What’s On

Taking an online leap of faith

2014 saw online retailing grow significantly enough to hurt brick and mortar retailers – both large format as well as traditional mom and pop. As smartphone users breach the 100 million mark in India – sometime in 2015 – an increasing section of Indian consumers will shop via the online platform. And their e-tailing experience will be through the mobile device.

Smartphones allow the marketer to track the geographical location of the consumer. Therefore, if the consumer is always on the move, he gets geo-targeted specifically. Spread of smartphones is also increasing the market space in terms of the number of eyeballs they are attracting.

The big leap of e-tailing:
Besides the leap in the number of smartphones, emergence of online retailers with scale was significant in 2014. The dominant advertisers on the front pages of the national newspapers were one’s of Flipkart, Amazon, Ebay, Snapdeal and Myntra.

A large part of the success of online shopping in India can be attributed to rise of smartphones. For younger users the online platforms is clear winner against its offline counterparts as it is more convenient, more aggressively priced, offers a larger variety of products on back of more SKUs. Moreover, online retailers also have the ability to broadcast their message to a larger group of consumers – specifically targeting each sub group.

Where e-tailing falls short:
Nevertheless, online shopping has its fair share of disadvantages too. Among the major shortcoming of online against offline is that the consumers is deprived of the ‘touch and feel’ of the product. The consumer cannot get a live demonstration of the product; whereas on the offline platform, the salesperson can assist the consumer and address his queries. The users can also experience the product in its entirety.

As the ecommerce industry moves forward in 2015, the distinct highlight is the blurring of the line between the online and offline customer experience.

But as the line between online and offline is blurring, both the platforms are trying to incorporate the advantages of the other. Large retail stores have tied up with online retailers or opened their own on line versions. The consumer can make real time price comparisons across multiple retail options-which enables him to indulge in a price bargain with the offline retailer.

Going forward, online retailers will have to move beyond just price discounting and open up service differentiators like trials and sampling. Only discounting cannot be a long term strategy and they need to improve the shopping experience for the consumer.

However, we must not forget the impact of smartphone penetration and mobile marketing. In this scenario, mobile marketing is at the point of infection. Increasing smartphone penetration in India is going to make the whole process much more effective in 2015. Further, faster speed of internet can help in making the users experience fluent. Mobile marketing will aid in bringing more relevant marketing to consumer based on information about his geographical location.

The challenge for marketers:
In the mobile domain, people are not just shifting from PCs and laptops to mobile devices but there is a large set of consumer which is coming online for the first time. This is the opportunity for Indian marketers – tapping on to this new market. Marketers have to look how to provide a better shopping experience on the 5-7 inch device.

Marketers have to recognise that a large number of consumers are taking their shopping experience online. They have to understand that the old format of ‘word of mouth’ marketing is being replaced by social media. On the online platform consumers are doing their research, sharing their experience. Therefore, the marketers have to learn to address their problems in real time. The consumer is not patient anymore. His attention span is getting shorter and demands a higher response rate. Therefore the response mechanism has to be very fast.

In 2015, there is pool of opportunities for the marketers in terms of studying the consumers buying pattern and his geography. So, the marketing stimulus has to be far more real time. They have to develop their marketing method to attend the demands of the consumer at a faster pace. Through access to consumer information, the marketers can actually target an individual consumer instead of a segment.

As the industry matures, investors will continue to pour in money but everyone knows that in the end it will boil down to two or three companies. Most of ecommerce players will try to give its users the experience they lack in comparison to their competitors. They will focus more on customer acquisition and are expected to move beyond pricing. But the challenge is going to be creating a differentiated brand experience.

The write up is part of the DMA Annual Report ‘What’s Trending 2015‘. To book your own hard copy of the Annual, write to marketing@digitalmarket.asia

Lloyd Mathias

Lloyd Mathias is the Marketing Head of Printing and Personal Systems at Hewlett - Packard in India