Scope Of Online Digital Retail Business in Pakistan

In Pakistan, corporations have not yet overshadowed small retailers. We still rely on local shops and vendors for our groceries and other essentials. One advantage to this, which is absent in the large supermarkets, is the human factor. Your local retailer knows you and everything you need from experience. Not only that, there will be loyalty perks, such as lines of credit and preferential treatment, which is always better than any form of efficiency.

A shopping experience which offers these facilities and perks has reasons to stand out. Let us explore how technology can make this experience even better with its added efficiency. We will start with some simple options and make our way upwards towards an e-retail utopia. Everything in this article is from practically implemented scenarios, so we know that it can be done.

Let us first admit that grocery shopping from the comfort of our homes is not yet a really viable option in Pakistan. Predominantly our retailers are not very tech-savvy, nor do they have a working understanding of supply chain, so we cannot assume that they will figure out a foolproof way of getting your shopping list from their store to your home safely and on time. The logistics have so many variables, such as optimum fuel consumption during transport, security, freshness, item integrity, order accuracy and hygiene that perhaps it would be easier to opt for an environment that eliminates home delivery.

Just like in any other business, information technology can largely help retailers in making their business more convenient and efficient.

Step 1: Go paperless

Most retailers manage their accounts through books. The first step for them is to go digital. A simple computer capable of running Excel is affordable to most shopkeepers, so it is definitely advisable that they start managing their books electronically. The learning curve is not sharp, making it a relatively smooth transition. Once the process is digitized, it will be easier to keep track of inventory, creditors and due dates, which in turn will help the process become more efficient.

Step 2: Automation

While we are optimizing processes, let us eliminate manual entry and let computers handle it. Almost all products already come with barcodes, barcode readers are not too expensive and are the easiest things to use, just point and process. So far, this information isn’t exactly ground breaking, but it is seen in practice in larger stores across the country because it is very time and cost efficient.

Step 3: Go online

Here is where it gets a little tricky. Many shopkeepers are already capable of maintaining databases on a computer. That said, the next step in technological evolution would be to take the entire system online. This can be done on the cloud (Google Docs, Dropbox, Skydrive, etc.) for starters, and then moved on to a dedicated website where a database can be maintained. Once this transition is complete, shopkeepers can announce their inventory (like homeshopping.pk, buypakistan.com etcetera) on their websites for customers to check before making a purchase (just checking though; purchase and delivery are not part of step 3).

Step 4: Inventory Management

This is more of a management task than a technological one, but it does fall in the realm of an ERP. Since we are already managing a database, we have an inventory system in place. It only makes sense that one should exploit technology fully and manage it efficiently. The information recorded in Steps 1 and 2 will tell shopkeepers how many customers are coming in daily, along with the items they are purchasing. This data will inform the shopkeeper of any trends, for example, what time most customers come, on what date certain items are most commonly sold. Based on this information, the shopkeeper will have a better idea of what to keep as well as recognize patterns.

Step 5: Centralization

Taking all that we’ve done so far, we can connect everything to a centralized database, because everything is just easier that way. The practical case becomes: you go to your local retail store and purchase your item(s), let’s say a toothbrush. The shopkeeper scans the item, takes the money and you leave a happy person. Let’s assume this was almost the last brush in the vendor’s inventory. The central server gets an update that it is time to restock toothbrushes for this shop. This will help manage supplies for which items are needed most. Suppose City X needs more toothbrushes than City Y, there is no means of managing this demand without a central server keeping track. Let us take it up a notch and say this database is connected to suppliers across the country. Now when the inventory goes under the limit, a notification goes to the supplier and they know it’s time to send new stock to the shopkeeper. This will require a lot of precision to execute, but once done it will make things tremendously easy for everyone involved in the process. We know such a centralized system is possible, take Easypaisa as an example.

Taking shopkeepers online is a Herculean task – a concept many struggle with, but can eventually adapt to. Beyond that, each module exists in practice in one form or the other, what is left is integration and execution.

Step 6: Shop from home

Speaking of EasyPaisa, we have already proposed a centralized system for vendors. Why not open the same system to customers so that they can make purchases online. For example, when you login to a customer database, you can select the items you want (the classic method) and this will give you a customer/OR code and a list of vendors where these items can be picked up (the database will already exist at this point). You drive to anyone of those vendors and present that customer code/OR code, the vendor will assemble your items, and you will pay for your purchase and be on your merry way. This can be expanded to any scale, as long as the shop is connected to the database (which we have established is very plausible).

The largest undertaking from all of these steps is the part where we take shop keepers online, that is a concept many will struggle with, but can eventually adapt to. Beyond that, each module exists in practice in one form or the other, what is left is integration and execution.

Future Tech:

No tech piece would be complete without a look into the future. Take South Korea for example, life is too busy there to even go shopping, but they created a solution that would be invaluable for life on the go. Home Plus has created virtual stores. They are constructed using large backlit billboards which display images of all the items one can expect to find in a standard Home Plus shop. Each item has a OR code next to the image of each product. This enables Smartphone-equipped commuters to automatically add the merchandise to their virtual basket by scanning the code. The total order is then delivered to the commuter’s door once they return home from work. During the campaign, Home Plus’ online sales increased by 130 per cent, with over 10,000 customers. More details can be found on www.springwise.com/retail/homeplus.

In Pakistan, using the technology we have established in steps 1 through 6, we can create OR codes for each item and put it on the centralized website. Customers can go online and scan their items’ OR codes from home. A purchase can be made using a credit card (or NFC-enabled Smartphone). From there, you can either have them delivered or personally (if possible) go to the store and collect the items you’ve paid for. So when you go to the store, someone will be standing there with the items ready to go. All you need to do is to walk in, collect and walk out. There are aspects of the digital realm that cannot be adapted to Pakistani retail successfully, but we can extract some successful functions and implement them. This creates an easy to adapt workflow for our retailers. Of course, the cost of such a wide scale operation would be phenomenal (the database alone would cost a fortune), but with government-funded incentives, the entire concept can be optimized in favor of both the retailers and the customers. With optimized retail outlets, it would start making that money back in terms of time saved. A win-win situation.

There are aspects of the digital realm that cannot be adapted to Pakistani retail successfully, but we can extract some successful functions and implement them.