As the COVID-19 pandemic made its way around the world, keeping shoppers at home and away from physical stores, web sales have seen a significant spike over the last few months. From a consumer perspective, the shift was obvious – from the initial days of lockdown to now, when stores re-opened, the fear of contagion remained constant and e-commerce quickly became a saving grace for shoppers desperate for products without the stress of stepping out of their homes.
“Given the pandemic, consumers are less confident with shopping offline and are opting for e-commerce sites to shop for fashion and daily necessities. E-commerce has definitely emerged as the strongest retail channel today and has seen a great uplift in the intent of people wanting to buy online,” says Umashan Naidoo, Head of Customer, Westside.
American multinational investment management firm Goldman Sachs has, in its report ‘Global Internet: E-commerce’s Steepening Curve’, noted that the COVID-19 pandemic has driven a doubling of penetration of e-commerce globally. “The pandemic has driven an acceleration in the adoption of countless technologies and consumer behaviours, chief among them being e-commerce. What started at first with panic buying, hoarding and nest feathering out of necessity has turned into an array of adaptations that have driven e-commerce penetration from 16 percent of retail spending in the US in 1Q19 to over 40 percent in May driven by year -over- year growth of nearly 70 percent,” the report documents.
German statistics portal Statista has revealed in July 2020 that retail platforms across the world have undergone a six percent global traffic increase between January and March 2020.
Even after the lockdown was eased, e-commerce has witnessed faster recovery compared to brick and mortar stores. According a report released on July 2020 by credit card bill payment platform CRED, e-commerce spends have surpassed pre-COVID-19 levels after the lockdown across Delhi, Mumbai, and Bengaluru as more individuals opted to shop online for their discretionary and nondiscretionary spends.
Evolving E-Commerce Strategies
Just like the shifts in societal and economic order, the COVID-19 pandemic has brought about significant changes in consumers’ behavior toward online channels; and the shifts are likely to stick post-pandemic. Hence, brands and retailers are now compelled to invest courageously and timely in pivoting their e-businesses toward the behavioral changes in a bid to capture market share and stay relevant post-pandemic.
While we were always active on the e-commerce front, the pandemic has made us evolve our strategies through innovative offerings. Today, we are closely mapping the digital shift and reaching out to our customers through a variety of options that assure them of their safety and convenience. There is a lot of emphasis on reaching out to customers online, keeping our websites live and updated and staying in touch with our loyal customer base. It is a good time for us to engage and be there for customers as well as gauge their interests,” says Alisha Malik, VP – Marketing and E-commerce, Metro Brands Ltd.
Metro Shoes is also offering services like Home Visits to ensure that the shopping experience is safe and hassle free. Moreover, the brand is also banking extensively on social commerce to amp up consumer experience digitally. “Customers can WhatsApp or call the store, have a virtual tour of the store over WhatsApp and choose the products over WhatsApp. Our store representative visits the customer post booking an appointment. The customer can Try and Buy the footwear of choice from the comfort of their home. Billing is also done via WhatsApp. We also offer a Drive Thru shopping service, wherein the customer can ‘Try and Buy’ footwear from the comfort of their car,” she adds.
As part of it consumer engagement strategy to provide a seamless experience, Westside continues to maintain its shop look and online pages similar across platforms. “Our communication to customers too provides an equal option to shop across channels, be it our 160+ physical stores or Tata Cliq website. Given exposure to cyber security and data localization, we pro-actively take measures and organize our technology schemes in ways to efficiently manage and deliver faster results, each time,” says Umashan Naidoo.
Banking on Technology for Seamless Consumer Experience
While, the consumers are going for various e-commerce platforms to meet their demands, they are also looking for new shopping experiences, which is possible only through technological innovation. “A great online experience is what’s going to attract customers now, so brands and companies will have to innovate and focus more on the digital and virtual experiences. Offline shopping will become a secondary medium, we can expect to see rise in virtual shopping stores, models to try to on clothes through the screen, etc. We’re going to witness a renewed revolution of the digital era with newer technologies and applications,” says Rishi Sharma, Assistant Vice President Marketing, Birla Cellulose and Head Digital of Brand Liva.
In line with this, both brands and retailers are making a beeline to experiment with new technology. “We recognize that being omni-present is critical now. Hence, we are now leveraging our concept of Ship—from –Store i.e., if a customer buys online from Tata CLiQ, our exclusive partner, the products gets delivered to the customer from the nearest Westside store, leveraging the goodness of omnichannel presence of Westside and Tata CLiQ. With approximately 34 stores active for Ship- from- store in pre-COVID times, we have now expanded to over 100 stores for our End of the Season Sale,” says Umashan Naidoo.
While brands like Being Human are working on an exhaustive and vigorous system for order management & inventory and seamless payment gateway to facilitate ease and security, retailers like 6 Degree are working towards better demand forecasting and reduction in RTOs. “We have always looked at 2 facets of any e-commerce operations – designer satisfaction and consumer delight. We are always looking to partner with new technologies and work on our in-house expertise to deliver the metrics for the e-commerce business. A few of them have been on the lines of demand forecasting, reduction in RTOs and building a consumer – designer loyalty to build a sustainable e-commerce business,” says Nikhil Hegde, Co-Founder and CEO of 6Degree.
