While focusing on growing a profitable chain of CDIT (Consumer Durables and IT) product stores, brick-and- mortar retailers often struggle to keep pace with the evolving purchase journey of their customers. With the rapid rise of online options which offer a better bandwidth of choice and price, the barriers to online shopping are starting to disappear. Consumers are slowly dropping their guard and increasingly succumbing to e-shopping, leaving the comfort of offline stores for impulsive online buying.
There was a time when buying a television meant a walk to the store. A clutch of brands were lined up to choose from and apart from screen size and budget, nothing else was a detractor. A customer would proudly walk in flanked by his spouse and a trail of excited kids (this was, after all, a huge lifetime investment and as a result, needed family approval). A salesperson demonstrated each model and his technical prowess with an air of supremacy, as the family nodded mouths agape. He convinced the buyer on a particular piece. The customer acknowledged his wisdom, closed the sale and went home happily, probably stopping on the way for a celebratory ice-cream. That was then. This is today.
Buying is Not So Simple
A customer decides to change his television. Yes, this time it’s a decision, not a need but a want. And why not, technology has become that much more desirable since the last one purchased only a couple of years ago. Screen sizes have grown bigger, slimmer and curvier. LED, UHD, OLED, 3D and 4K have propelled picture quality into the future. Android has made them smarter. There are more ports and more features most of which will probably take forever to understand or never even be used. There are enough reasons and more to change the current set for a swanky new one.
Now here’s the catch! Today’s techno-cloned world has given birth to a process line of CDIT brands that offer the same features albeit a few. They are all reputed names and they are all competitively priced. The digital proliferation complicates the matrix further. E-commerce portals have not only dropped prices to tempting levels, but also continue to woo customers with exclusive selling rights, especially in IT and electronics. Social media and specialist online forums have given rise to a rash of expert opinions. The very technology that was designed to simplify your life now complicates it. Who does the buyer turn to, to help him make the right decision?
The Purchase Journey is Non-linear
As a result, consumers have stepped off the linear purchase journey and are changing the way they research and buy. No longer it is restricted to just one platform. People use digital media to curate their search, shortlist their choices before validating the same at the store. On confirming that the product meets their expectations, a second quest starts – one for the right deal. Here again, both online and offline options are examined before the final choice is made. This has put retailers under tremendous pressure and they now need to adopt new forms of engagement with the consumer, at every step of their journey.
CEO and Jt. MD, Viveks, B A Srinivasan observes, “Traditionally the customer would ask for feedback from his friends, neighbours and finally at the retail point of purchase from the Purchase Manager or the Store Manager for suggestions or advice. With the advent of more choices to the customer from brands, product models, colours, technological innovations, the speed of product upgrades and obsolesce, and with less time to devote to the search, the natural inclination is to turn to the fastest solution at hand, i.e., social and digital media. This customer looks at all the experiences shared by them in the Viveks digital transformation either negative or positive feedback followed by few of his colleagues, relatives, friends and those at the shop floor”.
There are some retailers though who believe that online and offline work in synergy rather than at loggerheads with each other. “Information and its flow has been the primary reason for change in customers’ buying pattern”, observes Director, Great Eastern Appliances, Pulkit Baid. “Customers are much more aware than they were before. Their purchases now happen after conscious reading of reviews, product features and the brand and this helps firm the customer’s purchase decision. However, the final whistle blows only when he has experienced the product. While the new-age customer reads about the car he wants to buy, he still does take a test drive before deciding on the car.”
CMO, Croma, Ritesh Ghosal firmly believes that as India’s only functional Omnichannel retailer, Croma has a definite edge. “Being a brick-and-mortar retailer gives us an advantage over the ‘pure online players’ due to the presence of our 100 odd stores which serve as ‘landing pages’ for our digital catalogue, giving an experience that the e-tailers can only simulate through augmented reality someday. On the other hand, our webstore allows us to compete for the final purchase in contexts where pure offline retailers are absent”.
Managing Partner, Vijay Sales, Nilesh Gupta believes that the buying journey has particularly changed in the younger generation and that despite the online dependence, the majority of consumers still follow the traditional buying journey. He explains, “In today’s digital age, the young buyers’ discovery part of the buying cycle happens on the internet and he takes an informed decision after studying the reviews and ratings for the product. After discovery, he comes to the store and reconfirms what he has learnt on the net and then compares the pricing and makes a decision accordingly. His preference is still to buy from an offline retailer to whom he gives the first chance of refusal. All said and done, the majority of consumers still fall in the traditional buying journey.”
