She grew up in a time when shopping meant a trip to the local market and buying fresh vegetables or bring home a monthly refill of grocery, when visits to a fashion retailer in town was once a year affair with limited options and choices.
Times have changed and she now has a range of shopping options, from neighbourhood mom and pop stores to large department stores and from modern trade outlets to online e-commerce stores. “Now she is as comfortable haggling with the local vegetable seller as much as she is tapping open apps on her smartphone to scour e-commerce stores for the best deals. As consumers embrace new technologies, the shopping experience has become increasingly sophisticated, enabling new ways for leading retailers to reach their audience” says Ajay Kelkar, Co-founder and COO, HansaCequity unveiling India’s first Omni-Channel Shopper study.
The e-commerce battle in India seems to be very similar to what has already been seen in Western countries almost a decade ago. In the US, a $5 trillion retail market, retailers like Macy’s, Walmart and Best Buy have built vertically integrated cross-channel models to compete with online competitors like Amazon.
Even though two-thirds of American consumers make online transactions, $10 out of every $11 spent today is offline. Also, after mastering in the home country USA for over 20 years, and being eminent in many other countries in the West, Amazon has its stakes placed on the immense, unexplored potential that India presents. “Amazon and Alibaba are in the frazzle to cater to the large 375 million+ online population in India and many more abroad, along with several smaller players, and a new biggie namely Paytm,” says Nakul Bajaj, CEO Darveys.com.
“The Entry of the biggies like Amazon has changed the whole perspective on E-commerce in India “believes P. Rajan Mathews, V P – Marketing & Sales, Desai Brothers Ltd – Food Division. It has strengthened consumer’s trust and faith in the e-commerce model, created positive awareness, developed the infrastructure for timely deliveries and packaging, created alternate payment system of COD apart from the online payments, stimulated new e-commerce models such as Just Buy Live for E-Distribution, OLX and others in the West region, increased the digital marketing and social media marketing for the increasing online consumers. But the most important is they have been able shift online buying psyche from just travel purchases to consumer goods and groceries.
Why being Omni-Channel is important?
Customers are already inherently “Omni-Channel” – as in their shopping habits crisscross multiple channels. They conduct online research before buying products from physical stores, or visit a physical store to touch and feel products before buying online or compare prices online while buying from physical stores means Over two thirds of Indian shoppers each exhibit such “web-rooming” and “show rooming” behaviors.
Entering into digital space was indeed the natural progression for Mother’s Recipe but the preferred mode of selling the Mother’s Recipe range of products is through the Modern Retail and the traditional general trade consisting of the regular kirana and grocery stores. “Our presence is marked across all modern trade outlets nationally and regionally. “We wanted to provide our consumer with easy access to our entire product range and simultaneously reach out to a wider segment base” says Mathews. He further adds that “apart from a strong presence through offline retailers and food stores in the west, in the online space we are currently selling our products through 18 E-Grocers and specialized online stores such as Meatroot.com, and soon trying to make our presence felt through marketplaces.”
For them Pune has been the birth place for the ready-to-cook (RTC) spice and gravy mixes. Brands such as Parampara, Rasoi Magic, Suhaana and Mothers’ Recipe have been developed in this market, one of the largest markets for RTC mixes. The RTC mixes market in the India’s western has been growing at 42 per cent in comparison to the national average of 28 per cent. Nearly 30 per cent of the total online sales come from West India.
“We’re focusing on being physically accessible to the masses and to making Being Human a brand that is available in the deepest pockets of the country. That’s one reason why we’re aggressively working on our offline retail expansion strategy.” says Kunal Mehta – VP Marketing and Business Development Being Human Clothing. He further adds that the brand has both national and international presence and as of January 2016, has opened 42 exclusive stores in India and one store in Nepal. Mehta adds that the brand is selling through more than 200 point-of-sales in India.
In fact, the western market has been very receptive for Being Human Clothing and is one of their strongest selling markets. Approximately 40 per cent of their online sale comes from West India. So much so that they are planning to further expand into tier 2 and tier 3 cities in the West region. “We are currently only present in the online space and always will be only in the online space. Surprisingly, 17-19 per cent of sales account from west India and the number is going to grow” says Bajaj.
According to a report by IDC Retail Insights, retailers utilizing multiple channels in their marketing and retail saw between a 15 and 35 per cent increase in average transaction size, along with a 5 to 10 percent increase in loyalty customers’ profitability.
