This digitization of shopping has created a tectonic shift in shopping behaviour and ways of doing business. While establishing digital presence was the craze till now, a new shift in the trend has been apparent of late. Images BoF looks at the latest wave of born and bred online retailers that have now extended into brick-and-mortar stores in India.
E-commerce is easily the most disruptive force to have hit the global retail industry. Growing at a sweltering pace, the e-commerce industry, within a very short span, has revolutionised the way people shop. The impact was especially acute in India. At the time that it arrived, organized retail in India was still green and hard at work trying to go beyond the cities when it rapidly began losing its lustre to online retail.
With advantages such as convenience, wide assortment of products, easy returns, along with great services and discounts; and unencumbered by huge retail real estate costs, the number of online retailers began exploding at a scorching pace. Soon after, even cheaper connectivity, growing penetration of the Internet and the rapid spread of smart phones helped e-commerce metamorphose into what changed the way people did business in India – m-commerce.
M-commerce transformed businesses and lives alike in the country. It was omnipresent, touching every facet of human life, from arranging a cab to ordering food and meeting their fashion needs.
Eventually, retailers operating in the traditional format had no choice but to embrace this new format and a new trend of focusing on digital presence came in vogue. This trend was especially compelling for fashion retailers as apparel is the most searched shopping category on Google.
But even as traditional retailers are busy creating digital avatars to take on their new-age rivals, a new trend of born-and-bred online retailers venturing into physical retail stores is now picking up.
Undisputed champions of the digital retail space, Amazon opened its first bookstore in Seattle in 2015, followed by more than 30 pop-ups throughout the country. The e-commerce leader also disclosed plans to open permanent stores in Boston, San Diego, Chicago, and Portland. Google just launched its ‘Made by Google’ pop-up store in New York to much fanfare and press. Meanwhile others like Warby Parker, Bonobos, Ministry of Supply, Birchbox, and Rent the Runway have taken the plunge with stores and showrooms.
Some online retailers view the physical presence as a critical way to move beyond simply selling goods to providing an experience. In March 2017, Myntra launched its first retail store for online brand Roadster.
“Myntra had already set the stage for an established online brand like Roadster to have an omni channel presence. It’s entry into the offline segment will further boost its prospects,” Ananth Narayanan, CEO, Myntra and Jabong told reporters.
The store features several new elements to engage customers, including a video wall, controlled by shoppers through a futuristic, multitaction touch-interface to showcase the intricate details of Roadster products and provide an update on key international trends and communicate the brand story. The store is also equipped with multiple touch screen displays and the unique ‘Scan & Go’ purchase mechanism allows shoppers to add their favourites to their shopping cart on the Myntra App, doing away with shopping bags, checkout counters or billing queues.
In early 2015, propelled by the success of their web based baby care brand Babyoye, Mahindra Retail decided to launch its physical stores. In line with this, the company renamed its maternity and childcare stores as ‘Babyoye by Mahindra’, dropping the name ‘Mom & Me’. Mahindra had acquired Babyoye in early 2015 and this move was touted as the first time ever that an Indian retailer had adopted the name of an online entity for its brick and mortar stores. Later in 2016, FirstCry (BrainBees Solutions Pvt. Ltd) acquired BabyOye, with the merger, the combined entity, called FirstCry.com-A FirstCry Mahindra Venture, had its footprint across 300 physical stores in 125 cities.
It may be interesting to note that, away from apparel, Pepperfry the online furniture retailer had opened its first store in Mumbai in 2014, and has since then vastly expanded its growth avenues. The company plans to double its store count with a vision of 10 new stores in India. Pepperfry opens stores based on customer purchase data of the previous 24 months, which helps it zero-in on pin codes with high customer density is currently present even in a few Tier -I and -II cities as well. India Circus a brand of accessories, wall arts, home décor, fashion products, and utilities was launched in 2012. Now well-known for its quirky and contemporary slant started offline stores at airports in the early part of this year. With the management and support of the Godrej Group, India Circus will be foraying into nine offline stores to widen its reach. Touch and feel of a product is still the priority of a large section of Indian consumers and this has led Lenskart launch its first store in Alakananda in South Delhi. In one of their researches, it was revealed that the lack of trust in people opting for lenses online resulted in lower sales, and that was despite the fact that the brand was one of the most visited websites on search engines.
Coming back to apparel fashion, it seems that there is no denying that physical stores are a better medium when it comes to consumer interaction and getting the consumer closer to a brand. This realisation prompted Yepme.com to launch its first store in NCR in January 2016. The sprawling outlet in DT City Centre Mall, Gurgaon features no price difference from its online store and offers customers an Omnichannel experience wherein consumers can either buy their products from the store or online and get it delivered at their doorstep.
Aurelia expanded its operations via a franchise business model to now have its own physical stores. Aurelia continues to push boundaries and extend consumers’ access through its physical channels in India. The brand now has its outlets across 42 cities in India which are growing with a high pace.
The online route was a boon for the Indian lingerie industry and e-commerce was emerged as the preferred medium for lingerie retail in India. Yet, Zivame, one of the pioneers and most successful brands in this domain, chose to expand via the offline route and launched stores extensively across the nation. If founder CEO and Richa Kar is to be believed it’s all about the experience.
“Each store is designed to suit the lingerie needs, dreams and
desires of every woman, offering a personalized shopping experience with Zivame Advisors and comfortable changing rooms,” explains Kar.
Another brand that has aggressively been exploring the offline route is Nykaa, India’s largest multi-brand e-commerce beauty platform.
In-line with the e-commerce player’s Omnichannel approach to beauty retail, the brand has 9 stores as per their site.
Even online jewellery brands are taking the off-line route to give consumers a healthy omni-channel experience. At the vanguard of this domain is Caratlane, which recently opened its 30th store in India at Delhi’s South Extension.
“With an exclusive Solitaire Lounge to assist you with all the solitaire queries, a customisation desk to turn your dream jewellery into reality, the virtual try-on ‘magic mirror’ for those ‘just looking’ moments, our signature store will indulge you all the way,” said Mithun Sacheti, Founder & CEO CaratLane during the launch.
And, though their categories differ, this splurge of stores at Caratlane pales in comparison to Voylla, which has launched in surplus of 240 stores throughout the length and breadth of the country since its first store launched in December 2015.
There is indeed value in brick-and-mortar stores. According to retail management and software solutions firm iQmetrix, 60 percent of consumers would choose to shop in-store if online services were provided there, and several retailers have successfully bridged the online and offline worlds. Also, paradoxically, the rise of online shopping has made in-person experiences even more valuable to consumers.
In a recent Forbes piece, titled Why Warby Parker Is The Poster Child For The Store Of The Future, contributor Nitin Mangtani makes a case for physical stores because consumers want the personal interaction and hands-on experience when buying
certain products. It’s tough to buy apparel online if you need to try it on first, for example. Making an even stronger case for digital merchants to have a physical presence, research firm IDC says that consumers that shop both online and in-store have a 30 per cent higher lifetime value than those who shop using only one channel.
The idea of running a single medium store by either opting digital or physical store is no longer a viable philosophy in retail space. Retailers are realizing that having both a digital and physical presence allows them to make deeper, more significant connections that can benefit their bottom line. Successful merchants will be those who innovate by blending their growing online presence with state-of-the-art brick-and-mortar stores. We are sure to see more brands follow suit as retailers continue to compete for shoppers’ attention as well as revenue.