Embracing the Internet
In the last few years, the growth of Internet users in India has grown phenomenally. Between 2014-15, social media penetration in rural India had doubled, compared with urban areas, which witnessed around 35 per cent growth year-on-year, according to a report published by IMRB International and Internet and Mobile Association of India (IAMAI).
Of the 143 million social media users in the country (as of April 2015), 118 million were from urban areas while 25 million were from smaller towns and cities. Since June 2014, rural India saw a 33 per cent increase in the number of Internet users compared to the previous year.
While smartphone adoption and mobile Internet continue to dominate the urban landscape, the flux of low cost devices and payment plans is witnessing smaller cities fast catching up.
The Buying Behaviour is Changing
With the ease at which information is available, the buying journey would seem to be uniform across metros, mini metro and small towns. While most of the retailers didn’t find any geographic differences, they noticed separate behaviours and emotions when shopping in the category, i.e., Consumer Durables and IT products.
As a retailer with a footprint in only the larger cities, Ghosal felt that it would be a pure speculation to comment on smaller towns. His view is that the journey is essentially the same – just the ratios of how many start or end the journey in digital or brick-and-mortar destinations change. He elucidates, “Our research shows that a regular customer visits our store to buy a new mobile phone every 8 months, whereas the lifecycle for an appliance like a refrigerator or a microwave is at least 3-5 years. The sheer frequency with which mobiles change hands makes it a very impulse and ‘riding on the market sentiment’ sort of a purchase. Most digital products are for ‘self -use’ hence their decision making process is fairly instinct driven. However, most appliance purchase is a ‘family affair’, wherein the entire family visits the store, touch-feels-tries the product before any decisions are made.”
Srinivasan echoes the sentiment. “Consumer Durable Products are part of Big Home Appliances and Small Home Appliances. Generally in Consumer Electronic Products, the decision maker in most of the cases is between the head of the family and the housewife. Whereas IT Products like laptops and mobiles are personal items and their purchase is determined by the age and educational qualifications of the buyer. Children are normally influenced by their friends and peers whereas the head of the family by his colleagues and his nature of work.”
Baid shares a different point of view. He says, “Journeys are based on information and flow of information is not unique to a product category. Having said that, each customer has his own unique buying pattern. Metros being urban centres display some buying behaviours which smaller towns do not. Even in metros, customers in Mumbai have a different style than in Kolkata. Women consumers are also now more evolved and this is largely because more women are working. In markets where women have high employment, we observe them to be the dominant purchase decision maker.”
Ghosal agrees on the changing role of women as key purchase influencers. He says, “Today, with the growing prevalence of better educated, more self-assured housewives with higher aspirations, women have started playing a far more active role in home and kitchen appliance purchases. These are a reflection of her personality, abilities and her standing in the home. As a result, the ratio of men to women shoppers in our stores has changed from 79:21 a decade ago to 66:34 today.”
Engagement At Every Step is Imperative
With consumers relying heavily upon the ubiquitous digital for their product research and best deals, it has become all the more imperative for brick-and-mortar retailers of CD and IT products to engage with customers at every step of the buying journey, and probably even before the journey begins.
Customer engagement is the key binder between retailers and customers. Customer engagement helps understanding the need of the customer and how he is evolving in every step of the journey. It is the only aspect which helps retailers innovate and evolve based on the needs of the customers.
Gupta believes this is an impossible feat to achieve, especially in today’s time when a retailer has to focus on diverse things. “While it is important to be engaged at every stage, it is difficult to be always present in the discovery stage and also, this stage is no doubt better managed by the specific technology sites,” he rues.
While Srinivasan affi rms the importance and the challenge, his submission is that retailers must get in touch with their potential customer much ahead of their decision, either through service or engagement through phone, social media or mobile messaging.
