Saturday, May 2, 2020

How can Artificial Intelligence (AI) benefit SME's?

Artificial intelligence (AI) was invented to support humans. With time, it has developed into a technology that delivers results. Although expensive initially, AI has now become affordable for small businesses as well.

AI tools can transform the MSME space enabling small business owners, and entrepreneurs to create hugely successful operations across a spectrum of business functions including, product development, sales, customer service, and marketing. It can be used to support various kinds of businesses like Online Retail, Logistics, Customer Relations, etc.

Online Retail: Since most of the small businesses are also selling through the online platform, the idea to make use of artificial intelligence to give customers a feel of the product in advance that they are going to use has gained traction. Decision-making related to product purchase is happening through online research and by browsing through various applications of online stores. Small businesses are putting their products on the online platforms in the same group as the products from the big companies.

Logistics: It is one field all small retailers deal with. With the arrival of AI, it has become more accurate to deliver goods without any human intervention. For example, warehouse management is one such concern that businesses deal with, but artificial intelligence has given it a new meaning today. It focuses on predicting the points where congestion is likely to happen and strategically avoid that route or channel to keep it smooth.

The most crucial and essential use case of AI for small or even humongous business is in Analytics. AI has opened new horizons in the domain of analytics; by leveraging predictive analytics, one can scale up their enterprise in a tremendous way. If you are trying to implement AI for your business without wanting to invest heavily in machine learning, then analytics is the way to go. AI-powered analytics software will help get business intelligence at good rates. Amazon Machine Learning and Microsoft Onboard are few such analytics software.

AI also helps businesses automate Customer Communications with the help of a Chatbot. Both product- and service-based small businesses have begun using chatbots on their websites to initiate customer communication and help answer questions.

It also helps with Smarter Hiring. Small businesses have a tough time with the hiring process due to the lack of huge networks, name recognition, and other resources for job hunters. AI, however, can level the playing field considerably. Earlier, recruiters would manually go through hundreds of resumes. AI makes the process a lot more expansive and streamlined.

Small businesses can now utilize AI to improve their profit margin by increasing efficiency, identifying their actual competitors, reducing revisions and costly outsourcing, uncovering the actual wants and needs of the target audience, and generating meaningful recommendations from data.

Monday, April 20, 2020

General outlook of Indian economy as on 20 April 2020

1. India seems to have suppressed the curve so far. It looks like it might escape the worst of the pandemic, but will have to be cautious about it.
2. Possibility of W Curve – i.e. There is a good chance of re-occurrence of the virus, which could see a possibility of regular lockdowns. Businesses need to plan accordingly.
3. Capital will look for countries that are less battered. Western economies are badly battered while countries like India, Indonesia, etc are not so battered. Global Capital could flow into India, if we can act efficiently to pull it.
4. Emotional and Economic backlash against China is expected. Already, countries and companies are working on strategy to pivot away from China as part of their supply chains. Japan Govt has announced packages for it’s companies bringing back manufacturing home. Businesses need to keep this in mind and work accordingly.

Discretionary Spending 

1. For individuals, health and safety will become No.1 on their agenda from the 3rd of 4th place. There will be more spending on this area and reduction in other discretionary spends.
2. The ticket size of spending will drop for a while. People will spend on cheaper goods than on expensive goods, or delay spending for a while.
3. Extreme acceleration in digital economy. I.e. Home education, home entertainment, home fitness, etc
4. Loyalty shock. People will be less loyal towards brands as other aspects will take over. People will switch brands faster due to various other concerns like safety, etc.
5. General Trust deficit. There will be trust deficit amongst stakeholders like vendors, customers, employees, borrowers, banks, etc. Banks will have trust deficit with borrowers, companies will have trust deficit with suppliers, etc.

