The E-Retail market in India is vibrant and will remain so for years to come. An important reason behind the vibrancy of E-retail is relatively the easy access to a nationwide or global market. Sales from offline channels are limited to the city where a store is located making it difficult to have a nationwide or global presence without opening more stores.
We will see more brands emerging from Online first strategy
A crucial reason why e-retail is so popular among brands, it is the investment to sell online as this is significantly less than as compared to brick-and-mortar stores. Because advertising in the online space can be targeted to a specific segment of consumers, establishing an online brand with nationwide recognition is far easier than doing so offline.
It is for these reasons that in 2020 there will be a record number of offline first brands. Rather than opening a brick and mortar store first, online first brands will sell online before selling offline. An increasingly sophisticated logistics network will supply consumers with products sold by offline brands and its usefulness may negate the need for many brands to sell offline at all. Deeper penetration of 4G networks and more smartphone users will also spur brands to adopt an offline first strategy.
Well established brands focusing more on the online stores.
Buying products online is certainly convenient; however, it is also more affordable than buying offline. A brand that sells online effectively cuts out the middle man allowing products to be sold to end users at a lower cost. Because of sophisticated supply chains run on cutting edge software platforms, online shoppers are assured quick delivery and easy returns when requested. In 2020, due to advances in logistics, even small retailers will be able to promise 1-day-delivery or 2-day-delivery. Younger consumers are increasingly driven to buy online because they are technology natives and less inclined to waste time shopping in stores.
Small e-retailers adopting 1day and 2 day deliveries
As of now 1 days or 2 day delivery methods are only adopted by giant marketplaces and that too in metros. With lots of innovation and investment happening in the logistics sector, we will be seeing 1 day delivery and 2 day delivery options being prevalent even by a small e-retailer as well.
Changing Business Environment.
In 2020 more online brands will succeed than ever before because the infrastructure that supports them will continue to become more robust. The logistics processes that allow goods to be shipped easily will become even more automated next year. There are numerous advantages of this for e-retailers the most important of which is it will allow them to concentrate on their core competency. An online brand will have less need to manage inventory or worry about loading and unloading of products. Free from such worries, they will be able to dedicate their efforts toward building their brand and creating a better product. Hence unlike offline brands which devote significant time and resources to activities that aren’t crucial to their brand, online brands will have a near laser-like focus on creating higher brand equity.
Individual e-retailers giving stiff competition to Marketplaces
Other important developments likely to increase the number of individual e-retailers which would include the ease with which a new e-commerce website can be created. Until recently, creating an attractive online portal required considerable technical expertise, today it can be done in a few clicks. Other activities crucial for e-retailers including managing an e-commerce website and order fulfilment, inventory management, returns management etc can also be done with a few clicks, hence enabling any individual sellers to match the service provided by the giant Marketplaces. Another advantage of selling on their own store is it allows brands to interact closely with customers getting feedback directly from customers. So with increasing commissions and more compliances on marketplaces, we will see majority of merchants will prefer selling on their own stores.
The scope of e-retailing is tremendous because behavioural changes among consumers and new technologies make e-retailing easy. Evidence of this is a number of well-known brands in India have no offline stores yet they command a loyal following from niche, and in some cases, broad segments of consumers. The cost advantage and wide reach of e-retailing are other reasons why this sector will grow in 2020.
The article has been penned down by Gaurav Gupta, Founder, EzySlips