delivery of their goods.
Dutta\nsays the online-offline retail marriage follows global trends.\n“E-tailers abroad such as Amazon, Birchbox and Bonobos in the US,\nSpartoo in France, Astley Clarke in the UK have all opened physical\nretail stores in recent years. This completes the picture in a sense\nand plugs gaps if any,” he says.
Social media to retail
<\/span>Hybrid\nbusiness models are not restricted to retail alone. Social media giant\nFacebook recently entered hyper-local services in India, offering\neverything from medical and repair to business and personal services.\nApart from letting users to browse for these services, the initiative\nalso allows them to leave reviews so that other consumers can make the\nright choice.
Tech giant Google, too, is on a similar adventure.\nIn recent years, it has ventured into making wearable tech devices,\nmobile phones and is now piloting driver-less cars. This even as it\nstrengthens its presence online with a suite of services from basic\nsearch to online advertising, email, chat, browsing and software for\nphones.
Harish HV, partner (India leadership team), Grant\nThornton India, says that hybrid business models for these companies is\na way to ring-fence themselves from competition by marking their\npresence in virtually every space.
This online-offline merger,\nhe says, will mean that these firms will get stronger as they enter new\nareas. The world is indeed shrinking.
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