The Indian retail juggernaut saw progress and rapid growth, followed by tepid moments before the players took stock and decided to shore up their act in the new market panning out.
The terms e-commerce and m-commerce have become part of the daily lexicon in the world – with the buzz created by both the players and the brands. This rapid acceptance by consumers of e-commerce and m-commerce has got traditional as well as new players to accept the torrent.
This needs to be tempered with the actual scenario. There is certainly a trend being witnessed on the horizon now. Nonetheless, it is a trend.
One of the many descriptions for the term ‘trend’ is as follows:
“It is a manifestation of something that has ‘unlocked’ or newly serviced an existing consumer’s need, desire, want, value.”
At the core of this definition, it implies that an existing human need or desire is being fulfilled. There is an implicit supposition that human beings and, therefore, consumers are not much open to change. At least they do not like to believe that they are changing their behaviour much.
The core and innate needs of the consumers remain the same. Yet the manifestation of these needs and the way these needs are serviced are changing! And being accepted by consumers without disturbing their sense of status quo.
One of the core human needs is to be in control, or at least to have the belief that everything is under their control.
Both the e-commerce and m-commerce platforms are witnessing rapid acceptance due to this innate human need being addressed. The new technology and services now put the entire marketplace within the control of the consumer – with the consumer seated firmly on the driver’s seat. The consumer gets to choose their products; their price; their retailer; all within their reach.
Is that it?
Well, yes and no. Yes, it is just an innate human need. But no, that is not all about it!
E-commerce advocates explain that there is a whole new layer of customer experience, customer delight and user interaction that has gained traction with the addition of this technology. At the same time, sceptics believe that this industry does not create any new user need, and therefore all the media attention is just a hype bubble.
So who’s right?
That is a difficult question to answer – the reality is always somewhere in between. The fact does remain that this rapid acceptance by consumers and adoption of this new commerce stream enables interactions that simply were not possible before.
The retail industry has been the initial target of media attention. There is a lot of potential here and it is abuzz with activity, in terms of rollouts, providers and solution services.
The emergence of m-commerce and e-commerce in the retail milieu is one component of a trend – the blending of the virtual and physical worlds. This is an example of the Internet of Things (IoT).
Quoting from a recent global study, ‘In the IoT vision, the continually decreasing cost and size of sensors, hardware, and network capabilities means that more and more physical things become represented digitally – they can be queried and updated from remote locations just as we do with virtual services today. As this trend continues, layers of services will emerge to take advantage of these network-friendly things.’
The World Payments Report 2013 released by Capgemini states that prepaid cards are the fastest growing mode of non-cash payment witnessed in 2012–13. This mode of customer engagement is shaping the way that consumers interact with their favourite brands and retailers.
Brands and retailers have been finding ways and means to make their prepaid offerings attractive to their consumers – so much so that consumers are depositing their money with their favourite brands and retailers than with their bank accounts!
Global Prepaid Exchange Research studies estimate the Indian prepaid card market to exponentially grow from Rs. 2,000 crore in 2012 to Rs. 9,000 crore by 2016-17. In the 2013-14 financial year alone, more than 14.3 million prepaid and gift card transactions across various brands and retailers in India were clocked, which exhibits a 230 per cent growth as compared to 2012–13.
The growth of this segment in the e-commerce arena is over 300 per cent year on year. While the gift cards have significantly grown to be a part of the employee incentive programmes in most of the corporates, the category still performs symbolically around the festive season. In contrast to last year’s 2.7 lakh transactions, for 2013-14, the gift card transactions have clocked significantly to 21.4 lakh transaction during the festive season, special occasion gifting and promotional needs by brands and retailers in India.
Consumers find a strong value proposition in engaging with their brands through the prepaid and gifting paradigm.
Not surprisingly, the titans of the Internet are looking up at this segment of e-commerce as well. Google offers a virtual wallet; Amazon recently set up a service to allow its customers to transfer money; Facebook and Apple too have expressed interest in the field. There is much speculation that the latest iPhone’s ability to read fingerprints may be heralding a world-changing payment service. Closer home, Flipkart has also shored up its own payment scenario with PayZippy and its prepaid and gift card portfolio.
Physical retailers have also got onto this platform – launching digital and mobile gifting products (e-GCs and m-GCs) that can drive engagements with their offline stores. In the last 6 months, more than 40 leading offline retail brands have launched novel digital gifting products for their consumers – across Shoppers Stop, Lifestyle, Titan, Fastrack, Van Heusen, Café Coffee Day, Peter England, Westside, PVR Cinemas, Hidesign, TTK Prestige, Allen Solly, Arrow, Levi’s, and Arvind Brands among others.
Impact on brands and players
Consider this. On the horizon is the scenario when there will be many people (customers, clients, staff, or others) who do, or possibly could, interact and make their transactions and payments with your business via:
Mobile, including wearables, or any computing device that moves around
Physical space, such as a store, gallery, warehouse, cafe, office, etc.
They seek to engage with a brand and services from across multiple touch-points – all integrated into one unified experience.
If you do see this scenario, then this phenomenon has the potential to impact your business.
This is a trend. Ride the wave before it catches you!