Flipping the Script

Flipping the Script
Jun 2018 , by , in ARTICLE, Lifestyle, Trends

The industry experts often cited that e-commerce is eating out of mall’s profit pie. As Shubhra Saini reports, increasing number of e-commerce players are now opening brick and mortar stores which throws a new light on the synergies between offline and online retail.

Irrespective of how convenient online shopping is, consumers still like to visualize, try-on and feel products before purchasing them. That’s one of the rationales behind why many online retailers are now opening their physical stores.

Even today, around 85-90 % of shopping is done from brick and mortar formats, the online retailers warm up to the idea of having a physical touch points with their clientele.  Many of the e-commerce brands are interlacing digital apps with their physical presence. E-brands such as, Clovia, Zivame, Faballey, Lenskart, Caratlane, Myntra among others that began their journey with online retailing are fast moving toward omnichannel retailing.

Although consumers do relish the convenience available via online shopping, they still crave the tactile experience of the retail store. Because of this, many brands that began online are now opening offlinel stores, merging the online and in-store shopping experiences.


Back to Basics

If a brand can afford it, there are a lot of benefits to occupying a retail location. Not only do physical stores cater to digital generations attracted to experiences, but conversion rates in stores are also higher than online.  Brick-and-mortars also benefit when it comes to web search. Google prioritizes brands that have physical locations. Type in a topic or product into Google, and the search engine will surface a brand that has a retail store higher than one with only an online presence.

Clovia Store_Sarojini_1

Neha Kant, Founder and CRO of Clovia, shared her perspective on importance of having physical retail presence “The challenge that online retail faces is that it is a fragmented market with many unorganised players catering to a large user group. It is now with the entrance of new players in the segment that quality of offerings and services have improved. Plus, the customer cannot look and feel the products before purchase which affects the overall customer experience, a challenge that is overcome in offline retail.”

Whether it’s a permanent store, pop-up or short-term space, having a brick-and-mortar presence often strengthens the trust between brand and consumer. Pretty much anybody can sell something online these days, but to have a physical location, there is definitely brand legitimacy in that. It gives the sense to the consumer that the business is going to be in it for the long haul.”


Embracing Experiential Retail

Many big domestic and international retailers have closed down their stores in key locations in their home turf.  Many malls too going in losses have shut. So, when physical retail accounts globally for 90 % of sales then why, retail is bleeding. The answer to it is the failure of many retail organisations in embracing experiential retail.

The ever-changing retail landscape requires stores to transform as destinations, offering innovative experiences. Kant, added, “In today’s world, the ability to engage with and influence customers throughout their journey is paramount for continued success. Online and offline behaviours of customers feed into each other, affecting their overall customer journey. Econsultancy says that 2 in 5 online searchers decide to purchase after being influenced by an offline channel. Brands today can no longer restrict themselves to a single or limited number of channels as they will miss out on providing their users with a seamless brand experience they deserve and desire, and thereby the opportunity to make a sale.” Indeed, to be successful, online retailers are looking to experiential marketing campaigns and omni-channel shopping experiences to create an agile store. In other words, they are bringing the amenities of the online world into brick-and-mortar stores. No wonder,  Pepperfry, the online marketplace currently has 30 studios and is looking to expand to 70 studios by the end of April 2019 which will comprise franchise & owned Studios.

Retail therapy is taking on a whole new meaning. Exclusive online retailers with loyal customers are shifting to shop fronts to complement their thriving online presence.


Age of Omni channel Retail

The divide between physical and online retail formats is blurring. Each of these worlds has its own strengths and value deliverance. Brick-and-mortar retail gives customers the touch and feel of products and the experience of living the brand. E-commerce offers greater choice and convenience. While each of them is delivering to its own strengths, they both fall short of delivering the perfect customer experience.

The physical store of tomorrow will no longer be just a point of sale. It will be a true experience zone, where technology will be used to transform customer journeys. Personalized service and recommendations through location-based applications, digital surfaces that will help you select from endless options, single-click payments, quick home delivery to nearby locations, integration to online portals and buy-online pick-up in store.

On the online side, brands will need to learn how to reach out to digital natives and make them transact without deep discounting. It will mean improving the experience of buying online through a better offering, engaging content and increasing convenience through quick delivery and easy returns. The merger of these two worlds is what Omni channel commerce is all about.

