Is it time for Rural-First eCommerce?

Are we trying to sell English-Language classes through ads printed in English? The funny bit is, if you look around you'll find a lot of language institutes trying to do just that. It isn't just funny, it's a sad waste as well. And that brings us to our burning question. Is it time for rural-first eCommerce?

A lot of critical determinants of an eCommerce model vary between urban and rural markets. Customer evolution, internet speeds, language proficiency, retail expectations, buyer-seller-distance, supply-chain infrastructure - to name a few - vary between urban and rural areas. Hence the obvious fact that rural and urban eCommerce may need different approaches.

I'm not speaking of inventory itself - that's relatively simpler. We already know rural customers may have a stronger preference for battery life and ruggedness with respect to heat, humidity, dust and power-quality. We also know regional brands and designs may have a higher acceptance. I'm also not talking of translation or even of the different expectations (and realities) on delivery time, customer-care etc. I'm speaking of stuff that's tougher to pin down.

There is the complexity around color, font, language, dialect, idioms, syntax, imagery and visual design. If you ask typical rural populations in India, you might find they prefer the orange-colored Micromax phone with the loudest ringtone to the Vertu, and the Su-Kam inverter print-ad to the understated Apple ad. If you want to know what works for rural, look at the posters political parties make. They may not be the most elegant works of art for you and me, but they work for the rural masses- and much better than a Benetton hoarding.
And then it gets more interesting.

Rural isn't 'one' market. Urban, interestingly, may well be - most large cities turn cosmopolitan and while they do retain a bit of local flavor, urban markets tend to be more homogenous than rural markets. Each rural market may have its own unique idiosyncrasies. There is some media commonality so one may expect similar demand-trends, but the regional influences could be stronger than global cosmo ones. In the colorful south of India, people may prefer pristine whites while in the bleak Thar or Rann of Kutch, the preference may be for mirror work and applique in rich colors. Spending could me more linked to the 'actual ' harvest than the harvest festival as per the calendar. The differences by religion, caste and occupation could be more pronounced. Matriarchal and patriarchal societies could respond to different communication.

Now imagine one business that starts of by adapting its global platform and processes, and another that starts from a region, say the North-East of India - the more local business could well be better-suited for local success. Its challenge would be scale. The global business may have better scale, but if it doesn't resonate with the customer, it'll have a tough time succeeding. The business is not about - crudely put - discounting mobile-phones, wrapping them in miles of bubble-wrap and Fed-Exing them. The challenges could include the following:

• The translation challenge: from today, when everything from the website name to search-experiences and item-details are in English, how do we go to being easily understood by populations who may understand English less or differently - the answer may either lie in language adaption or in language-independence (visual / audio web etc)
• The custom-experience challenge: from uniform all-India prices, promises and T&Cs, how do we vary our promise of the best-possible for each taluk or tehsil, and how do we deliver, say, local language customer-support from a centralized location, how we get the items there and the cash back; also the business may need different measurement-norms on COD%, return-rates and so on
• The inventory challenge: how do we get to the portfolio that is closer to actual consumption
• The hand-holding challenge: how do we get people comfortable with the idea of digital commerce, where the initial levels of exposure, DIY and comfort with change vary from urban populace

The long-term game is about creating local or language-independent experiences, generating custom prices, delivery times and T&Cs on the fly, selling sattu, gamchas, lanterns and fertilizers, building financing, supply-chains and reverse supply-chains, getting customer-care to talk in the dialect and so on - while still aiming for economies of scale. A lot has become easier with soft keypads on touch-phones, transliteration and translation tools etc, but a lot more needs to be done. The big promise is that once these engines are built, they may well end-up being applied to urban niches as well.

A lot of this will remind you of the mass-customization paradigm. It is simple, but not easy.

The way ahead may be complex, but is certainly interesting. More than economic potential, it has the promise of separating the innovators from the me-too's, the talkers from the doers, the wheat from chaff - much more than the comparatively-less-complex urban eCommerce.


Previously published in ET Retail on July 29, 2015

Is it wise for eCommerce to go Mobile-Only?

After PayTM’s mobile-only launch, Myntra, and reportedly Flipkart is going mobile-only. While there is no debate wether it makes sense to build mobile web / apps, does it make sense to forego the PC experience, and in time the mobile-web experience? That is a tougher question to answer. 

It is certainly a brave decision. The future is mobile. Some claim the future is apps and no m-web. There could be some truth there, but the real question would be on the benefits of going off the PC/mobile-web completely. Let’s take the PC-web question first. 

