Wednesday, July 29, 2015

Perspective- Life at your fingertips || Aprajita Kalyani & Varun Bhandari NMIMS, Bangalore || July 2015 Edition

Life at your fingertips
Aprajita Kalyani & Varun Bhandari NMIMS, Bangalore

Convenience is the King!
What Sam Walton said long back, holds true and relevant than ever before in today’s world of web, for the king (customer) is armed with every possible information about his huge kingdom and the only way you get to see him is by making yourself seen. At the same time, it is important to note that just by being out there doing nothing worthy enough to catch his attention will fetch you no benefit. Hence, it is imperative that this question be asked - What is it that customers look for? Is it addressal of a need or want, is it about quality or is it a unique offering which the customers desire from the product? Customers have evolved in their thought process, taste, preference and buying behavior. So, one definitely cannot expect the economy to support easy wins or the marketer to ‘sell products’ as they did a few years back. To give it a second thought, all these are expected out of a brand which expects customer appreciation. But a brand which desires loyalty in response must offer “Convenience.” As the authors of the book The Effortless Experience rightly state, “Customers want ease. Getting back to their busy lives quickly matters more than anything.” Smart marketers understand this and are making full use of the “Internet of things” to reach on top in the age of the “Internet of customers.” For an increasingly large number of Indians mobiles are the daily first touch point to the internet. Mobile phones today seem to be the great technology equalizer.  Everyone has it today. Be it a CEO, a daily wager, a grandfather or a teenage daughter. In fact for an ecommerce company to keep tempo with the market trends, mobile phones have become an important conduit. M-commerce is the next big thing. Number of users of mobile devices have been growing faster than web traffic. Today’s customer is a tap away from booking an OLA, paying monthly bills, laundry service or getting fresh hot home-cooked food served in seconds. Studies have revealed that an app user seems to be more committed and engaged than a random mobile web browser considering the fact that it takes higher threshold of inertia to install a mobile application. India’s ecommerce story is taking an interesting shape all together. Customers are going through a fundamental shift, companies who realize this are the ones that will be visible in the consumer’s eye.  Technology has changed in the recent past. Digital distribution does not have a long history. From cave walls to Hieroglyphics, to the printing press and transistor radio, to today’s electronic age. Rather innovators’ focus has been on thinking about a specific technical problem, but yes innovations do eventually happen, leading to a significant change in the world. In fact, if we just rewind our memories and go back a little in time, we can observe how drastically marketing has changed. Things which were beyond our reach or imagination are now accessible on our fingertips. The fundamentals of how we shop, travel, pay, read or even live have changed. Let’s dwell more upon this by taking a few segments in consideration and understand how convenience has become the king in today’s era.

Grocery shopping – simplified! 

Gone are the days when your mom would give you a list of items which you were supposed to buy from the ‘kiranawala’ (shopkeeper), who used to know you by your 
name! Gone are the days of the ‘shuddh namak’ ad where the kid gave a lecture to the shopkeeper for not knowing what pure salt is. Today, we get not only what we want but also in the way we want. Hari Menon, one of the reasons why Big Basket is India’s biggest online grocery retailer today, says, “Grocery shopping is a chore, we’re taking out the pain.” It is interesting to note that a similar venture by Hari Menon and his team, Fabmall.com, which started way back in 1999 failed then and how. The reason for the success of Bigbasket.com today is the multi-dimensional lives led by the consumers. Big Basket claims it has over 5,00,000 active customers and that its revenues are growing by 12-16% every month. Local Banya on the other hand already has over 1,00,000 users. Aramshop, Ekstop, Grofers, Localbanya, Zopnow are some of the online grocery apps in the market. According to Technopak, the market for online grocery retail is growing at a steady 25-30% in Indian metros and is driven by urban residents who are in a hurry and prefer convenience to kiranas. Thus, consumers are increasingly taking the online route and are saying yes to adding products in the shopping cart instead of the shopping bag! Although brick and mortar shopping can be fun, shopping online or via a mobile device offers a better overall experience. No long queues and no hopping from shop to shop to buy your favorite brand. All you have to do is tap and buy grocery from your mobile phones. 

Commutation 

Few years ago a new breed of entrepreneurs started building startups that used technologies – to understand what it takes to build a successful venture in the transportation sector. It was felt that there was a Flipkart like opportunity and it would require the same kind of funding. Most of the cab services that raised money from the venture capitalists launched their mobile aps subsequently considering that Smart phone penetration was the biggest factor towards digitization. One of the biggest advantage that all the commutation companies had while going offline was it helped reduce the cost of running a call center to manage their customers considered a very expensive affair. Even from the consumer’s point of view, an application was the easiest and quickest way for bookings. It takes 2-5 minutes today, thanks to the high tech GPS installed, for a cab to reach the pickup point. Year 2012-13 saw major players like Meru Cabs, Taxi For Sure, OLA, Savaari & Uber hitting the Indian market and creating a fascinating story of correlation between the new technology and the distribution systems dominating a customer’s experience with a spur to maximize the usefulness. Ola has been the best example in the commutation/ transport companies that offer the cheapest cabs / the famous 2 min OLA Autos to premium cars in their services. Ola, today is India’s largest taxi booking service and has scaled rapidly to benefit customers using technology in its business model. The company is also expanding into food and grocery segments. Revenues have doubled since it acquired Taxi For Sure in March.  Meru is piloting a public carpooling platform as a green initiative in big cities. The first taxi company to venture into a nascent but highly advocated business, Meru, will earn its share by making the passenger and the vehicle meet on real-time basis. Strategically it is a decent move by the company as startups such as Mumbaikar, Zinghopper, BlaBlaCar have already launched carpooling services in India mainly focusing on long distance travel.

Mobile Wallets  

Imagine paying through mobile phone to pay for your Uber account. This could not have been possible a couple of years back. Apps like Paytm allows one to pay using a non-coin- based currency. It is in the recent past that the technology to support such systems has been made obtainable. The mobile wallet services today offer a bouquet of services with a premeditation to achieve millions of transactions one day. People have shown acceptance towards the mobile money remittances. The facilities to buy vouchers, gifts, pay bills by recharging the mobile wallet and using it at different merchant gateways and establishments looks like a huge opportunity in future. Companies like MMP Mobi Wallet Payment Systems Ltd (MMPL), a subsidiary of Tata Group Company are already planning to penetrate in the rural market with an intent to reach 900 million users. The mobile wallets are gaining success and are expected to be a game changer in the financial sector and the mobile markets. In the long run if not making physical money, if not superannuated, at least dispensable.

WHAT NEXT? 

The agenda more or the less has been to cater to the different but existing unmet need of the consumer in the market. If we look at a few startups like taxi for sure (now acquired by OLA), Eatlo, Chefensa, Freecharge or various laundry services that have emerged, the main rationale has been to cater to the consumer demand. Companies have realized the importance of the mobile platform. With more and more users having access, there is a lot more opportunity to tap in the application market space. The last couple of years could be called the service-ondemand app. Apps for services like cabs, beauty treatments, food grocery deliveries, courier/gifts (Food Panda, Uber, Ola, Chefensa, LocalBanya, paytm, and freecharge) took everyone’s phones to a new level.

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