With its ‘Shopping on Instagram’ feature, the company will help customers buy products online. Apart from India, the company is expanding the feature to 26 countries from existing 46 countries.

Written By Sandeep Soni

Instagram even beat out TV in this younger target group, a medium only 3 percent of respondents said was a primary platform.

Instagram is planning to compete against e-commerce biggies in India such as Amazon, and Flipkart even as Google too launched its shopping search feature last December. Facebook too had been testing the Indian e-commerce waters in the past.

With its ‘Shopping on Instagram’ feature, the company will help customers buy products online. Apart from India, the company is expanding the feature to 26 countries from existing 46 countries, the company said on its website. That seemed imminent since India is its second largest market with 71 million users – as per company statistics site Statista – following the US with 121 million users as of October 2018.

Selling on Instagram, hence, is a no-brainer for e-commerce startups particularly in fashion. “It is a great channel for an online fashion store like us to sell items to the right audience since the majority of its users are teens. Also visually it is very rich and that’s what a fashion brand needs,” said Sujayath Ali, co-founder and CEO of Sequoia Capital-backed online women fashion marketplace Voonik.

Also for startups like online-to-offline shopping marketplace Fynd (that offers its open API for businesses to develop omnichannel retail apps), it is a great opportunity. Fynd’s API, for instance, powers Google’s What’s In Store feature for shoppers to find out products stocked in stores near them. “I am sure once Instagram launches this, it will look at tech platforms like us to enable that,” its co-founder Farooq Adam said.

Mindset Matters

As Instagram looks to monetize its traffic and help customers get instant shopping gratification, it is important to understand how does it convert the eyeballs to actual purchases.

From the customer context, his/her mindset while browsing a brand page versus on an e-commerce site versus on Instagram is different “On a brand’s website it is about having already discovered the product, on marketplaces like Amazon then they are looking to discover products, but on Instagram, instead of buying it is more about aesthetic elements. I am not sure if it can drive customers to buy products,” said Devangshu Dutta, CEO at retail consulting firm Third Eyesight.

According to details mentioned on the Instagram website, a business can tag up to five products per image or video and up to twenty products per carousel in a feed. When an Instagram post is created with tagged products, the post is shared with the business’s audience on Instagram. The customer can check the product’s price and details and click on it which is directed to the product description page on Instagram. Customers can then go to the website of the product to buy it.

Here, the discoverability aspect of Instagram to allow customers to find the latest trends in products works great for startups. “As a discovery platform, it will help startups with significant access to customers and influencers,” said Pinakiranjan Mishra, partner and national leader, retail and consumer products, Ernst & Young India. “However, Instagram might start charging startups in some way,” added Mishra. The business account on Instagram, similar to Facebook, is free.

From a discovery platform, if Instagram switches to an e-commerce model and starts transacting then there will be some impact. “Most of the fashion startups are too small, so it might impact them mid-to-long term instead of short-term because the market is growing,” said Mishra. However, it might as well not be the case.

Customer Delight?

According to Forrester’s 2018 Customer Experience Index based on a survey of over 9,000 Indian online adult consumers in 2018, the rate of improvement of customer experience is slowing down. “Of the 36 brands surveyed, just five had a statistically significant rise in their scores, compared with 20 last year. The five companies include Bharti AXA, HDFC Bank, American Express, e-fashion and accessories site Koovs.com, and electronics retailer Ezone.

Across the end-to-end transaction in e-commerce that includes discovery, order, delivery, and post-delivery problems such as returns or refunds; customer experience has to be seamless. And, Instagram might struggle in it.

“While Instagram is good in product discovery and it might even figure out ordering, and payments but delivery and post-delivery experience will be very difficult as both are very operational in nature,” said Ali. “Companies spend decades to get them right. Neither Facebook, WhatsApp or Instagram have any experience in the physical operation of goods. So either they would stay away from it or would not do a good job.”

Instagram didn’t respond to the email seeking comments for the story.

Even if Instagram is able to pull off all that successfully, the fact that the transaction is initiated from its platform, customers might not find it seamless in case of any default. “If the customer buys a product, he/she is buying from the Instagram environment whether the payment happens on the brand page, e-commerce site etc. So, Instagram will be responsible for how it executes management of customer expectations,” said Dutta. “I think Instagram will drive impulse purchase, unlike fashion e-commerce sites where the buy is planned instead of impulse.”

Source: financialexpress

Written By Editor

Ikea wants to sell you more than furniture – it wants to sell sustainable living, and that includes what you need to grow your own food.

Ikea is reported to be developing a new line of products with British industrial designer Tom Dixon, to be formally announced in May 2019 and released in stores in 2021.

