Prescriptive Analytics for Retailers and Their Consumers
The retail industry in India currently accounts for 35% of India’s GDP and holds the highest number of outlets per capita in the Asian region – 12 million outlets.
With the Retail Industry in India estimated to be worth USD 440 billion by 2020, it is considered one of the most attractive destinations in Asia for retail outlets today. The retail industry in India currently accounts for 35% of India’s GDP and holds the highest number of outlets per capita in the Asian region – 12 million outlets. However, the oxymoron to this rosy picture is that India also has the lowest per capita retail space amounting to a mere 2 Sq. Ft. per person as opposed to 16 Sq. Ft. per person in the USA .
The reason for this is 92% of the Indian’s retail setup being crowded with small outlets, which are largely unorganized and primarily owner managed. On the upside however, an RBI report from August 2016 states that the 8% of organized retail in India accounts for a total of 14,61,672 Point of Sale (PoS) terminals with a total of INR 441.19 Billion spent in August 2016 alone using debit / credit cards on the same.
These 8% of retailers rely largely on traditional media to get the word out about discounts, freebies, sales etc. but continue to struggle with very low conversion despite their wide reach. Notwithstanding the permeation of social media and online marketing channels, there is less than a 10% spending increase projected in 2017 on these channels while compared to 2014.
Confusion continues to prevail as to which media channel brought about the conversion, while the opportunity is lost to know what the real consumer likes, wants and needs; owing primarily to the minimal use of analytics to measure conversion success across most media. Despite there being numerous mobile apps which have tried to help the situation by working specifically as deals aggregators, loyalty points aggregators, expense trackers, bill management tools or even retailer specific commerce applications, the situation remains unchanged as the retail ecosystem continues to be a ‘Bricks without Clicks’ environment with a majority of retailers having storefronts with some online presence (if any), while their entire prospective customer base continue to gleefully shop elsewhere and use other e-commerce channels.
To attempt to address specifically this issue and aiming at ‘Advancing the reach of Retailers to Intending Consumers based on Big Data Analytics & Machine Learning tools towards enabling Significant Savings for consumers & Revenue for retailers,’ GenCrunch was incorporated in April 2015. They spent 6 months building Zaakit, a disruptive PoS agnostic middleware solution from the ground up which enables integration with any PoS within hours. It leaves the PoS machine virtually unchanged since it needs no software / database integration or even additional hardware plugins attached. Sushanth Abhishek, Co-Founder and COO says, “The whole idea is to help retailers reduce costs, increase footfall and overall profits, all while going green.”
Once the agreement with a retail vendor is signed, their proprietary middleware is installed and within hours gives them access to itemized bill data across all participating retailers which is helping them understand consumer purchasing behavior to the itemized detail. This bill data once captured is sent to the consumer’s mobile app (Zaakit) post purchase and is an exact replica of the paper copy print out that they would receive otherwise from the store. If the bill is thus sent to the app, the paper print is automatically stopped thus enabling the merchant to go green and reduce on printing and stationary expenses.
Incidentally, this is the base idea which prompted Ravi Prasad (Founder & CEO) and Sushanth Abhishek to found the company. The idea came from them thinking about how whether the bill could be received onto the phone and kept for life, instead of having to deal with faded bill prints.
All captured bill data is processed by their Big Data Analytics and Machine Learning algorithms which in turn allows the system to churn out and send intelligent notifications to consumers from across all participating retailers based on their preferences, by predicting their needs based on actual spending history in retail stores. The system further helps retailers by helping them forecast inventory, sales based on spend patterns of consumers across the engaged retail network. This gives rise to a system suggested marketing strategy which the Retailer would be better off using with a focus on increasing the customer life time value by studying pricing trends, consumer loyalty and segmentation.
Having raised seed funding and getting continued technology assistance from TekFriday since October 2015, GenCrunch is currently gathering data from and servicing 110 store locations in Hyderabad across 22 retailers. Having been live since February 2016, they have record of over INR 205 crores of spend data across over 3,85,000 transactions covering 75,000+ unique customers. In a little under a year they have created an Integrated Retail Ecosystem which connects the hundreds of brands spread across thousands of locations, offering lakhs of products to reach the millions of potential consumers.
Their recent success stories include sold out stock in a matter of hours for Laven Fashions (Apparel store) and Centro (Shoes & Accessories store) on inventory which had not moved for over a year from their stores. Asked how this works as a business model, Ravi Prasad says, “We take a cut from merchants on Zaakit app only sales and to cross-sell and upsell across the network. Merchants also pay us for notifications sent and advertising on the platform.
As a special service we also provide our retail customers with building focused analytics dashboard that they need and charge them for the same. The biggest challenge of course if to get merchants to sign up with us.”
Having proven themselves in Hyderabad and currently having no other direct competitors, they now plan to expand to other tier 1 and 2 cities in a phased manner over the period of the next year. Asked about future plans Sushanth Abhishek said, “We want to permeate into every area of a consumers spending offline. As such we are currently focusing on entering into the groceries space. Further we want to expand the network to cover fuel stations and toll booths.”
Where major companies such as Google make their revenues based on focused advertising based on users search history and Facebook based on users social media usage, GenCrunch is poised to redefine shopping by flipping the model of focused advertising to be based on consumers actual offline spends.
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