Brick & mortar won’t be dead by 2023

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Extreme comments or views are often a huge hit or miss.

And Niti Aayog’s Mr. Kant’s futuristic sounding comment about how brick and mortar businesses in India will be dead by 2023 was a huge miss, in fact to the point of sounding immature.

Coming from a school or college student in a metro, that would have been ok, given our views are often influenced or limited by what we do and see in our immediate surroundings. And the recent explosion in the number of apps and online services would certainly give a lot of people the impression that that’s how the future will be. But not so fast.

The US has been several years, if not decades ahead of us in terms of some industries and technologies as well as innovative business models and businesses themselves.

As of December 2015 in the US, ecommerce retail formed a tiny 8.6% of total retail. The rest of it happens offline! So ~100% of businesses or only retail ones moving online by 2023 seems like a fantasy.

There are some significant differences between the Americans and us. To start with, they’re one-fourth of our population, living on a land that’s three times the size of India!! Years ago, one could have argued that that itself should’ve led to a majority of businesses serving customers online, to cut the long distances customers need to travel to buy even the basics for home. But that’s exactly the opposite of how things are happening there, as we speak. Though no doubt, technology has played a critical role in simplifying business for them, given the relatively lower manpower levels as compared to us.

Now let’s look at it from a physical store or service point of view.

In the states, a college girl working part-time can single-handedly manage a standard sized clothes store without breaking a sweat. Running between the cash counter, answering customer queries in the clothes section, to checking if the customer trying something in the trial room needs anything. Technology, be it tablets to order faster, or pager-type devices alerting you at your table that your meal is ready to be picked up at the counter, all make it for a more logical way to operate, given the light manpower models and limited manpower. Indians on the other hand, while in many ways far more capable, but perhaps given our sheer numbers, affordable manpower, efforts to reduce unemployment, etc., often find ourselves hiring more people than we need.

Driving across some of those bridges to New York, you either use an E-Z Pass device, or through coins into an automated basket at an unmanned toll crossing. Every time I drive by the Bandra-Worli sea-link in Bombay, there are around three people at every toll lane, one taking the money you hand them, the other inside the booth printing out your pass/receipt, and the third handing it to you.

A few years ago, heading a regional arm of a robotic solutions company, I remember speaking to an industry colleague of mine who worked for a mid-sized auto ancillary company. I was exploring the possibility of having a part of his company plant automated. He stopped me mid-sentence, and in no uncertain terms told me that they don’t need robots. He said, “we’ve had about 2 crores worth of robots gathering dust for over 2 years now, because our plant workers won’t allow it on the production line.” And for a progressive, carefully-run, mid-sized company to have ignored a sizable investment like that; doesn’t the idea of most companies being completely online in seven years sound like a pipe dream.

One of the youngest from the online era, Amazon, wouldn’t be opening physical stores now, if they already were one of the first people to sell online.

We in India are nearly the largest, and almost the youngest population in the world, and our country has never looked more promising from a technology, innovation and progress point of view. But I don’t see anything of the sort Mr. Kant mentioned in his comments happening ever. And it perhaps doesn’t have anything to do with technology either.

It’s probably our inherent need for human interactions, that will never make brick and mortar businesses go out of demand.

offline-retailer

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I’ll look forward to your views on this. Also, hit the ‘Follow’ button if you’d like to receive more such posts from time to time. You can also connect with me on Twitter and on LinkedIn.

Websites: www.ateamstrategy.in & www.thinkateam.in

Moral Dilemmas from the Future

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Moral Dilemmas from the Future

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I came across this extremely interesting article that not only gives us a peek into the near future, but also highlights the increasing complexity and moral high seas that businesses need to, and will have to navigate around in the years to come.

Google has been able to predict regional flu trends since 2008 or earlier. And given that most people share with her (I refer to her as Ms. Google) more than they share with close friends and family, Google has been getting increasingly good at predicting if someone may have a certain condition or illness, based on their searches and perhaps the mention of some symptoms, which ordinarily might not raise any red flags.

This article basically talks about whether, in such a situation, Google should, or is, responsible to tell the user that they might be ill, or just go about with business as usual, providing search results and nothing more.

While most of us might have a direct, personal answer to the question, either a ‘most certainly Google should tell me’, or ‘hell no!’, the problem gets more complicated with the large number of false positives (a.k.a. false alarms) and the astronomical medical costs associated with it; not to mention the number of angry users who might perhaps consider suing Google for medical expenses over the incorrect information it gave them out of a moral obligation it may have felt towards its users.

The problem (and article) doesn’t stop with Google, but also touches upon an older but extremely important topic about self-driving cars and the choices they’ll be making on our behalf. Imagine a situation where you, the owner of an autonomous car, are being driven toward a group of people who are irresponsibly standing in the middle of the road. Would you rather your car hit them, or manage to avoid them, but end up hitting a wall that kills you? Or the choice your car might one day make between one of two similar, unavoidable eventualities.

Coming back to the Google problem, while Google’s accuracy has only been getting better with time and searches, it deals with everything from user reactions to health insurance coverage, etc.; all of which makes it a very interesting and complex question to answer.

You should really read this one!

Here’s the article link.

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You can also connect with me on Twitter and on LinkedIn.

Websites: www.ateamstrategy.in & www.thinkateam.in

To Drive or not to Drive?

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50 Years of the Mini, Goodwood Revival 2009

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There was an extremely interesting article on Business Insider recently about the future of driving. From replacing the horse as a mode of transport barely a century ago, we are now at a point where the big question is about whether to replace the driver or not.

The article approaches the subject of drivers and cars themselves, from multiple points of view. One, being that of Morgan Stanley’s auto analyst who sees a future that works on an Uber kind of model, where you and me don’t own cars, but merely use them as a service when needed.

The next view comes from that of a Citi analyst, who feels that owning cars is almost an irreplaceable part of our lives, even if, for most part, they’re just sitting there doing nothing.

Into the mix, come companies of the future, like Tesla and Google. Google, with their Google Chauffeur (the software that runs their self-driving cars), seems future-safe, whichever direction the future approaches from.

Tesla, on the other hand, might prefer to sell cars to individuals, the total numbers being more than it being offered by companies as a service. And with their ginormous capacities to manufacture rechargeable batteries, it may not be too bad even if the future of car transport is reduced to that of a service.

While this shift will take some time to come, what, according to you, might be a better way to go forward? Would it be the Uber kind of model, where you can hire a car (self-driving or otherwise), or would you rather own the car, and the costs that come with it, and use it only for a fraction of the time?

You can read the whole Business Insider article here: Tesla is in the middle of a debate about the future of driving

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Mercedes self drive

Image: A Mercedes-Benz self-driving prototype

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