There might be a lot of speculation about Kishore Biyani and his Future Group being anti-startup. At TechSparks 2016, he put it to rest when he pointed out that he has invested in more than 26 small to medium-sized industries in India. Now to prove a point,and to ensure that his credibility of being the first at everything retail stays intact,he along with a startup,is rolling out a 1,000-store customer engagement and checkout (queue-less) mechanism based on Bluetooth radio (in smartphones). As this is published, the technology has finished trials and is undergoing commercial validation.
Now here is how the system will work. Today, there are around 35 million Indians who throng modern retail outlets and these consumers are sometimes stuck in long queues owing to a lack of a quick checkout and payment mechanism. Solving this can actually add at least $10 million to the top line on an annualised basis. Future Group is solving the problem of payments, checkout and customer engagement for exactly this reason.
As soon as the customer walks into the store he is asked to turn on his Bluetooth. Here the radio connects to the CRM of Future Group, and enables the machine to understand if it is a new or a returning customer. This data is captured based on the unique ID of the Future Group app or the third-party app (of the startup that is working for them), which is installed on the customer's phone. Immediately, customers are engaged with relevant content and the customers are led through relevant shopping aisles. The app uses the camera to scan all bar codes, which is captured at the self-checkout counter. Upon picking the entire shopping list, the customer then chooses digital payments based on either net banking, card banking or the Unified Payment Interface. At the press of a button all items are considered bought and the customer leaves the store immediately.
But what about pilferage? This is an opportunity for another startup to solve. In India, pilferage is around three percent, which is one of the highest in the world. According to E&Y the global average is around one percent. Although self checkout through smartphones is a reality, Biyani's team has to contend with pilferage. Future Group has pilferage of around 1.5 percent.
Others attempting omni-channel retailing are Aditya Birla Fashion and Retail, Arvind Mills and Lifestyle. While most of them are trying to solve the customer reach and engagement part, the payment aspects, that is –in-store payments and self-checkout,are yet to be rolled out. There are startups like Bezirk, Mobmerry, MobStac and Xlogix trying to solve this part of the puzzle, but the race is on to capture the $6-billion retail technology market. The opportunity is as big as $30 billion.
No wonder Biyani does not want to be left behind in the race to be the largest retailer in the country, especially with Reliance Retail closing in on its revenues.