Fundamentally, for me there is no question that going online should be one of the key elements of a traditional brick and mortar retailer's strategy to expand and grow their business. There is a lot of apprehension among offline retailers in India to take this essential and critical step for various reasons. Some of these include lack of understanding of the e-commerce business model, lack of precedence in their operating segment and to some extent fear of the unknown - Unlike a physical catchment area, where will my customers come from, how will i attract them etc etc.
Let me try and allay some of these fears but also try and highlight certain "specialties" of an online channel. Certain capabilities which are possible only in the digital world.
- In an online channel, the number of products/categories that can you sell is virtually unlimited as you are simply not constrained by the physical space available in a retail store.
- The moment you go online, you instantly become a global in terms of being able to reach and service customers. While there may be legitimate reasons not to service customers based on acquisition costs, specific product categories etc. you now have the ability to reach a worldwide audience.
- Unlike offline retailing, where the catchment area around the store is your target market and you have to strive to attract as many customers as possible in that physical area, online retailing does not impose those constraints. Let's say you need to attract 50000 customers in a catchment area around the store, in online you could attract 5000 customers in 10 different cities and still get 50000 customers to your website.
- Online offers the ability to completely personalize the experience of shopping which is quite difficult to do offline. Right from the moment, visitors come to site, elements such as content, merchandise, recommendations, promotions and offers and even prices can be personalized and made extremely contextual and relevant to that individual shopper visiting the site. all of this is possible due to the deep level of granular data that can be collected online.
- Online offers a fantastic array of tools to collect deep information about visitors and potential customers when they search, browse, research, compare, ask/share, decide and transact online. Information about customer's behavior in a lot of these critical activities of a shopping process cannot be collected in an offline world.
- Online also offers a tremendous amount of flexibility to adapt to changing market conditions and business models. Whether it is B2C or B2B or B2B2C or Marketplace aggregation models, online provides a relatively cost-effective avenue to pursue these models.
If one is convinced about these advantages that online offers, the most important and first step, that offline retailers need to do is to actually take a step back and map out a customer journey that includes both offline and online channels. Some critical questions to answer early on are:
- How do they see their customers interacting across these channels?
- How do they use technology and devices in the shopping process?
- What information do they expect at various stages of the shopping process?
- How can a brand provide a seamless experience to its customers as they weave in and out of channels and touch-points?
- Can customers shop Anytime Anywhere Anyhow?