The retailer has already introduced a hydroponic system to grow lettuce on your kitchen countertop, and the company’s innovation lab, Space10, experimented with a flatpack urban farm to fit in your backyard.

The collaboration with Tom Dixon would possibly to make it easier to grow plants in small spaces in city homes and to maximize the amount of food production in the smallest possible space.

With this, Ikea is jumping on to the trend of products focused on people farming in an urban environment.

Source: billionfarmers

The retail landscape of tomorrow necessitates stronger brand-customer connections that go beyond purchase

Written By Devangshu Dutta

There were rumours of a mega joint venture between Reliance Retail and China’s Alibaba, and also reports that Japan’s SoftBank is looking at ploughing $200 million into FirstCry.

Do you have this feeling that 2018 went by a little too quickly? Well, however quick it seemed, it was certainly momentous for retail in India.

If 2016 was marked by the shock of demonetisation, and 2017 by the pains of GST implementation, 2018 highlighted two threads — the obvious convergence of the online and offline world that had been ignored for far too long, and the interest of foreign capital in India’s consumer world.

India calling

Walmart bought India’s loss-making e-commerce leader (Flipkart) for an eye-popping $20.8 billion valuation, while e-commerce giant Amazon injected equity into Shoppers Stop, bought Aditya Birla’s More grocery chain (49% through a back-end entity) and held discussions with Future Group to acquire 9.5% in Future Retail. There were rumours of a mega joint venture between Reliance Retail and China’s Alibaba, and also reports that Japan’s SoftBank is looking at ploughing $200 million into FirstCry. Rivals Amazon and Alibaba were both reported to be looking at Spencer’s, one of India’s oldest retail chains currently owned by the RP-Sanjiv Goenka group.

Videos of the crush of curious crowds at India’s first, much anticipated Ikea store went viral, and the company said it planned to open in 40 locations over the next few years, upping its earlier projection of 25. Chinese retailer Miniso came out of nowhere and claimed to have clocked `700 crore worth of sales in the very first year in India.

But, along with these cross-border ‘big bangs’ we saw domestic confidence also quietly resurging. Indian retailers are not cowering before large foreign retailers and expensive e-commerce advertising splashes; today, they are less defensive about their own prospects than they were two years ago. There is also a growing interest among entrepreneurs and corporates to create new retail businesses, which augurs well for the diversity of competition and freshness of offerings in the market.

Going into 2019, one thing I can say with certainty is that the weather, economic and political — both in India and elsewhere — will be unpredictable, and might even turn stormy. Retailers should ‘expect the unexpected’. To ensure that the business remains on track, however rough it gets, retailers must centre all major strategies and decisions on the customer. Although this theme has been around for centuries, it is surprising how much it gets ignored in the most customer-facing business.

Make a connection

Retailers tend to divide customers into rigid segments. My suggestion would be to look at customers through the behaviour and experience lens.

It is often emphasised that Indian consumers are ‘deal seeking’. I don’t think we should treat this as a uniquely Indian thing: all consumers look for value reassurance in unpredictable times. Also, remember that even in value seeking, experience still rules. Retailers and brands that are solely focussing on price or price and feature comparisons are turning their business into a commodity. They are missing the long game: of defining the customer’s experience from the first moment of brand contact to the purchase and beyond.

In 2019, if you want to focus on a single competitive strategy, it should be this: for stickiness and sustainability, think about the customer’s experience, and actively design it in every environment where the customer connects with you.

Lastly, technology is transformative, but tends to get restricted to being the contrast between e-commerce and physical retail. Indian retailers need to embrace technology in all forms, from using the zillions of transactions within the business and with the customer for developing actionable knowledge, to automating processes.

Make customer-interfacing technology as invisible or intuitive as possible. When in doubt, learn from one of the leaders in the sector, Amazon: its 1-click ordering patent 20 years ago gave it a huge advantage over competitors. It is now aiming to replicate the same seamless, friction-free behaviour physically with its Dash button. Or pick cues from younger fashion businesses like Rebecca Minkoff, whose focus is on ease and convenience. The key reason for adopting technology is to remove friction for the customer.

I have no doubt that 2019 will be eventful. Let the customer experience be the guiding light to keep our businesses afloat and off the rocks.

Source: financialexpress

Written By Debojyoti Ghosh

In a bid to bury the ghosts of demonetisation and rollout of the goods and services tax (GST), both of which impacted small and medium enterprises (SMEs), the Narendra Modi-led NDA government is trying to woo back its core vote base with a promise to tweak foreign direct investment (FDI) norms in e-commerce in India, one of the fastest growing online retail markets in the world which is about $41 billion in size.

