VR is the future of customer engagement, says Urban Ladder Co-founder
Rajiv Srivatsa, the Co-Founder of Urban Ladder, believes the e-tailer’s bet on physical retail, when combined with digital experiences, will help grow their brand.
Established in 2012, Urban Ladder is one of India’s most popular ecommerce companies offering furniture, decor, and interior design services. But like many e-tailers these days Bengaluru-based Urban Ladder is also talking about the importance of physical retail. Now an omni-channel retailer, they serve more than 300,000 customers online; more than 5 to 10 percent of their audience also walks in to their stores in Bengaluru and Delhi. They have a total of 5 stores.
Rajiv Srivatsa, Co-founder of Urban Ladder, spoke to YourStory about how consumption in India is changing and how young people are shopping. He tells us about the importance of data to tailor-make experiences and draws from global experiences where retail is using VR to change customer engagement.
Edited excerpts of the interview:
YourStory: How is consumption rising in India?
Rajiv Srivatsa: In the last six years that we have been in business, we have seen housing go through different cycles. There has also been a significant rise in salaries, there are several brands coming up in India. The pie of retail pie has seen so many Indian brands such as Wrogn and GoColors emerge. It is a very strong story for the Indian economy. In furniture we will going to see a lot of international players come in to the market; there will be Indian brands too. I see home-grown brands taking off in a decade. Short cycles in the economy are always going to be there, but the consumption pie in India is only increasing and you have already seen an increase in the number of people moving from the unorganised to the organised sector.
YS: Tell us about your customers’ journey.
RS: When we started we were going after consumers who could afford small ticket sizes - Rs 5,000 or Rs 6,000. Five or six years ago, people were buying furniture online for the first time. We focused on repeat businesses because people went from buying coffee tables to beds and larger ticket-size items. They also started moving online for the first time. The consumer is coming back to us regularly now. We are going after the cream of the pie by targeting the mass affluent through offline stores. These people browse online and come back to the store. Urban Ladder is an omni-channel player. We will open stores whose sizes are 5,000 square feet, which is very unlike the larger 50,000 square feet furniture stores that people go to. A large part of our consumer base wants to touch and feel things like sofas and mattresses. We aim to enhance the consumer’s shopping experience, online or offline.
YS: How much do your customers spend when they move from the online to the offline world?
RS: We were initially seen as expensive retailers but people soon realised that our products were superior. Over the last year, we have seen a huge spend happening in physical stores. The spend is 2.5 times that in online stores and the conversion is 30 percent. I am proud of our revenue per square feet because we are able to blend online and offline store experiences. I am also happy that we did not open large stores. Profitability is the key for us and the small stores are helping us grow and get to profitability faster than any other retailer in our category.
YS: How do you look at design and audience conversion?
RS: Our products are modern and designed for India. We offer aesthetic design and great customer service. We understand the customer life cycle when they come online; this is what makes us a strong omni-channel retailer. Of the 300,000 visitors that come online every month, we need 10 percent of them to come to a store for our stores to break even. But we are doing bigger numbers than these. We are able to do this by understanding the customer life cycle online and guiding them to come to our stores in Bengaluru and Delhi to make purchases. We also understand what sells and what does not, and we can manage our merchandising far more efficiently than others. We are also using VR and AR experiences for people to understand what works for their homes.
YS: How are you spending on customer acquisition?
RS: Our target segment is already known today and they have matured with our growth. We are no longer spending a lot of money to tell people what Urban Ladder is; our spends are too understand the life cycle of the customer. We can target them with specific messages on warranty and ask them to visit our stores. We are using basic machine learning algorithms to understand how many minutes do people spend on our page and what categories they browse. Our algorithms nudge people to come to our store, but we don’t offer people coupons to come to our store as a reward. Our pricing remains the same.
We understand how conversions happen and we are able to do so because of the algorithms that we have built in. We track data to understand how customers are walking through a store, where they are going, which are the blind spots that can make our merchandising better. We are yet to map data back to our supply chain, but in one more cycle of learning we will compare what is sold in the store, mimic it to the online purchases, and map it back to the supply chain in China.
YS: What about your own labels?
RS: We are a brand and we are selling items that we design. We are not a manufacturer; we own the design and source the design that we like. We curate and tweak our own design. Market places can launch their own brands; we have seen that with Myntra. But, we are Urban Ladder and control our own design, we don’t sell other brands.
YS: What are your experiences with AI? How do you see this playing out in the future?
RS: At some level, new-age audiences don’t worry about AI recommendations. The newer generation wants to share data and how they live is actually out there in some social forum or the other. The technologies of the future are not just about AI and ML; those will be the base or foundation. Future technologies will be about visualisation and how they can provide experiences to consumers. The Occulus and the Holo Lens that got launched allow you to experience VR; they will engage consumers and they transform retail forever. Consumer psychology and behavioural economics are merging. Businesses will eventually be very powerful when they use data to tailor-make experiences for customers.