Focus could be a key point gained. There’s significant upkeep one could avoid, but the PC experience is already build for most players, and is easier to build if not. The PC experience does have advantages - much more decision-information on one screen, an experience users are used to and so on - and there may actually be a segment of users used to the PC experience who is not used to the mobile experience. On the other hand on mobile there are significant unknowns - it’s something that is evolving as we speak. But that said and done, mobile is a significant portion of the eCommerce future. But it is not 100% by any projection.

And again, the same question - would it be wise to discount the benefits of the PC-web? Is there something inherently distracting or destructive about maintaining the PC experience? One could always build a responsive experience where one has a shop-front for every access-point. The engineering doesn’t need to be different - and while smartphone numbers beat the PC numbers by a mile, those aren’t population numbers, just ship-outs. I haven’t seen the Comscore numbers for mobile-access since very few Indian eCommerce sites are covered or unified, but I believe the page-view and minute numbers would be much lower than the 50-90% traffic claimed by most eCommerce sites - this percentage is most probably the visit percentage. And we know how GMVs are not that closely linked to just visits.

Arguably, the quality of experience on a PC still beats the mobile today. There are enough pointers to lower conversion on mobile - smaller screens, more impulse less mission mindsets on an average, reluctance to use complex payment schema (read non-COD), a fresher TG and so on.

The worst reason to go mobile-only I heard recently was that app-downloads increase when a website goes down - does that even sound like a long-term strategy? It’ll only be a spike - we all know it’s about being most easily accessible across all channels for existing and new users - that’s religion unless you have a reason better than those above. More app installs is a nice metric, but one has to watch the cost at which that comes. If your cost per install is already way higher than the user’s lifetime value, the last thing you’d want to do is add the cost of lost-GMV to it - GMV lost-to-competition to be precise.

It gets worse. Some players in the Industry today don’t want to fire their engineering or product resources. They just want these people who were hired and trained for the PC-web front-end to start creating apps. Not fair or productive, I’d say.

There’s even more. The advertising story is less effective on the mobile-app. If a business wants to make money from space-selling like Alibaba does, the mobile just offers no real-estate for it. On the PC screen one can cover even three-fourths of the screen and still have enough space left to showcase the item to be sold. 

One could argue that while it is okay to reduce or even stop the investments on PC-web, it could be foolish or even dangerous to discount it as a past that has completely ceased to exist. I believe the comfortable-with-PC shoppers will take a bit of time to change and may not like the fact that their favourite website isn’t asking for their opinion or offering a bridge to the future. What will happen, in my opinion, is that affiliate websites will have a party once they are the only route to the inventory on the PC-web. And we all know that’s 5-10% more expensive a sale. 

Is it wise to put all your eggs in either basket is the question. Is it wise to forego an established paradigm and exit the field in favour of competition while taking a bet on the (almost) entirely unknown is the question. What do you feel? 

Is there a link between Employee Loyalty and Customer Loyalty?

Well, employee and customer loyalty are different things, right? There are different programs, processes and owners that drive merchant or channel loyalty, customer loyalty and employee loyalty in many big companies. In other companies, all of these may not exist but what does exist, say customer loyalty programs, don't ever concern themselves with employees or partners. 

What if there was a link?

One end of the spectrum would be a great company, doing well, and selling a great product. Customers are happy, which is why the product sells a lot. Employees would be happier here than in a slumping company with sad products to push, no matter what the HR policies are. Employees of a successful company tend to gain more resume-value (e.g. doubled sales from X to 2X), have more promotion and increment chances since such companies tend to earn money and expand, and in general even if they're riding a wave, feel proud about their numbers. But while this logic may hold, there's a much better, simpler way to see the relationship between the two loyalties. 

A company is its products, its customers and its employees. 

Imagine a restaurant that you want to be loyal to, but that loses its doorman every week, chef every other week, barman now and then. Now what will bring you back? It can't be the food since the new chef will cook it a bit different, and it can't be the service. Most of all, you'd suspect the restaurant does something wrong by its stakeholders. Just the brand or the interiors can't create loyalty. And more than anything else, especially in the service industry, the product is a function of who delivers it. The trainer is the training, the salesman is the shop and the call-center employee is the company. Once these front-facing people leave, patrons think the place 'isn't what is used to be'. And it applies to product companies as well since IP finally resides in people. It's just that all of them aren't leaving together - else we'd know that KM systems can only do so much to preserve knowhow. 

Allow me to also claim, for a bit, that since a company is a set of employees, employee-loyalty is loyalty to other employees. Once a company loses some employees, it'll lose more since the act of employees leaving spoils the employer-brand ones and of-course, those that leave can poach. So if you think the doorman is okay to let go but not the chef, you may be right... but only till the doorman tells the chef about his great new workplace that also needs a chef. 

How different is "my" customer and "yours"?

