Smartphones drive shopping behaviour

By bringing together online, mobile and social networks with its 11,000 plus stores around the world, WalmartLabs is creating a seamless experience for customers to shop in a way that’s most convenient for them – anytime, anywhere.

The combination of the company’s unmatched assets in retail and its focus on building the best-in-class e-commerce capabilities has positioned it to serve customers in a way no one else can. The company’s technology centre in Bangalore is a key part of a global push to strengthen Walmart’s business.

Teams are engaged in cutting edge engineering and process development to make Walmart operate more efficiently. Using enhanced data analytics, it helps predict what customers will need and want next. Jayakumar Kulakada, managing director, WalmartLabs India, spoke to FC on the company’s India operations.

Can you recall WalmarLabs India journey so far?

WalmartLabs actually started its operations in Bangalore, in the context of the acquisition of a startup, Kosmix. The founders of Kosmix came down to Bangalore and hired the first set of folks into the company. The operations in Bangalore has been on for around three-and-a-half years. Right from the start, the focus has been on talent.

The talent base in Bangalore has received a lot of recognition in the Bay Area, in the US and internationally for a long time and hence the decision to establish our India operations here in Bangalore. The idea was to set up teams to focus on specific areas of ecommerce.

By 2012, WalmartLabs was looking around to set up its India operations and form teams to develop suitable products. Right from the beginning, the emphasis has been on ‘valuing the talent’. WalmartLabs did the launch of Pangea thereby substantially increasing the capability to develop and scale the business.

The Indian e-commerce arena is attracting lot of attention and eyeballs of late, be it the funds or technological initiatives. Can you elaborate on this from Walmart point of view?

Bay Area is the hub of technology and attracts a lot of talent. In India, retail has been in the news a lot, with a large number of startups coming on the scene focused on pure play technology or on enhancing user experience. WalmartLabs has so far made about 15 acquisitions in the US, not only for talent but also for products.

We are focusing on the startup ecosystem in Bangalore/India. At WalmartLabs, we are keen to look at people, who are passionate in any area of retail. These could include startup focused on technology, startups focused on market places, aggregating suppliers or those which are involved in developing video technologies that can identify visual behaviour of consumers. We are keen to work with all of them.

However, it is not only that our liking them or their products, they should also like us and be keen to work with us. When our executives come down from the US, they also like to meet up with startups to understand new products and developments that can help Walmart improve customer experience or understanding of the market.

There are 4-5 startups, with whom we are working closely. But, WalmartLabs cannot be called as incubators or accelerators. We offer the startups a scenario to understand the Walmart problems of scale or merging digital and physical. This can be a good testing ground for their products/ideas/ innovations. But, as I always believe, it is possible that Walmart may broaden its ways of engaging with the startup ecosystem in future.

What are the challenges and opportunities you see in the Indian retail and e-commerce scenario?

The e-commerce industry continues to evolve and experience high growth in both developed and developing markets. Retailers are looking to understand consumers’ buying behaviour and are aligning with their desire to shop from their homes and offices, and even on the move.

But there are certain challenges that the e-commerce industry is facing. Key obstacles for retailers are to integrate the online and offline channels, expand payment options, and personalise the online shopping experience for users.

The number of simple online fraud incidents has decreased, but at the same time the cost of combating fraud has increased as incidents increase in impact and occur in more lucrative sectors. This is a key indicator of the complexity and sophistication of online fraud attacks, which still weigh heavily on many shopper’s minds and deters them from online shopping.

For online retailers, it will be difficult to retain customers if they do not integrate their back-end systems seamlessly with their front-end systems. Many online retailers do not provide a multi-channel payment option, which has also negatively impacted their businesses.

Mobile and smartphones have become the key drivers for e-commerce in India. What are the initiatives the company is taking to target this segment and tap its potential?

Yes. In India, smartphones have indeed become one of the key drivers of consumer shopping behaviour. Globally, from a Walmart perspective, we are focused on all channels from desktops to mobiles to physical stores. We seek to offer a seamless digital/physical experience, an omni channel offering to our customers, be it mobiles, desktops or stores.

We have mobile app, which is not available at the moment in India. But, abroad consumers can simply tap into the app and select products that they want to buy and go ahead and complete the purchase. Twenty two million customers actively use the Walmart app each month. The Walmart app features include checking in to pick up an online order at a Walmart store, refilling pharmacy prescriptions and finding an item’s store location.

We have introduced apps like the Walmart savings catcher, where folks who register get the difference between the price they paid at Walmart and any other advertised lower price in their area, depending on zip code which is put into a Walmart gift card and given to them within 72 hours. Another mobile app is the recently launched Walmart pay, which completely changes the shoppers checkout experience. A consumer can walk up to a register, open the app choose Walmart Pay, scan the code displayed at the register and pay seamlessly for the purchases. The Walmart associate will scan and bag the purchase items and an e-receipt is sent to the app which can be viewed any time.

What is the next big thing you foresee happening with the Indian retail and ecommerce market?

Regular retail has always had a huge element of demand generation being driven by retail analytics, and this has continued and intensified in the online e-commerce space. Business intelligence (BI) and analytics are at its seams, given that online e-commerce affords the opportunity to do the traditional RFM and market basket analytics Online additionally affords the ability to do behaviour analytics using click through and other related data that are captured in online log files.

Another trend in retail has been to go omni channel. However, the holy grail of a transaction beginning online, being explored in depth at a store and completing on mobile, that is till not easily achievable. One can imagine the complexity in managing the many permutations and combinations of such transactions across many different channels.

The difficulty is in tracking such multi-channel transaction across all channel interfaces. Companies are now beginning to touch the level of sophistication required to be able to collect the data around such multi-channel transactions and subject them to analytics to derive insights – all the while adhering to the strict privacy norms required at each stage.

The other emerging trend is the use of social media to gather sentiments around retail activity or to drive specific interest in retail. This is a two-way communication mechanism where the companies can use it to communicate to their customers and customers can also convey sentiments about various aspects of retail -– product, price, quality, promotion, and experience back to the company. The richness of information in the data generated in social media allows companies to derive proportionately more information from the application of analytics to this data.