Technology is just another tool for legacy players. With time and perseverance, their understanding of markets is not limited to digitally fetched analytics. However, omnichannel did bring a seismic change in their market base and eventually, their attitude towards tech adoption. The informative session on ‘Reviving Legacy Formats with Digital’ at the recently concluded IReC X D2C Summit 2023 in Bengaluru explored specialty retail and its response to tech-led omnichannel sectors with Vidur Kapur, Director, O3+; Lavanya Nalli, Vice Chairperson, Nalli Group; Zain Khwaja, CEO, US Pizza and Naveen Pishe, Partner, P N RAO as esteemed panelists.

Lavanya Nalli’s take on omnichannel hinged on the 100-year-old legacy of Nalli Silk Sarees. “As the fifth-generation business leader, I knew that omnichannel was here to stay even when I had joined Myntra as a VP in 2014. Quelling concerns by naysayers who thought sarees are about touch-and-feel and never find traction online, we have come to an age where marketing is much more than ATL and BTL. Influencer marketing is crucial today. So, it varies from one industry to another and challenges the retailer to explore how omnichannel will help one’s consumers realize value from the products sold,” she said. 

Adding to Nalli’s perception were Kapur and Pishe. Kapur talked about how 03+ began as a premium salon brand in 1964 by tapping into the rising popularity of black-and white films and showbiz. “We started with sugar wax and formed a salon skincare experience using imported products. We commanded a premium of Rs 2000 a facial then, as against a homegrown brand charging Rs 500 for the same. I wanted to get into the digital side of the business and realized how the salon business was impacted by online, as the beautician is our main ambassador. We innovated and grouped SKUs for retail, professional care and online,” Kapur said.

PN Rao, a brand nearing completion of a century of existence this year, also held similar beliefs about legacy brands at the crossroads of technology and new channels. “We are finding a middle ground with in-store experience for buyers seeking touch-and-feel, measurements in person, and pampering. Retail isn’t losing sheen as we have 18-year-olds walking in to get their graduation suits done. However, for a customer interested in our products abroad can easily log in to our app, share measurements, which are then sent to our CAD system. The garment is made and shipped. We even have takers for online services in tier-3 markets,” he said.

Zain Khwaja shared the flipside of the coin, wherein use of technology without focus on product quality is damaging customer experience. Explaining why he is against the food aggregation frenzy in India, he said, “As the third largest pizza brand in India, we focus mostly on dining and the overall experience that one gets inside a restaurant. We were courageous not to go the delivery route, as our products won’t retain their charm if not enjoyed fresh at a restaurant. Instead, we invest in the practice of going to the restaurant and interacting with people around.”

But does ignoring digital affect brand value? Lavanya states that legacy brands should explore how technology can complement their existing goodwill and not overwhelm it.  “As consumers, we all follow different formats for various necessities ranging from grocery to personal care. We went ahead with technology as much as our unit economics and ROI were profitable. Nalli doesn’t expose its entire inventory on digital, because the total ROI on marketing the most affordable product by our brand digitally isn’t worth spending so much resources and effort,” she mentioned.

Social media does help in uniform brand awareness, stated Kapur, and Pishe maintained how the informed customer understands the obvious disparity in retail and online experience, given that product quality never gets compromised. “For products heirloom in use such as a Kanjeevaram saree, which can last generations without fraying, one can’t compare its value to that of a garment 1/10th of its price, sold with discounts online. Today’s customer self-selects,” she added. 

Quality matters the most, and Kapur’s O3+ steers away from discounting in any format. Similar is the positioning of Nalli, who believes that when product quality is top-notch, the brand doesn’t need to worry about discounts in the long run. Bringing in the debate on predatory pricing, Pishe said, “Legacy brands need to shoulder the responsibility of being pallbearers of quality, so that predatory pricing doesn’t misguide our clientele.”

When asked about the infallible presence of artificial intelligence, he said how PN Rao is infusing CAD, ARP, and other technologies in the back-end to not miss out on younger generations who have grown up with regular usage of smartphones and internet. 

“Tracking metrics has been far more powerful now. Powerful analytical tools such as heat mapping are helping the company make informed decisions. In terms of customer experience, nalli.com has an AI-enabled visual search panel that gives product recommendations to the tune of about 75% accuracy if anybody were to sift through 17000 odd SKUs by just posting an image of a similar looking product,” said Nalli. 

Kapur talked about the future-forward retail experience by Reliance, wherein AI can help an onlooker see how a particular lipstick will look on them. “For skincare as a category, they are providing personalization that appeals to customers to experience a product offline first, and then continue online. They are using AI backwards and promoting offline experience,” he maintained. 

Summing up the conversation was Khwaja, who said that retail brands need to be cautious with how technology is benefiting them at their current journey. “I appreciate the usage of AI in understanding buying preferences on digital platforms. That helps brands greatly. However, SoftBank had invested $100 million into a company that floated the idea of having pizzas made inside trucks, which would deliver the products on the fly. Theoretically, it was a great proposal, but the project failed. So, legacy brands should treat technology as an enabler,” he concluded.