The beauty and personal care market in India is expected to grow at a CAGR of over 9 percent in the near future, propelled by increasing demand for enhanced products and a newfound desire to look good. While the major players in the market are predominantly international brands, a few homegrown brands have defied the trend and emerged amongst the frontrunners, especially in the segments of natural, herbal, and Ayurvedic products. However, the most pertinent question that these product brands, specifically those starting up, seek answers to is whether they should take the offline route or scout for digital-first modes to expand their consumer base.
It needs to be communicated at the onset that it is not the wisest step to rate one over another, for which mode you choose depends majorly on the consumer base that you intend to cater to. The customers can be broadly put into two categories – one who are digitally sound and the other who still prefer the visit and shop model wherein they ascertain if its ‘touch and feel’ is impressive enough for them to make the right pick.
When we refer to digital-first, we basically talk about e-commerce retail, in which one can cater to various pin codes at a pan-India level from a single point of sale, whereas in offline retail, a brand covers a particular geographical location, following which the expansion is usually gradual. Also, the manpower required to run an e-commerce setup is way lower than what the offline retail ecosystem requires.
The offline retail ecosystem is traditionally based on distributors and their vast networks while most of the e-commerce setups work on a D2C model. It is also a no-brainer that since e-commerce platforms are powered by cutting-edge technology, they ensure consumers access to a wider range of products, irrespective of whether they are in a metro city or other tier II and tier III cities. If the industry players wish to replicate the same experience via a conventional retail ecosystem, it would entail a whopping investment. As a matter of fact, the overall capital investment goes down drastically when a brand is digital-first.
But what really are the pros for the offline retail ecosystem that continues to thrive despite the advent of new-age tools? The touch that consumers experience in the traditional outlet system takes the cake against the online route. Remember, shopping for many is more than buying products, it is an experience and even stress busters for some. Also, offline retail fulfills the ‘want it now’ psyche of the consumers. These personal human touches and influence cannot be replicated at any cost by e-commerce setups. Lest we forget, there’s still a section that isn’t technologically advanced, and only offline retail ecosystem can cater to them.
There is nothing like the best bet. With new users booming every single day, e-commerce is a thriving model to reach many people and do business, but in order to grow and establish a loyal consumer base, a brand cannot ignore the offline retail ecosystem. Most e-commerce setups, especially those who have achieved a successful run digitally, ultimately need to step into the traditional way.