Getting The Omni Channel Retail Strategy Right Using Payments

Earlier this year, U.S retail giant Walmart picked up a 77% stake in one of India’s largest online retailers, Flipkart. The deal was valued at $16 Billion. With a further investment of around $2 billion to challenge Amazon’s world domination in the eCommerce segment, Flipkart’s value now stands at an approximate $21 billion. With this deal, Walmart has got its foot into the slowly burgeoning eCommerce markets and Flipkart comes closer breaking to Amazon’s domination.

India and eCommerce

While Walmart has been operating 21 stores in India, it has no other retail presence in the country. With this acquisition, Walmart gets straight access to a tapped 100 million user base. The reality also is that India is gradually gravitating towards online shopping. A research by eMarketer revealed that, in 2017 Indian consumers spent around $21 billion on eCommerce making India the 10th largest eCommerce market globally. This market is steadily expected to grow and online sales are expected to grow over $50 billion between the 2017-2020 period.

The predictions for significant gains in Indian eCommerce is further substantiated by a report from Morgan Stanley that forecasts a 30% annual growth in GMV (Gross Merchandise Volume), taking the Indian e-Commerce market to $200 billion in 2026.

India eCommerce and Payments

The Indian consumer has matured quite fast on their eCommerce journey. This has been owing to the no-questions-asked returns policy, the artificial push provided by the Cash-On-Delivery payment model, and also the additional VC push that this sector has received. And while apparel has been the largest segment for online retail, today from grocery to electronics, home appliances, beauty and cosmetics are amongst some of the fastest growing categories.

While Cash-On-Delivery is still one of the popular payment mechanisms, post demonetization, digital payments are being looked at favorably by the customers. In fact, the acquisition of a digital payments startup by Flipkart was one of the things that contributed to the Walmart-Flipkart deal. Walmart CEO Doug McMillon went on record to say “It is an important piece of the puzzle to build the entire e-commerce ecosystem.

India Digital Payments and Mobile

The growing digital maturity of the Indian shoppers and fluid digital payment experiences are also a reason for the fast-growing e-Commerce market in India. With the increasing smartphone adoption, the digital payments market growing in India. Credit Suisse estimates that digital payments will touch $ 1 trillion by 2026.

Lessons for Retailers

As the world of brick & mortar stores and eCommerce seem to reach a convergence point, retailers have to now look at providing an omnichannel experience to their customers. With expectations from the retail segment for elevated shopping experiences, hyper-personalization etc. rising, the management of brick & mortar stores cannot be in isolation from their online counterparts. As consumers begin to view brick & mortar stores and their online stores as a single entity, they expect the brand to provide the same experience across all the channels. They want, no, rather they demand, that they should have the flexibility to start a transaction on one channel and end it on the other. The silos separating brick-and-mortar stores from online stores thus have to be removed and retailers have to look at enabling omnichannel payment processing to make it possible to switch between payment methods seamlessly – sometimes even within the same transaction.

To enable this, and to create seamless customer experiences across channels, data integration is imperative to make payment processing integrated. Irrespective of how the payment is made, all the data at hand must go into the same processes. Retailers have to have flexible payment engines to support all types of transactions – whether it is an in-store order or processing a cross-channel return.

It is abundantly clear today that omnichannel is the way ahead for retail – whether it is for marketing or for payments. As the consumer of today continues to mature owing to economic growth, global exposure and the rise in disposable incomes it becomes clearer that having a 360-degree view of the customer is crucial to provide personalized shopping experiences, generate avenues to increase in-store shopping, assess and understand the customers’ needs better to make targeted and contextual offers and keep the customers moving through the sales funnel.


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