Big Bazaar Fires 300-400 ECommerce Employees As Online Operations Are Scaled Down: Retail 3.0 Is A Failure?

According to the sources, the Kishore Biyani-led Future Group has scaled down its e-commerce venture, Retail 3.0, and laid off 350-400 employees.

How Did This Happen?

The sources said that the Future Group has layoffs across roles in sales, product development, marketing and ground operations were carried out in the last few months.

Recently, the Future Group shuttered many of its EasyDay stores amid little traction for its EasyDay grocery app.

Also, the closure of 140 EasyDay stores in November, which was reported by The Economic Times, was part of the same restructuring exercise, said one of the two people cited earlier.

What Does Future Group Say?

In 2017, while announcing Future Group’s e-commerce strategy Biyani had stressed blending technology with his existing physical stores. “The idea was to convert the entire offline journey of a Future Group consumer into the online world,”.

Also, a Future Group spokesperson confirmed the layoffs without disclosing details.

Why Would This Happen?

The retail major began hiring to build digital assets to support a new e-commerce strategy at the end of 2016.

 In November 2017, Biyani unveiled the Retail 3.0 initiative at a Nasscom Product Conclave and by 2018, it had 500-600 employees building different digital assets for Retail 3.0. 

During November 2018, e-commerce giant Amazon bought a 9.5% stake worth ?2,500 crore in Future Group.

What To Expect In The Future?

Amazon and Future Group last week said Amazon India would become the authorized online sales channel for Future Retail Ltd stores and Future Retail would ensure the participation of relevant stores on the Amazon India marketplace and its programmes.

Future Group also announced a research and development unit named C&D (Consumer and Digital) Labs in Bengaluru in April 2017.

Sources said “They (C&D Labs) were developing a map of the entire journey of a Future Group consumer… basically a psychographic analysis of the buyer,”.

 “For example, if we knew the age and gender and marital status of the customer, we could figure out what kind of products could be marketed to him or her from a pool of previous order history of similar customers,” they said.

But in 2019, Future Group decided to pull the plug and massively scale down its digital strategy due to the slowdown in retail spends and delays in proposed investments in the e-commerce venture.

According to the sources, the C&D Labs, which was spun off from Future Consumer Ltd, had around 150 employees.

They informed that some of the fired employees were working on two key digital assets, including storefront software for managing loyalty programmes at physical stores and a hyperlocal delivery app called EasyDay.

The software was supposed to ease the onboarding of customers to the loyalty programme priced at ?999 a year.

Though the EasyDay app in its beta phase was rolled out to 22 stores in north India, but never made it out of the testing phase, said the two people cited earlier.

In 2019, the Future Group began shutting stores customers began seeking refunds and the company started shifting memberships to other nearby EasyDay stores as a solution, the second person said.

Sources said, “Future Group collected around ?38 lakh worth of memberships through its ?999 initiative, but since the delivery product never made it out of the beta phase, it never saw a national rollout,”.

The managing director at Wazir Advisors Harminder Sahni said “When a traditional retailer like Future Group starts investing in e-commerce, the company should be sure of how deeply they want to integrate technology into their units, and whether they want to build it from the ground-up or start with acquisitions,”.

“And with the latest Amazon and Future Group tie-up, it’s clear that the new strategy for Future Group is getting into an Omni-commerce model. But they are unlikely to stop with just this model; since they are very adaptive to new technologies, one could expect them to come out with newer models to sell online sooner,” he added.