R Chandrashekhar President, NASSCOM Consumer-Centricity Digital as a Differentiator

Four rapid disruptions re-defining the global retail industry… “Digital natives” – the age group of years - shopped the most via mobile phones Global demographic shifts Mobile phone technology How consumers interact, make decisions, check information, check stock, find stores, communicate Proliferation of social networks Developing world: Part of the daily fabric of shopping Developed world: More communication tool than shopping tool Evolving role of the store Premium in the future will be on creating unique, brand-defining offers that keep customers coming back

Increasingly digital world creating empowered consumers and new business environment Influence on Product Design Requirement Change Shorten Lifecycle Closer Interaction Demographics & Reach

The concept of customer interaction is drastically changing Data Explosion Where is all this data coming from? Should I be looking at all this data? What will I get from this data? What are my competitors doing? Social Media Why aren’t we tweeting?Let’s start a blog? Should we be on facebook? Growth of Channels What are the new channels and devices? Should I be integrating all the channels? Is my customer on all channels? Shifting Consumer Demographics Can I Profile my Customers

Faster time to market: Faster release of products to the market Clarks’ 3D printing shoe prototypes on demand: –Cut design/development cycle to weeks (prototypes in few hours vs. 2–3 weeks) –More models of higher quality in shorter time –Release shoes earlier in the market Enhanced user experience (UX): Focus on customer experience Volvo’s Roam Delivery service: Via a smart phone app, car owners can have online deliveries left in vehicles or have returns collected from them. Owners can track when their vehicle has been opened and locked Personal shopping via Google+ Hangout video conferencing: Users can ask for specific clothes, book one-on-one video sessions and purchase items Technology enabling retailers retain their competitive edge and stay relevant to their consumer base (1/2) Digital experience RFID tags prompt videos on “magic mirrors” about product features >10% of all orders in flagship store now placed using iPads

Augmented reality: Virtual reality experience Interactive Sofa Studio allows customization and on-demand manufacture of sofas through 3D printing Gives users something tangible to base their purchase - improved retail experience Automated delivery: For last-mile delivery Technology enabling retailers retain their competitive edge and stay relevant to their consumer base (2/2) Inventory accuracy to 97% in RFID pilot –Self-driving cars delivering products to customers –Robotic drones delivering in 30 minutes –DHL using PARCELCOPTERS – to deliver medication and other urgent goods in Germany Automation technology: Increased supply chain productivity Electronics shelf labelling to automate price changes and save associate time Automated scheduling based on forecasted demand to reduce costs due to oversupply of labor

Digital disruption – Top Priorities For CIOs In 2015 A Social: Sales & marketing, customer service and recruitment, linking insights to R&D & design Mobility: Mobile POS/payments, digital signage, context-aware tech Analytics/Big data: Descriptive & predictive to prescriptive, cross channel analytics Cloud: Balancing speed & agility and privacy & security. Security (privacy/protection), regulatory (data retention within boundaries) Unified transaction platform: Fully integrated systems and pulling together business activities like cross-channel order, promotion, inventory, customer data into one environment Data security: Need for speedier cloud security system. Data management and collaborative services to help maintain customer confidence. Innovation in prevention, detection, remediation Enterprise security: Beyond compliance with EMV (smart payment cards) regulations to protect consumer data collected at point-of- sale; other potential cyber-attack weakness like service provider network links, mobile devices, RFID: Track products from supply chain to consumer 3D printing: “Just in time” supply chain – lower cost of inventory, transportation Build a single customer experience Understand CxOs: Partnerships among IT, marketing, stores, and others - change CIO’s role to being a strategist Omni-channel: Integrating various selling channels - see inventory across channels in real time Need for speed: Strong governance to measure strategic, tactical and operation imperatives needs Up-skill staff: o Align ageing technology / skills workforce with new-skills workforce o Address clients’ ageing technology needs Modernize merchandising systems to optimize assortment, pricing, inventory; also support more frequent price changes SMAC technologies B Cyber Security C Ecosystem

India’s IT-BPM retail landscape - facts and trends (1/2) India’s IT-BPM exports: Retail USD billion India Retail Market India: Ranks 15th on A T Kearney’s 2015 Global Retail Development Index TM Market size: USD 1.3 trillion by 2020 India: Good opportunity in single-brand retail, cash- and-carry, and eCommerce CAGR +15% India IT-BPM exports: Retail 10% share in total IT-BPM exports 2X growth in exports since FY2010 eTailing: Fastest growing e- Commerce segment - USD 2.4 billion ; >55% CAGR since FY2010 TRENDS Indian IT-BPM firms’ niche capabilities - improve supply chain, operational efficiencies, streamline/optimise store ops, manage merchandise, customer loyalty & build/manage multi-channel capabilities Analytics: Merchandise & customer analytics, churn analytics, inventory mgmt, supply chain optimisation, sales performance, market mix modeling, CRM, fraud detection and prevention

India’s IT-BPM retail landscape - facts and trends (1/2) Key IT-BPM investments in retail Consulting/implementation: Product/tech implementation, bid data/analytics, custom application development and maintenance, process consulting CRM: Customer support, campaign mgmt marketing/promotion, customer insights/retention mgmt SCM: Demand/inventory planning / forecasting, procurement & warehouse Transaction processing: Real-time order processing mgmt, payment processing, risk/data mgmt Sales & marketing: Channel selection, merchandising, internet marketing, sales campaign analytics, etc. Case examples Syntel’s Shopper Assist: A consumer mobile app - Consumers can maintain shopping lists, access to product inventory, retailers can offer personalized services - enhance customer loyalty and engagement Lenskart enables users to try and buy a customized pair of glasses Snapdeal launched its logistics platform, “Safeship”, that offers an integrated order fulfillment engine to sellers Flipkart to use analytics to help SMEs scale up business and target right customers - help decide right selling price, payment automation, proper packaging, transportation, brand building

Over 500 eCommerce centric startups in India provide opportunity for retail players to partner and expand market reach ~3,100 Start-ups ~2,000 Digital ~5,00 eCommerce Indian Start-ups, 2014 eTailing/ Retail Apparels, fashion & lifestyle, mobile handsets & accessories, electronics, etc ~200 eCommerce enablers ~70 ~50-60 ~15-20 ~50 Travel/ Ticketing Ticketing services, hotels and tour packages online Classifieds Offering classifieds space to advertise product, job, matrimony sites, etc Financial services Online sale of insurance related services, utility bill payments, other transactions Other online services Online discounted deals, coupons, search sites etc Real time analytics & tracking Delivery & logistics Mobile payments Mobile advertising Consumer marketing intelligence Rise of the eTailers

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