Liquidity and P&L 

1. Segregate Good Costs and Bad Costs
a. Good costs (Eg. Digitization, tech costs, digital marketing, best employees, etc) need to be insulated and protected
b. Bad Costs (Eg. Fancy office, unnecessary spending, bad performers, traditional working methods) need to be ruthlessly eliminated. Don’t be emotional about non-core businesses. Concentrate on core business.
2. Be Frugal – Not necessary to have fancy office, fancy cars, excess employee strength, etc. Remove all the flab and be lean.
3.  Maintain Good behaviour – have frank and open conversation with all stakeholders like suppliers, employees, etc and try to find the middle ground, so that the burden can be shared justly.
4. Be Future Ready – In this crisis, there will be winners and there will be losers. Those who re-orient their strategy will be winners.

Govt Stimulus 

1. Economy was in poor shape even before Covid. The govt has little leeway to provide large stimulus.
2. Govt earns about $60-70 billion a week from taxes. Imagine what a hit a 5-week lockdown will have. Size of Indian economy is about $3 Trillion. In some scenarios, it is predicted that Govt could take a hit of nearly $1 Trillion.
3. Inequality has already sharpened. The gap between rich and poor has further increased. Govt needs to concentrate on mass health and mass welfare. If not, 200 million people could sink into poverty.
4. Govt must explore printing currency (Quantitative easing), but there are limitations here. It has side effects like inflation, etc. Rich countries have more leeway for such quantitative easing.
5. Govt must concentrate on grabbing more capital from outside and do reforms to enable that.

Result of backlash against China 

1. Internationally, there could be an emotional and economic backlash against China. 
2. Businesses with supply chains passing through China will need to keep this in mind and insulate themselves and build alternatives.
3. India and Indian businesses need to try to become the contract manufacturer of the world, just like China is. India needs to make use of this opportunity smartly.
4. All big wealth funds and soverign funds will be awash with Liquidity. This liquidity needs to be attracted to India.
5. In every sector, there are good and bad companies. Management has to invest correctly in manufacturing and modern tech, be honest and fair to all stakeholders, etc., Those companies with good management and displaying good behaviour will come out victorious.

Export Business 

1. Indian exporters need to build trust. They need live up to promises made. They need to deliver on time and deliver the promised quality. They shouldn’t make incorrect promises just to get more business.
2. Bangladesh export business has built trust and a good reputation. Despite a chequered past (low quality, human rights issues, etc) they have managed to overcome and are winning.

Wholesale, Retail, etc. 

1. More people will prefer to buy from retail stores where there is perception of safety (Eg. Sanitation, cleanliness, crowds, etc). They will move more towards malls away from markets. Many will move towards online stores. Wholesale suppliers also need to concentrate on such retailers. 
2. Customers also need to be ring-fenced :
a. A high end restaurant in Delhi is giving 40% of bill value as a gift coupon to be used anytime upto December 2020.
b. Car companies are giving buy back offers, incase the customer loses his job in the next one year.
3. Pricing needs to be re-approached. People are looking for cheaper prices or cheaper goods.

Brick & Mortar in Discretionary Spends 

1. Cinemas could take a big hit in the near future. Entertainment could move home.
2. Because of this, cafes and restaurants might see some increase in business. Many chains are implementing measures like social distancing like lesser furniture, etc, to build confidence to consumers.
3. Smaller retailers need to send a message of safety. Eg: Have sanitisers, put up notice of no Covid positive employee found in the store, maintain social distancing, etc.
4. Since travel and tourism will take a big hit, connected purchases will also shift. Purchases that happened abroad will happen at home. (Eg. Electronics, Luxury goods and apparel, etc.,). But travel related purchases will drop.

Real Estate 

1. Indian real estate economy is sitting on a huge inventory with a huge cost-of-carry.
2. The industry is highly leveraged with low margins.
3. Unsold inventory is considered as an appreciating asset, but might turn out to be a flawed view.
4. Market was already overdue for a huge reset, which will be accelerated by the pandemic.
5. Also, the sharing and co-working space could be hit as more businesses try to have their own smaller spaces and more WFH employees. 

