Jan 02 2017


India's Online Stores Go Back To Basics With Latest Brick & Mortar Trend

India’s Online Stores Go Back To Basics With Latest Brick & Mortar Trend

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After a successful stint online, e-commerce companies in India are now venturing into a world they thought they would drive into extinction: the brick and mortar space. Lenskart (online eyewear shop), Zivame (lingerie e-commerce player), and Pepperfry (online furniture company) are among the players to have opened a physical store in India, a country where e-commerce spend is still less than 2% of total retail spending, according to a study by Deloitte.

This is at a time when every industry is trying to make its presence felt online. And e-tailers certainly enjoy some clear strengths. For instance, a web store is always up and available, its reach unlimited by geography. However, online firms have found it hard to grow beyond a certain number in terms of customer acquisition, which is making it more and more necessary to have a brick-and-mortar store along with online presence.

A physical store is a great brand building exercise since it has high recall value for a customer. “The brand experience that one gets in a store is incomparable as there is a touch and feel element to it. Also, stores are a good place to bring on board a customer who has never shopped online,” says Ankur Bisen, senior vice president at Technopak, a management consulting firm.

Of course, there are products that could be picked off a website with little consideration to the retail environment, like a pair of headphones or baby diapers. But some products such as clothing or jewelry have a touch-feel element where a physical retail environment can complement the product.

Case in point, online lingerie retailer Zivame which so far has opened eight stores across the country and plans to have 30 more by the end of March 2017. “Since we are in the lingerie space, we know for a fact that most women in India wear ill-fitted bras,” says Richa Kar, CEO of Zivame. “With only an online presence it was difficult for us to guide them. We piloted the concept in our office where many women walked in and expressed their concern surrounding the lingerie issues they were facing. This probed us to take the next step and establish Fit Studios across the country.” Kar believes this has helped the company attract customers who would be hesitant shopping online because of issues over fit.

India’s top online fashion portal Myntra has its own reasons to venture offline. It is confident that this is an important step in strengthening the online fashion segment. “Fashion is a touch and experience based category,” says Ananth Narayanan, CEO at Myntra. “In order to initiate more shoppers to try fashion online, we are looking at an omni channel distribution approach that allows us to create multiple touch points for customers.” The firm’s tech-enabled stores, which is expected to open in the next two quarters, will have digital walls to help customers navigate and browse products.

It’s a global phenomenon

The trend is not unique to India. Globally, players like Amazon, Birchbox and Bonobos in the U.S., Spartoo in France, Astley Clarke in the UK and Alibaba in China are all expanding beyond just the online space. Although Amazon is an established player in the global retail e-commerce market which is expected to reach $2.5 trillion by 2018, e-commerce still represents less than 10% of the global retail market. Hence, even for these global players, offline presence is inevitable if they wish to attract more customers.

Devangshu Dutta of Third Eyesight, a consulting firm focused on the retail and consumer products ecosystem, says online companies so far have presented themselves dramatically different from offline players. He sees this as a mistake. “I do not see online separate from offline. Customers may want to interface a brand at different places and hence it becomes imperative for them to provide a seamless experience.” For instance, a customer might seek initial comparative information online, step into a department store to try a product, pay for it online and have the product delivered at home. Consequently, companies need to make sure that the experience is uniform across channels.

Online and offline both are essentially aimed at expanding reach and engaging with shoppers in more customized ways, thereby providing convenience. This is an emerging trend which will play an important role for online retailers in the days to come, for those who choose to embrace the backwards step.

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