Retail disruptions occur every four or five decades. In the United States of America (U.S.), traditional Mom and Pop stores made way for modern retail players like Walmart. Today, companies like Walmart are under a lot of pressure from e-commerce players like Amazon. Having lost the start in the USA to Amazon, we can see how Walmart scurried to get a piece of the Indian e-commerce market action by picking up a stake in Flipkart. Similar things can be observed in India.
As per IBEF, The overall e-commerce market is also expected to reach $350 billion by 2030 and will experience 21.5 percent growth in 2022 and reach $74.8 billion, on top of the growth we have already seen. This growth was led by many factors like falling prices of internet connectivity, affordable smartphones, the world’s smartest and most innovative Indian fintech led by UPI, and of course, COVID forced even the most skeptical ones to buy online.
When things change rapidly, many dynamic variables at play must be handled in a way that one just goes along with what the big data says, rather than lose time by trying to figure out why it happened and what happened.
Large, well-known online retailers invest heavily to understand consumer behavior – where consumers spend online! Let us simplify things by listing a couple of important variables at play:
The main digital expenditures are currently on fashion and clothing, utility payments, electronics, groceries and F&V, health and wellness products, and cooked and ready-to-eat food items. Travel and Home Decor is the next digital expenditure competitor.
It is important that we understand who our clients are. We can divide it into gender, age, city, and income brackets.
According to a current IIMA study, male consumers are browsing more electronic devices whereas, female consumers are browsing more fashion apparel products. While a higher proportion of male consumers felt influenced by social media in their purchasing decisions, a higher proportion of female consumers felt influenced by family and friends. There was a difference in approach to browsing on multiple platforms of both genders while shopping for different categories of products and how they were influenced to purchase.
The 18-24 age group seemed more likely to adopt online spending and spending in certain categories, and that varies by age group.
The consumers in Tier I cities are more exposed to choices (even offline) and are at ease with online buying - leading the e-tailers to believe that Tier I seems to be more saturated (data proven) and hence they are shifting much focus of theirs in Tier II/III/IV cities and rural areas. The Meesho platform is a good example.
Technology Adoption changing at such a rapid pace and a high percentage of sales is attributed to impulse purchases, there is what we call Tech Anxiety building up in online shoppers. E-tailers working to reach their customers will have greater confidence in their platforms, which will give them an advantage over their competitors. Comparisons, Fair prices, trackable deliveries, easy return and refund policies, and relevancy of products for customers – are a few things that can help ease this anxiety and can make the user a repeat user.
In conclusion, the e-commerce sector is large and growing. The digital landscape is evolving quite rapidly. The e-tailers that create a niche in their strong segments by offering a better quality of products at competitive prices with engaging and better customer experience will ensure they become leading stars of the industry.