E-commerce has revolutionised the concept of e-retailing across the globe, by encouraging retailers to assert their online presence. Amidst growing challenges, brick and mortar continues to move hand in hand with e-commerce leading to an emerging trend of Omni-channel retailing. Wherein, the brand has both online as well as offline presence.
In the last 5 years, India’s online retail industry has grown at a swift pace, from about Rs 15 billion revenues in 2007-08 to Rs 139 billion in 2012-13, translating into a CAGR of over 56 per cent.
Besides, it is expected that the buoyant trend will sustain in the medium term and is estimated that the market will grow at 50-55 per cent CAGR to Rs 504 billion by 2015-16, according to a study by CRISIL research.
Interestingly, eCommerce has swapped the retail scenario of the country in such a way that the traditional retailers are moving towards online portal to stay in the game. Off late, most of the brick and mortar brands had expanded their reach through marketplace e-tailing or by introducing their flagship e-store like Croma tied up with Snapdeal to open its e-shop.
Commenting on the Croma and Snapdeal venture, Ajit Joshi, MD & CEO, Infiniti Retail said, “Today’s dynamic retail industry demands an infrastructure that is equally robust on the online and brick-and-mortar fronts. Omni-channel retail is undoubtedly the way forward in the Indian retail industry and therefore the association is designed to enable Croma and Snapdeal to leverage from each other’s strength to provide a winning proposition for customers and business alike,”
Besides, brands like Shoppers Stop, which started its online presence in 2008, has improved features and user interface to bring its online visage on a par with leading e-commerce websites. The company is also trying to leverage its physical network by giving customers the option to return products at its stores.
Modern retailers are using omni-channel retailing, not only to tap more consumers, but also as marketing tool to promote their brand. Online medium has given the retailers, an opportunity to reach out to their target consumer segments and convert their prospective consumer to a final customer.
Further, for retail segments like precious jewellery and furniture where standardization is required, e-commerce cannot satisfy the consumers completely, as every product is different and so is the pricing. Multi-channel retailing works better for these segments.
Elaborating on the matter, Vikram Chopra, Managing Director, Fab Furnish said, “People buy both online as well as offline products because shopping is not always about price and convenience, it is also the experience which they get when they go out to shop. I think shopping is way more than just convenience and pricing, so both the models will co-exist. We are into omni-channel retail model because online gives us a great reach and consumer conversion as compared to that of a physical store.”
“Besides, online gives consumers a way to plan, for example the category we are in like furniture, people want to do a lot of research before they come and buy the product. Our website is a great platform for them to research and then finally purchase the product from the store or vice-versa. So, it’s part of a buying process of how the consumer shifts from online to offline or vice-versa,” added Vikram.
According to a research report, the future shows tremendous potential for growth in the retail sector. Almost all large companies worldwide are looking to establish a base or stake in the Indian market. In this scenario, the Indian retail sector itself must seize the initiative to realise the dreams of contributing to a prosperous and booming economy.
In the near future, India will see a phenomenal growth of shopping malls and specialty retail stores. The specialty stores will cater to home, electronics, furniture, watches, sunglasses and assorted items’ category.
Experts predict that the next phase of growth in the retail sector will emerge from the rural markets. By 2015, the rural retail market is projected to have a total of over 50 per cent market share. The total number of shopping malls is expected to expand at a CAGR of over 18.9 per cent by 2015. According to market research report by RNCOS, the Indian organised retail market is estimated to reach $50 billion by 2020.
In a nutshell, it can be concluded that the retail sector will continue to move on a progressive trend, despite shifts in paradigm. However, it is expected that brick and mortar stores will sustain being the foundation of retail industry and will prosper alongside with eCommerce.