Jewellery etc 

1. Gold-as-an-asset could see appreciation.
2. Jewelry, as a discretionary spend, will take a hit.
3. The Indian wedding industry will take a hit, as social distancing, cost consciousness, travel avoidance, etc., will prevent fat weddings, destination weddings, etc. This will hit all connected industries. (Eg. Silk, partywear, etc) 

Financial Markets 

1. There will be value destruction and value creation in different companies in the same sector.
2. High Debt low margin companies will find it difficult. (indicates risky or unscrouplus management)
3. High Debt high margin companies could be rewarded, but caution needs to be exercised. (may indicate sharp or dynamic management)
4. No debt high margin companies are best rewarded now.
5. Know more about the CEO and management and their actions and activities.
(Eg: 3 branches of Starbucks were kept open in India for last few days. The CEO of Starbucks India sat in the Fort (Mumbai) branch throughout the day to give his employees confidence and motivation)
6. New tech unicorns will be born. Those involved in cyber security, cloud services, online education services, etc.

Forex Markets 

1. No doomsday scenario (i.e. Dollar will become 90 rupees etc). Such scenarios don’t seem realistic
2. Govt should be buying as much oil as possible, as such prices may never be seen in the future of oil.
3. As the western economies are more battered and Indian economy is less battered so far, there is more liquidity coming in. That’s why there is a rally in the market. This scenario could change depending on the spread of the disease in India.
4. Watch out for sharp spikes in the market. Better to avoid the spikes.

Outlook for near future 

A. Large Companies 
a. Huge concern seen for employees. Companies are paying the employees even when closed. 
b. HUL Decided not to cut a single rupee for their suppliers, service providers, etc. No haircuts.
c. Safety of employees and customers is becoming a major point of focus.
d. This is possible because they have reserves of funds, etc that have been built up over the years.

B. Medium and Small businesses 
a. They have to work with thin capital reserves. Excess capital is taken out of the business and applied into personal assets.
b. Small businesses take out the surplus and purchase personal assets instead of re-investing in the business. There are various factors and motivations here.
c. Because of this, they are unable to meet the cash expenses of even the next month.
d. A high end restaurant chain in Delhi (with Rs.40 crore annual turnover) is unable to pay the salaries of the current month as it has no liquid reserve. Owner has invested in personal assets like house in London, etc.
e. Medium and Small business need to have a look at how they can build some business reserves to endure such disruptions.

“ Force Majeure ” in Contracts 

1. Should force majeure clauses be triggerd in various contracts like rent, supply, etc? It will lead to litigation, but there is no point in getting into litigation now.
2. All parties have been affected by the crisis. The tenants, the landlords, the lenders/financiers, etc.
3. Parties need to sit across the table and find a common ground and mutually decide upon the costs, rentals, etc. Burden has to be shared.

Work From Home Scenario 

1. It is possible for lot of employees to not visit the office and still be productive.
2. In RBL corporate office, it is found that it is enough that only 30% staff stay in the office. Others can be connected from homes. This leads to lesser commute expense, stress of the commute, time wasted, etc.,
3. Parents can take care of children more effectively when WFH. There can be dark hours when no calls will be made, etc.


As per a McKinsey survey of entrepreneurs released few days ago, 53% of Indian entrepreneurs are optimistic, while only 25% of Japanese entrepreneurs are optimistic.
It seems to be a mild U-Curve for the Indian economy.

Friday, April 10, 2020

Leveraging Virtual Reality for Market Research

Virtual Reality (VR) has the power to revolutionize the customer experience and has multiple applications from marketing to new service development, however one avenue for VR that does not get the attention it deserves is Market Research (MR). While using VR for Market Research the obstacles like technological and consumer adoption factors which are often present in other applications are not present in VR. This makes VR for market research an ideal first step for most brands to experiment with.

