Even though e-commerce is emerging the big winner in today‘s retail scenario, traditional retail also holds its ground, unlike what analysts had earlier predicted. The same customer is providing impetus to both retail modes. Vice Chairman, Kapsons Group, Darpan Kapoor discusses the present retail market in India and emphasizes that retailers from both the varieties should invest in each other‘s territories to create an integrated platform to engage customers.
E-commerce Wins Big
E-commerce is that super-power which entered the market as an underdog but has today conquered the world of Indian retail market by storm.
Online shopping portals identified all the gaps that pertained in the offline retail structure, like inventory management issues, higher pricing, long wait times, etc., and used these drawbacks to carve out their niche within the sector. Several offline retailers who under-estimated the power of online market were proven wrong with a large segment of e-retailers going online using high-end technology and creative marketing plans.
The inclination towards online was obvious as international fashion brigade members like USA, China, and England had already moved leaps and bounds in the field of e-commerce.
The online sale portals soon topped the favorite list of all, since its inception till date, and keeping in mind the predictions of the market gurus, the decline of the traditional offline retail market is largely proven wrong.
Offline retail sector still stands tall and is stoutly taking on the e-commerce newbie bulls by its horns. Offline retail also wins the number game with an overall market share of 98 per cent of the domestic market and is sure to cross the mark of more than $1.244 billion in sales by the year 2018. In comparison, the online market expects a growth of about $10 million in this fiscal year.
The online market in India has some major obstacles to cross. The infrastructure is in a dire need of improvement, as the internet penetration in India is just 1.1 per cent right now. Other hiccups that crop up in case of online retailing are at the delivery level.
Presently, shipping to a tier II town in a rural region is difficult and a major part of these purchases are paid through cash on delivery as debit/credit cards are still a luxury for people in these regions.
To cope up with all this, the e-commerce market is gearing up with several ways to lure the customers, in which they have been successful too. The choice that is available in e-retail space is vast and incredible.
Several brands that are not available in the brick-mortar stores even in the metro cities have a endless variety to showcase and sell on the e-commerce portals. Shipping is on the go. Discounts are galore. Returns are smooth and easy, thereby making the complete service an amazing one.
Every now and then these online players take up new initiatives for the users to turn to their applications across different platforms and lure them with easy buying options, thereby aiming at enhancing conversions on their sites. The online retailers have, to a very large extent, traversed beyond prime shopping hours to buying anytime-anywhere phenomenon with increasing number of customers shopping on the go.
Omnichannel Is The Future
If we talk about customer, they have always wanted a seamless access to both offline and online channels. Betting on this shopping behavior of the customers several retailers are all set to go Omnichannel. The experts acknowledge the fact that the upcoming major investment that the Indian retail sector is implementing is a unified offline and online channel.
What makes Omnichannel the first choice? A report states that around 77 per cent of the customers browse across brick-mortar stores before purchasing any good online and on the other hand, 55 per cent of the shoppers have an on-the-go mobile analysis before making any offline purchase.
The 21st century’s beginning saw rapid growth in the mall culture. The crowd abandoned the ages old traditional marketplaces in droves to peep into the fancy windows of the outlets with unpronounceable names and merchandise that was scarcely recognizable in air-conditioned comfort.
The shoppers and the retailers both took a while to fall in love with this new way of shopping. Soon after a decade, the mall became yesterday’s thing and e-shopping has become India’s new way of shopping, till something new creeps in.
I believe that the narrative of click versus brick is flawed. The customer base across both the channels is the same. The same segment of consumers that are driving an exponential sale across the e-commerce portals are also the driving force behind the traffic across the major offline retail outlets across the nation.
For those among us who think that offline retail is dying, a quick traffic count across any of the major shopping malls across the top cities of India will reassure that there is no dearth of visitors.
The cash registers may have been depleted as more and more shoppers are diverted towards the cheaper prices across the e-marketplaces that make us flush down ours funds into the discounts that they make us habitual of. Without going deep down to compare the merits of this strategy, we all know that it will have to end someday. The question that ponders is that, what then?
Clearly, as the shopping scenario is changing so are the retailers. The customer has decided to go the smart way by combining the goodness of the brick and click approaches to shopping. They check out the products offline and shop for them online or vice versa- just not with the same retailers. The challenge faced by the retailers today – both online and offline channel is to create an integrated platform to engage the customer and make them shopper and seeing through the whole decision-making process. A platform which helps the retailer to be a part of the conversation as an early bird in the consumers’ decision-making process, take them through the shopping excursion and allow them to shop wherever and whenever they are ready.
This whole process requires the retailers from both the varsities to invest in each other’s territory, the substantial brick and-mortar outlets to invest in virtual brand stores but also require the most diverse e-commerce portals to create physical retail presence.
Retailers regardless of the channels they serve in have started moving towards Omnichannel services like Virtual aisles and Click & Collect. While virtual aisles are about extending the merchandise already pitched to the customers in the brick stores, the latter allows a retailer to take an e-shopper to a physical space.
This new retail movement may be an enticing and customer-friendly one but being an online-cum-offline maestro is not everyone’s cup of tea. Retailers should take cautious steps and take help from experts in the field to come out with a global platform.
Summing up in a conclusion, it’s the customer who is the king – the future belongs to the retailers who understands what every customer wants, why they want it and how to attract and engage him till they shop for it.
About the author: Darpan Kapoor is the force behind the leading fashion retail house of North India – Kapsons. In 1989, when people could only imagine shopping for different colors and different styles under one roof, he had the vision of bringing different international brands under that same roof and build a successful multi brand store which the people of Chandigarh fell in love with. Today, Kapsons has more than 34 Multi brand outlets and an e-commerce portal by the name of Kapsons.com that offers fashion from across the globe to kids, youngsters, mothers and fathers – alike.