Recently my eyes were glued to the television set in a commercial break. I was surprised to see an advertisement of an online store selling eyewear, lenses and solutions promising variety and price competitiveness. Lured by the â€œnewnessâ€ of the store category I dived into the website only to find myself ordering a pair of funky pink glasses with the attraction of the first frame free and reward points! And wait! Even before I realize I had talked good about this website to a few office colleagues! This convenient and smooth transaction reminded me of an experience with a retail store where I (loyal consumer) was rudely asked to finish off my work (buying) in two minutes because the owner had to leave early for some religious activity! Needless to say I immediately left thinking the owner does not deserve my money.
The entire marketing fraternity is right now talking about how on ground retail will suffer a major setback from FDI. My question is FDI will start showing its impact after 2-3 years from now but what about online stores being run so well in all possible categories? I see them as a direct competition instantly. And there are enough reasons to justify this feeling. First, they have a huge variety at one place which promises a lot of choices to the buyer and also leads to impulse purchases.
Second, there are sites where one can compare prices of different brands and therefore gives a rational base to the shopper for making decisions. Thirdly, since these websites sell all possible brands and non brands in the category they give a good price advantage to the shopper which turns out to be a good incentive to shift from local retail store to online like in my case of buying eyewear. So the challenge here is not from people who always bought stuff online but itâ€™s from people who have started shifting to online. And categories like eyewear and jewellery which has traditionally always been bought from local trusted retail store is now growing in the online space for reasons mentioned above. Major online shoppers see price competitiveness, convenience, payment security and options, online storage of transactions, variety, free and hassle free shipping etc as valuable benefits. Like for e.g. itâ€™s very convenient to order a pair of eyeglasses sitting in the comfort of my office using net banking then rushing from the office at peak traffic times only to find the store closed.
So I do see tough competition emerging for my neighbourhood stores from virtual stores. And as online stores grew they have made substantial changes in order to fit into the Indian consumersâ€™ psyche of risk avoidance and price sensitivity. Dull looking websites have started wearing new accessories of live chat, toll free phone call, easy EMI options, coupons and what not to address doubts and resistance. On a store selling bags you can upload your full picture and see how the tote bag looks on you! On a decorative home paints website you can actually fill colours in your bedroom and see the result and thatâ€™s not the end, you can also calculate your painting budget! You receive a call on your mobile the moment you have faced problems while check out more than once! And then almost all stores give you the option of gift wrapping and also putting up personal mushy messages on it! And then there are sites wherein you can request domain experts to call on you so that you are guided through the process and the selection.
Therefore my feeling becomes stronger by the day that other than FDI allowed in retail there are many such developments in the retail space thatâ€™s demanding a lot of makeover from on ground retail stores. While the biggest advantage working in favour of local retail stores is the personal touch and trust, arrogance and wrong attitude developed due to the once upon a time monopoly is harming them. Thus, the need of the hour is a change in the mindset from business to services. Maybe retail stores are not waking up because the magnitude of the impact may not be large as of now. But the day is not far off as I can surely see relevant and strategic changes being made by online stores to tackle the consumer perceptions and assuring them of safe and secure transactions.
Along with this fact one must remember the word of mouth and recommendations that happen online and its reach and ability to go viral. And how can you forget the awesome number of people using smart phones and internet? Lastly, even if we forget all other benefits, convenience alone would be a game changer. From the convenience of buying anywhere and anytime to paying online to shipping and the list is endless. In this age of money rich and time poor consumers, online stores truly are changing the rules of the game called retail!
And itâ€™s never about budgets and resources itâ€™s always about the right focus, priority and orientation. With the right strategy even the smallest budgets will work. So on ground stores – time to wake up and ponder over your actions because unfortunately there is no magic wand in this age of competition and consumer orientation. Refocus, Prioritize and Orient Yourself!