Croma leverages their Omnichannel presence which gives them a better chance of winning the customer’s business by entering the conversation early and staying the course till the final purchase. Ghosal elaborates, “We strongly believe in ‘Helping our Customer Buy’ and hence it is our constant endeavour to always be available to our customer in whichever touch-point he/ she choose to interact with us. All our staff has been trained using the GUEST process, i.e. Greet, Understand, Evaluate, Suggest, Thank, which gives them a platform to first understand what the customer is seeking before suggesting solutions. When the customer visits our store or the website, he is coming with the trust for the brand Croma and expecting the service that we have stood for since a decade.”
Gupta adds, “No matter how advanced iPad surveys and feedback become, the real kick is in shaking hands with your customer and rating his feedback with his smile.”
The Weakest Link
Today’s customer is an evolved buyer who constantly seeks variety, technological excitement and hence, keeps refreshing his knowledge on product innovation, availability and pricing. The shop floor of a modern retailer is a small speck in comparison with the online universe and has to battle for physical space to display all brands/ models, technology, knowledgeable staff and pricing.
“The gap lies in the traditional retailers’ inability to embrace technology as an enabler to business”, comments Baid, “They still feel technology is their foe. Some retailers who have used technology have tried to keep its use minimalist. We need to ride the wave with the consumer and give him what he aspires for in the format most convenient for him. We cannot push him to follow a path which we as retailers feel is best for us.”
Srinivasan on the other hand, attributes this to shop floor talent and training. He says, “Attracting all the right talent at the shop floor level, to understand the needs of the customers and fullfilling his needs is the weakest link in the consumer durables and IT products brick-and-mortar retail. This can be achieved through constant training, soft skills and best customer service.”
Gupta speaks from his own experience when he says, “Pricing is the weakest link in the cases where online sites burn cash. There is no way to address this problem till the time the online channel matures. We are sprucing up our digital presence to be a part of this online discovery journey.”
Ritesh Ghosal, CMO, Croma, outlines the particular process a customer follows when starting the purchase journey, and this is:
According to him, most brick-and-mortar retailers lose the battle at the third stage, i.e. price comparison. “Which is why, we decided to change our strategy to address online marketplaces as our key competitors and started tracking their assortment, pricing and promotions on a weekly basis,” he adds. “Tracking the online pricing for our assortment and devising selling propositions that take these into account helped us empower our store staff with information and selling tools that were absent from his repertoire. Finally, we shifted our advertising focus from traditional media such as print and outdoor to digital media that allowed us to catch the shopper as he warms up to the idea of a new purchase. As of today, this is our differentiator versus both e-commerce and offline stores – the key reason for our continued same-store growth.”
Multiple Moments of Truth, Starting with the Zero Moment of Truth
‘Moment of Truth’ (MOT), a concept popularised by Procter and Gamble, is defined as a time when a person is tested and a decision has to be made. In business terms, this is the situation wherein the customer and organisation come into contact for a product or service in a manner that gives the customer an opportunity to either form or change an impression about the firm.
In 2011, Google introduced the Zero Moment of Truth, or ZMOT, which outlines how consumers search for information online and make decisions about brands. ZMOT states that consumers today face not one but multiple moments of truth, as they are constantly being influenced by somebody else’s MOT at every stage of their search. Then there is the actual first MOT when they buy the product – whether online or offline – and the second MOT when they experience it. This second MOT could actually serve to become somebody else’s ZMOT. It is therefore important for a brand to be consistent in its communication and experiences.
Since then, search and ZMOT have scaled up in volume and importance and as consumers evolve in their purchase journey, so also must the ways in which retailers engage them. In today’s smartphone savvy world, what are retailers doing to win ZMOT and get closer to the customer during their buying journey?
Marketing and advertising, telephone follow ups, mailers, promotional offers and sales, attractive finance schemes and cashback options, exchange offers, and a few sporadic online communication were the answers we received. The modes of engagement were still traditional and while traditional communication is effective in building the overall image of a brand, it does not offer the bandwidth to offer solutions at a micro level like digital mediums do.
Google answers over 100 billion searches from around the world in a month. By the time you have finished reading this article, over 7.5 million new searches would have been done in just a few minutes. That is a million opportunities to reach customers with the answers they are looking for. If you are not there to grab their attention, somebody else will.
Content Can Be The Differentiator
For brick-and-mortar retailers to stay ahead of the curve, they need to first understand what exactly it is that consumers are looking for. If their SOPs and budget busting advertising and marketing spends are still not getting the sales, it is imperative to find out what is missing that could be costing them customers.
