A panel discussion titled ‘The Omni-channel Age: Has physical retail converged with the digital world’ at the fourth edition of Medianews4u Straight Talk delved into the fundamentals of convergence and what it means to brands. The event was hosted in Chennai on 18 November 2022.
The panel discussion moderated by Yesudas S Pillai, Founder & CEO, Y& A Transformation, also discussed the role data plays in convergence and how brands are staying relevant to the omni-channel consumer. The panelists were Suman Saha, CEO, Arrow; Vignesh Murali, Head of Marketing, Brand & Corporate Communication, Equitas Small Finance Bank; and Kavitha Srinivasan, Founder & CEO, Coeus Communications.
The discussion started with the question: What are the fundamentals of convergence for the business and how are brands tackling it?
Saha said, “There are no omni-channel consumers; consumers are consumers. What has happened fundamentally is the purchase pathway got altered post Covid. How people discover your brand and how they make a choice about the brand have altered fundamentally. All conversation about purchase is about the sales side of it – there is also the supply and create side. The real convergence is going to happen when the supply and create are going to link through to the sales side. The real convergence is when your assortment starts reflecting the consumer values and that will move from your data.”
He underlined that the consumer is undeniably finding newer ways of discovering brands and added, “One part of the organisation is moving faster than other departments, but there is a lot of work to be done on the supply chain and creation side of it.”
“When the brand is multi-channel, your business model does not allow visibility into consumer behaviour because 40 to 50 pc of the sales is through a controlled network. What about the balance percentage? There you get a sketchy condition of things. If you ask me about the total number of consumers in the category, I will not be able to give a finite answer because I don’t know. I can tell you how many customers are served through controlled channels. Therefore, for me real convergence is when you can integrate everything and when you have holistic data on the consumer,” explained Saha.
While there are traditional sources of consumer data getting upgraded with technology, there are new interventions to track cohort behaviour across social media and metrics, underlined Saha.
“But that is one part of it. Now, given your insights, how quickly you can turn around, how quickly changes are made, remains an area where it is underfunded,” he added.
Game Changers in Consumer Behaviour
Asked on how digitally transformed is Equitas Small Finance Bank, Murali said, “There were two happenings in the BFSI space that were game changers in terms of consumer behaviour, one is demonetisation and the other one is the pandemic. Post demonetisation, we were all impacted and the UPI era started. Post Covid, digital became mandatory. We were ready from day one. We had the product called Selfe, where customers can open an account sitting at home. RBI came up with a regulatory framework, where the entire contactless KYC could happen. In the last four years, Equitas as a brand opened 2 million accounts across the country with Tamil Nadu having 25 pc contribution; 40 pc comes through the video KYC channel. What has happened is the entire productivity that normally happens shot up. In a month where we (usually) saw 20,000 account openings, the number went up to 2 lakhs. The front-end team, whose earlier job was to do cold calling and acquire customers, is now responsible for managing these clients.”
Murali said that digital transformation which was forced upon the brand has become positive for the brand, as productivity has gone up and customer acquisition is happening at a cheaper cost.
He continued, “Earlier the acquisition used to happen at Rs.4,000 to 5,000; now the cost has come down to Rs.400 to 500. The opportunity for cross-sell has also happened and multiple products can be pitched. For us, the marriage between digital and phygital is perfectly summing up in terms of profitability and acquisition. Phygital channels are used in driving values. We are very much happy in terms of how we are strongly shaping up and well poised in terms of our growth story.”
Long way to go
Srinivasan observed that there is a long way to go for seamless convergence to happen.
She elaborated with an example, “All of us would have probably experienced this situation. We might own a credit card of a particular bank and still get another call from the bank about owning a credit card. They wouldn’t even check the database, as in whether the customer is already having a credit card and the longstanding relationship with the same bank. Hence, I reiterate that convergence has long way to go.”
Murali said that one of the critical things the brands are working towards is to leverage data.
“Today acquisition is not a challenge for us, retention and profitability are. We have now started investing money in data warehousing, where we look at the customers in a different angle, with past data and pin codes as critical parameters. India has over 19,000 pin codes and Equitas has opened accounts in 5,400 pin codes. Now, how do you classify these customers? Unless investments happen in terms of understanding it is going to be very difficult. All the customers are digitally active, the traditional methods of reaching out to them is not going to work. We need to be proactive. So, lots of study and investments are happening in terms of data leveraging and mining insights,” he added.
According to Srinivasan, clients to a large extent are aware of the transformations that are happening, but most are hesitant to act.
“Maybe some of them are trying to find ways to get into omnichannel convergence. While some of them are aware of it, they are trying to see how to go about it. Omnichannel or convergence can happen when the brand establishes all the channels as then convergence comes in,” she added.
The Consumer’s Voice
On assimilating consumer feedback into the journey, Murali elaborated on the ratings and redressal mechanism at Equitas. Besides the internal team that watches and acts on feedback on an ongoing basis, an external agency has been hired to seek inputs from customers twice a year. “Those inputs will be seriously taken up in terms of implementation and we do go back to consumers informing them of suggestions being accepted and working on improvement. We do take customer voice very seriously,” he said.
Saha noted that every company has an established process of knowing the consumer. While in physical retail customers are met in person everyday, he personally meets five to 10 customers each month.
“When Covid came, we were unprepared and 80 pc of business didn’t exist. Then we figured out different ways of surviving. The customers today are more and more demanding, the way they seek and discover and go about life is going to be different,” he noted.
Besides bringing different systems into play, how they can usher in the next change is what brand owners are thinking about, reflected Saha.
