E-Commerce has left a deep impact on the way people once shopped. With the increasing penetration of smartphones and emergence of online marketplaces, online portals are drawing large pools of loyal customers away from their favorite physical retailers, the latter finding it tough to keep up with the variety and prices that these portals offer.
Predatory pricing is on the rise in the young and nascent e-commerce sector, where new rounds of investments year after year are ensuring fresh and aggressive selling.
The traditional brick and mortar stores have been feeling the pinch and many have reported plummeting sales. The tipping point has led to some retailers shutting shop or downscaling to smaller stores, letting go of loyal and well-trained staff. The worst hit are the small-time local businesses that run out of neighbourhood plazas.
Does e-commerce boom mean it’s the death-knell for offline stores? Certainly not.
There is a silver lining behind every cloud. Change is inevitable, and most of the traditional stores have been in the business for a long time, resisting economic tides and upheavals. Their resilience and determination is propelling them to innovate and find newer ways to tackle the e-commerce threat.
Here are some measures that offline retailers are taking to counter the e-commerce pressure:
Cashing in on the ‘feel good’ experience - The 21st century has replaced the ‘need-for’ based shopping by a ‘want-for’ based experience. People all over the world, including India, are now no longer reluctant to spend money to ‘feel’ good. Retail therapy is the best stress-buster for many.
Offline stores that understand that shoppers love to be pampered are going all out to enhance the user experience, where their online counterparts are at a loss. It is all about designing the right shopping experience. From virtually enabled digital in-store experience, to having trained staff personally handle each customer, offering a free coffee or refreshments and hosting interesting events, stores are doing it all, even if it does not lead toenhanced sales volumes immediately. Rather, their focus has moved to having happy customers.
Stores offer free karaoke sessions and free childcare corners whilst the parents shop around the store. There are innovations like free makeup and hair styling in apparel shops. The satisfaction of physically touching the object of desire, trying on the clothes or accessories that one wants to buy, feeling the texture and even holding and evaluating the features of an electronic item like a smartphone before purchasing, are the main crowd-pullers that stores can confidently bank on by playing their cards right to improve the overall user experience.
Leveraging omni-channel support - Offline stores should not view the online world as an enemy. Rather, they can augment their own services over the two mediums, seamlessly integrating the omni-channel strategy to drive their sales and revenue. They can launch their own apps, for instance, and encourage people to download these apps when in the physical stores, even offering them attractive rewards for the same.
Similarly, many stores even allow customers to view or buy a product online and then pick it up from a physical outlet. This gives the users a chance to conveniently shop online and validate the product physically, so they are fully convinced about it. For example,you might like a watch or a new gadget online, but would like to validate the product before actually buying it, and hence would like to physically examine it in a physical store and then buy it, with an option to exchange it or even return it if not satisfied.
Many others are adopting “apps” from retail-centric start-ups, which allows a physical store to reach out to an online buyer and showcase their merchandise with minimal overheads. Almost all retailers have a smartphone and are tech savvy. The technical challenges are gone and retailers are open to using all channels to reach out to the customer.
PriceMap is one such app that allows customers to view their favourite product online, yet pick it up from an offline store after being fully assured of its quality, features etc., so they have no regrets later. In the process, using an online model, it is also empowering offline stores by driving traffic their way.
In a win-win situation, it also draws the online tech-savvy customers to the store, and increases the opportunities of impulse purchases, cross-selling and up-selling. A discovery thus made online or in-store should continue at home or on-the-go. This is what the user is likely to value the most.
Hospitality of your brand - Some brands are offering pure boutique-only experiences to users, where the focus is not sales at all. Rather it’s about encouraging them to move out and socialize. The Apple i-Store is one such initiative. Such boutiques are platforms to entertain the guests and engage them in conversations over free refreshments, and in the process,build brand value. The services and products on offer here are exclusively available in select stores or channels only, akin to a limited-edition item or designer-label. As word-of-mouth spreads, this in turn drives repeat and more customers back to offline stores, who sell the brand.
Brands can, in fact, add valuable add-ons like free Wi-Fi. Similarly, pop-up stores are the latest entrants to help brands connect with customers. These stores are on-the-move shops and to travel to places to connect with consumers; something like a shop-on-wheels.
Conclusion
Many online e-commerce stores now understand the value of physical contact. They are, therefore, launching their own pop-up stores and devising innovative ways to build a connect with their customers. Sure, e-commerce is not going anywhere. But, smart strategizing can definitely help the traditional, yet more experienced physical stores to adapt and grow their businesses. They are after all the masters of the game!
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About the Author
Suresh Kabra is a serial entrepreneur whose latest venture, PriceMap, provides a platform for a shopper to do product and price discovery in brick & mortar retail. His prior two ventures were successfully acquired. In corporate life, Suresh was the GM of Aricent, Inc. Software Product Division and prior to that, VP, Greater China region for Conexant, Inc.
