In a year when technology was arguably the most powerful influencer of consumption in India, brick-and-mortar retailers became the new ‘traditionals’. Monies and press coverage were being ruled by e-tailers and e-marketplaces, which captured both the consumers’ imagination as well as their (digital) wallets.
On the other side, physical giants scrambled to reach where the consumers were going – the Internet. They integrated multiple channels of sale and tried to create a seamless system where in all channels aided all other channels in increasing sales.
With the onset of the Omnichannel era, retailers in India are looking to a future where offline and online shopping aren’t two separate business models. They are creating an environment where there will just be ‘shopping’ and it will be an integrated online and offline experience.
Winds of Change
As it is in the rest of the world, consumer behaviour is shaping the retail landscape in India as well. Over the last few years, India has seen the consumer shopping journey change rapidly from making trips to stores to just clicking, comparing and buying virtually.
E-commerce majors – both homegrown (Flipkart) and global giants (Amazon, Alibaba) – are thriving on the back of having provided consumers with choice as well as convenience. Their mantra: Omnichannel is not just about the growth of more channels, but how to optimize the customer experience, options and flexibility across channels.
According to a retail survey conducted by PricewaterhouseCoopers titled Building Retail Businesses for Tomorrow Today, the value conscious Indian shopper believes that price is just a part of the larger value story. Convenience offered by the retailer also plays a major role in determining value. The survey data shows that Indians buy online primarily because of convenience (65 per cent), followed by price (31 per cent).
The study further points out that shoppers are demanding a service-focused in-store experience and want to interact with a knowledgeable store employee (both in e-marketplaces as well as physical stores).
What’s Driving This Growth?
According to a study conducted by the Internet and Mobile Association of India, the e-commerce sector is estimated to reach Rs 211,005 crore by December 2016.
By 2020, India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion e-commerce. Online apparel sales are expected to grow four times in the coming years.
There are plenty of reasons for this upsurge in Omnichannel retail, the foremost being the penetration of broadband Internet, as well as a growing number of 3G users in the country. Add to this the fact that India will soon be home to the world’s second largest smartphone user base and one can understand why there has been an explosive growth in online sales.
Other factors such a rise in the standard of living, competitive prices and availability of a wide range of products, doorstep delivery options and loyalty privileges have all contributed towards forwarding India’s Omnichannel boom.
Easement of FDI policies and retailing growth too occurred hand-in-hand. The retail scenario in India registered a paradigm shift when the Government of India allowed 100 per cent foreign direct investment (FDI) in single brand retailing as long as 30 per cent of sourcing was done locally.
The Role of Millennials
Millennials too, have received their fair share of attention as the largest demographic generation today. They dictated the shopping pattern completely in the past ﬁve years, changing the retailing landscape with their shopping behaviours.
Senior Research Analyst at Euromonitor International, Sharbori Das writes: ‘Technology provided consumers two key things which drove retailing growth to newer heights. Firstly, information and secondly convenience. The millennial consumers were more aware of brands, pricing, discounts, and other such details due to higher connectivity. Part of it was driven by social media, and the other part was due to the availability of the copious amount of information online.’
Omnichannel Goes Both Ways
In the current retail scenario, where developing an omnichannel identity is a must-do for most brick-and-mortar retailers, the rationale for online retailers for adopting the reverse strategy (online to offline) holds relevance too, and can also find importance in some of the Indian e-tailers strategy aswell.
In the past few years, a slew of pure-play e-tailing companies in India, including Amazon, Yepme, MakeMyTrip, CarTrade, Babyoy, Lenskart, Healthkart, Fabfurnish and Caratlane, among others, have opening physical stores.
These online giants moving from clicks to bricks have the advantage of using all the data collected through their e-marketplace to open a store in the best possible location which will give them heavy footfalls, and help create a stronger presence with their target audience.
Developing A Successful Strategy
Omnichannel by its very definition touches all parts of a company including marketing, IT, customer services, physical stores and online. An Omnichannel strategy will require significant investment and maybe even a management rejig.
Simply providing consumers with an e-brochure of items in a store will not cut it, and neither will a store that provides no more value than its online counterpart. Companies will need to distinguish themselves through more creative means and by catering to all consumer demands, since Omnichannel is consumer driven.
A company which is constantly involved in an offline-online revenue civil war will never be able to develop a working Omnichannel strategy. Both will need to work together to cater to the evolving, empowered consumer and towards capturing his wallet share.
To hear how brick-and-mortar retailing giants are transitioning with new consumer behaviours, attend the 13th edition of India Retail Forum (2016), on September 21 and 22, 2016 at The Renaissance, Mumbai. At IRF, with its stated mission of being a catalyst for profitable retail, technology will be featured in a stand-alone status as both a key challenge and facilitator for consumer-facing businesses. With this in mind, the second annual edition of India Omnichannel Forum (IOF 2016) is being organised alongside IRF 2016, and will focus on Customer-Centric Commerce –Engage, Experience, Enable.
IOF 2016 is a tailored and one-of-its-kind technology forum for business owners, business leaders and technology teams to meet, engage and conceptualise the next-generation of consumer experiences. Enriching the quality and expanse of retail experiences across physical and digital worlds through intuitive consumer engagement and technology enablement is the vision of the India Omnichannel Forum.