So many brand discussions start with customer profiling. There are deep dissections on the difference between our customers and those of our competition. Our customer is more open to using her credit card online while the competition's customer favors cash on delivery. Our customer is older but more evolved. Our lapsers are more likely to be staying in big cities. It stops striking some of us after a point that we're using a cognitive shortcut by giving an identity to an aggregate average statistic.

More importantly, we forget that in many if not all cases, all these different identities are just one person. These many customers aren't different people who behave differently. Our customer also shops with the competition. Our customer is the competition's customer.

This is not trivial. We draw up pen-portraits, day-in-life's, mood-boards of preferences and so on and forth for these supposedly different characters. We do qualitative research around customer groups that are 'our customers' and 'our lapsers' or 'competition customers' to understand them better. If we see the same person turning up in two groups, we suspect incorrect recruitment if not foul-play and impersonation. How could the agency mix up our customers with theirs? Or customers with non-customers? Sounds familiar?

If there are more men in the people who end up converting on my platform versus my competitor's, this may show up as 'our customer is 70% male while our competitor's is 80% female'. I think it starts off being a small poetic license (the use of the singular) and ends up sounding inane. There is no one out there who is 70% or 20% male.

Reality check - it gives us great pleasure to prick this balloon with the pin of knowledge you had all along. These different characters with their distinct unique personalities are like the average man. Like the man with exactly the average height, weight, hair and nose-length - who doesn't exist.

These customers - yours and mine, are heuristics, short-cuts, simplifications - and just that.

What we really should be talking about, and thinking about - are different need-states. In one need-state, a customer prefers my shop and in another, my competitor's. That's really what it is.

If my eCommerce platform, for example, is great for technology products and not so great for lifestyle products, the same customer, in the lifestyle need-state is my competitor's customer and when in the technology frame-of-mind, is my customer. A frequent misread of this state is as follows: my customer is a technology buyer and the competitor's is a lifestyle buyer. Familiar?

So what?

A lot of things. Just as a starting example, do you think segmenting users or customers makes more sense now or segmenting need-states, use-cases or states-of-mind? Litmus - think of yourself, are you ever just one brand's customer?

Are you building a Concorde?

All of us know about the concorde - sorry, let me correct myself - about Concorde, right? You have to get it right, so I hear.

So here's what happened, broadly.

An Anglo-French JV (Aérospatiale and the British Aircraft Corporation) built Concorde, a supersonic passenger plane (out of two ever built) that halved transatlantic flight-times, a proposition that'll still sell if you were to poll potential passengers today. It flew for 27 years but only 20 aircrafts were built. While there are multiple theories on its efficacy, it is known as a supreme technological feat. It is also known that it never made money. Finally after the one accident it had, and in face of mounting losses, the program was shut in 2003. This was despite Government subsidies and sponsorship, despite the muscle of Aérospatiale and BAC, but importantly, despite a very strong consumer proposition – halving transatlantic time, the hype value of flying cutting-edge etc.

Or was it? Was it really a strong value proposition? I'm not an expert there, I've not seen the value-prop, but I assume that while it was undeniably good for the customers to half their flying time, maybe it wasn't important enough to pay the ticket price premium. Why I say this because had it not been the case, I assume other supersonic passenger jets would have been built.

What is known is that costs spiraled to 6 times the initial estimate. For perspective it was $ 23mn. Note, in 1977 dollars. Post retirement, Branson offered to buy British Airways’ Concorde planes, first offering their nominal original price of £1 each, then increasing the offer to £1 million each. Note, this is in 2003 pounds.

Also quoted is the fact that the big reason behind Concorde's grounding, apart from the cited reasons of the 4590 crash, fuel cost etc, was that it was more profitable to carry passengers at subsonic speeds.

The existence of technology, and a thumbs-up from potential customers sometimes blinds us into confusing these things as a 'buy-in'. Today, a faster website, faster delivery, better packing, better consumer service will all be things that a customer wants. Without a sensitivity curve along all the value-prop axes, however, these are all directional and that's all. What we should be researching is how many customers will pay what it takes to get these desirables on the table. What we should also do is check if there's a margin buffer between original price and a post-spiral price for long development projects.


I'm never against cool technologies. I love them. I'm genuinely sad to see Pandora, Wikipedia and WorldSpace bleed. Maybe not wiki - they made a choice not to make ad-money, but WorldSpace was in it to make money. Customers loved it. Just not enough customers maybe, not enough love perhaps, not enough love to pay. This is an important litmus for those of us in the In Tech industries especially, it is common to see over-spec-ed products. It's an engineer's / designer's self-actualization, but let’s remember all that is useless if there aren't enough people who pay for those specs.

What do you think?