Enriching Omni channel experience
The Omni channel study report mentions examples of few online retailers like Flipkart, mimicking Amazon.com moves has launched 20 stores in 10 cities to let its customers collect the items they ordered online at their convenience. Paytm plans to set up 30,000–50,000 retail outlets, where its customers can load cash on their digital wallets, and to enroll retailers – mostly kirana stores – as merchants for accepting digital payments. Fashion And You has opened three distribution hubs in Surat, Mumbai and Bengaluru to accelerate deliveries. Snapdeal has launched ‘Janus’ anOmni-Channel platform for brands, that integrates offline and online retail channels to render a seamless shopping experience to their respective customers. The whole idea is to offer customers an enhanced buying experience that combines the speed and convenience of e-commerce transactions with the trust and reliability.
“We have an in store engagement platform that reflects real time in store inventory where a customer can easily browse through products, match and create looks, search/discover new ones, and share with friends for feedback via email or social networks through a large touch screen. This technology helps a customer to combine online and offline experience in the store itself” says Mehta.
To enrich customer experience some stores in the western countries also aim to provide an overlap between the physical store and digital channels. For example, German convenience store EmmasEnkel has set up iPads in its café area to enable consumers to browse and order over a cup of coffee and then collect their order on the way out.
“We are all about digital marketing as we connect socially with our customers through social media sites, give them insight & information about brands via the blog. Our consumer base is really different which spends almost over `20,000 in one transaction” says Bajaj. He further states that “we have realized offline players play an important role in making the consumers aware. Here at Darveys we do a majority of our sales for the brands, which already exist in our country in an offline mode. It’s providing consumers with something they do not get at these offline stores.”
Amazon has been passionately battling with Flipkart and Snapdeal, not just in terms of giving discounts and a splendidly great customer service, but has been combating it out to dominate eyeballs with a splash of merchandising, engagement activities on social media and many innovative advertising hacks” says Bajaj.“We are spreading our reach through various channels like Tele Shopping Channels, food service outlets, food ordering channels such as Fasoos and Food panda, setting up Mother’s Recipe Exclusive stores to enrich the brand experience and reaching out to the maximum target audience” says Mathews.
Ikea India provides its customers with mobile apps where they have all the products, online planning, location services and of course integrated communication through various social media. They have introduced applications and tools that will secure seamless access to information across all channels like the store itself, the Web, customer kiosks and mobile. A recent report on the retail sector published by the Mumbai-based Retailers Association of India (RAI) and Knight Frank India said that out of the total retail penetration in seven top cities, e-retail is still just two per cent of the retail market versus 17 per cent in the case of brick-and-mortar modern retail.
While these online retailers are opening physical establishments to provide or extend Omni-Channel experiences, the traditional offline retailers have started logging in with innovative offerings. Click & Collect, Ship from Store and Endless Aisles seem to be the new buzzwords for brick-and-mortar retailers.
Retail chains like Shoppers Stop, Tata-owned Croma, Reliance Retail and ITC show a range of products with different variants online, but may not stock all of it on their offline floors. This helps them cut down on real estate costs and allows consumers to order products of their choice. Olabi, launched by Mindscape Computing Pvt.Ltd. provides for a seamless click to collect Omni-Channel / endless aisles experience, an In-store personalized ‘phygital’ experience for consumers through the use of Mobile devices and consumer insight analytics, Mobile apps that allow the retailer to have visibility & monitor his stores real time & 24×7.
Endless aisle technology equips Adidas and Reebok franchisee stores with iPads where shoppers can browse and order for items that are not in stock at the physical stores. Croma has recently piloted endless aisle in store.
In a counter to online grocery deliveries’ growing business, Big Bazaar will launch an app that will offer a pizza delivery-type grocery supply service that will reach daily essentials and produce to customers’ doorsteps within 30 minutes in Mumbai to start with. “We have a store located every 2-3 kilometers and we’ll launch the service in the coming weeks,” Biyani said in an interview. He believes that pure play online in segments like grocery will not work in India. “Omni-Channel retailers like them will be the future as they have the products, brands, and the supply chain. Experts say that multi-channel retailers accounts for over half the revenues in global e-commerce. When $1.1 trillion store sales across the globe were directly influenced by one’s web presence, it surely means that retail businesses should start creating an Omni-Channel experience for their customers.
“In Omni-Channel marketing” playground, companies have to balance a growing number of customer touch points with the need to deliver a consistent and seamless experience across those various channels. For best results, Omni-Channel marketers need to embrace integrated strategies across their various advertising channels like TV, online, print, etc. and then use variable testing i.e., a technique for examining a hypothesis in which multiple variables are modified to determine landing page conversions, display ad effectiveness, and other important measurements” says Bajaj.