Protesting online prices: Not an effective customer-winning strategy

Just in the last couple of weeks, there have been many reports that both consumer electronics brands as well as physical retailers like malls, protesting against online retailers offering discounts on products. I find this to be quite amusing and immature. If you haven't been following the news, i am referring to news articles like this one here
(http://www.business-standard.com/article/companies/malls-want-brands-to-end-deep-discounts-online-114022700032_1.html)

While price is a big factor, that drives shoppers to online channels, physical retailers should not get so hung up about cheaper prices being available online. what about assortment, range, availability, customer service and other value-added services and not to forget the all-important sensory experience of shopping in stores/malls? What are physical retailers doing in these areas to attract customers to come to their stores and not go online?

As many surveys and studies have shown, Showrooming is inevitable but retailers need to look beyond that and think of seamless shopping experiences across their physical stores and digital channels, and find ways to address the needs of the consumer. The fact that certain categories have a higher propensity to move online (like electronics, books, music etc) makes it difficult for physical retailers to compete. However, there are plenty of examples of physical retailers competing effectively with online sellers, via innovative solutions that embrace the strengths of both the physical and digital worlds. Nordstrom's clever use of social data (specifically using Pinterest boards) is one such example.

The good news is that, around the world, a vast majority of shopping still happens in the physical store and while online commerce is growing, it is relatively tiny even now. But retailers really need to stop living in denial and accept that online commerce is inevitable and digital technologies are empowering customers like never before and providing unprecedented information at their fingertips. The question is, do physical retailers want to embrace these very technologies to their advantage or not?


Complaining and protesting has not been proven to be an effective strategy to win over customers.

The Curious Case of Offline Retailers going Online

I was recently on a panel discussion at the Etailing Expo Conference in Mumbai, India. The subject of discussion was about offline retailers going online and consequently the challenges they face etc. I wanted to elaborate on the subject as I received many basic questions about going online from the audience.

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.

1. 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.
2. 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. 
3. 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.
4. 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.
5. 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.
6. 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?

Finally, the key for offline retailers is to NOT treat online as an "IT project" to be run by the IT guys. It has to be an essential component of an overall business growth plan and strategy and should not be dealt with in isolation. It should include all stakeholders from the organization such as marketing, supply chain, operations, finance, customer service and of-course technology. Once the strategy is clear, a blueprint of the design and building the foundational elements is critical. A phased road-map approach in terms of developing the basic blocks and delivering functionality from a customer perspective would help in the long run.