Personalization versus Customization

A lot of things in online retail have changed in the last some years. The biggest is that we have been told that the online buyer now doesn't like take-it-or-leave-it experiences. I'm not sure anyone's tested it out (e.g. do users buy from suboptimal websites if, say, the prices are slightly lower there?), but let's say it makes logical sense. Another equally big thing that has changed is our ability to create multiple experiences on the same website, without which the first insight is useless. The third thing to keep in mind as background is what I may have said before in the Escalator Problem post, most shopping sites are built by techies, not retailers. Techies love complexity. Multiple experiences, multiple skins on the same backbone is exciting and cool for techies.

As a result of all the above and more, the hue and cry for Personalization.

There's one small school for customization and another big school for personalization, to be clearer, and the second school considers vanilla customization-ability uncool. Custom flows are about giving the user a choice of experience that the user explicitly makes (e.g. you want to see more deals? more lifestyle or tech? when you log in?) while Personalized flows second-guess the user (e.g. we know that you have bought / browsed T-shirts, so here's more T-shirts when you log in). It is cooler to not ask the user but surprise him / her with what we know without being told.

I'm not sure what the best approach is. Personalization could be cooler but could just be techie-cool and not user-cool. I believe customization is safer, not sure if that's the best. Here are a few things to remember whenever, if ever, we as businesses make this call.

a) Users may actually like being asked questions when they walk in. Maybe it's a nice thing to ask them if they like seeing deals on furniture better than music instruments.
b) We know some people mind being second-guessed. We all know the Target example, what happens when your analytics team figures out someone's daughter is pregnant without that someone knowing about it.
c) There could be parts of the user's browsing or buying that (s)he doesn't want recorded for a number of reasons you can imagine
d) Preferences change, with time, with occasion and so on. You may know the buyer's history, but that may not be a good predictor of his / her present state of mind. For that matter, even people change over time.
e) There could be things the user is done with. Maybe (s)he's already purchased the dream double-bed from your site or elsewhere, and now your snowing him / her with latest double-beds is not just useless but harmful. The next time the same person will buy a double-bed is either ten years later or never.
f) There is a distinct possibility, and probability of multiple-user-ids e.g. the son using his Dad's id or the wife using her husband's - maybe it is faster than creating a new id or maybe that someone's received a coupon the other person wants to use. In this case you'd be personalizing for an average of the husband and the wife, a person who doesn't exist, and not impressing them both.
g) Personalization needs data (if not Big-Data, the buzzier, fuzzier word) and if a lot of your users are new users without a lot of data history, you'll have a cold start problem. By the time you figure out the person's preferences, you may have already pissed him off with irrelevant suggestions

I'm sure a lot of statisticians and coders are working on these angles as we speak, but we have buyers walking in now. What should we do? Any views?

The Privilege of a Privileged insight

This nice-sounding word that started doing the rounds a few years back, called Privileged Insight. Everyone from McKinsey to McDonalds was losing sleep over it and all the hot thought leaders were pounding their desks demanding it. This is a cool strategy, but what's our differentiator? What's the one competitive advantage that will remain our advantage? What's our privileged insight about the consumer? What do we know that they don't know?

Now we know that a lot of tough questions don't have answers.

We know what a Privileged Insight means (let's call it Pi for shortness's sake, I'm getting carpel-tunnel-syndrome from typing it each time). And we also know the magic of Pi, how we'll use Pi and how

it'll transform the world. The only thing most of us were unsure of is its existence, more than momentary-fleeting that is.

Now that I've had the fortune to work on emerging industries (like eCommerce, and yes, I know it's emerged to various extent in various countries, but in India it's called emerging or yet to emerge), I've

often hunted for Pi myself. I've sometimes imagined I have it figured, only to lose it again. It troubles me. What can give me the privilege to know any Pi to the last decimal? How do I keep it privileged evenif I do pin it down? I'll not be the only person in the company who knows, and people leave companies and join others. Plus the same customer talks to other companies too. The same research company /researcher talks to others in the game.

Bigger problem, if Pi isn't known, then we market-players have the same insights. Then we should have the same imperatives, the same strategy, right? Not really. Possible, but not necessary.

Sometimes I feel there's something like Pi, even if there's nothing that's 'exactly' Pi. Maybe the difference in my company and the next is not different insights, but the way we use them. Specifically, even if given same / similar insights, we take different punts. That's the difference between 'us' and 'them'. We go and invest in Rural while they invest in the Youth. We build out the smartphone experience while someone else grabs the SMS / feature phone platform. One, or both of us will win, but we'll be different.

Under the same sky, some plant more potatoes and some plant more onions. One of these farmers will make more money and people (including the farmer himself) may think he had this Pi thing figured out. A consultant will convince him, and a management guru will spell it out, it's 3.1415926....