A little less than two decades ago, when globalisation and liberalisation were reshaping the Indian economy, the retail industry witnessed a conflict between the organised and unorganised sector.
This conflict only built up through the last decade as friendly neighbourhood retailers across the country suddenly found themselves competing with bigger and swankier retail outlets which lured consumers with the promise of more choices and better prices. With more options than ever to choose from, the average Indian consumer's demands only continued to grow.
The unexpected entry of online retail in the early 2010s took the entire country by surprise. Armed with technologies and systems that had never been used by anyone in the country before, e-commerce players revolutionised shopping for millions of Indians, simply by leveraging innovative marketing and promotional tools.
Not to mention, the convenience of purchasing products online and having them delivered to their homes played a major role in drawing consumers from across the country to online shopping platforms. Therefore, today, after more than six years since the creation of the e-commerce industry in India, the debate is no longer about organised versus unorganised retail, but about online versus offline retail.
Going digital
The experience of shopping at a brick and mortar store can never be replicated online, especially when it comes to the fashion and lifestyle segment. The sense of satisfaction from shopping in an offline store and feeling the products also influences the customer's decision to purchase.
In recent times, however, one of the key reasons for the rise of online shopping is the fact that most brick and mortar stores lack shopper engagement, which has become critical to win customers and establish loyalty. With evolving preferences and consumption behaviour, the new-age shopper today seeks engaging and relevant content that effectively communicates the brand proposition and value.
With nearly 450 million internet users, approximating 40% of the population, India is just behind China as the second largest market in the world in terms of internet consumption. Thus, the market opportunity is substantially huge, not only for online retailers but also for the offline players, who are now reinventing their services and business models and realigning their business strategies to adapt to changing market dynamics.
Offline retailers are now reaching out to consumers online through various channels like mobile applications and social media platforms by leveraging innovative digital marketing tools like data analytics. Moreover, with the proliferation of smartphones and rising penetration of internet across the country, nearly half the buyers of fashion and lifestyle products are expected to be more digitally inclined by 2020.
Also, nearly 40% to 50% of marketing spends are now being channelled by brands towards building a stronger digital presence. In the current scenario, establishing digital loyalty among customers is paramount
for any offline brand to not only compete with the online retail sector but also with other offline players in the market.
However, a majority of brick and mortar businesses lack a strong digital infrastructure to effectively undertake social media marketing or digital advertising. Therefore, a digital marketing ecosystem, which acts as a bridge between the publisher and the advertiser, can aid offline players in retaining, engaging, and eventually converting shoppers into loyal customers after the initial stages of engagement.
Shopholix seeks to bridges this infrastructural gap with its mCoupons. The mCoupons have been designed for brick and mortar businesses to enhance their value proposition for consumers and acquire digitally-inclined shoppers, engage and re-target them over a period of time. It uses location data as a tool to achieve in-store conversion, thereby eventually reducing the gap between the digital point of impact and the point of sale.
The offline retail sector's sheer size is one of its biggest strength. With over 14 million retail units in India, players in the online retail space are now seeking to collaborate with brick and mortar stores to aid the overall sector's growth.
Furthermore, the concept of online to offline couponing for retail shopping is a potential game-changer for the omni-channel retail space, offering consumers instant gratification, while ensuring digital loyalty for brands in the long run – a win-win situation all around.
(The writer is co-founder, Shopholix)