Target Corp, the second-largest discount retailer in the U.S. is betting big on Indian start-ups. The firm, with sales of $74 billion, is incubating start-ups at an idea stage and accelerating their product roadmap through its accelerator in Bengaluru. It also makes investments in them selectively. In return, it uses the innovation developed by these firms to bring in efficiency and tap new businesses.
“We need to find future growth opportunity and it can happen through a very systematic external engagement,” said Jamil Ghani, Senior Vice-President for strategy and innovation at Target in an interview. He said large corporations tend to have more a sequential approach towards innovation. “We need to iterate quickly. Also, we don’t have to develop everything internally,” he said.
Target’s Bengaluru accelerator, which is the only such facility outside the U.S., is backing young firms which have developed innovations in areas such as data analytics, personalisation, wellness and Internet of Things — where devices communicate with each other intelligently.
One such firm is Bengaluru-based House of Blue Beans. It is providing three-dimensional visualisation technology to Target to help them with merchandising for select product lines. Keshav Vijayaraghavan, 26, Founder of House of Blue Beans said that it uses computer generated images as an alternate to photography which is more “efficient and reusable.” He said in return becoming a vendor for Target has helped the firm with credibility and recruiting of talent.
Navneet Kapoor, President and Managing Director at Target India said the intention is to co-develop the products with these firms from idea to proof of concept stage. “That is a huge commitment on behalf of a Fortune 30 company,” he said. “When we set up Target India ten years ago, it was more like an experiment, whether we can do any work out of India.”
Indeed, a lot has changed since then. Chennai-based Konotor is simplifying the communication between the store staff and support team at Target headquarter in the U.S. It does this through a chat interface like ‘WhatsApp’ that sits within their apps. Konotor Co-Founder Srikrishnan Ganesan, 33, said this has reduced the turnaround time from days to minutes for Target in the case of queries on the availability of stock in the stores. Ganesan said it has also brought them the convenience of doing it through their mobile devices instead of desktop machines. Last December, Konotor got acquired by top tech firm Freshdesk for an undisclosed sum and it has been re-launched as Hotline.io.
“Retail is no more a gut and feel business in the US and Western world, it is becoming the biggest hotspot for technologies such as data analytics and virtual reality,” said Ankur Bisen, Senior Vice-President at Technopak, a retail consulting firm. He said companies like Target are not only tapping the talent pool in India but are also looking for innovative products from young firms “to help them do their day to day business.
For instance, large retailers typically have revenue leakages and overpayment made to vendors or suppliers to the tune of 1-5 percent. This is significant as leakages for them could be worth over hundreds of millions of dollars. Bengaluru-based Discover Dollar, another participant at the accelerator has built algorithms which help Target to identify these revenue leakages in near real time and resolve them over a click of a button.
Subrahmanya Rao, 28, Founder of Discover Dollar said that in return the most important value the firm got from Target was an opportunity to validate the solution. “Before that I met chief experience officers of top Indian retailers but they wanted a proven solutions before they tried their hands,” he said.
Source: The Hindu
Image Courtesy: The Hindu
