BIG MARKET: But mom & pop stores, e-commerce will thrive too, says data analytics firm Dunnhummy
India's retail sector, growing annually at 20% and cruising towards $1 trillion by 2020, is in for exciting times as consumers want "clean and swanky" stores, even as e-commerce and kirana stores grow too, according to Dunnhumby, a data analytics firm owned by British retailer Tesco.
"India is in a bright spot. Very soon fancy stores will be coming into India. Eventually shopping will become very clean, very luxurious and retailers will make their shops destination oriented," Dunnhumby India head Anthony Kilili, an expert in predictive analytics, told DNA Money.
Kilili leads more than 350 data scientists at Dunnhumby's Gurgram office, which is global R&D hub for the UK-based company. The company Dunnhumby's looks at data of 700 million customers from 27 countries, including the US and Europe, to understand their behavioural and shopping pattern.
Dunnhumby global CEO Guillaume Bacuvier was recently in India and had an interaction with major Indian retailers to explore and promote data analytics here.
According to Bacuvier, India has reached the required maturity, and it is right time to harness the upcoming opportunities and partner with potential clients. India is already among the top 10 big data analytics markets in the world. Dunnhumby is investing in the India centre and plans to add 10% more workforce by the end of this fiscal. The Indian R&D centre is growing at 25% annually.
Kilili said there is huge data available in kirana stores to analyse customer behaviour in India. He said in India kirana stores will co-exist with big retail stores. Globally too "we have retailers spread out that way. Small stores like mom and pop stores co-exist with big stores and e-commerce," he said.
Even global multi-brand retail chain like Tesco now have small , mid and large stores spread across England and Europe. The concept of having only very large stores is changing, he said.
Both e-commerce and big retailers work on thin margins and huge volumes get them money, he said, adding that middle men between the producers and the retailers make huge margins, particularly on perishables. In e-commerce, stocking is a major challenge.
Return of goods is an issue for e-commerce firms. Sometimes it is as high as 5-6% and translates into millions of dollars as e-commerce works on volumes, he said. Anything 1-2% of return is a problem for e-commerce.
Kilili said this is where data analytics helps. "It also helps in resurrecting brands as well as recapturing the lost markets by predicting behaviour of customers," he said.
ALL PERVASIVE
- Big retailers are in all formats like express stores large retail as well as e-commerce
- Even within retail stores there are restaurants so that customers combine shopping with leisure
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