"Online grocery players lack customer understanding and credibility": Mohit Khattar, Godrej Nature's Basket

The online grocery space has been in the news lately for all the wrong reasons, from players scaling down operations to shutting shop. Amidst the frenzy, Godrej Group's retail venture for fine food, Godrej Nature's Basket (GNB), rolled out a television campaign to promote its e-commerce platform.

The 'shoppable' digital film and television commercial highlights the simplicity and convenience of using the Godrej Nature's Basket mobile application. The digital version of the 35-second film is a shoppable and interactive video, allowing viewers to engage and shop for products of their choice at the same time. The TVC incorporates YouTube annotations and cards. The company claims that the majority of GNB's core target group is SEC A and A1, residing in metros and large cities. They are affluent, aspirational and open to experimentation. Typically, they would like to replicate international cuisine at home and buy indulgence brands (such as international chocolate brands).

Advait Gupt, co-founder, Supari Studios, says, "When Godrej Nature's Basket approached us with the brief to create a film to launch its online platform, we wanted to do something that was extremely relevant to the digital medium, and hence, there couldn't be a better time to launch an interactive, shoppable film. It was a pleasure to work with a client who gave us the creative freedom to experiment and develop a piece that has the potential to not only engage audiences, but also delivers tangible data-driven results."

Unlike other premium brands, the GNB media plan includes both English and Hindi entertainment channels, English movie channels, and news channels including Colors, Star TV Network (Star World, Star Plus), Sony, HBO, Movies Now, NDTV, CNN and Tata Sky Channel 100, as well as HD channels. The commercial will also play on popular shows such as Big Boss, Comedy Nights and Masterchef. Khattar believes that it is a myth that consumers interested in premium products do not watch Hindi channels. However, he concedes that the Group's targeting a regular buyer to convert into a Godrej Nature's Basket consumer, though he agrees that would be a difficult task.

"It will be very difficult to convert a regular consumer who has not experienced Godrej Nature Basket physically to come online and shop from our e-store. They need to be convinced that they are buying products which are not easily available elsewhere," he says.

GNB's online platform was revamped in April 2015 and it has announced pan-India operations recently. All kinds of processed and packaged foods are being delivered outside the five cities Godrej Nature's Basket has a physical presence in. The company is covering 130 cities currently. In-house delivery is done in the cities where the company has a physical presence, while in other cities, it has forged third party tie-ups. However, the order packaging is governed by Godrej.

"We will, for instance, fulfil the order from Nagpur and Ahmedabad from our Mumbai store, while an order from Lucknow will be facilitated by our Delhi store. The closest city will serve as a distribution centre for the online orders," informs Khattar.

While the retail chain focusses on international products, it also stocks Indian products which are relatively healthy and unique.

"Our focus is not mass products," claims Khattar, noting that the focus is on organic grocery and higher quality brands which are not mass. The most popular products at Godrej Nature's Basket includes exotic coffee, blends, specific variants of tea, snacks (imported and Indian), exotic cooking oil, and sauces.

Refusing to divulge a number, Khattar informs that the average ticket size on GNB's e-commerce platform is arrived at with the average transaction number at the store.

Giving an overall view of the online e-grocery space in India, Khattar highlights that the food and grocery industry, in general, is a low-margin industry. Therefore, one needs an understanding of this industry in terms of consumer needs and operational issues.

"If a player has limited amount of funds, then scaling up in a hurry is not a good idea. There will be limitations for such businesses sometimes, which has been the case with certain start-ups recently. If players don't understand the market and enter the segment only backed by technology, then the business will not survive. A lot of online players still do not have the credibility. So, once their advertising dies out they are not top-of-mind brands as they haven't built the credibility and that's the major gap they have. Customer understanding, lack of credibility, brand name and equity are factors that contribute towards creating brand recall," he explains.

Godrej Nature's Basket, to his mind, stands apart from other online players owing to the omni-channel approach and the brand trust that Godrej brings. A consumer can check products online and buy offline or vice-versa. He/she could buy the product on one channel and return on another. "That trust factor is not there in the case of new start-ups because they are unheard names and may not bring the same amount of credibility while making claims," he says.

The company has acquired e-grocery store Ekstop a year ago and integrated it with the Godrej Nature's Basket online platform.

The company currently works with over 400 odd suppliers who supply to its stores and distribution centres, both online and offline. Godrej is carefully gauging the demand on the online space and will tread accordingly.

For the record, Godrej Nature's Basket started in 2005 as a single fresh food store. It has grown into an omni-channel gourmet retail chain, with 36 stores strategically located at high street locations in Mumbai, New Delhi, Pune, Bengaluru and Hyderabad, along with an online platform. The retail chain boasts of stocking international and domestic wines, cold cuts, meats, cheese, organic foods and a large variety of pastas, noodles, beverages, exotic and rare ingredients, meals, sauces, preserves and packaged food from around the world.