Reaching Out to Consumers Through Social Media
After the pandemic hit, consumers across the world are turning to social media to keep them entertained, connected, and informed while they’re spending more time at home. This has presented a unique opportunity for businesses across the globe — they can now reach out to their consumers on a personal level without spending big bucks that other communication channels normally require. As a result, brands and retailers are doubledowning on social media to build relationships with new and existing customers over the last few months.
“There has been a significant digital shift after the pandemic hit and the subsequent lockdown. We are adapting to this dynamic environment and exploring new ways to engage with our customers through our social media handles and digital advertising. So far, we have successfully stayed in touch with their customers and cater to their needs. Metro and Mochi, have been coming up with engaging digital activities on an ongoing basis that has worked well with our customers,” Alisha Malik.
“Relevance, return on investment and engagement metrics keenly guide us internally on choosing the channels of communication with our customers. Given our current TG mix, we index our activities majorly on popular social media channels like Facebook and Instagram. We actively deploy other digital communication touch points as well such as Google and YouTube. We have made large strides in engaging with our base beyond a transactional association, which can be witnessed in the various engagement metrics and NPS we measure internally,” says Umashan Naidoo.
Challenges Faced By Brands in the Indian E-commerce Ecosystem
Talking about the main challenges faced, Kunal Mehta, Chief Operating Officer (COO), Being Human, says, “India is not an evolved market like the US and UK when it comes to e-commerce. Here, e-commerce is still seen only as a bargain hunting space. Customers are always looking for better deals and discounts. Moreover, the touch and feel factor is still an inherent part of Indian purchases so that also acts a roadblock sometimes, especially in a category like fashion.”
According to him the primary reasons for India’s underperformance are market inefficiencies and underdevelopment. This is most prominently manifested in return to origin (RTO) rates across India, especially when cash on delivery (COD) orders are involved. “The primary reason for under performance of e-commerce is RTO rate across PAN India, especially in COD orders involved. Currently COD rate is 90 percent in Tier -II and -III cities as compared to metro cities. Due to this RTO rates are doubled, and this indicates efficiency gap in the Indian logistics industry,” he adds.
Sizing-related issues are one of the biggest reasons behind returns in fashion and apparels, a category that accounts for the largest chunk of items being sent back on e-commerce portals in India.
RTOs particularly plague Indian e-commerce players because sizing has long been a grey area in the Indian fashion retail market. The truth is that there are no standardized sizing charts in India – most apparel brands in the country have been following size charts meant for global countries, especially the US and UK, with respective tweaks relevant to their TG.
“Every brand follows its own standardization in sizing purely based on the product categories the brands deals in. At HRX we have corrected and standardized sizing issues over the last few years. Data always helps in mending issues like these. HRX is an active wear, sportswear brand hence our size standardization would be very different from say formal shirts brands,” says Afsar Zaidi, Co-Founder, HRX.
But of late, most major fashion brands began investing investing in sizing divisions and hiring data scientists to decode tailoring, and, in turn, reduce wastage and returns due to poor garment fit.
“There are a lot of companies looking to solve this problem to deliver an India centric size that can help e-commerce companies perform and deliver better. Companies are experimenting with AR, smart mirrors and several other methods to deliver personalized fashion. We are also trying to help solve this problem using the various data points that we are able to utilize and arrive at a best-fit size for Indian consumers,” says Nikhil Hegde.
In December 2019, Allen Solly Women reported about 70 percent surge in its average sales a month ago when the women’s clothing brand introduced 70-80 styles meant for four different Indian body types, from slender to generously built women.
“There was a need to move beyond the standard one-size-fits-all and…complement Indian body types,” Vishak Kumar, CEO at Madura Fashion & Lifestyle that owns apparel brands such as Allen Solly, Louis Philippe, Van Heusen and Peter England was quoted by the ET.
Notably, the Indian Governemnt in February 2019, had launched an initiative to measure a group of people and prepare a comprehensive ‘India Size’ chart, which can be adopted by the country’s apparel industry. The ‘Size India’ project undertaken by Clothing Manufacturers Association of India (CMAI) jointly with the Ministry of Textiles and National Institute of Fashion Technology (NIFT) seeks to develop a standardised India size chart. The developments of the project stays hitherto stays unavailable to public domain.
Current Status of The Fashion Retail Market
Although it has been about two months since malls and stores have re-opened, consumer sentiment continues to be poor and cautious. E-commerce, on the other hand, is picking up momentum.
“Over the last three months, despite the COVID-19 sentiment, our fashion retail segment has delivered a consistent 300 percent growth on a month-on-month basis. The demand for fashion and apparel has seen a dip for premium-wear and for the low-cost fashion segment. However, affordable luxury commands its own loyalists and has on the contrary grown despite the pandemic. We are seeing an increasing demand in this segment and expect it to see a further surge in FY21-22,” says Nikhil Hegde.
Myntra’s 12th edition of End of Reason Sale (EORS) – the first online sale after COVID-19 lockdown, recorded a staggering 3.5 million shoppers in 4 days. As reported by Myntra in a statement, it processed more than 8,000 orders and sold 18,800 items per minute at peak.
It also is notable that categories like athleisure and loungewear are enjoying renewed demand as consumers, mostly confined to their homes, are gravitating towards comfort wear.
“Lounge wear, active wear is seeing a consistent demand owing to people resorting to fitness these days We have registered good sell through in tracks pants and t-shirts of late. Even footwear is a growing category for us as well as women’s active wear,” says Afsar Zaidi.