PROFILE

Ananda Chakravarty

Vice President, Research at IDC
Ananda is a retail thought leader. Currently Ananda is Vice President, Research - Retail Merchandising and Marketing Analytics Strategies at the premier market intelligence firm, IDC. He formerly served as Director, Global Retail Lead & Software Strategy at Diebold Nixdorf, the premier firm in European retail and progenitor of the ATM. Ananda also served as Director, Retail Omnichannel Solutions Strategy at Oracle. Ananda was a senior analyst at Forrester advising c-level leaders on digital store, digital store technologies, retail enablement, digital in-store analytics and Digital Grocery. Prior to Forrester, Ananda served as Director of Enterprise Digital Strategy at The Hartford and executive and product roles at Staples, Talbots and Monster.com. Opinions reflect those of the author only. Ananda holds an MBA from Northeastern University, a Masters in Electrical Engineering from University of Massachusetts, Lowell and a Bachelors in Electrical Engineering from Clemson University.
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  • Posted on: 06/30/2022

    Will consumers become even more frugal post-pandemic?

    There are two segments untouched by the pandemic -- the wealthy and the poor. The wealthy will continue purchasing at their regular pace, a shift from 1% of budget to 2% has limited real impact. The poor will continue to scramble for whatever little they can find, through subsidies, coupons, thrift, second-hand and other means. They were unable to afford regular products and meals anyway, so the change will have little impact on how they find and purchase goods. Typically, thrift items won’t see a tremendous rise in price. What I covered more thoroughly in a recent report is the impact to retailers and the need for price optimization during times of inflation. Essential goods can be treated differently. Price elasticity changes for mid-tier products means optimization is the primary avenue for retailers to address the issue.
  • Posted on: 06/29/2022

    Will a gas tax holiday drive retail in the right direction?

    A temporary band aid at best, and it will hurt taking it off. If fuel/energy prices continue to increase, retailers will first pass costs onto customers in the form of higher product costs. They’ll then begin looking at lowering costs and finding ways to rely less on gas -- e.g. electric fleets, renegotiated supplier contracts, etc.
  • Posted on: 06/28/2022

    Retailers tell their customers to keep their returns

    For low priced, perishable, consumable, and non-restockable items consumer driven disposal will be the norm (keep it). For higher priced items that can be restocked or refurbished and resold, retailers will seek alternative disposal. The cost of disposal whether at a landfill or in liquidation is becoming a retail challenge. To counter this trend, retailers will look to that ounce of prevention that they’ve been avoiding (because managing information can be just as costly), but in the long run lowers cost of sales.
  • Posted on: 06/24/2022

    Is the metaverse opportunity getting any clearer?

    The metaverse is in early stages and retailers should approach it as any early stage tech. The use cases for retail and commerce still remain elusive. Until these are discovered or invented with consumer support, metaverse for retail will be chaotic.
  • Posted on: 06/17/2022

    Ultra-fast delivery may burn out or fade away

    My fellow BrainTrust experts have outlined the key points already, there is only one item I would add -- as inflation rises, ultra-fast service becomes even less attractive with additional fees and costs that can easily be avoided with a smart detour past the grocery store from a client meeting. The market was already small, and with inflation grows even smaller.
  • Posted on: 06/14/2022

    Has online grocery shopping hit its sales ceiling?

    Retreating, then creep back to where it was on the timeline in terms of volume and dollars spent. Investments have been focused on concepts like curbside pickup, which constitutes a healthy portion of online grocery. I don’t think grocers ever shifted investments away from in-store shopping. All of retail grocery has driven and continues to drive in-store shopping. Online remains secondary, and is still used as a tool to encourage in-store shopping.
  • Posted on: 06/10/2022

    Could better technology have averted the supply chain crisis?

    AI may have helped, but AI as well as existing tech is heavily dependent on historical or situational data. With the pandemic, war, inflation, etc. we had unique, disruptive events that were not easily foreseen -- black swan events that would make most technology incapable of response, because of dependence on data. In addition, the processes in place were crafted in conjunction with the tech as a symbiotic relationship. These were designed for longer term merchandising, not for short one-off conditions. It was like a tidal wave came in and washed away the tech and processes. Maybe that leaves a fragmentation of debris, but clearly the systems were not designed for it.
  • Posted on: 06/09/2022

    Is Franchise Group’s plan for Kohl’s a retail disaster in the making?

