Future Group founder Kishore Biyani on Thursday said brick-and-mortar stores and digital retail have their own sets of advantages as well as challenges, and bringing in a hybrid model of 'phygital' can help businesses perform better.
Biyani, in a fireside chat at Amazon's SMBhav event, said physical and digital retail started in different eras but will eventually come together in the next 3-4 years.
"Physical has its own advantages and nuances and digital has its own advantages. Both of them came in different eras and they will meet, I think in next 3-4 years it will be 'phygital'," he said.
Interestingly, Amazon India and Future Group have entered into long-term business agreements for expanding the reach of the latter's retail stores and consumer brands through the former's online marketplace.
Future Group, which operates over 1,700 stores under various entities like Big Bazaar, EasyDay, Heritage Fresh, Nilgiris and WH Smith, attracts over 350 million footfalls across its retail network.
Biyani explained that physical retailers will need digital, while digital will need physical presence because of the costs related to acquiring customer and fulfilling orders.
"...ultimately, there will be a hybrid model which will help our business to perform better," Biyani said.
Noting that both the formats have their own challenges and advantages, he said digital platforms have a reach that physical formats do not. Brick-and-mortar stores, on the other hand, bring in customer interaction.
"...I think we need everything. I think the best is 'phygital' which is happening, and will happen in India much earlier," he added.
E-commerce has been growing at a phenomenal pace in India with Amazon and Walmart-owned Flipkart accounting for a lion's share of the market.
According to a report, India is among the fastest-growing markets for the e-commerce sector and revenue from the sector is expected to increase to USD 120 billion in 2020 from USD 39 billion in 2017 - growing at an annual rate of 51 per cent.
While Amazon and Flipkart have been pumping in millions of dollars to boost the India business, many small traders have alleged that these players are offering deep discounts and indulging in unfair practices to gain market share.
The two players are also facing a CCI probe for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.
However, Amazon chief Jeff Bezos - who is in India this week - on Wednesday announced a USD 1 billion (over Rs 7,000 crore) investment in India to help bring small and medium businesses online and committed to exporting USD 10 billion worth of India-made goods by 2025.
Before this, the online retail giant had committed USD 5.5 billion investments in India - Amazon's most important market outside of the US and a key growth driver.
On Thursday, Biyani also spoke of what he thought was his "craziest" mistake ever.
"I made two films that did not work. That was the craziest mistake I have made so far," he said. Biyani had produced two films - 'Na Tum Jaano Na Hum' and 'Chura Liya Hai Tumne' in 2002 and 2003.
"I made two films in one year. The failure of these films taught me that don't get attached to what you create... The customer can reject you in an hour," he said.
Emphasising that making mistakes is also an important part of an entrepreneur's journey, Biyani said people need to learn from the challenges they face.