The way to do this is by creating a robust content strategy which can drive real, serious buyers through the door and of course, real revenues.
In today’s digitally driven world, content is an engaging and effective marketing tool for any brand and should form a critical component of your communications plan. CDIT product retailers can only aim to bring their brand in line by conquering online first.
But first, here are 3 things every retailer must focus on.
1. Know who your audience is, what they do, and what it is they really want
Your customers build your business. This makes it all the more imperative to fulfil their needs and wants. Can you offer them a niche product or service that will truly elevate them?
Start by understanding what they are searching for online, what
device they use to search, what topics interest them, what problems they want solved, what needs they want met. To find these answers, you would need to invest in market research but this will help you plot a cohesive content marketing strategy both online and offline – that can help you target the right customer.
Your customers are already online and informed. Before they step into a store, they have travelled online. The right kind of content can drive them to look for you.
2. Become the authority on information
To achieve this status, put out information that they want to read, not what you want to say. Remember, the information is for their benefit, not yours. So avoid any kind of superlatives or any overpromising self-promotional material that sounds too good to be true. Position yourself as a solution, not a promotion.
3. Convert online traffic to in-store traffic
People don’t like to step out too far from their home or work place unless it is for something they are really interested in. To tap this
segment, make sure to list your name, address and phone number prominently on your header, footer and neighbourhood you are located in consistently across your site. Google can identify these areas and associate your business with that location name.
Create Online Content to Drive Offline Sales
There will always be a market for offline just as for online and both segments can enjoy an equal share of the pie if they complement rather than compete with each other. “As we have seen, even in the developed economies, online contributes just 15 to 20 per cent of the total sale,” says Gupta. “Hence I feel offline retailers should not be worried and instead focus on improving customer experience.”
Baid believes that neither of them can survive in isolation. He explains, “It is the store which enables consumers to experience and go back to the sites and make the purchase. Having said that, in 2020 you cannot imagine a town where consumers would not have looked up a product online before going to the store to buy it. Both channels complement each other’s existence. The real driver of customer flow is the value you offer and the merit your deal has over others. Customers are wise to make a purchase decision in line with what’s best for them.”
Additionally, to the mandates of good pricing and customer experience, consumer durables and IT products, retailers can also create a content strategy which their e-commerce sites can implement to drive buyers into their physical stores and increase offline sales. In the case of high value products, Indians especially still want a touch-feel-try and have to be thoroughly convinced before closing the deal. The higher the price tag, the more their questions and at such times, personal interaction can drive more sales when shopping in-store. Besides, they are not entirely comfortable using online payment gateways for the same.
Combine Both Worlds
We believe that a consistent experience online and offline will be critical and retailers should combine the two and use content, especially engaging content, to get the best out of them.
Personalise the online information – address different audiences by communicating how the product could solve their diverse needs and meet their expectations. You could also throw in offers which will lead to more offline sales.
Encourage customers to visit your physical stores – invite them to check out the products before clicking the buy button on your online site. This will greatly benefit customers who are unsure.
Offer ‘Click and Collect’ – once booked, customers cannot wait to receive their orders and retailers can take advantage of this by including a ‘Click and Collect’ option.
Promote your flagship stores – compared to regular stores, flagship stores are geared towards experience and engagement more than just sales. This makes them a better place to spend time in and putting actual customer testimonials and experiences online will attract real feet offline. A great example of this is the Apple company operated stores.
Make your website engaging – embed responsive data-driven interactivity as easily as you do a video.
Focus on interesting storytelling – think about adding videos, infographics, animations and other exciting visual interactive content to educate, inform and inspire buyers.
Harness the power of SEO – buyers usually want to visit outlets that are close to their work or home and about 82 per cent use a smartphone to search for products that are near me. Optimise SEO for location base product searches on mobile.
Connect through social media – with Facebook and Twitter becoming strong influencers, it is important to be present and listen to what customers are saying about brands and competition and respond to these with solutions.
Make your information shareable – add social media buttons such as Facebook, Twitter, Pinterest as these increase virality.
Become a category commentator – post blogs regularly on product innovations and analysis which will position you as an authority.