Mumbai: After bringing massive disruptions in the online space, the e-Commerce companies seem to be going back to the basics. This discount-driven marketplace, which helped create huge resentment the traditional offline distribution channels, is slowly acknowledging the significance of the brick and mortar.
Major e-Commerce companies are largely pursuing the offline channel business model. According to the industry experts, it is a wise move by online marketplaces who are struggling to create their niche in the highly crowded digital space.
Online To Offline
The growth and expansion of E Commerce industry is phenomenal in India. The E Commerce companies not only introduced a new way of shopping to people but also led huge disruptions on the price front. The desire for a larger market share and growing demand for better service support is prompting major e-Commerce vendors to build brick-and-mortar retail chains.
Online portals like Flipkart, Amazon, Pepperfry, FirstCry, Lenskart etc. have already set up physical stores or are in the process of doing so. Some call it ‘experience zones’ – suggesting that users still prefer to touch and feel goods before acquiring them. In fact, the e-Commerce that were rigidly following the online model are now rethinking. They believe that the traditional ways of retails can offer them both a marketing tool and a sales channel.
Flipkart has rolled out 20 offline stores across 10 cities and opened up 100 experience zones. Online eyewear retailer Lenskart has about 110 stores across India. The marketplace recently opened its offline store in Bengaluru and targets 1,000 by 2020. FirstCry.com, an online kidswear company, has opened up 135 physical stores in the country. Similarly, online furniture and decor portal, Pepperfry.com have opened about 10 experience stores across the region.
Big Bet On Omni-presence
The primary aim of physical stores is to give customers a touch-and-feel experience of products which lacks in online shopping. With the physical presence, these marketplaces also aim to improve on post sales support in order to increase their credibility. It is also one of the key elements of the expansion strategies of OLS who are betting big on the growth coming from small towns and rural area.
Apart from that, these vendors are also focusing on creating ‘Omni-presence’, where they are able to address customers’ needs through multiple touch points. Though it is a relatively a new concept in the digital retail business, Omni-presence is a perfect blend of integration of the best of both online and offline market places.
While mainstream e-Commerce vendors are focusing on their offline presence, certain online players such as furniture portal Urban Ladder, garment retailers Zivame, FabAlley and Yepme are opting for single-brand retail strategy. India allows 100 per cent FDI in e-Commerce marketplaces. However, such marketplaces cannot stock or sell on their own; they are only allowed to lend their platforms for retailers to sell products. The single-brand FDI policy allows retailers to hold and sell their own inventory online without bypassing FDI rules. Hence, many online portals are opting for a single brand retail policy.
Brick & Mortal To Stay Long
Though e-Commerce marketplaces have created a lot of noise in the booming retail space, the glory of brick-and-mortar has not diminished yet. In the country like India, where customers expect more than a product push, the brick and Mortar offer several benefits over OLS such as personalized support, better after sales services, product information and so on.
It is a fact that despite the big tsunami of e-Commerce, the traditional offline retail channel still exists in the competition and consolidating to give tough fight to OLS. Now with online players taking an interest in the brick and mortar it will be interesting to see how the retail business shapes up with the synergies of both the marketplaces.