Aneesh Reddy, the co-founder of Capillary Technologies, is a man in demand these days. Capillary, which offers cloud software as a service (SaaS) for retailers and consumer goods companies, finally rolled out its latest product, and Indian retailers are banging on Reddy’s door to become early adopters. It’s easy to see why it’s caught their attention. The product measures customer demographics—age, gender, and even attire—all via in-store cameras. Eventually, it could also detect repeat customers. A handy addition to any retailer looking to better understand its customers.
This latest offering is the second in what is meant to be a three-product project. The first, VisitorMetrix, was launched around the fag end of 2017. In less than a year, it had already done a million dollars in revenue. No Capillary product before it had hit the million-dollar mark in as little time. VisitorMetrix’s value proposition is as interesting as its more younger sibling. It keeps track of store footfall—the number of people walking in—and uses this to calculate the store’s conversion rate—the number of people who actually made purchases.
Already, some 20-25 Indian brands have signed up with Capillary. These include apparel brands such as VF Corporation—the company which runs Lee, Wrangler and Vans—and the Ritu Kumar group. In addition, New Delhi-based jewellery chain PC Jewellers, and Softbank-backed baby care brand FirstCry are also customers. All told, this Singapore-based company now services some 800 stores across the country.
The interest shown by Indian retailers is a fairly recent phenomenon. “Although we are 10 years old in India, we are growing faster in India now than we were growing even three-four years ago. The reason is that there is a major change in attitude,” says Reddy.
The change, Reddy explains, is in line with the changing retail landscape. Most retailers in India have traditionally been traders. Their mindset was always to simply get inventory at a good price, put it in a store, and expect it to sell itself. But this approach is no longer sustainable with the e-tail boogeyman looming large in India. This past Diwali—a crucial sales period for Indian retailers—was a dismal one for offline retailers, as they struggled to compete with the heavy discounting of their online rivals.
To make matters worse, online retailers don’t just sell cheaper, they sell smarter, thanks to the insight they have of customers’ browsing and purchase habits. Sure, e-commerce accounts for just 3% of the overall retail market in the country right now, as per data from retail consulting firm Technopak Advisors. However, major online players—armed with troves of customer data—are increasingly going omnichannel, putting further stress on offline-only retailers.
