Home as a category did take some time to build salience and gain traction in the online world. This is largely to do with consumer behaviour. Currently the category constitutes a critical mass in terms of size of business for most of the platforms.
At the brand’s end, most of them did struggle to get tuned to this world initially. The online way of working was very different from the traditional ways of working – be it cataloguing norms, understanding the back end tech and processes, stocking inventory in their own warehouses or fulfilling orders. In India it’s still some of the labels (not well known brands) who have been the early adopters and jumped onto the online bandwagon. They beat some of the big brands in this segment hands down. This is largely to do with the agility of the labels to turn around things faster and comply with some of the asks of these online players. They have been nimble footed when it comes to using data points and converting them into meaningful products / services which enables better conversions. Big brands being largely dependent on some of the offline channels still take a lot of time when it comes to decision making thereby losing out on the opportunity. This trend is however changing and even big brands & retailers are not seeing this channel posing competition to them but as another means to reach out to the same customer.
India being a country with so many diverse customer choices and regional influences becomes a challenging turf for most of the big brands or even offline retailers. Flexibility to cater to regional tastes shrinks and this is one more area where labels have managed to move swiftly and create capsule collections to test the market and then build it at scale.
Omni channel (Phygital) has already become the next big buzz word and is technically blurring the lines between online & offline world. From an overall reach perspective most of the brands or retailers have resorted to the fact that online as a medium helps them to reach a much larger audience giving them the much needed penetration in their desired geographies which may not be feasible otherwise. On the other hand this has also become a means to identify potential demand in specific markets which would then aid their offline expansion.
Innovations & technology advancements for agile transformation
a. Personalization has been at the fore front of online retail. It has gained tremendous significance over the last 2 years as it allows to cater to different customer need states basis multiple parameters – be it their past browsing / buying patterns or something as basic as their geographical location.
b. Virtual Reality / augmented reality – These tools have made the overall customer buying decision much easier as customers are able to envisage the placement or usage of the products in a near to real world.
c. Data Science tools helping prediction of the customer’s next purchase basis certain signals and accordingly targeting the specific cohort of customers has increased the ROI for marketing & CRM.
d. Omni channel integration – Most of the e-tailers today have integrated inventory of brands & retailers across multiple stores & warehouses. This just helps the e-tailer to fulfill the order from the nearest point of sale and bring down the timelines & cost significantly & ensuring customer delight at the same time.
e. Shoppable content – Engagement through the right content will continue to be the biggest driving force for online retail. Videos have always aided the sale of a particular product as they effectively communicate the features of a product in detail. In the new era, the entire content of a video is being made shoppable (for eg – if there is video around creating a recipe, all the tools used in the video can be made shoppable)
Customers have come to terms with this mode of shopping. Key drivers being – huge assortment, great pricing & convenience of shopping (case in point – online gave customers the flexibility to stay at home and still have their essentials delivered without having to move out during COVID). The penetration is relatively lower in the tier 2 & 3 cities but these are the fastest growing markets and also the segments which will bolster the next phase of online growth. Some of the apprehensions which most of these customers have is around – a. genuineness of products b. security concerns (pertaining to financial transactions) c. Policies around returns / exchanges etc. Having said that, most of these points have been addressed by almost all the platforms and things will change over a course of time.
Expectations from the retailer or the brand is not significantly different. Today’s customer is smart & intelligent. He / she follows a typical pattern of browsing and engaging with the product content before purchase (medium could be online or offline). The final decision of the purchase being completed online or offline would again depend on a lot of parameters ranging from convenience to assortment to price to touch & feel factor (may vary across categories). At the end of the day the product value proposition delivered has to be optimal irrespective of the medium and both the channel partner and the brand have an equal role to play.
ABOUT THE AUTHOR
Ex CEO of Shoppers Stop, C K Nair has 30 years of retail business experience in setting up new business format stores, building profitable businesses and consulting. After holding a variety of roles, most recently consulting to various retail brands. Gifted with the vision, determination, and skills needed for high-level revenue-building strategies and tactics, building a profitable, predictable, program oriented & scalable business model through collaborative business partnership. A strategist with strong execution skills, recognized proficiency in accomplishing corporate plans and goals successfully. Today under his CK Retail Consultancy company he consults retail brands, providing end to end solutions for business growth, setup and strategy, helping global brands to set up their business in India, helping E-com businesses to set up home business, he has also worked with various apparel and non – apparel retail brands in building future strategy. He is also at present the SAARC Representative for International Housewares Association.