New Delhi, 27 August 2015
Joining the league of e-tailers with offline presence, furniture e-tailer Pepperfry has taken on lease 1,800 sq ft of retail space on a Mumbai high street, property consultant JLL said in a recent report.
"Pepperfry has joined the list of e-tailers going ‘hybrid’ by recently leasing a 1,800 sq ft space at Linking Road, Santacruz," JLL India Chairman and Country Head Anuj Puri said.
The trend of ecommerce players foraying into physical retail is fairly new to India. However, in the past few years, a slew of pure-play e-tailing companies, including Lenskart, Healthkart, Fabfurnish and Caratlane, among others, have already opened physical stores to directly connect with customers.
In the current retail scenario, where developing an omnichannel identity is a must-do for most brick-and-mortar retailers, the rationale for the reverse strategy can be to either boost online sales or to deliver a more real, ‘five-senses’ experience for customers.
"For products that have a touch-feel element, the physical retail environment continues to be attractive for the customer. Also, an offline store can help to create more credibility and a more direct customer connect, especially in an environment where online sales are dominated by discounts and deals," Devangshu Dutta, CEO of retail and market analyst firm Third Eyesight, explains.
According to market sources, in 2014, over 70 per cent of ecommerce website-based transactions came from the top 10 cities of India. This means that a vast majority of transactions, particularly in cities within tier-II and beyond, happen in physical stores.
"There are more offline consumers today than online ones," Harminder Sahni of Wazir Advisors, asserts.
"While retailers can choose to be exclusively online or offline, the consumers aren’t going to get classified like that. Consumers will shop across offline as well as online. Thus retailers will have to have a mix of both and find their own profitable balance," Sahni adds.
Paytm, an online payment solutions company, has also installed over 50,000 kiosks for customers to be able to load their e-wallets. By being offline, the company is building trust with customers who would otherwise have felt lost in the already-crowded online space.
"So strong is the urge to move offline globally that for the time ever, Amazon US has opened a physical store in the US in early 2015, and it plans to open more such stores by mid-2015," Puri says.
"As more and more brands and retailers move online, there is bound to be a convergence between channels. Retailers need to — and will — see themselves logically serving customers across multiple channels that are appropriate for their product mix as omnichannel evolves from being a buzzword, to being a reality," Dutta observes.
(Published in Indiaretailing.com.)