Sensing the structural changes in retail landscape, eCommerce companies are going the Brick & Mortar way by opening physical stores.
Sensing the structural changes in retail landscape, eCommerce companies are going the Brick & Mortar way by opening physical stores to give customers a touch and-feel experience of products. Flipkart, Caratlane, Zivame, Pepperfry, FirstCry and Lenskart have started offline experience zones to differentiate their offerings from their online rivals and to increase their credibility.
"Today, anyone can open an online store. Where is the quality audit?" asked Richa Kar, founder of Zivame, an online lingerie company that plans to open 100 stores in the next three years. "Physical stores will help us deal with the credibility issue." The Bengaluru-based company opened its first offline store in the city about two weeks ago. The brick-and-mortar stores serve as a window-shopping zone and a starting point for purchases. Customers can walk in, browse through the offerings and then book their orders at the store.
Companies say such stores can act as both a marketing tool and a sales channel and saves them advertising costs. "We spend Rs 8-15 lakh per month on a store. For a large hoarding, it will cost us about Rs 5-10 lakh per month, depending on the location. So, we opened studios where customers can experience and not just recollect the brand," said Ashish Shah, founder of Pepperfry.com, which has set up six offline stores and will open four more in the next three months. Almost 20% of sales of the furniture and furnishings company come from the experience stores.
FirstCry.com, an online kidswear company, reduced its marketing budget by 25% after opening 135 physical stores. "With our onground presence, we have been able to increase the wallet share of the consumer or converted our consumer without incurring any cost," said Supam Maheshwari, founder of FirstCry.com, which will increase its offline store strength to 150 by the end of the year.
Flipkart, the largest Indian ecommerce company, has rolled out 20 offline stores across 10 cities and hopes to expand to 100 experience zones by March. The company launched the stores in conjunction with its logistics arm eKart a key element in its rural expansion strategy. Lenskart started opening offline stores in January. Currently, the online eyewear retailer has about 110 stores across India and targets 1,000 by 2020.
Experts said the line between online and offline is getting blurred as companies from one side cross over to the other and vice-versa. Retailers including Reliance, Tata and Future Group have ventured online as part of their strategy to attract more customers.
However, not all online companies are enthused by the concept. "We are a pure technology player working towards building a virtual experience zone. Hence, we don't see the need for an offline store," said Prasad Kompalli, head, ecommerce Platform, at Myntra.
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