Lenskart Pune-store

Online eyewear retailer lenskart plans to open 2000 offline stores across India and have a robust Omni-channel presence. In a quote to media Peeyush Bansal, CEO and Founder, Lenskart.com had said that E-commerce without doubt helps one to scale up the business but some consumers still need to be assisted and encouraged to buy online. Eyewear is more of a planned purchase done once in two years. A healthy mix of both online and offline will increase the touch points and be able to reach maximum number of consumers. Whether a customer visits the store, calls for home service or directly buys online, the presence of an offline store helps the customer to look at and feel the products and services. Thus, developing a sustainable business model with a seamless integration between online and offline models is imperative for the eyewear category.

Talking about how Clovia is taking on the Omni channel retailing in its own stride, Kant, said, “We use smart technology and big data analytics to plan consumptions and purchase patterns. All our product designs are based on consumer feedback – both online and offline. We stock the maximum number of SKUs in the industry with minimum inventory holding. That’s some serious disruption in a legacy market. Also, using technology for geographical understanding of tastes, we’re bringing structure to a traditionally unorganized market.”

Retailers have seen that when a customer shops via just one channel, online or offline, they shop at 1x. But when they go for both forms, shopping increases three to five times. Presence across channels has become critical for both acquiring new customers and retaining existing ones.



Getting the nuances right

All the progressive retailers understand the core value of investing in Omni channel, but what they don’t understand is that Omni channel investment is not just an extension of their e-commerce business. Consumers discover a product online and purchase at the store or online. A successful Omni-channel strategy drives consumer from clicks to bricks and back again.

Digitally innovative retailers, struggling to maintain margins now that consumers expect free next day delivery, are realizing that fulfilment cost are dramatically reduced if you persuade your customers to buy online but collect in-person from a store. The added bonus of this approach is that basket size often increases, as customers purchase additional items when collecting their order-in-store.


For instance, online lingerie retailer Zivame with offline experience stores in three cities plans to scale up to 50 such customer touch points. According to the company, these stores will only be customer touch points and will not store inventory. The focus will be on technology to show customers products in a unique way.  At Zivame flagship fitting lounge in Bangalore, customers can enter their details on a tab. The professional fitters help them discover their right size and provide expert advice. The lounge also allows customers to make an online purchase right then and there.

For an online brand entering the brick and mortar format they need to understand that where is their customer present – being closer to customer to enhance brand salience and awareness. The location should meet the premium positioning of the brand. The design should resonate with the user’s taste in trend, style and comfort and the personalization has emerged as an important lever in enhancing customer experience.

Whereas click & collect is one of the popular trends in omni-channel, one of the hot investment in the past one year was the launch of real-time visibility of in-store inventory, especially in the luxury sector where stores may only stock a handful of each item.


Future of Retail

Not all e-commerce brands can afford to open their own physical locations. Retail space is expensive in India. This issue has spurred the emergence of marketplaces for short-term retail spaces, which offer online brands a way to reach consumers outside of the internet for a specific time period. Some of the innovative ways to drive customer’s in-store are –

  • Enabling stores to act as mini-fulfilment hubs
  • Order online to pick up in store or at curb side, fulfilled from store or warehouse
  • Order in-store for home delivery, from a warehouse, same store, or another store
  • Order in-store for pick up from store, from same store or another store
  • Equipping sales associates to act as Omni channel evangelists

Globally, luxury apparel brands like Burberry, Tommy Hilfiger, are using chatbots to drive user engagement and improve customer engagement.  Amazon’s ambition to open retail stores under Amazon Go brand provides an indication of mobile’s future as an in-store technology by eliminating the store checkout completely.

Many e-commerce brands in India are experimenting with types of locations or pop-up shops before owning or renting their own real estate. The “stores-within-stores” are also on the rise. It’s a win-win for smaller brands and big-box retailers alike since e-commerce brands can get their products to consumers in well-trafficked stores, and it gives consumers another reason to step into larger chains.

Omni channel is and will continue to be the buzzword in Indian retail landscape. The end goal of every retailer is sales and all the retailers those who are jumping on the Omni channel bandwagon should invest in technology to integrate the Omni channel.

Smart approach to different retail channels will create diverse opportunities to connect with the customers. As convenience remains the driving force, the ‘one size doesn’t fit all’ theory gains a stronger foothold in the world of retailing.

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