How Digital Disruption Changes eCommerce Industry
—By Samarjeet Singh, Director, Iksula (e-Retail Strategy Consulting)
The expanse of e-commerce in India is witnessing a stupendous growth- it has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the world’s fifth-largest global destination in the retail space.
The Boston Consulting Group and Retailers Association of India published a report titled, ‘Retail 2020: Retrospect, Reinvent, Rewrite’, highlighting that India’s retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth, urbanization and attitudinal shifts.
The report adds that while the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent.Retail spending in the top seven Indian cities amounted to Rs 3.58 trillion (US$ 57.6 billion), with organized retail penetration at 19 per cent as of 2014.
Online retail is expected to be at par with the physical stores in the next five years: The way of the future is clearly to commit fewer resources towards opening brick-and-mortar stores and instead, manifesting into virtual ones. As a result, online e-commerce marketers are constantly straddling between engaging with consumers whilst being agile in managing their online reputation.
Indian online retail on an aggressive upward growth trajectory
Online retail underpins the significance of M-commerce.There is a burgeoning demand for online marketers to grapple with the massive number of people browsing and shopping online – shifting marketer’s focus from generating brand hype to being helpful via social media, engaging content, and community development with today’s ‘anytime anywhere’ – on the go – consumer. Fueled by rising internet penetration and broadband availability, online retail and marketing is becoming an interesting subject, dangling as a tantalizingly big carrot for both domestic and international retailers. People are turning to the Internet to buy everything from diapers to books, jewellery, houses, groceries, electronic gadgets, and varied kind of accessories.
Driven by lower prices, convenience and the broadest selection of products, online consumer spending in India is soaring, given India’s rising middle class, growing disposable income and busy lifestyle in metro cities.
With the proliferation of multi channel commerce, it is no surprise that mobile continues to reshape the way that consumers engage with digital content. This evolving footprint is generating swathes of new information that both the content and advertising sides of the ecosystem must consider and act upon. In many global markets, a clear ‘multi-platform majority’, that is to say that more than 50 per cent of users are online with two or more platforms over the course of a month. It’s clear: smartphones and tablet devices are not simply replacing desktops, but instead largely adding incremental usage throughout consumers’ days.
As eCommerce behemoths such as Amazon and Alibaba are setting a precedent as a world-class e-tailer, the competition is expected to further intensify. Both these international players come with deep pockets and the patience to drive the Indian eCommerce market. Also, their strong domain knowledge and best practices from their international experience give them an additional edge.
Witnessing a consolidation, Indian ecommerce companies realize this, and to have a voice of their own in this online marketing cacophony, they are aiming to continue their focus on expanding sellers and selection on their platforms, innovating on multiple customer touch points, and providing seamless and rapid delivery services in order to compete with the international entities. Competition is expected to continue, with these eCommerce companies experimenting with different ways to attract customers and increase online traffic.
Online Marketing Synthesis is here
Digital innovators are changing the face of marketing for e-commerce players in India. Be it using Twitter to tell a story or crowdsourcing content on Instagram, more brands are shifting their focus toward integrated marketing campaigns that allow them to generate buzz around new products and strut their stuff – both offline and online. Social media presents marketers with a unique opportunity to connect with their target audience, build a consistent brand image across channels, and generate more sales.
Digital disruption has driven change in the eCommerce industry with shoppers embracing multiple touch points in their purchase journeys. Companies should spend enough resources on technology development as also advertising and branding, especially because the younger population is demanding. In the journey toward digital business transformation, embedding SMAC technologies in the business becomes crucial.
The Indian government’s ambitious Digital India project and the modernization of India aims to offer a one-stop shop for government services that will have the mobile phone as the backbone of its delivery mechanism. With 70% of marketers planning to allocate more budget to digital, social media advertising in particular, it’s time to start thinking innovation and integration to make your campaigns count and messages last forever.
There is no doubt that consumers use online media when researching products, services… Recent study by RetailNet Group– reports that 97% of consumers use online media before making a trip to the store, and they call this the ‘trip capture’ and says that ‘online-to-offline integration is the next wave of e-commerce innovation’… and that mobile devices such as smart phones and tablets are enablers that are shifting shopping habits. Whether it is to sell product, build awareness or to establish a brand, online marketing is only getting more matured to cater to a highly cognizant and a well-read consumer today.
So what’s the marketing imperative ?Integrating communications– capabilities, reliability, competency and content… from the initial e-commerce transaction through fulfillment… then, to communicate the progress of each purchase to the customers, in real-time… the e-commerce process must be– fast, seamless, well-communicated from dispatch to delivery– the entire process has stated to become streamlined and cohesive.
Measuring Marketing made simple
comScore has introduced a service called “Social Essentials” to help quantify the impact of social marketing efforts according to the demographic and behavioral composition of a brand’s social media audience, while also providing the reach and frequency of social brand impressions. These metrics will allow e-commerce marketers to tie social media exposure to desired consumer behaviors, including brand engagement and buying, and to measure actual campaign performance – further strengthening its relationships with its target consumers.
Extensive use of advertisements and presence on social media websites also helped these online shopping websites to gain brand recognition. Today, the services have improved so much that online marketers offer products at huge discounts, with delivery in 48 hours, along with a no question asked return policy.
The Road Ahead – 2015 and beyond
Digital consumerism is seeing the emergence of e-commerce companies handing over the power of shopping to consumers through just a ‘click’ of a button mantra. And even as Indian consumers have mastered the art of shopping online, cash-on-delivery still accounts for 60% of all e-commerce orders. An interesting number which highlights an existing distrust of online transactions for a majority of the population. But this is expected to change soon with more focus on personalized customer service.
(The article was first published On CXOtoday.com)