One of the biggest shortfalls of traditional market research is its inability to recreate a realistic testing environment. Majority of times issues of cost or convenience keep respondents stuck in a sterile room behind a two-way mirror, and not out in the real environment which is actually needed to bring additions to the research. Virtual reality research is helping people overcome these barriers, lowering the operational costs while providing a near real-world experience.

VR has a number of benefits to offer to research techniques like in-depth interviews and ethnographic research which already offer a contextually-aware approach. Ethnographic research conducted on-site or in the home has a few downsides relating to its ability to fully observe and document all of the respondents' reactions, both conscious and subconscious. Virtual reality can replicate these known environments while maintaining a highly regulated and observable environment for the researcher. Little things like hand gestures or the eye glances become easily noticeable this way. Technologies such as eye tracking, heat maps, and at times even simplified EEG can give a view of the customer reaction on the deepest levels when paired with a VR headset.

This technology can do wonders for companies that are looking to invest in a new physical space or undergo renovation. Initial consumer testing is a must to assure that the change will be a success. VR even allows for real-time comparison of different environments wherein the environments can be changed with a mere click.

Taking the example of the retail giant Tesco; they did just that when they created a virtual store for people to walk around in and experience before it was even built. This gave them the ability to gain much more reliable feedback than their initial testing gathered only through image-based focus groups.

Product testing is also a major opportunity for virtual reality. Companies usually test their product concepts and designs in 3D as a digital prototype. Despite having this highly detailed rendering on hand, most companies still choose to manufacture or 3D print the prototype before they go out to consumer testing. We believe this is a waste of time and money considering the VR experience that could be used instead.

Market research should not resist this technological change but rather adapt and embrace it. Soon consumers themselves will start to adopt VR into their day to day experiences. Brands that are ready to follow their consumers into this space will be at a huge advantage when the day comes.

Thursday, April 2, 2020

How is technology changing market research?

Market Research in India which was once dominated by traditional methods is slowly giving way to evolved technologies like social media, advanced data collection software and analytics. Companies can today mine and analyse data at the drop of a hat with the help of global panels.

The world is becoming a smaller, more accessible place with the help of technology. For a researcher, technology has created the ability to access respondents across the globe, collect and process insights instantly, and peek inside the life of respondents whenever and wherever they are; all in real time.

Some of the most exciting technological advances in marketing research involve the integration of multiple data sources, permitting a holistic view of the person or situation. Unconscious motivational-emotional data can now be integrated with passively collected data, such as bio-metric measurements via wearable devices or smartphones, and social media or other digital data. Market research will continue to evolve as we shift toward creatively combining new data inputs and developing models that lead to more practical applications.

Big data and marketing research will converge to help businesses produce more meaningful insights. Brands can make more strategic decisions in a faster amount of time by using more behavioral data, attitudinal data, and advanced analytics. Using data mining and visualization and predictive models can also help with the different states of the customer life cycle including acquisition, churn, retention, up-sell/cross-sell, and collection effectiveness. Businesses can increase revenue, resources, and productivity by using a combination of big data and traditional marketing research.

An example of Technology-Based Market Research Revolution can be seen in one of the newest methods of understanding customers’ shopping patterns. This method utilizes scanning technology and is called Scan It! It has been adopted by grocery stores in the US. Shoppers are asked to carry a scanning device with them throughout the store. They are permitted to avoid the check-out line and it also helps them take advantage of customized discounts as they shop.

The amount of market research data collected when shoppers use this device is astounding. The previous purchasing behavior of the shoppers can be retained on a loyalty card that may be activated as the scanner is deployed, so location-specific discount offers can be provided to the shopper when he moves through the store, and his response to the location-specific ads can be tracked.

The impact of the scanner on customer loyalty, spending levels, and buying behavior all become available to the market researcher. This is what the new research revolution looks like.

Mobility is the biggest advantage of technology in market research. Advanced software can gather feedback and consumer insights whether in the office or out in the most remote areas and help engage both the consumer and the researcher more effectively.