    For Franchise Group this is a focus on financial/monetary gains and less synergistic engagement with existing brands. Frankly, there are few compatible parties that might be able to leverage Kohl's or generate value from corporate synergies. Bluestem or Sycamore might be better partners as they have more tightly knit fashion retail branding. Though any PE solution will not be a good omen for Kohl's. Bootstrapping their way to success would still be the best option given how much they’ve pioneered with concepts like the Amazon returns ... and more.
  • Posted on: 06/08/2022

    Driverless trucks to keep Sam’s Club in-stock around the clock

    Yes. However the real value will be long haul before adoption in the middle mile. Long haul highway -- Port to DCs will drive the most value because we’ll see the most adoption here first. These are fixed highway trips, usually the highest demand for the most amount of goods. Store deliveries will be overshadowed by the value and adoption cycle in long haul trucking initially.
  • Posted on: 06/07/2022

    Target isn’t wasting any time in cutting the glut from its inventory

    Target is expecting growth now and for the long term. The added costs for new DCs incurred now takes advantage of a profitable quarter translating into decreased margin. This has less to do with inventory and more to do with spending on infrastructure for the future. Downside occurs in the event of a massive recession, Target would have overcapacity. The large recession scenario however is unlikely. Competitors might not take the cue from Target, and instead will look to expand later, especially as competitors are at different points in their infrastructure needs.
  • Posted on: 06/06/2022

    Does Lululemon have to sweat inflation?

    Inflation presents a lower level of risk for Lululemon than other retailers-precisely because its constituency is more affluent, resulting in more inelasticity for most products they sell. Lululemon has the ability to raise prices as well, and the strategy it’s taking is the best, with selective price increases. Staying away from the promotional herd suits (no pun intended) Lululemon and keeps their brand in sync with high quality luxury athleisurewear.
  • Posted on: 06/02/2022

    Are consumers stumped by percent-off promos?

    I would surmise the fastest moving promo for merchandise is “free shipping.”. When looking at the product on their mobile device in the store customers can opt for the delivery option first. Not only does it remove a variable amount that customers don’t know, it locks in the current amount that they do. Maybe customers don’t like to compute stuff in their heads, but the only real result is sticker shock at the cash wrap or not. The ethical point is moot as almost all retailers will allow the customer to leave their product at the register if they decide not to buy (incurring the restocking costs in terms of labor) because the price tally was too high.
  • Posted on: 06/01/2022

    New members re-up at Costco in record numbers

    The general public is pretty smart - especially when it comes to thrift and money out of their wallets. Cost per unit at warehouse stores is typically lower due to bulk purchasing and Costco maintains the best example of efficient sourcing in the market for bulk goods. Combined with taking care of their customer and employees, their model will continue to attract customers. Costco holding off on increasing fees is a good move and makes it even more attractive, especially as costs will filter through the product prices first.
  • Posted on: 05/31/2022

    Why are retailers struggling so hard to balance inventory?

    Ricardo, you have this right -- low switching costs and consumer finickiness play a huge part in the products bought and inventory turn rates. The main thing for retailers will be whether they can absorb the markdown costs of the excess reserve stock they bought to cover out-of-stocks during an upturn in the market. The real problem won’t be inventory holding costs, which they’ve already accounted for, but liquidation at less than full margin -- especially if demand levels drop. As of right now, however, the market is seeing only a slight drop in demand with a high Customer Confidence index.
  • Posted on: 05/27/2022

    When the going gets tough, consumers shop dollar stores

    Nope. Dollar stores should be able to increase prices and pass them onto consumers, though not with impunity. Most if not all of the rest of the market will be increasing prices. These stores will remain the low price providers and hence the focus of attention for value-seeking consumers. Dollar stores do have tremendous price flexibility, despite their lower costs. Pricing a gallon of detergent has different value than pricing a candy bar with different elasticity and price points. Price discrimination can allow dollar stores to improve price efficiency tremendously. The whole “Everything is $1” menu is a great marketing play, but it leaves money on the table.

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