Fast forward to click-and-brick retail

Ritesh Ghosal Updated - January 20, 2018 at 12:10 AM.

Challenges abound as shoppers switch between online and offline stores

shutterstock.com/NicoElNino

These are interesting times for the retail industry in India. Till the end of the 20th century, the way people shopped, where they shopped, what made a certain piece of merchandise desirable, even the rules of engagement between shopper and shopkeeper stayed virtually the same for centuries and then hit a series of transformative curves. A miraculously revived-from-the-dead Shahjehan could have navigated Chandni Chowk of the 1990s with greater ease than a nostalgic beatnik returning in 2015.

The beginning of the 21st century saw rapid growth of the mall culture. People abandoned traditional markets in droves to press their noses against fancy windows of stores with unpronounceable names and scarcely recognisable merchandise in plush air-conditioned comfort. It took a while but both retailers and shoppers grew to love this new way of shopping. Yet, just a decade later, the mall is yesterday’s phenomenon and e-commerce is the way the India of tomorrow is shopping.

Same consumers online and off
I believe the premise of a click versus brick narrative is flawed. The same generation of Indians that is driving the exponential growth of online shopping is also driving the traffic to the major retailing districts across Indian cities. A quick traffic count at any of the leading malls across the top 35-40 cities will reassure the doubters that there is no dearth of visitors. Yes, the cash registers are depleted as more and more purchases are diverted to the cheaper prices showcased by e-marketplaces flushing speculative funds into discounts in the hope of creating a habit. Without entering into the merits or otherwise of this strategy, one can safely assume it will have an end-by date. The key question to ponder, therefore, is what then?

To understand the phenomenal success of e-commerce, one needs to start by understanding what modern retail means to India. The one key difference modern retail has made was the breaking of the counter-top and creation of self-navigated aisles.

Modern retail allows shoppers to engage with the merchandise on the shelves, read the pack descriptions, the ingredient stories, the benefit claims, try things on themselves, sample their uses, and judge for themselves the worth a product would add to their lives.

From being an advisor/controller, the shop-keeper gets reduced to a mere cashier. This empowerment of the shopper is what is stimulating the growth of brick-and-mortar modern retail.

The early years of the 21st century is when the larger cities of India started enjoying the demographic dividend – hordes of young employed singles and affluent young families migrated to aggregations of employment and consumption in a few areas of the cities. This self-confident, self-aware, conscious consumer of branded merchandise started voting with his wallet and led to the accelerated growth of modern retail.

E-commerce has taken this journey of empowerment to the next level. It offers the first level of engagement with the merchandise, the price at which it is available in different shops and the stock position without the mandatory trip to the shopping district. In our traffic, this is surely a huge service. Further, online access to information and buying sites allows shoppers to make their decisions at their own pace rather than be dictated by time and space constraints. In fact, a series of shopper surveys conducted in the CDIT market by Croma show that close to 90 per cent of shoppers go online at some point in their decision-making process. This data proves how successful the “habit change” strategy is already proving.

By the same coin, however, only 10 per cent of people make up their mind on what to buy without making a trip to one or the other brick-and-mortar shop! Shoppers continue to be wary of buying merchandise they have not seen, touched or felt for themselves.

Indeed, to do so would be to revert to the dark ages of the Nineties when one would have to accept whatever the lalaji handed over across the counter.

Clearly, while retailers on either side of the e-wall have taken adversarial positions, the shopper has decided to do the smart thing by combining the merits of both click and brick approaches to buying. Customers are checking out products online and buying offline, checking out products offline and buying online – just not with the same retailers.

It is up to the retailers to try and extract full value from the shoppers they are engaging in one platform but losing to the other.

Be present, on tap The challenge and the opportunity facing retailers today – of both the brick and click varieties – is to create an integrated platform for engaging the shopper and seeing through the full decision-making process. A platform that would allow the retailer to enter the conversation early in the shoppers’ decision-making process, hold his hand through the journey and allow him to close the purchase whenever and wherever he is ready to do it. This would require not just the big brick-and-mortar brands to invest in virtual brand stores but also perhaps require the most successful e-commerce marketplace to create physical retail spaces.

Already today, we see retailers talk of omni-channel services such as “click and collect” and “virtual aisles”. The former allows one to take an online shopper to the physical store while the other extends the merchandise pitched to a shopper already engaged in the physical space. These are mere indicators of the larger concept – to be available to the customer whenever he happens to be in the mood to shop, wherever the fancy strikes him and being able to serve him regardless of whether he is just surfing or reaching for the wallet.

Ritesh Ghosal is CMO, Infiniti Retail

Published on February 18, 2016 15:02