The government’s revised norms for FDI in the e-commerce sector, which was announced earlier this week by the Department of Industrial Policy and Promotion (DIPP), could make things difficult for foreign-owned online players such as Amazon India and Flipkart, which is now owned by the $125-billion U.S. retailer Walmart.

On December 26, the DIPP banned e-commerce companies from selling products from entities in which they have an equity stake, and restricted online marketplaces [such as Amazon India, Flipkart and others] from mandating any seller to sell any product exclusively on its platform. It also mandated that a single seller cannot have more than 25% of sales on one online marketplace. It also instructed that cash-back policies provided by online retailers to customers should be “fair and non-discriminatory”. The revised norms will be effective from February 1, 2019.

Today the online marketplace in India is dominated by Flipkart and Amazon. Experts say the revised FDI norms might impact Amazon the most due to its investment in Cloudtail and Appario, which contribute a major chunk of its sales. Cloudtail is a joint venture between Amazon and Catamaran Ventures, a fund founded by N.R. Narayana Murthy; Appario is a joint venture between the Patni Group and Amazon. The government’s move to ban selling of products exclusively on a single marketplace would be a major blow to both Flipkart and Amazon as the online retailers have exclusive partnerships with smartphone makers—Flipkart with Xiaomi and Oppo, and Amazon with OnePlus. According to reports smartphones contribute about 50% of overall e-commerce sales in India.

Devangshu Dutta, chief executive of retail consultancy Third Eyesight, feels the revision in norms is in light of the upcoming general election. “Given that we are entering an election year, clearly, the government needed to be seen supporting the domestic constituents.”

Adds Amarjeet Singh, partner, KPMG India, “The changes are being made to appease the domestic retail lobby. The domestic players who may have been hurt by the ecommerce revolution need to make themselves more nimble than to rely on government’s interventions of this nature.”

K. Ganesh, Bengaluru-based entrepreneur and promoter of e-commerce companies such as BigBasket, Bluestone, FreshMenu, and Homelane, feels some of changes to the FDI policy in e-commerce go against the principles of free market economics. “This will negatively impact all the milestones achieved in the last 10 years during which billions of dollars of FDI has come in, millions of small sellers have had the opportunity to sell their products across India thanks to well-funded marketplaces, lakhs of new job were created at entry level. I feel there is scope of some of these measures to be clarified in the larger interest so the gains of the past are not eroded,” says Ganesh.

In May this year the world’s largest retailer Walmart bought India’s largest e-commerce company, Flipkart, for a whopping $16 billion. It was the world’s biggest e-commerce deal and gave the U.S. giant access to one of the biggest markets in the world.

Commenting on the development, Flipkart released a statement that read: “It is important that a broad market-driven framework through right consultative process be put in place in order to drive the industry forward.” India’s e-commerce poster child is of the opinion that the e-commerce ecosystem created innovations in MSME manufacturing, supply chain, warehousing, packaging and digital payments, having created thousands of new jobs. “This is just a start, the industry is set to be a major growth driver for the Indian economy and create millions of [more] jobs in the future,” the statement read, adding that “it is important that a broad market-driven framework through right consultative process be put in place in order to drive the industry forward.”

Kunal Bahl, CEO and co-founder, Snapdeal, however, spoke in favour of the changes introduced by the government in FDI norms. “Snapdeal welcomes updates to FDI policy on e-commerce. Marketplaces are meant for genuine, independent sellers, many of whom are MSMEs. These changes will enable a level playing field for all sellers, helping them leverage the reach of e-commerce,” Bahl posted on Twitter.

Even smaller niche online marketplace players Qtrove welcome the new policy changes. Vinamra Pandya, founder and CEO, Qtrove, an online marketplace for curated organic food, personal care, and home décor products, believes in fostering small and medium enterprises on its platforms and let them sell their products without the pressure of predatory pricing, unrealistic discounts and cash backs. “We are not into electronics and fashion where this predatory pricing and discounts rule the roost. We welcome this decision, the only rider being we would need to see that it is a balanced ruling.”

Source: fortuneindia

Written By Deepti Govind

E-commerce firms have been reducing amount of discounts over time, say analysts. Photo: iStock

Ecommerce companies in India have been criticized for predatory pricing, but the revised e-commerce policy plans to make deep discounts a thing of the past. However, some analysts believe online marketplace is likely to find innovative ways to continue offering discounts once the dust around the new rules settles.

On 26 December, the commerce and industry ministry had issued new guidelines, reviewing its policy on foreign direct investment (FDI) in e-commerce. As part of the move, the ministry plugged loopholes to stop online retailers from selling products of companies, wherein they own stakes. Besides, the new guidelines also restrict them from entering into exclusive merchandise deals. The new guidelines will come into effect from 1 February.

Source: livemint