Much disruption has happened to businesses in the last few months. Unavailability of employees at workplace, demand slowdown, supply chain disruption, cash-flow issues, working capital crunch, and looming loan burden have been common problems. As organizations re-imagine business, embracing technology will be an important step. The impact can be multi-fold if an organization has a multi-channel strategy. It is time now to relook at the entire gamut of digitization for organizations.
Forced digitization of the economy: Nothing could have digitized the economy faster than what Covid has managed to do. With people locked-up at home for an unimaginably extended period of four months and more, with stores and malls being shut, the only possibility of shopping was through digital means. And for sure, once e-commerce deliveries were allowed by the government, both customers and marketers heaved a sigh of relief. Safe contact-less deliveries became the norm. Pre-paid transactions rather than cash on delivery became the order of the day. People who had hitherto never made a digital transaction, became smartphone experts overnight. Some companies were ready for this shift while a lot others have been caught napping. However, going forward, a firm can ill-afford to ignore this giant force of socio-economic transition. Companies will have to take conscious and deliberate steps towards aligning themselves to the new reality.
Some still think that this is a temporary phase and things would come back to normal once Covid blows over. For me, this is a permanent shift of behavioural patterns simply because of the ease, transparency and opportunities that digitization provides to the consumers. They have an almost unlimited choice of products and services at their fingertips. They can browse the features and compare the products without going from shop to shop. They can scan through the best deals available without feeling cheated. And they don’t have to carry back an unwieldy product to their apartment. And thereafter break their head over installation and warranties. In a few years people may actually forget that buying a television or a washing machine used to be nothing short of a minor battle wherein one would have to visit at least 4-5 shops located in different markets in the heat, dust and grime. Haggling over prices and asking for that last hundred rupee discount was preceded by the challenge of finding an appropriate vehicle to ferry the product back home. And then running after the electrician or plumber to get it fixed. Only to the friendly neighbour walking in and say “Oh you paid so much for this?” or “This brand has the worst service ever”. Now consumers trust the reviews, ratings and comments made my good Samaritans for everyone to benefit. All this is common knowledge. What is new is the pace at which the consumers have taken to this new way of shopping over the last 5 months. Here is what the companies will need to do if they wish to not fall off the new treadmill.
- Digitize Operations: Every company has to figure out how they can sell efficiently using digital platforms. This means getting everything right end to end, right from knowing what to sell at which price in this new transparent world, how to present it to the aware consumers, and how to market it in an environment where a million products are vying for attention. The importance of quality content – text, imagery and videos, cannot be overemphasized. In addition to this a brand has to get its logistics right with a fine balance between the use of own systems and third party logistics partners.
- Achieving the balance: It is an ongoing debate whether it is better to try and sell from your own website or third party platforms i.e. marketplaces. Further it is a complex task to figure out what should be the balance between the two. This is a journey that every brand has to traverse before it can reach an acceptable conclusion. Both require their own specific approach and investments. Some brands choose to sell only from their own platform. This often requires huge investments in marketing. Some sell only on marketplaces and never manage to build a loyal customer base of their own. For me, a 25:75 spread between own and third party platforms is a good starting point.
- Becoming tech-savvy: A successful digital strategy means the organization has to achieve a certain degree of savviness when it comes to technology. Technical talent cannot be completely outsourced otherwise the risks are too high. How much to in-source and what to outsource is a conundrum that many companies struggle with. According to me, this must be treated like sinusoidal wave. There will be times while somethings will be outsourced, processes learnt and then they would be insourced. Further, while some distribution channels may not be directly impacted by digital strategy, they must be sensitized to the opportunity to avoid channel conflict.
Building a brand on digital is not easy. It can entail severe level of cash-burn. Gone are the times when investors use to say that if you are not burning money, you do not have a vision. Today everyone is looking at unit level of economics and not only operating profits but also profit after tax. This also sounds business sense. In such a scenario, if a brand follows an omni-channel strategy, it can create a 360 degree effect for brand building and reduce the burn on digital. Omni-channel also happens to be a more customer-focused approach and a powerful strategy for improving customer experience, business, sales and loyalty. Offering multiple touch-points to the consumers ensures that when they encounter the brand in the digital space, the brand does not suffer from credibility issues.
‘Seamless’ is another important operative word when it comes to omni-channel business strategy. For the consumer, the buying experience must be painless, natural and free-flowing to really raise the bar from multi-channel to Omni-channel execution. At the very basic level it means that a consumer must be able to get a digital order picked up or delivered from a physical retail outlet and conversely she can place an order online at a physical outlet in case of non-availability of a product.
Wonderchef has had an omni-channel strategy not only encompassing digital and retail space but also alternate channels like direct marketing and TV shopping. Over 70,000 women entrepreneurs have been using Wonderchef products and sharing their excitement via closely held cooking shows across India. This ensured that when Wonderchef went digital, millions of consumers were already familiar with the brand. Our strong investment in SIS in departmental stores and hypermarkets also ensured success in digital space. Post lockdown, digital sales zoomed by 4-5 times not only on Wonderchef website but also on third party platforms. This enabled other distribution channels to continue their investments even when sales were challenged. Now it is time for Wonderchef to go to the next level of digital domain which would entail even higher quality content, and utilisation of more sophisticated digital tools.
As they say, when life serves lemons, make lemonade. Some firms managed to do that during Covid challenge. But for be able to do so one must be ready with sugar and ice. There is no time to lose. The game stands changed forever even when Covid would become a distant memory. Every company has to act, and start now.