The onset of the COVID-19 pandemic has brought a sea change in the shopping behaviour of many Indians. The prominence of online shopping became a reality as the physical stores were compelled to shut down to prevent the spread of the Coronavirus.
According to a report by Mckinsey, around 96 percent of consumers have adopted new shopping behaviour and approximately 60 percent of consumers are anticipated to shift to online shopping in the festive seasons and continue it throughout COVID-19 and beyond. Such humongous growth would never have been witnessed without the ever-increasing smartphone and internet penetration.
To catch up with the trend, many FMCG retailers like Modern Bazaar and Le Marche have gone Omnichannel.
Since its inception, Le Marche has been known for retailing niche and imported products. The brand has grown to meet all the grocery needs of consumers. The brand stood by its philosophy of not indulging in deep discounting. So, whenever, the brand used to evaluate going digital, it faced an issue of not having a core differentiator for the online customers, who have typically a more transactional need for shopping and hence are looking at value.
“Value is normally related with discounts that consumers get and that is something which we do not believe in as it is not sustainable in the grocery retail business, given the margins that we operate in. So, we consciously stayed away from the digital,” says Amit Dutta, CEO, Le Marche.
“Apart from this, we were also experiencing growth in our offline business and decided to focus more on that. However, the game has completely changed post pandemic and digital has become equally important for us,” he adds.
Along with its own website and app, the brand is also available on Zomato, Swiggy and Dunzo.
“From an expansion standpoint, we might look at opening dark stores in the near future to cater to more consumers,” Dutta further adds.
Similarly, Modern Bazaar, which has 14 stores across Delhi/NCR, is also available online. The brand has connected all the stores to their online channel and it caters to the nearby catchment areas.
“We are planning to double our offline and online presence by opening at least 2-3 stores every year. So, we should be able to open at least 25 stores in another 2 years,” Kunaal Kumar, Owner, Modern Bazaar says.
Differentiating Online and Offline Offerings
Despite going omnichannel, Le Marche is not offering the entire range online.
“As we have just ventured into online, so we have a limited assortment to begin with. Packaged food is contributing the highest for the online sales,” Dutta says.
At present, online and home deliveries is contributing 15-20 percent of the total Le Marche’s revenue.
Just like Le Marche, Modern Bazaar is also not offering the entire range online.
“Online has little less product range because we don’t have a warehouse. The inventory control online is difficult. We do with our physical stores, that’s why some products are not available online because it is difficult to monitor them,” Kumar explains.
In stores, Modern Bazaar offers around 1,5000 SKUs, and online it is somewhere around 6,000-7,000.
Can Online Stores Replace Offline Stores?
According to a research, online stores are stouted to grow significantly, however, online will continue to be a small contributor of the overall pie.
“I don't think that online will replace offline completely going forward and both will have to have a symbiotic relationship. I don't think one channel will supersede the other or completely wipe out each other. Both are here to stay,” states Dutta.
Resonating the same thoughts, Kumar concludes, “The touch and feel factor will never go, especially in India. In our nation, it is a form of entertainment. Therefore, we are focussing on opening our physical stores. We’ve just opened stores in Defence Colony and Green Park. After that, soon, we’ll have more stores in Noida, Gurugram, and Palam Vihar, and all of them will be connected online.”